Levels of Organizational Trust in Individualist Versus Collectivist Societies: A Seven-Nation Study

Abstract

Competitiveness in global industries increasingly requires the ability to develop trusting relationships. This requires organizations, and the individuals they are comprised of, to be both trustworthy and trusting. An important question is whether societal culture influences the tendency of individuals and organizations to trust. Based largely on Yamagishi's (1994, 1998a, b) theories explaining trust, commitment, and in-group bias in collectivist cultures, this study examines potential differences in levels of trust between individualist and collectivist cultures. Survey data was collected from 1,282 mid-level managers from large banks in Japan, Korea, Hong Kong, Taiwan, China, Malaysia, and the United States. We first study differences in how individuals from individualist and collectivist societies trust ingroups versus out-groups. This provides an important foundation for hypotheses regarding differences in individual propensities to trust and two measures of organizational trust: internal trust (trust within the organization) and external trust (an organization's trust for suppliers, customers, etc.). Findings show higher levels of propensity to trust and organizational external trust in the United States than in Asia.