EXECUTIVE SUMMARY
the situation
The relationship between organizations and their stakeholders has become increasingly problematic due to breaches of trust. This trust problem is at the heart of the recent financial crisis in which individuals and whole societies were shown to be highly dependent on large corporations. For example, banks have control over savings, mortgages, and pensions, while – individually and often even collectively – affected stakeholders have no means of control over these parties.
key questions
What is the role of third parties in trust repair? Given power imbalances, can trust be repaired, and if so, how?
new knowledge
This chapter presents one of the first empirical tests of the role of third parties in trust repair.
Third parties are tasked with repairing damage to trust that results from three disruptive events among partner organization: legal haggling, misuse of power, and cultural distance.
With regard to legal haggling, the process of drawing up a contract and its actual use tend to evoke distrust unless a third party steers it clear from suspicion. Third parties can help eliminate misunderstandings, clarify causes of disappointed expectations, and help negotiate altered conditions. Under the guidance of a third party, legal haggling need not harm trust.