Horizontal Trust Research Articles

THE ROLE OF TRUST IN STIMULATING THE INNOVATIVE ACTIVITY OF INDUSTRIAL EMPLOYEES

The prospects of boosting the modernization of Russian industry necessitate the study of resources that might stimulate such endeavors. Contrary to the global literature, Russian publications mostly focus on the studies of generalized and institutional trust, as well as on the influence it exerts on modernization processes at the macro-level. Meanwhile, the impact of intra-firm trust as a factor, contributing to employee involvement in innovation, remains relatively misattended. Our purpose lies in encouraging the discussion of the presence of intra-firm trust and the effect trust has in furthering the processes of technological modernization. The intermediary tasks include the assessment of trust’s prevalence between colleagues, employees, and managers, as well as an analysis of the impact these types of trust have on the employees’ involvement into innovative activities at the enterprise level. The empirical ground for the study includes the results of a formalized survey of main industry workers conducted at three industrial enterprises in the Perm Territory in 2018-2019 (n = 450) using the method of a continuous survey of people present at their workplaces. The input of our research is due to the approach we propose to measure the horizontal trust by examining the vertical trust on several levels of organizational hierarchy; in addition, we employ an expanded list of indicators of employee involvement in innovation. The survey data are collected at three industrial plants. This helps to arrive at conclusions distinct from the published results of the studies of employees, sampled and surveyed per municipalities. Our results manifest the wide expansion of trust in organizations studied. However, we have not discovered any relationships between the organizational trust and actual employees involvement in the initiation and implementation of innovations. The impact of trust was detected only for the employees’ preparedness to take part in the ongoing projects. Thus, trust-building efforts at the workplace have a limited effect on employee involvement in innovations. We stress the importance of considering other factors that make the relationship between organizational trust and involvement in innovation more specific.

Interpersonal Trust in the Working Environment. A Theoretical Analysis

Summary The paper Interpersonal Trust in the Working Environment. A Theoretical Analysis describes the phenomenon of trust in social relations, provides definitions and types of trust, explains the conditions necessary for the development of trust, and discusses the relational and personality-related aspects of trust. It also reviews the interdisciplinary literature on the subject of trust, providing a multidimensional description of trust in the workplace, in organizations. Vertical and horizontal trust in organizations is described. Presenting some trust-building models in businesses, the paper selectively describes the consequences resulting from trust vs a lack of trust in the working environment. It identifies the culture of trust and employee empowerment as desired models promoting the development of workplace relations and addresses some controversies that disrupt the functional adaptation of employees to the reality of knowledge-based organizations in the post-modern social reality.

Explaining and tackling unregistered employment: evidence from an employers’ survey

ABSTRACT When explaining and tackling employers participation in the informal economy, they have been conventionally viewed as rational economic actors who engage when the benefits outweigh the costs, and thus their participation is deterred by increasing the sanctions and/or risks of detection. An emergent social actor approach, however, has explained employers as engaging in the informal economy when there is a lack of vertical trust (i.e., their norms, values and beliefs are not in symmetry with the relevant laws and regulations) and horizontal trust (i.e., they believe many others are being non-compliant). The aim of this paper is to evaluate these competing perspectives by reporting a 2015 survey of 450 employers in FYR Macedonia. The finding is that although there is no association between employers using unregistered workers and the perceived level of penalties and risks of detection, there is a strong significant association with both the level of vertical and horizontal trust. Those whose beliefs do not align with the laws and regulations display a significantly greater likelihood of employing unregistered workers, as do those who perceive a larger proportion of the population to be engaged in the informal economy. The theoretical and policy implications are then discussed.

Tourism as a mobile way for building horizontal trust

Tourism as a mobile way for building horizontal trust

Construct validity of a global scale for Workplace Social Capital based on COPSOQ III.

Background and aimWorkplace Social Capital has been suggested as a useful concept when addressing organizational and social factors of the work environment. The overall aim of the present study is to establish and evaluate the construct validity of a measure of Workplace Social Capital based on the operationalization suggested in the third version of the Copenhagen Psychosocial questionnaire.MethodsThe present study is based on data collected as part of a validation and development project for the use of the Swedish version of COPSOQ at workplaces and includes responses from 1316 human service workers answering a workplace survey. Six items from scales for organizational justice, vertical trust and horizontal trust in COPSOQ III were included in the analyses. Rasch Analysis was used for scale validation.ResultsThe analyses showed that the psychometric properties of the suggested COPSOQ scale for Workplace Social Capital were satisfactory after accommodation for local dependency. Each individual item worked as intended, the scale was unidimensional and functioned invariantly for women and men, and for younger and older employees. The scale was furthermore found to be valid for use for distinguishing groups, not individuals.ConclusionWe have established that the scale for Workplace Social Capital measured by COPSOQ III is valid for distinguishing groups, e.g. work teams. The scale exhibits good construct validity as it satisfies the measurement criteria defined by the Rasch model.

