Academic journal article Organization Development Journal

Organizational Trust: What It Means, Why It Matters

Academic journal article Organization Development Journal

Organizational Trust: What It Means, Why It Matters

Article excerpt

Abstract

This paper describes the construct of organizational trust as positive expectations individuals have about the intent and behaviors of multiple organizational members based on organizational roles, relationships, experiences, and interdependencies. The development and testing of a five-- dimensional model of organizational trust (competence, openness and honesty, concern for employees, reliability, and identification) is presented. The model, in turn, is related to employee job satisfaction and overall perceptions of organizational effectiveness. The model's implications for managers, human resources, and organization development practitioners are discussed. The paper concludes with future research issues and challenges.

Organizational Trust: What It Means, Why It Matters

Globalization, workplace diversity, increased awareness of cultural differences, downsizing, delayering, the call for (and in some cases the reality of) increased workplace democracy, international networks, complex alliances, information technologies, and decentralized decision making are only some of the events and processes during which trust assumes significant importance. Trust within and across organizations is conceived by many to be directly related to the ability to form new associations and networks of trusting relationships to accomplish business transactions and, therefore, is predictive of whether or not an organization will remain viable (Fukuyama, 1995). Additionally, trust has been linked to overall employee job satisfaction and perceived organizational effectiveness (Money, Shockley-Zalabak, & Cesaria, 1997). In a time of increased imperatives for change and less certainty about how change can and should occur, it is not surprising that a renewed interest in trust surfaces as scholars and practitioners alike seek to understand relationships among trust, cooperative behaviors, and organizational abilities to change (Kramer & Tyler, 1996).

The purpose of this paper is to describe the constructs of individual and organizational trust, present a research-based model of organizational trust with relationships to job satisfaction and perceived organizational effectiveness, and discuss the model's implications for managers, human resources, and organization development practitioners. The paper concludes with future research issues and challenges.

The Constructs of Individual and Organizational Trust: Definitional Issues

A general consensus among researchers concludes that trust is important in a range of organizational activities and processes such as team work, leadership, goal setting, performance appraisal, and in general, cooperative behaviors (Axelrod, 1984; Elangovan & Shapiro, 1998; Gambetta, 1988; Jones & George, 1998; Mayer, Davis, & Schoorman, 1995; McAllister, 1995). Less agreement exists around distinctions between individual and organizational trust definitions and how trust forms, evolves, and changes through organizational experiences and communication.

In recent years definitions of how individuals experience trust have moved from emphases on intentions and motivations to behavioral orientations. Hosmer (1995), for example, views individual trust as one party's optimistic expectations of the behavior of another when the party must make a decision about how to act under conditions of vulnerability and dependence. Mayer, Davis, and Schoorman (1995) describe trust as, "the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other party will perform a particular action important to the trustor, irrespective of the ability to monitor or control the other party" (p. 712). Lewicki, McAllister, and Bies (1998) define trust as confident positive expectations regarding another's conduct, while distrust is confident negative expectations regarding another's conduct. Bhattacharya, Devinney, and Pillutla (1998) suggest that trust is an expectancy of positive (or nonnegative) outcomes that one can receive based on the expected action of another party in an interaction characterized by uncertainty. …

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