Trust has become an essential topic in today’s business environment. Understanding trust from both an organizational and individual perspective will help you to develop as a leader within your organization and can impact the bottom line.
Improving levels of trust in the workplace has become increasingly recognized as key to long-term organizational effectiveness and success.
In this article, how to develop high trust work relationships, you will start to explore the phenomenon of trust and investigate why it is seen as a fundamental aspect of the culture of flourishing and sustainable organizations.
You will examine the changes in organizational dynamics, which have led to a focus on trust within modern economies, and investigate the specific consequences of a lack of trust within organizations.
The dynamics of contemporary organizational trends and the resultant implications for trust are the focus of exploration throughout this course.
We want you to be able to fully answer the following questions:
What do we mean when we talk about “trust” within organizations’?; ‘
Why is trust important in organizations?’ and
What are the consequences of trust in organizations?’, moreover,
What are some of the likely consequences of a lack of trust within organizations?’.
What is trust?
While a great deal of interest in trust has been generated by academics and practitioners alike, it is a concept that has attracted different definitions and interpretations.
Before we examine why trust is important, we need to establish the phenomenon of trust or, in other words, ‘what trust is.
We will start by examining some ‘working’ definitions of trust to enable our analysis and discussion of the role and importance of trust within organizations.
Some definitions of trust are provided below:
Definitions of trust
… when we say we trust someone or that someone is trustworthy, we implicitly mean that the probability that he [sic] will perform an action that is beneficial or at least not detrimental to us is high enough for us to consider engaging in some form of cooperation with him.
(Gambetta, 1988, pp. 217–18)
The willingness to be vulnerable to the actions of another party is based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party.
(Mayer et al., 1995)
…trust is both the specific expectation that another’s actions will be beneficial rather than detrimental and the generalized ability to take for granted, to take under trust, a vast array of features of the social order.
(Douglad Creed and Miles, 1996, p. 17)
From these definitions of trust, we can see several different issues emerge.
Each definition of trust above involves two specific parties: a trusting party (trustor) and a party to be trusted (trustee).
Also, there are two related concepts raised in the definitions.
These are the notions of ‘risk’ and ‘vulnerability’.
For now, it is useful to assume that trust is associated with the related notions of risk (the specific expectation that another’s actions will be beneficial rather than detrimental) and vulnerability (the implication that there is something of importance to be lost).
Making oneself vulnerable is taking the risk. Hence ‘trust is not taking risk per se, but rather it is a willingness to take risk’ (Mayer et al., 1995, p. 712).
Trust as a belief
To further our understanding of trust as a phenomenon, it is useful at this stage to consider why we may trust or distrust another person.
Within the context of the organization, why do we choose to trust a co-worker or line manager, or senior manager?
According to one theoretical view, trust can be seen as a belief. In other words, we trust someone if we believe that certain ‘properties’ or ‘actions’ are associated with that person.
A description of ‘trust as belief’ is provided by Cummings and Bromiley (1996, pp. 303–5) in the extract below.
Trust as a threefold belief
‘Trust [is] defined as an individual’s belief or a common belief among a group of individuals that another individual or group
(a) Makes good-faith efforts to behave following any commitments both explicit or implicit,
(b) Is honest in whatever negotiations preceded such commitments, and
(c) Does not take excessive advantage of another even when the opportunity is available.
The rationale for this definition of trust rests on the socially embedded, subjective, and optimistic nature of most interactions within and between organizations that involve trust.
Much of organizational interaction rests strongly on these three characteristics and thus makes trust so centrally important.
The contrasting position, dominant in many economic formulations of organizational action, depicts individuals acting alone in a strictly self-interested objective fashion and driven by pessimistic assumptions about other individual actors. …
That is, in transaction cost economics, actors lie in negotiations, cheat on any deals if it is profitable to do so, and exploit opportunities for renegotiation to their utmost.
We assert that in many important situations, such a depiction is both inaccurate and inadequate. …
Our definition of trust rests on a view of organizational action based largely on good-faith effort, honesty in exchange, and limited opportunism.’
(Cummings and Bromiley, 1996, pp. 303–5)
The idea of trust as a belief can be usefully explored by testing your own trust ‘belief’ system in a test instrument called the ‘Organisational Trust Inventory’.
The challenge of trust in organizations
There is no doubt that trust is an appealing concept and one that is highly valued. In our daily lives, it is an important feature of our relationships and social adjustment.
But in the context of organizational life, trust does not necessarily sit easily.
As mentioned in the introductory section, the nature of work has undergone significant changes, leading to a need to reconsider old command and control modes of management.
Contemporary organizations are increasingly placing a greater emphasis on voluntary forms of cooperation such as employee engagement.
Underpinning the heightened need for cooperation and engagement, however, is the fundamental issue of trust.
The main changes that have led to the focus on developing trust within organizations are highlighted below:
- Changed work organization – people are increasingly working in widely dispersed groups and inflexible working arrangements, including home working, remote working, virtual working, and working different types of work schedules. This spatial and temporal dispersion of work renders traditional control and monitoring unviable and implies the need for a new type of interdependence and cooperation between workers and managers.
- Diversity – people are also working within a diverse workforce across different geographical locations both nationally and internationally. As with the point above, a dispersed workforce requires a new type of interdependence and cooperation between workers and managers. Moreover, the increased diversity within the workforce leads to the need for people to be able and willing to trust people with very different backgrounds.
- The design and content of work – rather than routinized and simple tasks, jobs are increasingly focused around a strong customer service orientation, as well as ‘knowledge work’ and intellectual labor. Each of these types of work depends heavily on high levels of engagement and voluntary cooperation in work, again leading to a focus on cooperation and trust.
- Structural change within organizations – hierarchies within organizations is increasingly being replaced by lateral alliances and social relations (Sheppard and Tuchinsky, 1996). Flatter hierarchical structures mean that people are working in teams, with responsibilities shared across group members, and within matrix structures with different managers for different tasks. Against this backdrop, formal controls and sanctions are minimal and relationships between co-workers and management can be complex; trust becomes paramount.
Diagram illustrating the complex nature of organizational relationships
Think about your own work team(s) or one in which you have worked. Reflect on your experience of working in the team(s) and the level of trust with the team(s). Do you think the level of trust has affected the effectiveness of the team, its performance, or the commitment to the organization?