Evaluating policy approaches for tackling informal entrepreneurship

Purpose When tackling the informal economy, an emergent literature has called for the conventional rational economic actor approach (which uses deterrents to ensure that the costs of undeclared work outweigh the benefits) to be replaced or complemented by a social actor approach which focusses upon improving tax morale. The purpose of this paper is to explore the effectiveness of these two policy approaches in reducing informal sector entrepreneurship. Design/methodology/approach To evaluate this, data are reported from a 2015 representative survey involving 1,384 face-to-face interviews with owners or managers of small businesses in three South-Eastern European countries, namely, Croatia, Bulgaria and FYR Macedonia. Findings The findings provide support for the “social actor” approach and display that small businesses have a greater propensity to perceive competitors as operating informally when the level of tax morale is lower. Meanwhile, no support for the deterrence measures of the “rational economic actor” model is reported. Research limitations/implications The major limitation of the study is that the paper is not able to display the reasons for the low level of tax morale and horizontal trust. Therefore, further in-depth qualitative research is necessary to explain whether and how the low levels of trust are determined by the failures of various formal institutions. Originality/value This is the first known study on small businesses which analyses simultaneously two distinct policy approaches that aim to reduce participation in informal entrepreneurship.

Tackling undeclared work in the European Union: beyond the rational economic actor approach

ABSTRACT To tackle the undeclared economy, an emergent literature has called for the dominant “rational economic actor” approach, which increases the sanctions and risk of detection, to be replaced and/or complemented by a “social actor” approach that fosters citizens’ commitment to compliance. Reporting two waves of the Eurobarometer survey conducted in 2007 and 2013 across Europe, fixed-effects logistic regression analysis reveals that although both approaches reduce participation in undeclared work, the strength of the impact of deterrents on the likelihood of participation in undeclared work has weakened between 2007 and 2013, but has strengthened for vertical and horizontal trust. The paper concludes by discussing the policy implications of these findings.

The birdcage is open, but will the bird fly? How interactional and institutional trust interplay in public organisations

ABSTRACTIn the wake of New Public Management reforms, the prospect of increasing task performance by building trust within public organisations has awoken renewed interest in the public sector. The focus has, however, predominantly been on strengthening leaders’ trust in employees by offering the latter greater autonomy, while employees’ decisions to accept and return trust have received less attention. The purpose of this article is to develop a conceptual framework for studying how interactional and institutional trust interplay when employees in public organisations respond to leaders’ attempts to build trust by offering them greater autonomy. The conceptual framework is applied to a case study conducted in Copenhagen Municipality, which is actively engaged in a reform to strengthen trust. The results support the proposition that the optimal conditions for employees to accept offers of greater autonomy occur when they experience both high interactional and high institutional trust. However, the case study also illustrates that other factors such as horizontal trust, professional confidence and available resources also affect employees’ willingness to accept offers of greater autonomy.

EVALUATING INSTITUTIONAL THEORIES OF INFORMAL SECTOR ENTREPRENEURSHIP: SOME LESSONS FROM ALBANIA

This paper evaluates three waves of institutional theory that have variously explained participation in informal sector entrepreneurship. The first wave of institutional theory explains informal entrepreneurship as resulting from formal institutional failures. This second wave of theory explains it as resulting from an asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions. Finally, a third wave of theory as resulting from a lack of both vertical and horizontal trust has explained informal entrepreneurship. To evaluate these waves of institutional theory, this study reports evidence from a 2015 survey of businesses in Albania. This finds that 30 percent of turnover of Albanian businesses is under-reported and that this percentage is higher in smaller firms. In terms of the institutional failures that explain participation in informal entrepreneurship, the regression analysis reveals a strong association between annual under-reporting of turnover and the red tape involved in dealing with the tax administration and the frequent visits of tax inspectors. Moreover, it shows both vertical and horizontal trust are strongly associated with participation in informal entrepreneurship. The paper concludes by discussing the theoretical and policy implications.

