Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-5cf477f64f-xc2pj Total loading time: 0 Render date: 2025-04-07T21:08:13.916Z Has data issue: false hasContentIssue false

5 - Public trust in business and its determinants

Published online by Cambridge University Press:  05 July 2014

By
Michael Pirson ,
Kirsten Martin  and
Bidhan L. Parmar
Edited by
Jared D. Harris ,
Brian Moriarty  and
Andrew C. Wicks
Michael Pirson
Affiliation:
Fordham Schools Business
Kirsten Martin
Affiliation:
George Washington University School of Business
Bidhan L. Parmar
Affiliation:
University of Virginia’s Darden School of Business
Jared D. Harris
Affiliation:
University of Virginia
Brian Moriarty
Affiliation:
University of Virginia
Andrew C. Wicks
Affiliation:
University of Virginia
Get access

Summary

Executive summary

The situation

As the importance of public trust in business becomes ever more obvious to both practitioners and scholars, the levels of generalized trust in business have reached alarmingly low levels.

Key questions

Is an emerging trust gap – where the need for trust outpaces the actualization of trust in business – likely to impair successful business development? What are the determinants of public trust in the institution of business? Do stakeholder-role-specific perspectives impact public trust in business? If so, how do they do so?

New knowledge

Men tend to be more trusting of business than are women. Age plays a role in people’s trust in business, with those 23 years old or younger being much more likely to trust business.

While it is commonly supposed that the public has greater trust in smaller companies, this study finds that changing the size of the firm from small, regional, national, or global does not substantially “move the dial” for trust. The authors’ research, however, does find that public trust in business will be affected by a firm’s industry.

Key lessons

Public trust in the institution of business matters to all companies, since it colors stakeholder trust in particular businesses.

Age and gender play a role in stakeholder trust. Business leaders should be cognizant of these differences when assessing the status of their relationships with various stakeholders.

Type
Chapter
Information
Public Trust in Business , pp. 116 - 153
Publisher: Cambridge University Press
Print publication year: 2014

