Scholarly interest in the study of trust and distrust in organizations has grown dramatically over the past five years. This interest has been fueled, at least in part, by accumulating evidence that trust has a number of important benefits for organizations and their members. A primary aim of this review is to assess the state of this rapidly growing literature. The review examines recent progress in conceptualizing trust and distrust in organizational theory, and also summarizes evidence regarding the myriad benefits of trust within organizational systems. The review also describes different forms of trust found in organizations, and the antecedent conditions that produce them. Although the benefits of trust are well-documented, creating and sustaining trust is often difficult. Accordingly, the chapter concludes by examining some of the psychological, social, and institutional barriers to the production of trust. CONTENTS

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TRUST AND DISTRUST IN ORGANIZATIONS: Emerging Perspectives, Enduring Questions

Publisher Summary This chapter focuses on one particular aspect of authoritativeness: voluntary compliance with the decisions of authorities. Social psychologists have long distinguished between obedience that is the result of coercion, and obedience that is the result of internal attitudes. Opinions describe “reward power” and “coercive power”, in which obedience is contingent on positive and negative outcomes, and distinguish both of these types of power from legitimate power, in which obedience flows from judgments about the legitimacy of the authority. Legitimate power depends on people taking the obligation on themselves to obey and voluntarily follow the decisions made by authorities. The chapter also focuses on legitimacy because it is important to recognize, that legitimacy is not the only attitudinal factor influencing effectiveness. It is also influenced by other cognitions about the authority, most notably judgments of his or her expertise with respect to the problem at hand. The willingness of group members to accept a leader's directives is only helpful when the leader knows what directives to issue.

A Relational Model of Authority in Groups

Institutional theories of organizations provide a rich, complex view of organizations. In these theories, organizations are influenced by normative pressures, sometimes arising from external sources such as the state, other times arising from within the organization itself. Under some conditions, these pressures lead the organization to be guided by legitimated elements, from standard operating procedures to professional certification and state requirement, which often have the effect of directing attention away from task performance. Adoption of these legitimated elements, leading to isomorphism with the institutional environment, increases the probability of survival. Institutional theories of organization have spread rapidly, a testimony to the power of the imaginative ideas developed in theoretical and empirical work. As rigor increases, with better specification of indicators and models, it is likely to attract the attention of an even larger number of organizational researchers. Institutional theory is inherently difficult to explicate, because it taps taken-for-granted assumptions at the core of social action. The main goal of this review, then, is to make institutional theory more accessible. The review begins with a brief summary of the two current theoretical approaches to institutionalization in organizations, moves to identification of indicators of central concepts, and then progresses to a review of empirical research. It concludes with two short sections, one on points of intersection with other theories of organization, the other on the "new institutionalism" in economics and political science.

https://www.jstor.org/stable/pdf/2083256.pdf

Institutional Theories of Organization

Extensive empirical evidence and theoretical developments in multiple disciplines stimulate a need to expand the range of rational choice models to be used as a foundation for the study of social dilemmas and collective action. After an introduction to the problem of overcoming social dilemmas through collective action, the remainder of this article is divided into six sections. The first briefly reviews the theoretical predictions of currently accepted rational choice theory related to social dilemmas. The second section summarizes the challenges to the sole reliance on a complete model of rationality presented by extensive experimental research. In the third section, I discuss two major empirical findings that begin to show how individuals achieve results that are “better than rational” by building conditions where reciprocity, reputation, and trust can help to overcome the strong temptations of short-run self-interest. The fourth section raises the possibility of developing second-generation models of rationality, the fifth section develops an initial theoretical scenario, and the final section concludes by examining the implications of placing reciprocity, reputation, and trust at the core of an empirically tested, behavioral theory of collective action.

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A Behavioral Approach to the Rational Choice Theory of Collective Action: Presidential Address, American Political Science Association, 1997

A distinction is proposed betweentrust as a cognitive bias in the evaluation of incomplete information about the (potential) interaction partner andassurance as a perception of the incentive structure that leads the interaction partner to act cooperatively. It is hypothesized that trust in this sense helps people to move out of mutually committed relations where the partner's cooperation is assured. Although commitment formation is a rather standard solution to the problems caused by social uncertainty, commitment becomes a liability rather than an asset as opportunity costs increase. Facing increasing opportunity costs, trust provides a springboard in the attempt to break psychological inertia that has been mobilized to maintain committed relations. In conjunction with an assumption that networks of mutually committed relations play a more prominent role in Japanese society than in American society, this hypothesis has been applied to predict a set of cross-national differences between the United States and Japan in the levels of trust and related factors. The results of a cross-national questionnaire survey (with 1,136 Japanese and 501 American respondents) support most of the predictions, and indicate that, in comparison to Japanese respondents, American respondents are more trusting of other people in general, consider reputation more important, and consider themselves more honest and fair. In contrast, Japanese respondents see more utility in dealing with others through personal relations.

Patricia English Zemke

Papers

Individual adaptations and structural-change as solutions to social dilemmas