It has been a quarter century since issues of trust began attracting the attention of those concerned with business and the management of business (cf. Zand). During the quarter century prior to that point, trust was particularly the concern of psychologists and those focused on issues of international security and relations between the superpowers. It is ironic, then, that at a time when there is increased trust between the superpowers, there seems to be less trust by many within and between businesses. Downsizing, mergers, outsourcing, and reengineering have led to mistrust by many employees of the business for which they work (or worked). Dangerous products, invasive marketing, and efforts to pressure people to agree to unneeded repairs have fostered mistrust between customers and businesses. Takeovers, leveraged buyouts and corporate espionage have fostered mistrust among businesses.

And yet the importance of trust within and between business organizations, both nationally and internationally, is increasingly recognized. Trust is said not only to reduce transaction costs, make possible the sharing of sensitive information, permit joint projects of various kinds, but also to provide a basis for expanded moral relations in business. Indeed, many (such as Gewirth and Hosmer) have claimed that ethics and trust are bound up together. One CEO has even claimed that “ethics is simply and ultimately a matter of trust. People act in their economic self-interest. But a system based on that fact must also be grounded on mutual trust, among individuals and among organizations” (Loucks, 1989: 55).

In light of these apparently conflicting movements of both extensive mistrust and expanding trust, as well as the strong claims made on behalf of trust, it is not surprising that trust has become an important topic for those studying business and its values.

In this essay, we argue that trust is a dynamic emotional relationship which entails responsibility. Trust is not a social substance, a medium, or a mysterious entity but rather a set of social practices, defined by our choices, to trust or not to trust. We discuss the differences and the relationship between trust and trustworthiness, and we distinguish several different kinds or “levels” of trust, simple trust, basic trust, “blind” trust, and authentic trust. We then argue that trust as an emotional practice, can be “willful,” voluntary and a matter of personal responsibility.

This article defines and analyzes the nature of a trust relation. It specifically examines the internal and external morality of trust relations and the ethical limits of those relations. It examines both the ends pursued by trust relations as well as the means by which trust is developed. It shows that the ends need to be evaluated by traditional ethical theories, while the ethical constraints of the trust process depend upon the specific bases of trust. In addition, the consequences of the trust process differ in their impact on the trustor and third parties. Despite the popularity of trust in the literature, this study recommends caution in the use of trust as an ethical basis for economic organization. The optimal form of trust, although still subject to limitations, is fairness-based trust.

This paper explores the moral responsibility a manager has toward a worker. The primary focus is upon those relationships where workers have been led to trust their managers. I argue that in such circumstances, models of the employment relationship based on rational self-interest fail to adequately describe the behavior of the actors. Rather, I show through case studies how trust operates in these environments to supercede pure, self-interested behavior. I then explore the moral implications of this finding relative to those managers who lead their workers to trust them. I make the claim that these managers cannot adequately discharge their moral obligations unless they take on positive moral obligations. I cast this responsibility as one of positive care for some portion of worker welfare and briefly discuss what this might mean in practice.

In recent years, two topics have made prominent debuts in the management literature—“virtual” corporations and trust within and among organizations. These two themes are related in that trust is important to the success of the virtual corporation. This article argues that confidence in the development of virtual corporations may be premature because of what we call the Virtual Corporation Paradox. This paradox can be succinctly stated: the short-term, transient deal-making on which the efficiency of the virtual corporation rests greatly impedes the development of the mutually trusting and cooperative relationships on which its success depends. We examine both economic and sociological explanations for the emergence of trust in similar situations and find both deficient. We conclude that the success of virtual corporations will ultimately depend on an ethics-based form of corporate “character” that allows firms to develop trusting relationships without the usual safeguards or social norms.

This paper argues that trust is one of the crucial bases for an international business morality. To defend this claim, it identifies three prominent senses of trust in the current literature and defends one of them, viz., what I term the “Attitudinal view.” Three different contexts in which such trust plays a role in business relationships are then described, as well as the conditions for the specific kinds of Attitudinal trust which appear in those contexts. Difficulties for the international development of these forms of trust are briefly characterized and some of the possible responses are noted. Finally, the paper identifies morally important features of trust and some of their implications for an international business morality.