Who Can You Trust? UVic Researcher Illuminates Issues of Trust in Business Organizations

A UVic business professor is turning the tables on trust. Research on trust within organizations usually focuses on trust building - Dr. A. R. Elangovan is studying trust erosion.

"People assume that when you start a new relationship, trust is zero," says Elangovan. But studies show that employees and customers often enter business relationships with a moderate to high level of faith in others. If people already exhibit high levels of trust, the issue becomes not just building it, but maintaining it.

Elangovan is studying trust in organizations to develop a theory of how trust breaks down within them. He spent the past year in Austria working with European colleagues to establish a series of six studies that explore the dynamics of trust erosion. The first study was completed in December; others are in the pre-test stages and will be completed, both in Europe and in Canada, over the next two years.

Elangovan's current research on trust erosion builds on his prior work on betrayal of trust in organizations. Betrayal of trust is not an issue that people are always willing to discuss. "It's hard to get people to talk about the last time they betrayed someone," says Elangovan. "Although everyone was willing to talk about the last time someone betrayed them."

To gather data for their studies, Elangovan and his team have constructed questionnaires using a variety of trust-violation scenarios. In one scenario, test subjects are asked to indicate how many chances they are willing to give colleagues before they lose trust in them completely. In another, they must decide if receiving an apology, explanation or remedy after a trust breakdown affects their trust levels differently. In all cases, Elangovan measures the difference in initial trust and end trust, accounting for any differences in forgiveness of his participants.

After one's trust has been betrayed, "there are a bunch of factors that people, probably subconsciously, zoom through in their head as they decide whether to continue to trust," says Elangovan. "Our focus is to identify these factors and try to figure out the roles they play."

What has he found so far? In his first study, Elangovan hypothesized that trust would diminish more if a colleague was unwilling to fulfill an obligation as opposed to being unable to do so. And he presumed that participants would give three chances, similar to the three-strike rule.

His first hypothesis was right. Someone's willingness as opposed to their inability to fulfill expectations did have an effect on trust levels. But he was wrong about the second hypothesis - the biggest drop in trust happened after the second violation of trust, showing that it's two strikes and you're out.

Trust is an important issue in both new and old economies. Increased inter-dependence and the fast pace of start-up companies, especially "dot coms," has forced companies to rely on a network of businesses.

"Relationships and alliances, especially in the information technology sector, are created very quickly, and the cost of trying to monitor all the transactions is very high," says Elangovan. "It becomes business on a handshake."

They are important handshakes. Only skeletal arrangements can be put into a contract, forcing people to trust each other in order to move forward. Without trust, things slow down to a level where every move is monitored.

"The only thing that keeps these companies going and keeps them together is that they trust each other. They have to trust because they can't stop to put everything down on paper," says Elangovan, referring to fast start-up companies, mergers and acquisitions, and manufacturing companies who are turning to outsourcing to increase efficiency.

But trust also plays an important role for individuals. "Our society is getting more skilled. We now have empowered, skilled and highly motivated employees. If we're going to hold a whip and look over their shoulders, we're defeating everything."

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