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Barber, B. (1983), The Logic and Limits of Trust. New Brunswick, NJ: Rutgers University Press.Google Scholar
Barney, J. B. and Hansen, M. H. (1994), ‘Trustworthiness as a source of competitive advantage.’ Strategic Management Journal, 15, 175–190.CrossRefGoogle Scholar
Blois, K. J. (1999), ‘Trust in business to business relationships: an evaluation of its status.’ Journal of Management Studies, 36(2), 197–215.CrossRefGoogle Scholar
Bohnet, I., and Zeckhauser, R. (2004), ‘Trust, risk and betrayal.’ Journal of Economic Behavior and Organization, 55(4), 467–484.CrossRefGoogle Scholar
Buchan, N., Croson, R., and Solnick, S. (2008), ‘Trust and gender: an examination of behavior and beliefs in the Investment Game.’ Journal of Economic Behavior and Organization 68, 466–476.CrossRefGoogle Scholar
Clegg, C., Unsworth, K., Epitropaki, O., and Parker, G. (2002), ‘Implicating trust in the innovation process.’ Journal of Occupational and Organizational Psychology, 75(4), 409–423.CrossRefGoogle Scholar
Coleman, J. S. (1984), ‘Introducing social structure into economic analysis.’ American Economic Review, 74, 84–88.Google Scholar
Collins, J. and Porras, J. (2002). Built to Last. New York: HarperCollins.Google Scholar
Cook, K. and Schilke, O. (2010), ‘The role of public, relational and organizational trust in economic affairs.’ Corporate Reputation Review, 13, 98–109.CrossRefGoogle Scholar
Cook, K. S., Hardin, R., and Levi, M. (2005), Cooperation without Trust?. New York: Russell Sage Foundation.Google Scholar
Dacin, M. T. 1997. ‘Isomorphism in context: the power and prescription of institutional norms.’ Academy of Management Journal, 40(1), 46–81.Google Scholar
Davis, F. D., Schoorman, F. D., Mayer, R. C., and Tan, H. H. (2000), ‘The trusted general manager and business unit performance: empirical evidence of a competitive advantage.’ Strategic Management Journal, 21(5), 563–576.3.0.CO;2-0>CrossRefGoogle Scholar
Dervitsiotis, K. N. (2003), ‘Beyond stakeholder satisfaction: aiming for a new frontier of sustainable stakeholder trust.’ Total Quality Management, 14(5), 511–524.Google Scholar
DiPiazza, S. A. (2002), Building Public Trust – The Future of Corporate Reporting. New York: Wiley.Google Scholar
Dirks, K. T. (1999), ‘The effects of interpersonal trust on work group performance.’ Journal of Applied Psychology, 84, 445–455.CrossRefGoogle ScholarPubMed
Dirks, K. T. and Ferrin, D. L. (2001), ‘The role of interpersonal trust in organizational settings.’ Organization Science, 12(4), 450–467.CrossRefGoogle Scholar
Doney, P. M. and Cannon, J. P. (1997), ‘An examination of the nature of trust in buyer–seller relationships.’ Journal of Marketing, 61, 35–51.CrossRefGoogle Scholar
Eckel, C. and Wilson, R. (2003), ‘Conditional trust: sex, race, and facial expressions in an experimental trust game.’ Virginia Tech University Department of Economics Working Paper Series.
Edelman, R. (2011), Trust Barometer 2011. In E. P. Relations (ed.), .
Enz, C. (1988), ‘The role of value congruity in intraorganizational power.’ Administrative Science Quarterly, 33, 284–304.CrossRefGoogle Scholar
Fichman, M. and Goodman, P. S. (1996), ‘Customer supplier ties in interorganizational relations.’ In Cummings, B. M. S. L. L. (ed.), Research in Organizational Behavior. Greenwich, CT: JAI Press, vol. XVIII, 286–329.Google Scholar
Fombrun, C. J. (1996), Reputation: Realizing Value from the Corporate Image. Boston, MA: Harvard Business School Press.Google Scholar
Fombrun, C. J. and van Riel, C. (2003), Fame and Fortune – How Successful Companies Build Winning Reputations. Upper Saddle River, NJ: Financial Times-Prentice Hall.Google Scholar
Forum, W. E. (2005), Decline in Trust, 2006: .
Forum, W. E. (2006), Decline in Trust, 2006: : World Economic Forum.
Fukuyama, F. (1995), Trust: The Social Virtues and the Creation of Prosperity. New York: Simon & Schuster.Google Scholar
Ganesan, S. (1994), ‘Determinants of long-term orientation in buyer–seller relationships.’ Journal of Marketing (April), 1–19.CrossRef
Giddens, A. (1984), The Constitution of Society: Outline of the Theory of Structuration. Cambridge: Polity.Google Scholar
Gilligan, C. (1982), In a Different Voice: Psychological Theory and Women’s Development. Cambridge, MA: Harvard University Press.Google Scholar
Glaeser, E., Laibson, D., Scheinkman, J., and Soutter, C. (2000), ‘Measuring trust.’ Quarterly Journal of Economics, 115(3), 811–846.CrossRefGoogle Scholar
