Development of organizational trust among employees from a contextual perspective

Abstract

It is becoming increasingly accepted that trust in the workplace is an important factor which potentially leads to enhanced organizational performance and can be a source of competitive advantage in the long run (e.g. McAllister 1995, Whitener et al. 1998, Leana & van Buren III 1999, Wicks et al. 1999, Gould-Williams 2003). Although it may be unreasonable to expect that any firm can have boundless trust among employees, the starting point of this paper lies in the argument that organizational trust is more desirable from the viewpoint of the firm’s economic prosperity than its lack. Organizational trust is important for successful socialization, cooperation and effective teamworking (cf. Putnam 1993, Fukuyama 1995) and in the long run helps to minimize risks and decrease operating costs (Connell et al. 2003). In addition, trust provides a foundation for social order (Lewis & Weigert 1985, Hosmer 1995, Lewicki et al. 1998) and contributes to improved quality of life. In recent years, the issues of globalization in the business world have drawn scholars’ attention to the role of socio-cultural context in organizational life (Putnam 1993, Doney et al. 1998). Expanding internationalization implies a need for companies to understand the impact of the socio-cultural context on their operations and to pay attention to the risks arising from it. Despite rapid development in theory building in the field of organizational trust during recent decades, the literature on the subject has been criticized for insufficient focus on the role of the context in formulating theories and practical methods of trust-building (Doney et al. 1998, Wicks & Berman 2004). Consequently, too little work has been done to understand how a socio-cultural context is related to the development of organizational trust. Through this article, we attempt to contribute to the existing gap and develop a contextsensitive theoretical model of organizational trust. The model derives from the theory of resource dependence (Aldrich & Pfeffer 1976, Pfeffer & Salancik 1978, Wicks & Berman 2004) and identifies four different contexts from the viewpoint of the level of work morale of the employees in a particular society. Based on the findings of prior research, we argue that trust among employees is not inherent, but management can nurture it with the help of appropriate and context-sensitive managerial practices (Creed & Miles 1996, Paine 1997, Whitener 1997, Whitener et al. 1998, Connell et al. 2003, Gould-Williams 2003, Blunsdon & Reed 2003, Young & Daniel 2003). For example, interventions by the management, such as development of workplace ethics, better provision of information, and support for employees have an impact on employees’ trust in the workplace. Respectively, Professor, School of Business and Economics, University of Jyvaskyla, Finland and Doctoral Student, Center for Business Ethics, Kaunas Faculty of Humanities, University of Vilnius, Lithuania.