News
Trust
March 20, 2017
by Kevin Lehnert, Associate Professor of Marketing, Seidman College of Business
Trust is a fickle thing. It is the cornerstone of the business transaction. Deals ride on a handshake when trust is high, or are embroiled in contracts when trust is low. We rarely know when someone has lost trust in us, yet we are very aware when we lose it in someone else. We know trust when we see it, but may stumble when forced to define it. All of which begs the question, since trust is so important, what is it and how can we manage it?
Scholars present a myriad of definitions regarding trust. Sabel (1993, p.1133) defines trust as “the mutual confidence that no party to an exchange will exploit another's vulnerabilities" While Mayer et al, (1995, 712) sees trust as “ the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party". Ethicist Al Gini (2006) defines trust as, “something that we make, create, build, maintain, and sustain with our actions, promises, commitments, emotions, demeanor, and integrity”. Of course, those definitions seem highly academic. They are filled with three-dollar words, speaking of integrity, vulnerability, exchanges, and commitments.
Three things are common to these definitions (Parkhe, 1998).
- Trust is about a relationship. It is placed in another; whether that other is a partner, a friend, a family member, or a business. When we trust we inherently trust something that is outside of ourselves.
- Trust is about being vulnerable. Whether it is our own vulnerability that we trust another to respect, or the vulnerability of the other that we hold through our promises, trust recognizes the inherent power that the other party has.
- Finally, trust is about uncertainty. Trust recognizes that that other party can exploit that vulnerability, and we do not know if they will or not. We trust that our friends will support us, that our coffee will be flavorful and that our doctors will have our best interests at heart. Ultimately, we do not know whether that is the case.
So, we implicitly manage the vulnerability that is found in trust. We weigh what we have to gain in the business transaction, against our risks. We balance this based upon how honorable (or trustworthy) the other party is (Parkhe, 1998). Moreover, by looking at all three, we intuitively decide whether we can trust the other person. Barring that, we determine whether we need to have systems in place to protect us from being hurt. In business, this usually takes the form of lawyers and contracts.
What may be more important to trust is the realization that trust is an action. It is a verb (Gini, 2006), that we must cultivate and foster. Trust doesn’t happen in a vacuum and it isn’t formed overnight; it must be nurtured and grown. A former mentor always used to say that it takes “three attaboys to make up for one what the ?!” One broken promise can destroy a lifetime of trust. One exploitation of another’s vulnerability can devastate the relationship.
Trust is something that we decide to do. However, it’s also something that others decide to provide us. We trust others based upon their choices, actions and promises. These promises are based upon consistent behavior. Businesses need to remember this. In a world filled with nameless consumers, and thousands of transactions, it’s easy for businesses to forget about the foundation of trust. As scandals and corporate malfeasance continue to make headlines, consumers reevaluate their level of trust. Once consumers decide to walk away, then it’s a long road to rebuild that relationship. Remember, it takes a lot more attaboys to make up for one what the ?!
Post inspired by: https://blogs.luc.edu/gsb/2016/11/08/the-role-of-trust-in-business-politics-and-life/
References:
Gini, A. (2006). Why it's hard to be good. Routledge.
Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An integrative model of organizational trust. Academy of Management Review, 20: 709-734.
Parkhe, A. (1998). Understanding trust in international alliances. Journal of world business, 33(3), 219-240.
Sabel, C. F. (1993). Studied trust: Building new forms of cooperation in a volatile economy. Human Relations, 46:1133-1170.