Organisational trust has been studied for many years. Only relatively recently however have events helped to drive this issue to the top of many business agendas.
The near collapse of the financial system and the actions of senior bankers is one of the most damaging. The recent behavior of British MP’s in claiming expenses has undermined trust in UK democracy.
We have also seen oil companies being attacked for their impact on the environment and on staff safety, pharmaceutical firms being exposed for ethical issues around drug trials and airlines vilified for poor customer service when operations have gone wrong.
While many of these reputation and trust issues impact on customers and investors, there are also significant workforce implications.
Dr Cecily D. Cooper recently explained the complexity of organizational trust at one of our forums. According to Dr Cooper, employee related trust can facilitate acceptance of organizational change, it can build good corporate citizens, and can help develop credible leadership.
Organizational trust can also stop people leaving, being absent, becoming disruptive, or even stealing a firm’s assets.
However, until recently, there has been little research into the building blocks of trust and even less about trust failure and repair. For Dr Cooper, fairness or justice is key.
For example, how an organization behaves in difficult situations, such as during layoffs, can have a significant impact on levels of staff trust.
This is of course highly relevant in the current recession. But interactional justice is that most closely linked to trust and this arises in day-to-day staff relations. In this respect, one key lever of trust building arises through the actions of managers.
With trust breakdown, Dr Cooper’s research looks at trust failure in terms of competence and integrity, and it is the latter that can cause most damage. So when trust breaks down what is the best approach –- apologize, deny, shift blame or stay silent?
For individuals, if you can turn a trust problem into a question of competence and then apologize quickly, you have a better chance of keeping your integrity intact. This was Arnold Schwarzenegger’s approach to sexual harassment claims which threatened his run to become governor of California.
For organizations, it may not be so clear cut. Here, there are additional layers of complexity. However, the approaches of the US airline jetBlue to its counterpart American Airlines, when faced with similar crises, serve up some useful lessons.
More effective trust repair came from the company which:
- Took responsibility where it was appropriate, as opposed to blame others (be open and transparent)
- Apologized profusely, with the CEO taking a very public lead (communicate extensively & show concern)
- Compensated where necessary and showed how it wouldn’t happen again (Demonstrate fairness)
- Developed plans on how customers would be more effectively treated in the future (Outline future vision)