Gulati, R. (1995), ‘Does familiarity breed trust? The implications of repeated ties for contractual choice in alliances.’ Academy of Management Journal, 38(1), 85–112.Google Scholar
Gulati, R. and Westphal, J. D. (1999), ‘Cooperative or controlling? The effects of CEO–board relations and the content of interlocks on the formation of joint ventures.’ Administrative Science Quarterly, 44, 473–506.CrossRefGoogle Scholar
Hardin, R. (2002), Trust and Trustworthiness. New York: Russell Sage Foundation.Google Scholar
Holste, J. S. and Fields, D. (2005), ‘The relationship of affect and cognition based trust with sharing and use of tacit knowledge.’ Academy of Management Best Conference Paper, MED, B3–B7.
Jasso, G. (2006), ‘Factorial survey methods for studying beliefs and judgments.’ Sociological Methods and Research, 34(3), 334–423.CrossRefGoogle Scholar
Jensen, M. (2003), ‘The role of network resources in market entry: commercial banks’ entry into investment banking, 1991–1997’. Administrative Science Quarterly, 48, 466–497.CrossRefGoogle Scholar
Kluckhohn, C. (1951), ‘Values and value-orientations in the theory of action: an exploration in definition and classification.’ In Parsons, T. and Shils, E. (eds.), Toward a General Theory of Action. Cambridge, MA: Harvard University Press, 388–433.Google Scholar
Levitt, S. D. and List, J. A. (2007), ‘What do laboratory experiments measuring social preferences reveal about the real world?’ Journal of Economic Perspectives, 21(2), 153–174.CrossRefGoogle Scholar
Lewicki, R. J. and Bunker, B. B. (1996), ‘Developing and maintaining trust in work relationships.’ In Kramer, R. M., and Tyler, T. R. (eds.), Trust in Organizations: Frontiers of Theory and Research. Thousand Oaks, CA: Sage, 114–139.CrossRefGoogle Scholar
Lewis, D. J. and Weigert, A. (1985), ‘Trust as a social reality.’ Social Forces, 63(4), 967–985.CrossRefGoogle Scholar
Lewis, J. D. (1999), Trusted Partners – How Companies Build Mutual Trust and Win Together. New York: Simon & Schuster.Google Scholar
Luhmann, N. (1979), Trust: A Mechanism for the Reduction of Social Complexity. New York: Wiley.Google Scholar
Lynch, J. (1982), ‘The concept of external validity.’ Journal of Consumer Research, 9(3), 240–244.CrossRefGoogle Scholar
McAllister, D. J. (1995), ‘Affect- and cognition-based trust as foundations for interpersonal cooperation in organizations.’ Academy of Management Journal, 38(1), 24–59.Google Scholar
McKnight, D. H. and Chervany, N. L. (2002), ‘What trust means in e-commerce customer relationships: an interdisciplinary conceptual typology.’ International Journal of Electronic Commerce, 6(2), 35–53.CrossRefGoogle Scholar
McKnight, D. H., Cummings, L. L., and Chervany, N. L. (1998), ‘Initial trust formation in new organizational relationships.’ Academy of Management Review, 23(3), 473–490.CrossRefGoogle Scholar
Mayer, R. C., Davis, J. H., and Schoorman, F. D. (1995), ‘An integrative model of organizational trust.’ Academy of Management Review, 20, 709–734.CrossRefGoogle Scholar
Mayer, R. C. and Gavin, M. B. (2005), ‘Trust in management and performance: who minds the shop while the employees watch the boss?’ Academy of Management Journal, 48(5), 874–888.CrossRefGoogle Scholar
Morgan, R. M. and Hunt, S. D. (1994), ‘The commitment–trust theory of relationship marketing.’ Journal of Marketing, (58), 20–38.CrossRef
Nahapiet, J. and Ghoshal, S. (1998), ‘Social capital, intellectual capital, and the organizational advantage.’ Academy of Management Review, 23(2), 242–266.CrossRefGoogle Scholar
Nock, S. and Gutterbock, T. M. (2010), ‘Survey experiments.’ In Wright, J. and Marsden, P. (eds.), Handbook of Survey Research, 2nd edn. Bingley, UK: Emerald, 837–864.Google Scholar
Noteboom, B. (1996), ‘Trust, opportunism and governance: a process and control model.’ Organizational Studies, 17(6), 985–1010.CrossRefGoogle Scholar
Osterloh, M. and Frey, B. S. (2000), ‘Motivation, knowledge transfer, and organizational forms.’ Organization Science, 11(5), 538–550.CrossRefGoogle Scholar
Parsons, T. (1961), Theories of Society: Foundations of Modern Sociological Theory. New York: Free Press of Glencoe.Google Scholar
Paxton, P. (1999), ‘Is social capital declining in the United States: a multiple indicator assessment.’ American Journal of Sociology, 105(1): 88–127.CrossRefGoogle Scholar
Pirson, M. (2007), Facing the Trust Gap: How Organizations Can Measure and Manage Stakeholder Trust. St. Gallen: University of St. Gallen.Google Scholar
