DOES COMPETENCY-BASED TRUST BENEFIT ORGANIZATIONAL PERFORMANCE—A MESO EXPLORATION USING COMPUTER MODELING

Abstract

From a competency-based perspective of trust and an open system's view of organizations, this study explores the micro-macro linkage between interpersonal trust and organizational performance in work organizations where internal and external contexts can matter. With the help of a formal computer model for meso theorizing, this study shows that competency-based trust generally does not benefit organizational performance in a distributed decision-making setting, except under incorrect information conditions or when no formal procedure is available. The study further demonstrates that external environments, organizational structures, and internal operating conditions can all moderate such trust-performance relationships. Findings from this study suggest the need for new thinking relating to trust in organizations and the possibility to integrate psychological, economic, and sociological perspectives on trust.