The importance of trust in effective business and management – July 2017 Press and Journal Business Supplement

In this month’s column I’ll reflect on why and how trust matters in the field of organisational management. Let us as ever start with a definition – what is trust? According to Rousseau et al. (1998, p. 395) trust is “a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another”. More simply in terms of organisational management, Zand (1972, p. 238) conceptualises ‘trust as behavior that conveys appropriate information, permits mutuality of influence, encourages self-control, and avoids abuse of the vulnerability of others’. From these definitions we can see that the two antecedents necessary for trust to exist are a preparedness to be vulnerable and an absence of negative consequences as a result.
Trust is important to us in personal relationships, in education, in work, in politics and in almost every aspect of how we live our lives. And yet we seem to be living in a world where little is to be trusted, where facts are undermined at every turn and where we are perpetually finding that what we believed in, was ‘shady’ as my students might put it.
And what happens when trust is undermined? Lack of trust stimulates defensive behaviour in others in response, avoidance, suspicion, reluctance to invest in or believe in new ideas, unwillingness to ‘put your head above the parapet’ and dissimulation. Particularly importantly, lack of trust results in a world where all future communications tend to be regarded with scepticism and cynicism. In organisational relationships with a low level of trust, information exchange will be very poor in both directions, both from management to staff and vice versa. The result will be little cohesion in the solving of problems or working together towards a mutual goal. In such a world issues often remain unidentified and unresolved and, although such critical flaws may seem invisible and can go undetected for some time, they will eventually result in fatal damage to the fortunes of the organisation as a whole.
There is a good deal of evidence of the ways in which trust can strengthen organisations and groups, as well as ways in which its lack damages them. It is not simply a matter of creating a feel good factor. Zand’s early but seminal research (1972, p.232-3) found that ‘an increase in trust will increase the exchange of accurate, comprehensive, and timely information. Problem-solving groups with high trust will: (H1) exchange relevant ideas and feelings more openly; (H2) develop greater clarification of goals and problems; (H3) search more extensively for alternative courses of action; (H4) have greater influence on solutions; (H5) be more satisfied with their problem-solving efforts; (H6) have greater motivation to implement conclusions; (H7) see themselves as closer and more of a team; and (H8) have less desire to leave their group to join another’.
For those who have experienced their trust being misplaced, the overwhelming feeling is one of a future of at best precarious uncertainty: ‘I’m not upset that you lied to me, I’m upset that from now on I can’t believe you’ (Friedrich Nietzsche). Your staff and customers don’t want to work for or do business with an organisation they cannot trust. We want to work with, to engage with, to be with people we can trust.
Building trust is good for business too: as Gounaris (2005, p.128) notes ‘the more the client trusts the service provider, the more affectively committed to the provider the customer becomes’. Trust is at the heart of all good customer service; when it is lost, that customer or client’s business is often forever lost too. And in today’s world of rapid consumer communication of product and service intelligence, a swathe of associated customer business may also be lost. It is why companies who care little for repeat business invest so little in customer service and happily serve you substandard products. When you’re in St Mark’s Square in Venice your waiter knows he will likely never see you again and clearly doesn’t care if your experience is a good one or not. It’s why your hairdresser (if you are very lucky) tells you when the colour you’ve selected is a bad choice and even manages to do so sensitively. For trust is not strengthened by avoiding harsh truths but by being thoughtful in communicating them and both parties trusting each other’s honesty and respect. When trust in a provider is lost, no future marketing or media campaigns can redress that, however sophisticated or costly.
Ultimately trust is a necessary prerequisite of commitment, whether to a provider or an employer, but in particular in the formation of what Gounaris (2005) terms ‘affective commitment’ in contradistinction from ‘calculated commitment’ where there is an underlying monetary advantage to the customer of maintaining loyalty. If an organisation or leader can build affective commitment then that will remain true even in circumstances which are challenging, in ‘the bad times and the good’.
Trust is built upon openness, veracity and mutual sharing of issues. It is destroyed by duplicity, lack of candour and double dealing. Avoidance of hard truths does not encourage trust, as argued by Eric Sevareid, author and newscaster, it is ‘better to trust the man who is frequently in error than the one who is never in doubt’. Trust is fluid, it can ebb and flow as factors in one’s context change and new information emerges. It is, however, questionable if trust can genuinely be rebuilt once it is lost: the very language of trust is about creation and loss suggesting how deeply an emotive issue it is for most of us.
Overall research suggests that charismatic leadership behaviours and attitudes can encourage trust in team leaders. But of course trust is a complex phenomenon and can vary throughout any organisation at different levels, ‘at the team level (i.e., between team members), leadership level (i.e., between the team member and the leader), the organizational level (i.e., between the employees and the organization), and interorganizational level (i.e., between organizations)’ (Burke et al. 2007, p.610). Mayer, Davis and Schoorman have carried out seminal and influential work in this field (1995 and 2007), arguing that trust is constructed through our experience of relationships and that it is an essential precursor to trust that leaders are seen as possessing ‘ability, benevolence, and integrity’.
And of course ‘people follow leaders they trust. Without trust at best you get compliance’ (Blanchard and Stoner, 2011).

