Trust Within and Between Organizations. Conceptual and Empirical Applications. - Review - book review

Organization Studies, March, 2001 by Richard Butler

Christel Lane and Reinhard Bachmann (eds.): Trust Within and Between Organizations. Conceptual and Empirical Applications

1998, Oxford: Oxford University Press. 334 pages.

The pressures upon the management of organizations due to the complexity and competitiveness of the late twentieth century business environment have generated an interest in understanding the processes by which co-operative relationships can be more effectively managed. In one sense, trust can be viewed as a lubricant to allow the machinery of large-scale organization to operate more efficiently and with less friction. However, while the interest in trust as a route to economic performance undoubtedly pervades this book, the idea that trust may be viewed as a 'good-thing', to be pursued as a value for its own sake, is also an important issue that receives some attention.

There are ten chapters in the book, each written by authors who have either been researching on trust directly, as their major research question, or for whom trust is an important concept in understanding another phenomenon. Christel Lane introduces these chapters in a review that identifies the major issues and problems in conceptualizing trust and which provides the reader with a useful orientation for the subsequent chapters. We also immediately get a feel for the complexity of the issues facing us in trying to get to grips with the notion of trust. There are many different uses and types of trust developed by the various authors to which the concept is applied. Most chapters have a welcome empirical base, either using a comparative survey methodology or case studies -- much of the available literature on trust, useful as it may be in stimulating thought, is synthetic rather than grounded in data.

Nevertheless, the first chapter by Jorg Sydow is a theoretical one on the constitution of inter-organizational trust, but it helps us get in tune with the issues raised in subsequent chapters. He notes the rational or calculative side of trust and the notion that trust makes work within organizations easier, but also emphasizes that there is a moral dimension to trust. Drawing upon Gidden's structuration theory, he develops a recursive view of social praxis in which trust has an essential part to play both as a consequence and a cause of co-operation. This is a useful chapter, because it highlights one of the major confusions evident in the literature, namely, whether trust is a dependent or an independent variable.

The all important, but neglected, question of the relationship between trust and power is investigated in Chapter 2 by Cynthia Hardy, Nelson Phillips and Tom Lawrence within the framework of a case study of inter-organizational relations between Canadian refugee organizations. They see trust as a risky investment and one that can easily slide into using trust as a facade to hide asymmetric power relations.

Chapter 3, by Mari Sako, tackles head-on the question of whether trust improves business performance. This is approached by means of an extensive survey of automotive suppliers in Japan, the United States and Europe using a questionnaire that operationalized contractural, competence and good will trust, fairness, and customer opportunism. Performance was operationalized by costs, just-in-time delivery and joint problem solving. A number of conclusions are made, some supporting the author's initial hypotheses, such as that technical goodwill enhances technical assistance, while some conclusions run counter to initial hypotheses, such as that written contracts foster goodwill trust rather than, as more usually assumed, degrade trust. Undoubtedly, there is a lot more yet to emerge from this major study, but this chapter highlights one of the major methodological problems in relating trust to performance. Trust, because it is 'a good-thing', tends to become a surrogate for performance.

A rather more dynamic view of trust is re-introduced in Chapter 4 by Julia Porter Liebeskind and Amalya Lumerman Oliver in their study of interactions and property rights within a scientific laboratory. They emphasize the need to see trust in terms of the credibility of a social community rather than as a characteristic of an individual. It is only when we contextualize individuals within a complex set of social relations, where individual interests are pursued, that we begin to understand the essence of trust.

Simon Deakin's and Frank Wilkinson's Chapter 5 on the economics of trust gives a good succinct review of the issues surrounding contract law and makes some useful connections with institutional theory. They contrast the differences in relations governed by formal regulative means and those governed by social norms, and then compare contractual relations in their study of the kitchen furniture and mining machinery industries in Britain, Germany and Italy. They find that country differences are more important than industry differences in determining the processes by which trust develops. They also introduce us to the usefulness of national comparisons in developing both theoretical and empirical frameworks for the study of trust. The way in which the legal systems work in different countries is relatively observable in comparison to vaguer concepts of cultural differences in the development of trust, which makes them a useful unit of analysis for research into international differences on trust.