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Organizational Trust Essay

Knowledge-based trust is based on the behavioral predictability that comes from previous interactions (Kramer & Tyler, 1996). It exists when there is enough information about someone to accurately predict their probable behavior. It relies on data rather than deterrence. Knowledge of the other parties and the predictability of their behavior replace the policies, punishments and legal arrangements typical to deterrent based trust.

Identification-based trust is the achievement of trust on the basis of identification with the other (Herriot, Hirsh, & Reilly, 1998). A party can be allowed to act as an agent for the other and to substitute for that person in interpersonal transaction. Trust exists when both the parties understand each others’ motives and appreciate the other’s demands and desires. This mutual understanding is developed to the extent that each party can effectively and efficiently act for the other. Antecedents of Organizational Trust

Previous studies have shown that psychological contract breach (Costa 2001; Robinson, 1996), leadership style (; Mankin & Perry, 2004; Connel & Zeffane, 2003) and organizational communication (Gardner & Moynihan; O’Reilly & Robert, 1974, 2005; Tsai & Ghoshal, 1998) are antecedents of organizational trust. Psychological contract. Psychological contract is an individual’s belief about the terms and conditions of a

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reciprocal exchange agreement between that person and another party (Rousseau, 1989 as cited by Robinson, 1996).

Fulfillment of psychological contract would result to trust between both parties (Robinson, 1996). The social exchange framework is the theoretical explanation linking psychological contracts and trust. When the organizations fulfills the terms and conditions of employment, this increase the level of organizational trust. Employees would perceive that the organization is benevolent and does not exploit its works. Leadership style. Leadership style are the ways on how to influence individual/group toward the achievement of goals (Robbins, 2005).

Prior studies have shown that vision, empathy, consistency, and integrity in a leader could foster the development of trust (Bennis & Townsend, 1995) For example, leaders who possess honesty and integrity will trigger the employees to trust the organization. Honesty and integrity are two traits that are found to be consistently associated with leadership. Thus, positive leadership styles generates organizational trust (Mayer & Davis, 1995). Organizational communication. It is a formal study of communication as a process through which information is circulated and exchanged throughout the organization (Schmerhorn, 2001).

A study conducted by O’Reilly and Robert (1974) has shown that open communication is related to organizational trust. Open communication within the organization is expected to enhance trust between the employee and the employer. Furthermore, Robert and O’Reilly (1974) stated that organizations have lower level of communication within the company would result to a lower trust for the reason that employee confidence would significantly be affected in terms of not reacting to their duties to communicate in the organization.

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