References
Blanchard, K., & Stoner, J. (2011). Full steam ahead!: unleash the power of vision in your work and your life. Berrett-Koehler Publishers.
Burke, C. S., Sims, D. E., Lazzara, E. H., & Salas, E. (2007). Trust in leadership: A multi-level review and integration. The Leadership Quarterly, 18(6), 606-632.
Ferrin, D. L. and Dirks, K. T. (2002) Trust in Leadership: Meta-Analytic Findings and Implications for Research and Practice. (2002). Journal of Applied Psychology. 87, (4), 611-628. Research Collection Lee Kong Chian School of Business. Available at: http://ink.library.smu.edu.sg/lkcsb_research/675
Gounaris, S. P. (2005). Trust and commitment influences on customer retention: insights from business-to-business services. Journal of Business research, 58(2), 126-140.
Mayer, R. C., Davis, J. H., and Schoorman, F. D. (1995). An integrative model of organization trust. Academy of Management Review, 20, 709−734.
Rousseau, D. M., Sitkin, S. B., Burt, R. S., & Camerer, C. (1998). Not so different after all: A cross-discipline view of trust. Academy of management review, 23(3), 393-404.
Schoorman, F. D., Mayer, R. C., & Davis, J. H. (2007). An integrative model of organizational trust: past, present, and future. Academy Of Management Review, 32(2), 344-354.
Zand, D. E. (1972). Trust and Managerial Problem Solving. Administrative Science Quarterly, 17(2), 229-239.

Update June 2015

It’s  been three busy months since my last post with many events and a number of overseas trips. Arguably the 50th anniversary has been a primary factor. Anniversary events of not include the RGU Student Business Ball , a staff quiz night and a fantastic evening at the Cherries Awards where not only did we present a special Cherry to an alumnus of the MSc Human Resource Management, but Anne Stevenson also won the Cherry Award for Outstanding Achievement 2015.

there are a number of forthcoming events planned in the second half of 2015 including an Alumni Day in August, a conference on business education in November, a bake off competition, and culminating in  a staff dinner in December. More details to follow.

The Facukty has also introduced monthly Town Hall sessions for staff which have been an excellent opportunity to discuss strategy and priorities, update on plans and discuss important topics such as research and course development. Attendance has been really impressive and the sessions have been very interactive. Thanks to all for participating.image image image image image image image image image

This year’s fashion organised by our Fashion Management students, chose the theme of the Golden Show, in celebration of the 50th anniversary and it was a spectacular evening with a beautiful set, wonderful entertainment and great organisation throughout. The show waist over £4700 for Down’s Syndrome Scotland. We also had a very impressive array of industry speakers delivering to the MBA Leadership Week, with our toop speaker Lord Digby Jones sponsored by BP. The inaugural Energy Management Dinner was very kindly sponsored by Balmoral Offshore and our thanks to them for doing so.

Other events in which I’ve been involved personally include participating in panels at both the Edinburgh Internatiinal Science Festivale and Oil and Gas UK’s Oil and Gas conference – in both cases on the future for the industry in the UK. I’ve also attended an academic conference – the European Conference on Fesearch Methods. This is always a great opportunity to meet with others interested in social sciences research methods and on this occasion our paper was on a comparison of approaches to demonstrating impact, in the the UK and Australia. I was also very pleased to be asked to join the judging panel for the Aberdeen Journals’ inaugural oil and gas awards which was established in 2015 to celebrate 50 years of the UKCS. M

i also attended the AACSB Conference on accreditation in Tampa Florida and I’m delighted to note that we now have our accreditation visit scheduled for November 2016. There will be lots of work involved in preparing for the visit. A final trip was to the Zurich Graduation ceremony for our Benedict School students and as ever this was a fantastic occasion and a great opportunity to meet up with our programme managers there.

Aberdeen Business School Open Day March 2015

It’s been a busy weekend at Aberdeen Business School with hundreds of visitors to our lovely Garthdee campus. Staff were on hand to answer queries and take applicants on tourse of the campus and student accommodation. Thanks to all those who visited and those who helped on the day.

   

 

OnFriday evening I attended the 2015 Student Achievement Awards which recognise student achievement in support of the RGU Association and in volunteering. It was great to see so many awards being presented. There are also awards for student Societies with this year ESN, the ERASMUS Student Newtork winning Society of the Year.

  

Spring sunshine

It’s lovely to see the Aberdeen Business School on the beautiful Robert Gordon University campus in the Spring sunshine. A reminder that the semester is progressing and that lovely Summer days aren’t far behind. We’ve enjoyed hosting a number of events this week, in particular the Energy Law and Polcy Conference, where delegates enjoyed a ceilidh and learned some traditional Scottish dances.

   

Traditional dancing and celebrations …

 

Next week as part of our ongoing 50th anniversary celebrations there’s a quiz night and the Faculty office is participating and of course highly competitively. Results will follow.

The Energy Law and Policy Conference

It was a pleasure to welcome delegates and speakers to the second Energy Law and Policy Conference this week. We are very grateful to All of the speakers including Fergus Ewing, the Scottish Government’s Minister for Business, Energy and Tourism, who opened day one of the conference with his keynote address and Professor Peter Cameron, Director of the Centre for Energy, Petroleum and Mineral Law and Policy at the University of Dundee who opened day two. Debate has been lively and conference presentations will be available on the RGU website in due course.