Explaining and tackling the informal economy: an evaluation of competing perspectives

AbstractThis paper provides an evidence-based evaluation of the competing ways of explaining and tackling the informal economy. Conventionally, participants have been viewed as rational economic actors who engage in the informal economy when the benefits outweigh the costs, and thus participation is deterred by increasing the sanctions and/or risks of detection. Recently, however, an alternative social actor approach has emerged viewing participation to result from a lack of vertical trust (i.e., their norms, values and beliefs are not in symmetry with the laws and regulations) and horizontal trust (i.e., they believe many others are non-compliant). Reporting 2,000 face-to-face interviews conducted in Croatia in 2015, only a weak and partial association is found between participation in the informal economy and the perceived level of penalties and risks of detection, but a strong significant association with both the level of vertical and horizontal trust. Those who perceive a larger proportion of the population to be engaged in the informal economy, and those whose norms differ to the laws and regulations, display a significantly greater likelihood of participating in the informal economy. The theoretical and policy implications are then discussed.

Institutional Asymmetry and the Acceptability of Undeclared Work

This report is part of the project SHADOWS which aims to investigate the effectiveness of different policy measures in reducing undeclared work. As such, the project evaluates not only the effectiveness of using a rational economic actor approach (that tackles undeclared work by ensuring that the payoff from undeclared work is outweighed by the costs), and a social actor approach (grounded in a view that undeclared work arises when tax morale is low), but also analyses the interaction effects (between deterrents and tax morale, and vertical and horizontal trust) in various contexts. This report focuses on the social actor approach, which is grounded in institutional theory, and aims to produce a more nuanced and variegated deeper understanding of citizens views on horizontal and vertical trust and the determinants of their tax morale. Which institutions and who do citizens not trust, and why? What causes trust and distrust? Does vertical trust influence horizontal trust, or is it the other way around? Under what circumstances is undeclared work deemed acceptable by citizens? And what are the main narratives on accepting and/or participating in undeclared work? Are these similar in different contexts? To answer these questions, the report briefly reviews how scholarship on participation in undeclared work has increasingly adopted the lens of institutional theory, and three waves of thought in institutional theory will be outlined regarding how to explain citizens` participation in undeclared work (Williams, 2017). This will be followed by a methodological section of the qualitative research conducted where details about the country case studies will be provided (as well as the type of questions used to investigate the issues). The third section then reports the results obtained using in-depth-interviews, focusing on how tax morale and trust in public institutions and/or in other citizens are shaped by formal institutional failings. The results will be structured into four main categories of formal institutional failure, namely: resource misallocations and inefficiencies; formal institutional voids and weaknesses; formal institutional powerlessness; and formal institutional instability and uncertainty (Williams, 2017). The report concludes with the policy implications of the findings.

Explaining and Tackling Under-Declared Employment in FYR Macedonia: The Employers Perspective

Abstract The aim of this paper is to evaluate how employers who illegally under-report their employees’ salaries to evade paying the full tax and social contributions owed can be explained and tackled. These employers have been conventionally explained as rational economic actors doing so when the benefits outweigh the costs, and thus the solution is to increase the sanctions and/or probability of detection. An alternative social actor approach, however, explains employers as under-reporting salaries because of their lack of both vertical trust (i.e., their beliefs are not in symmetry with the laws and regulations) and horizontal trust (i.e., they believe many others are non-compliant). Reporting a 2015 survey of 450 employers in FYR Macedonia, the finding is that there is no strong association between employers under-reporting salaries and their perceived level of penalties and risks of detection, but a strong significant association with both their level of vertical and horizontal trust. The theoretical and policy implications are then discussed.

Is Social Capital Associated with Academic Achievement in Lithuanian High-school Students? A Population-based Study

The present study aims to determine the associations between family, neighbourhood, and school social capital with academic achievement among Lithuanian high-school students. The study included 1854 high-school students (901 males and 953 females) aged 16-18 years. At the end of the school year, the students’ achievements were measured as an average grade. Family, neighbourhood, and school social capital were identified, indicating trust and understanding perceived from those social settings. Gender, body-mass index, self-perceived socioeconomic status, self-rated health, psychological distress and physical activity were also measured and used as covariates. Academic achievement was associated with family social capital, horizontal school trust and reciprocity at school. Family support, cooperation, and trust between students positively affect their achievement. Policies and strategies for a healthy environment for children need to be incorporated, especially within the school system for students’ better progress.

