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The topic of trust is generating increased interest in organizational studies. Gambetta (1988) noted that "scholars tend to mention [trust] in passing, to allude to it as a fundamental ingredient or lubricant, an unavoidable dimension of social interaction, only to move on to deal with less intractable matters" (unnumbered foreword). The importance of trust has been cited in such areas as communication (Giffin, 1967), leadership (Atwater, 1988), management by objectives (Scott, D., 1980), negotiation (Bazerman, 1994), game theory (Milgrom & Roberts, 1992), performance appraisal (Cummings, 1983), labor-management relations (Taylor, 1989), and implementation of self-managed work teams (Lawler, 1992).
Although a great deal of interest in trust has been expressed by scholars, its study in organizations has remained problematic for several reasons: problems with the definition of trust itself; lack of clarity in the relationship between risk and trust; confusion between trust and its antecedents and outcomes; lack of specificity of trust referents leading to confusion in levels of analysis: and a failure to consider both the trusting party and the party to be trusted. The purpose of this article is to illuminate and resolve these problems in the presentation of a model of trust of one individual for another. Through this model we propose that this level of trust and the level of perceived risk in the situation will lead to risk taking in the relationship.
Need for Trust
Working together often involves interdependence, and people must therefore depend on others in various ways to accomplish their personal and organizational goals. Several theories have emerged that describe mechanisms for minimizing the risk inherent in working relationships. These theories are designed to regulate, to enforce, and/or to encourage compliance to avoid the consequences of broken trust. In order to avoid self-serving behaviors as well as potential litigation, many firms utilize control mechanisms and contracts, and they alter their decision-making processes, internal processes, reward systems, and structures (Jensen & Meckling, 1976; Meyer, 1983; Sitkin & Bies, 1994; Williamson, 1975). Legalistic remedies have been described as weak, impersonal substitutes for trust (Sitkin & Roth, 1993), which may bring organizational legitimacy, yet often are ineffective (Argyris, 1994: Donaldson & Davis, 1991; Granovetter, 1985; Sitkin & Roth, 1993).
Current trends in both workforce composition and the organization of the workplace...