Pirson, M. and Malhotra, D. (2011), ‘Foundations of organizational trust: what matters to different stakeholders?’ Organization Science, 22(4), 1087–1104.CrossRefGoogle Scholar
Politis, J. D. (2003), ‘The connection between trust and knowledge management: what are its implications for team performance.’ Journal of Knowledge Management, 7(5), 55–66.CrossRefGoogle Scholar
Poppo, L. and Schepker, D. J. (2010), ‘Repairing public trust in organizations.’ Corporate Reputation Review, 13, 124–141.CrossRefGoogle Scholar
Porter, M., and Kramer, M. (2011), ‘The big idea: creating shared value.’ Harvard Business Review, January–February(1), 1–17.
Putnam, R. D. (2000), Bowling Alone: The Collapse and Revival of American Community. New York: Simon & Schuster.CrossRefGoogle Scholar
Rokeach, M. (1973), The Nature of Human Values. New York: Free Press.Google Scholar
Rossi, P. and Nock, S. (eds.) (1982), Measuring Social Judgments: The Factorial Survey Approach. Beverly Hills, CA: Sage.Google Scholar
Rotter, J. B. (1971), ‘Generalized expectancies for interpersonal trust.’ American Psychologist, (26), 443–452.CrossRef
Rotter, J. B., Chance, J. E., and Phares, E. J. (1972), Applications of a Social Learning Theory of Personality. New York: Holt, Rinehart & Winston.Google Scholar
Rousseau, D. M., Sitkin, S. B., Burt, R. S., and Camerer, C. (1998), ‘Not so different after all: a cross-discipline view of trust.’ Academy of Management Review, 23(3), 393–405.CrossRefGoogle Scholar
Saparito, P. A., Chen, C., and Sapienza, H. J. (2004), ‘The role of relational trust in bank–small firm relationships.’ Academy of Management Journal, 47(3), 400–410.Google Scholar
Schwartz, S. H. (1994), ‘Are there universal aspects in the content and structure of values?’ Journal of Social Issues, 50: 19–45.CrossRefGoogle Scholar
Schwartz, S. H. and Sagiv, L. (1995), ‘Identifying culture-specifics in the content and structure of values.’ Journal of Cross-Cultural Psychology, 26(1), 92–116.CrossRefGoogle Scholar
Sheppard, B. H. and Sherman, D. A. (1998), ‘The grammars of trust: a model and general implications.’ Academy of Management Review, 23(3), 422–437.CrossRefGoogle Scholar
Simmel, G. (1908), Soziologie. Untersuchungen über die Formen der Vergesellschaftung. Berlin: Duncker and Humblot Verlag.Google Scholar
Sprenger, R. K. (2002), Vertrauen führt- worauf es im Unternehmen wirklich ankommt. Frankfurt am Main: campus.Google Scholar
Swift, T. (2001), ‘Trust, reputation and corporate accountability to stakeholders.’ Business Ethics: A European Review, 10(1), 15–26.CrossRefGoogle Scholar
Sztompka, P. (1999), Trust: A Sociological Theory. Cambridge, UK: Cambridge University Press.Google Scholar
Tsai, W. and Ghoshal, S. (1998), ‘Social capital and value creation: the role of intrafirm networks.’ Academy of Management Journal, 41(4), 464–477.Google Scholar
Turnbull, S. (2002), A New Way to Govern – Organizations and Society after Enron. London: New Economics Foundation.Google Scholar
Uzzi, B. (1997), ‘Social structure and competition in interfirm networks: the paradox of embeddedness.’ Administrative Science Quarterly, 42, 35–67.CrossRefGoogle Scholar
Wallander, L. (2009), ‘25 years of factorial surveys in sociology: a review.’ Social Science Research, 38, 505–520.CrossRefGoogle Scholar
Whitener, E. M., Brodt, S. E., Korsgaard, M. A., and Werner, J. M. (1998), ‘Managers as initiators of trust: an exchange relationship framework for understanding managerial trustworthy behavior.’ Academy of Management Review, 23(3), 513–531.CrossRefGoogle Scholar
Williams, M. (2001), ‘In whom we trust: group membership as an affective context for trust development.’ Academy of Management Journal, 28(3), 377–396.Google Scholar
Williamson, O. E. (1988), ‘Corporate finance and corporate governance.’ Journal of Finance, 43(3), 567–591.CrossRefGoogle Scholar
Williamson, O. E. (1993), ‘Calculativeness, trust, and economic organization.’ Journal of Law and Economics, 36(1), 453–486.CrossRefGoogle Scholar
Yaniv, E., and Farkas, F. 2005. ‘The impact of person–organization fit on the corporate brand perception of employees and customers.’ Journal of Change Management, 5(4), 447–461.CrossRefGoogle Scholar
Zucker, L. G. (1986), ‘Production of trust: institutional sources of economic structure.’ In Cummings, B. M. S. L. L. (ed.), Research in Organizational Behavior. Greenwich, CT: JAI Press, vol. VIII, 53–111.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×