Roads to Trust


Before defining trust, we try to make clear why trust has become such a popular object of research, not only on organizational studies but in other fields, too. There are at least three areas worth mentioning in which recent progress has emphasized the importance of trust and confirmed its potential for the effectiveness and efficiency of human interaction. These areas are derived from theoretical and empirical research on decision-making, the social implications of informational power and the dynamics of sense-making. A short examination of each of these prepares the way towards defining trust and mistrust and helps to locate them in the larger organizational context.

From Rational to Satisfying Decision-Making

One of the most important processes in organizations is decision-making. People are not only the passive implementers of the decisions of their superiors but, depending on their positions, they need to make strategic, operating, and administrative decisions (Ansoff, 1965). On all these levels, the ultimate objective of decision-making is perfect rationality based on the assumption that people and organizations are rational maximizers in politics and markets (see, for instance, Backhouse, 1994, pp. 12–13; Formani, 1990, pp. 39–42). Rational maximizing is based on the theory that decision-makers will go thoroughly through all the alternatives before choosing the correct means to achieve their objectives (Friedman, 1986, p. 173). The primary purpose of organizational theory has always been to promote the rationality of decision-making and subsequent action by providing rational methods for researchers and tools for practitioners.

Attempts to increase the likelihood of perfect rationality in decision-making have yielded many benefits for management. They have promoted certainty and reliability of reasoning and deciding. Solutions deemed rational have symbolized basic truths superceding other truths. Perfect rationality has minimized the probability of disagreements because it is useless for a rational mind to argue against such a solution. Understood this way, perfect rationality could be seen as a substitute for trust and the failure to meet its criteria can be considered a sign of mistrust, either in careless decision-makers or a defective decision process. In other words, the pursuit of perfect rationality has minimized the need for trust.

However, studies on organizational behavior and decision-making have shaken confidence in the possibility of reaching perfectly rational decisions. For instance, Simon, Cyert and March have argued that perfect rationality is the unattainable ideal in the real life of organizations and, for many convincing reasons, it is only possible to expect that rationality could be at best satisfactory in nature (March & Simon, 1993; Cyert & March, 1992; March, 1998; March & Olsen, 1989; March, 1994). Thus, if the possibility of perfect rationality is not an attainable ideal, it could be removed from decision-making, and then trust and loyalty can take their place as highly valued and scarce commodities (March, 1994, p. 110).

Why does satisfying rationality restore trust to management and underline its importance for human interaction? Because there are too many problems for management to handle efficiently, it must choose the ones whose solutions concretely promote the interests of the employees and external stakeholders of the organization. Because errors and mistakes are often included in management's choices, it must trust that these occasions will be dealt with justly from the point of view of learning, but not that of automatic punishment. Because the information that organization's management has at its disposal is usually limited, defective and inexact, others must trust that management can act with care and experience and know how to avoid behavior that engender distrust and suspicion. Mutual benefits, cooperation and collaboration, partnership and sharing information and experience are based on trust. To alleviate apparent problems in satisfying decision-making requires that management can inspire and implement trust in human interaction.

From Comprehensive Information to Asymmetric Information

Information is an essential feature in nearly everything that happens in organizations. No group can exist without the communication of information, the transference of meaning among its members (Robbins, 1998, p. 310). Findings from different studies indicate that the greater the interconnectedness of the network with information, the higher the general level of satisfaction of the members and the faster their ability to solve their problems (Mullins, 1996, p. 220). When an organization assigns a new task or duty to its employees, it must provide them with sufficient information to act humanely, efficiently and creatively — and at the same time they will become a new source of communication to the organization (Simon, Smithburg & Thompson, 1974, pp. 218–219).

In order to succeed in managing the information flows, management must make sure it has easy and unhampered access to different sources of information and a capacity to disseminate it through the organization. Information as comprehensive as possible in terms of relevance, neutrality and objectivity could serve best for these two managerial purposes. Comprehensive information has at least three important benefits for managing an organization: It motivates people to make use of it, it rewards them by increasing the possibility of accuracy in decisions and it provides protection against distrust and fears.

It is important to realize what is generally supposed in speaking about the desirability of comprehensive information in the hands of managers and employees. According to the supposition, the purpose of management is to provide a roughly equal amount of information to everybody. Bennis and Mische (1995, p. 102) argue that managers must give employees sound reason and explanations for the new design, a forum for voicing concerns, and feedback to show those concerns are being heard. Rosen writes that executives, managers, and associates should be well informed about what is going on inside the organization (Rosen, 1996, p. 102). He goes on to say that if information is readily available to them, they know how well their organization is doing and in return they are willing to take responsibility and do what is required from them (Rosen, 1996, p. 102). When people have approximately equal access to vital information, they are able to meet customer expectations and follow the ethical guidelines of their organizations (Webster, 1994, p. 127).

It is thought that people will take comprehensive information as indisputable objective truth that assumes trust away from reflection. However, the situation becomes almost totally different if the information people can obtain is at best situational, partisan and limited rather than objective, neutral and comprehensive. If this is the case, it will make perfect communication an unattainable ideal in organizations (Robbins, 1998, p. 310). The following observations speak for this interpretation.