Tax morale and institutional theory: a systematic review

PurposeThe purpose of this paper is to conduct a systematic review of the factors that shape tax morale. A large range of random explanatory variables identified in the literature as determinants of tax morale are synthesised and structured by drawing inspiration from the institutional theory.Design/methodology/approachTo do this, a systematic search has been conducted using a library catalogue which provides access to more than 400 databases.FindingsThe finding is that the institutional theory provides a suitable theoretical basis to explore tax morale. Indeed, all the factors until now identified as determinants of tax morale (except the control variables/socio-demographic characteristics) can be categorised either as belonging to formal institutions or to informal institutions. The most salient factor is trust, with both vertical and horizontal trust positively related to tax morale.Research limitations/implicationsThe outcome is a call for a more nuanced understanding of not only the effect of formal and informal institutions on tax morale but also how formal and informal institutions interact and alter each other and, consequently, affect tax morale.Practical implicationsThe paper seeks to encourage governments to start recognising that as low tax morale arises when a gap exists between formal and informal institutions, they need to design policy measures aimed to reduce this gap, rather than persisting with deterrence measures.Originality/valueThis is the first systematic review of the factors that influence tax morale using an institutionalist lens.

Horizontal trust among lecturers at the universities of applied sciences

Purpose: Horizontal trust among lecturers at universities seems to be particularly unexplored in the literature. The main purpose of this paper is to fi ll in this gap and is an attempt to answer the question: how lecturers perceive, address and reconstruct trust in their teaching. Methodology: The data; narratives of lecturers, consists of told and written stories (N=23) collected in Finland, Hungary and the United Kingdom. Collecting multinational dataset is based on the European attempt of the harmonisation and internationalisation of education and on the cooperation of educational institutions. The narratives were analysed in two stages: first by narrative analysis and then by condensing textual data. Findings: The results argue that trust creates trusting atmosphere between lecturers. Without trust cooperation between lecturers creates tension and diff iculties. Trust creates welfare and good results for teaching. Without trust the lecturers cannot give their best to the students, colleagues and all in all to the university of the applied sciences. Trust makes it possible to change teaching methods and organisational structures at the universities of the applied sciences. Without trust working methods are difficult to develop. Trust contributes to good cooperation between lecturers and more positive results to develop academic education in Europe. Originality/value: The results of this paper are consistent with previous research, however they shed light in much more detail on horizontal trust at universities emphasizing, among others, the fact that trust impacts the organization’s success, and strengthens intra- and inter-organizational relationships.

EXPLAINING INFORMAL SECTOR ENTREPRENEURSHIP IN KOSOVO: AN INSTITUTIONALIST PERSPECTIVE

Institutional theory has been widely used to explain entrepreneurship in the informal economy. A first wave of institutionalist theory argued that informal entrepreneurship resulted from formal institutional failures and a second wave that such entrepreneurship results from an asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions. This paper evaluates the validity of these two waves of institutionalist explanation and a new third wave of institutional theory explaining informal entrepreneurship in terms of a lack of both vertical and horizontal trust. Reporting data from a 2013 survey in Kosovo involving 500 face-to-face interviews with owners of small and medium-sized enterprises, 35.7 percent of sales are estimated to be unreported and a regression analyses reveals this is significantly higher among smaller and older firms, and firms owned by men. No significant association is found between formal institutional failings and the under-reporting of sales, but there is a statistically significant correlation between sales under-reporting and the level of vertical and horizontal trust. Taking account of the limitations of this single country study, the implications for theory and policy are then discussed.

Explaining and tackling the informal economy: a dual informal labour market approach

