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7 - Public trust and trust in particular firm–stakeholder interactions: a theoretical model and implications for management

Published online by Cambridge University Press:  05 July 2014

By
Jared D. Harris  and
Andrew C. Wicks
Edited by
Jared D. Harris ,
Brian Moriarty  and
Andrew C. Wicks
Jared D. Harris
Affiliation:
University of Virginia
Andrew C. Wicks
Affiliation:
University of Virginia
Jared D. Harris
Affiliation:
University of Virginia
Brian Moriarty
Affiliation:
University of Virginia
Andrew C. Wicks
Affiliation:
University of Virginia
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Summary

Executive summary

The situation

Leaders need a better understanding of “public trust,” what factors influence it, and what that means for organizational action.

We understand a great deal about organizational trust, but research generally assumes that all parties view trust in organizations the same way. Stakeholder trust – or, an analysis of differential stakeholder approaches to trust – has been relatively unexplored, with a few notable exceptions.

Key questions

What role can stakeholder theory play in understanding public trust in the institution of business?

How do different stakeholders conceptualize organizational trust, and what impact do these differences have? What does a better understanding of stakeholder trust tell us about public trust in business?

New knowledge

Trust has at least two key components – trust that is based upon an assessment of integrity or goodwill and trust that is based on an assessment of competence. Competence-based trust may be a higher priority in certain stakeholder relationships, whereas in others goodwill-based trust may be more important. Recognizing and understanding which aspect of trust has priority in particular stakeholder relationships, and understanding how those stakeholders balance these two aspects of trust in their decisions, would be highly useful to business leaders.

Key lessons

At the individual level, trust in the institution of business and trust in a particular business are distinct concepts.

Stakeholder roles (e.g., customer, employee, investor) differ qualitatively and engender different areas of emphasis when it comes to organizational trust; this has an important bearing on trust in business as an institution.

Information

Type
Chapter
Information
Public Trust in Business , pp. 179 - 202
Publisher: Cambridge University Press
Print publication year: 2014

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