1 The concept of trust
In this section, you will be introduced to the concept of trust in organisations.
Activity 1 Introduction to trust
Start by watching the video featuring Dr Graham Dietz, one of the leading academics in the research on trust. Graham gives an overview of the multitude of ways that trust is important in organisations. As you watch the video note down your own thoughts about what ‘trust’ within the organisational setting means for you. Consider how something so individual can be meaningful for organisations.
Transcript
DR. GRAHAM DIETZ: My name is Dr. Graham Dietz, and I work at Durham University Business School, and I'm also one of the partners at Crucial Connexions. And the research that I do and the consultancy that I do is all about what inspires trust inside the organisation. And it's about helping HR functions to understand more the dynamics of trust and how the dynamics of trust can help performance and employee well being.
There are multiple relationships that are going on inside organisations, but also outside organisations. All of them rely on trust. Trust is crucial for HRM, because everything that HR does is about building that trusting relationship between the employee and the employer. The way in which you appraise people the way in which you pay people, the way in which you train people, the job design, even recruitment and selection.
All of this is about building a trusting relationship between the employee and the employer. And so HR has a vital role to play in enhancing trust levels inside the organisation. And if the employees feel that they are trusted and they in turn trust their managers, they can reciprocate in kind with superior customer service, sales, innovation. There are a number of key metrics that have been proven to have a decisive link with employee trust.
Trust suffuses all of these commercial relationships. And if we can understand better how trust is built and how trust is maintained, we can manage those relationships better and that will help business to thrive. If you trust somebody, you have confident reliance in them in conditions of risk and uncertainty. Several studies have shown now that if people trust their leaders, they reciprocate in kind with demonstrating superior customer service, which translates into better sales, which translates into better performance.
We worked with a leading housing agency in London and we trained the entire workforce, from the senior executive team down to the maintenance staff, in what trust is and how trust is so important for their working relationships and their working performance. And within three months of that training, staff satisfaction had gone up, customer satisfaction had gone up. And when they looked at the key performance indicators for maintenance and for dealing with customer complaints, for example, they found that the organisation had become more efficient, more effective, and also understood much more about the customer needs and was much more responsive.
There was a tangible impact within three months of the Trust Training Programme, and that's some of the things that we can offer. I think trust is absolutely crucial to the way in which all organisations function. All organisations thrive and rely on the relationships that they have internally and the relationships that they have externally. Without trust, you have no business.
Feedback
The interest in the concept of trust within organisations has not occurred in a vacuum. A number of specific contextual factors have led to the almost ‘holy grail’ status of the concept and in turn each of the contextual factors changed organisational dynamics, which have served to further highlight the importance of organisational trust.
Underpinning the value of trust is the importance of effective cooperation in organisational life. In the simplest of terms, trust is key because it enables cooperation (Tyler, 2003). While cooperation has always been important in organisations, emerging trends in organisational dynamics have pushed this to the foreground. Changes in the nature of work have made ‘old’ styles of securing cooperation more difficult to maintain. Additionally, the nature of cooperation has changed; there is now a greater emphasis on more ‘voluntary forms of cooperation’, which can be more difficult to achieve (Tyler, 2003, p. 557). Old-style ‘command and control’ strategies for securing motivation are no longer considered sufficient against the backdrop of organisational changes.
Processes of globalisation, flexibilisation of labour relations, continuous change and the virtualisation of organisational forms mean that the relations between people have become looser and behaviours are less easy to monitor. Within firms, hierarchical relationships are being replaced by lateral relationships (e.g. matrix structures and teamwork), further emphasising a growing need for the voluntary cooperation and ‘extra-role behaviours’ (Bijlsma and Koopman, 2003, p. 543) associated with trustful relations.
The dynamics of contemporary organisational trends and the resultant implications for trust are the focus of exploration throughout this course.
By the end of this course, we want you to be able to fully answer the following questions: ‘What do we mean when we talk about “trust” within organisations’?; ‘Why is trust important in organisations?’ and ‘What are the consequences of trust in organisations?’, moreover, ‘What are some of the likely consequences of a lack of trust within organisations?’.