PurposeTo transcend the long-standing debate regarding whether workers are driven into the informal economy by either their involuntary “exclusion” or voluntary “exit” from the formal economy, the purpose of this paper is to propose and evaluate the existence of a dual informal labour market composed of an exit-driven “upper tier” and an exclusion-driven “lower-tier” of informal workers, and to explore its policy implications.Design/methodology/approachTo do so, data are reported from a 2015 survey of the informal economy conducted in South-East Europe involving 6,019 face-to-face interviews in Bulgaria, Croatia and FYR Macedonia.FindingsIdentifying a dual informal labour market with three exit-driven informal workers for every exclusion-driven informal worker, a multinomial logit regression analysis reveals that, compared to the exclusion-driven “lower tier”, the exit-driven “upper tier” is significantly more likely to be populated by the formally employed, retired and those not struggling financially. Participation is not affected by the perceived severity of penalties and likely risks of detection, but relative to those in the exclusion-driven “lower tier”, there is a significant correlation between those doing so for exit rationales and their lack of both horizontal trust and vertical trust in formal institutions.Practical implicationsThe outcome is a call to transcend the conventional deterrence approach of increasing the penalties and risks of detection. Instead, to tackle those driven by exit rationales, tackling both the lack of horizontal trust that other citizens are operating in a compliant manner and the lack of vertical trust in formal institutions is advocated. To tackle exclusion-driven informal workers, meanwhile, a focus upon the macro-level economic and social conditions which lead to their participation is required.Originality/valueThis is the first paper to empirically evaluate the existence of a dual informal labour market and to evaluate its policy implications.

Ethnic heterogeneity, social capital and psychological distress in Sweden

IntroductionEthnic heterogeneity has been linked to both protective and detrimental effects on mental health. Few studies have investigated the role of social capital in this relationship and none have found that it has an explanatory role. The aim of this study is to investigate the relationship between two measures of ethnic heterogeneity and psychological distress in Stockholm County, as well as the explanatory role of social capital for individuals with Swedish-background, foreign-background and those who are foreign-born. MethodsThis study used data collected from respondents aged 18–64 to the 2002, 2006, 2010 baseline questionnaires of the Stockholm Public Health Cohort and was linked with individual and area-level register information. Ethnic heterogeneity was the main exposure, measured by: 1) ethnic density, defined as the proportion of first and second generation immigrants with 2 foreign-born parents; and 2) ethnic diversity, using the fragmentation index. Social capital measures of individual and contextual-level social support and horizontal trust were the main explanatory factors of interest. The outcome, psychological distress, was assessed using the General Health Questionnaire-12 with a 2/3 cut-off. Prevalence ratios with 95% confidence intervals were estimated using multi-level poisson regression with robust variances. ResultsAge and sex adjusted analyses for the whole study population demonstrated that a 10% increase in ethnic density or diversity was associated with a 1.06 (1.05–1.07) times higher prevalence of psychological distress. In the stratified analyses, both foreign-born respondents and those with Swedish-background showed increasing prevalence of psychological distress with increasing ethnic heterogeneity. However, this trend was entirely explained by socioeconomic factors in the Swedish-background respondents and by additional adjustments for individual and contextual social support and horizontal trust for the foreign-born. Further adjustment for contextual horizontal trust showed ethnic heterogeneity to be protective for respondents Swedish-background. There was no clear trend between ethnic heterogeneity and psychological distress for respondents with foreign-background. ConclusionThe association between ethnic heterogeneity and psychological distress differs by ethnic background. There was no difference in this association based on the measure of ethnic heterogeneity used, nor in the explanatory role of social capital between ethnic heterogeneity measures. Socioeconomic indicators and some elements of individual and contextual social capital are important explanatory factors of the excess risk of psychological distress with regards to ethnic heterogeneity.

FEELINGS ABOUT COMPETITION AND SELF-REPORTED TRUST EVIDENCE FROM THE WORLD VALUE SURVEYS

This paper estimates the relation between individual feelings about competition and self-reported horizontal trust. Individuals who increasingly dislike competition report lower levels of trust towards others. But the association is not linear. This finding is different than and complements previous research which shows a positive or negative relation. We conclude that the evolution of perceptions of competition may be causing more harm than good in terms of trust and wellbeing, and policy should direct efforts at minimizing the negative effects of one of the most important institutions of market capitalism: competition. The paper improves over previous research by using individual-level measures while at the same time considering objectives measures of competition. We test for robustness of our results by considering different approximations for trust. We conjecture about the potential negative effects on Trust and Social Capital of the declining appreciation of the benefits of competition.

Zaufanie organizacyjne a przywiązanie normatywne

The purpose of this study is to investigate the impact of the institutional, vertical and horizontal trust upon normative and normative team commitment. The survey of 501 randomly selected employees was conducted in Poland. The method of multiple regression analysis was used in order to test hypotheses on the impact of different of types organizational trust on the normative and normative team commitment. The results indicate that the horizontal trust exerts the greatest influence on both types of normative commitment. Impact of institutional trust on normative team commitment has not been confirmed.