There are different fundamental sources of distortion in the communication systems of organizations, such as the inexact decoding of the message, the poor choice of communication channels, receivers' prejudices, perceptual skills, insufficient span of attention and senders' hidden purposes and agendas (Robbins, 1998, pp. 312–314). Feedback and reports flowing upward in the organization may become "sugar-coated" by managers who want to evoke a favorable reaction from their bosses by playing down their mistakes and bungling (Simon, Smithburg & Thompson, 1974, p. 240). Because this deception in communication of information upward and downward is both deliberate and inadvertent, it makes information asymmetric (Simon, Smithburg & Thompson, 1974, p. 240).

There are other significant organizational factors that accentuate the importance of asymmetric information in human interaction. A hierarchical structure in the organization causes risks of asymmetric information by putting people in unequal positions in relation to each other (March, 1994, p. 113). It is difficult or even impossible for people in different organizational roles and positions to acquire comprehensive information and set up an efficiently working communication system. Technological development generates complex products (computers, cars, etc.) and services (health, education, etc.) in which asymmetric information occurs between them and people (Harisalo & Huttunen, 2001). The growth of knowledge-intensive organizations tends to create new situations for asymmetric information.

Asymmetric information permeates many common situations in the selling and buying of complex products and services. In these conditions sellers and buyers are not necessarily always equally knowledgeable. It is probable that the seller may both over-emphasize the useful positive characteristics, thus leading the buyers into unwarranted trust and persuading them to believe that all the alternatives are to some extent worse, and thus playing them into unwarranted distrust (March, 1994, p. 112). Because the buyer has not enough time and other resources to convince himself of the arguments of the seller, it is possible to argue that the buyer could be at least to some extent at the mercy of the seller.

One of the severest outcomes of asymmetric information is rent-seeking in political decision-making and market transaction (McNutt, 2002, p. 164, pp. 226–227). Rent-seeking is a process by which an organization acquires different kinds of benefits for itself to which it could not have access without asymmetric information on the side of other actors (see McNutt, 2002, p. 164). A seller, who knows there are some deficiencies in the product, but refuses to tell to the buyer about them, makes use of rent-seeking in terms of better prices. Firms that are spending and exerting effort in order to maintain a monopoly position in the market are rent-seekers (McNutt, 2002, p. 226). In politics, parties may find many ways to efficiently promote their own interests at cost of the public (Bergstr m, 2001, pp. 36–39).

Because asymmetric information seems to be a real and essential phenomenon in an organizational environment, people cannot suppose that they have equal access to the information they need in their decision-making situations. As a result, they must resume trust in their relationships because trust helps them to get along efficiently without comprehensive information. Trust provides people with more possibilities than comprehensive information to energize their mutual interaction.

From the One-Dimensional Interpretation to Sense-Making

Management has usually relied on hard facts and statistics and empirically verified theories. For management, things are either true or false and they can be thought of rightly or wrongly. This way of thinking could be called one-dimensional thinking, the purpose of which is to eliminate subjective elements from consideration and base decisions and action on firm ground (Peters & Waterman, 1982, p. 29). Facts, logical thinking and quantitative methods are the keys to one-dimensional interpretation in which problems can be stated properly and solved correctly, making trust of little importance in the process. In this purpose, organizational theory has significantly promoted systematic theorizing and thinking about the problems and solutions of organization and management (Lupton, 1975, p. 39).

The roots of one-dimensional interpretation can be traced to rational thinking in science, systems theory in policy analysis and professionalism in management. It was supposed that there are certain laws in human behavior in an organizational context, as well as in nature, that can be discovered and utilized by management in its steering development towards willed directions. When these regularities have been revealed, their substance is so strong that it pushes trust aside from planning and acting.

In spite of the fact that one-dimensional interpretation is strongly rooted in organizational theory, it has been challenged by new developments in the field. Senge, for one, has tried to give systems thinking a new and dynamic nature by emphasizing learning and experimenting and by showing that the successes of organizations could be depend more on nurturing human capabilities rather than structural configurations, programs and standing rules (Senge, 1990). Appealing only to rational self-interest will push aside other human motives like envy, jealously, and hate (Lawrence & Nohria, 2002, p. 10). These feelings are automatically involved in all conversations, discussions and debates (see especially Stone, Patton & Heen, 1999).

One-dimensional interpretation has slowly given way to subtler traditions in which giving a voice to participants, providing an opportunity to argue for and against, securing constant flows of information and stressing new thinking are considered more important than rationality in thinking and action. With his theory of sense-making, Karl Weick (1995) turned one-dimensional interpretation into multi-dimensional interpretation. For Weick, sense-making is a continuous dynamic thinking and valuation process which can unite people and separate them from each other. It is a process that is difficult for management to control. Managers may tell pure and indisputable facts, but if employees do not trust them they will not pay any attention to what they are being told.

It is this feature of sense-making that emphasizes the importance of trust in human interaction. Sense-making is an automatic and dynamic process in an organization (Weick, 1995, pp. 43–44). It could happen by justification and in retrospect (Weick, 1995, p. 12). By cooperating and collaborating in these processes, people learn to what extent it is reasonable for them to trust each other. They learn to recognize what they say and mean. Trust is really needed in order to make sense-making serve the organization and make human interaction possible.




L., Iivonen M. Trust in Knowledge Management Systems in Organizations2004
WarDriving: Drive, Detect, Defend, A Guide to Wireless Security
ISBN: N/A
EAN: 2147483647
Year: 2004
Pages: 143

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