Abstract
In the wake of the global financial market collapse of 2007–2008, Werhane and her co-authors Hartman, Archer, Bevan and Clark reconsider the issue of trust. Trust is considered here as invaluable and essential metaphorical glue in the smooth running of any globalized economy. The causes and effects of such a breakdown in this dynamic are identified, and the generally institutional barriers to any remedies are discussed with positive and negative examples. The paper proposes a range of organizational and cultural transformations which include adopting: (i) a preference for collaborative, rather than authoritarian, leadership; (ii) a more dynamic approach to corporate responsibility; and (iii) a more egalitarian and democratic approach to managing and communicating with stakeholder constituencies.
Original publication: Werhane, P., Hartman, L., Archer, C., Bevan, D. & Clark, K. 2011. “Trust After the Global Financial Meltdown.” Business and Society Review, vol. 116, no. 4, pp. 403–433. ©2011 Reprinted with permission.
Werhane, P., Hartman, L., Archer, C., Bevan, D. & Clark, K. 2011. “Trust After the Global Financial Meltdown.” Business and Society Review, vol. 116, no. 4, pp. 403–433. ©2011 Reprinted with permission.
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Notes
- 1.
Although identification of these two components of trust relations is nearly universal in the literature, scholars differ in the terms used to describe them. Despite occasional differences in terminology, definitions of competency trust are largely uniform. However, important differences have arisen in naming the component of trusting and distrusting relationships that is linked to values. For example, Sitkin and Roth (1993) refer to the need for “value congruence” to prevent the emergence of distrust, while Hardin describes a similar requirement of shared values as “benevolence trust.” The value-related component has also has been termed “moralistic” trust (Uslaner 2010) or “goodwill” trust (Sengün and Wasti 2010), and Poppo and Schepker (2010) refine this component further by distinguishing between “benevolence” and “integrity” trust. We have avoided using the term “benevolence trust” because it implies that trust relationships are primarily based in benevolence or kindness. But that is not true. Trust relationships are based on beliefs by both parties that the relationship has shared values or goals and will be beneficial to each party. This kind of relationship entails the expectation of fair reciprocity, but it does not necessarily entail benevolence.
- 2.
One of the questions that arises is why, in an open society such as evidenced in most Western nations, we do not see more in the way of cheating and deception, as it is so easy to do and so difficult to detect. The answer, we suggest, lies at least partly in the fact that we are afraid to threaten the “glue” of trust.
- 3.
Bevan and Werhane (forthcoming) have described mental models or mind-sets as follows. “Mental models might be hypothetical constructs of the experience in question or scientific theories; they might be schemas that frame the experience, through which individuals process information, conduct experiments, and formulate theories. Mental models function as selective mechanisms and filters for dealing with experience. In focusing, framing, organizing, and ordering what we experience, mental models bracket and leave out data, and emotional and motivational foci taint or color experience. Mental models, as Peter Senge carefully reminds us (Senge, 1990), function on the organizational and systemic levels as well as in individual cognition. Sometimes, then, how we depict accountability relationships within an organizational culture creates mental habits that may or may not be as appropriate in new settings. Similarly a political economy can be trapped in its vision of itself and the world in ways that preclude change on this more systemic level.
- 4.
Milgram’s original experiment involved three participants. The first participant assumed the role of “teacher” and was actually the subject of the experiment. The teacher was told that this was an experiment to determine the effect of punishment on learning. The second participant was identified as the “experimenter” and was usually played by a 31-year-old high school biology teacher wearing a gray technician’s coat. Occasionally, this role was played by Milgram himself. The “learner” was a 47-year-old accountant with a kindly appearance, also a confederate of the experiment. Although it was made to appear to the teacher that the roles of teacher and learner were determined by drawing lots, in fact, the roles were predetermined. Milgram created a machine that appeared to be an electric shock generator, including switches representing shock levels that started at 15 volts and increased in 15-volt increments to 450 volts. As the learner was a confederate of the experimenter, the learner was never actually connected to the machine and was instead instructed how and when to respond and, in doing so, to pretend to receive actual shocks. The teachers were given a list of word pairs (e.g., “blue/girl”) that were to be read aloud to the learners. Then each of the first words of the pair would be presented to the learner, followed by a set of words (e.g., “boy, girl, grass, tent”). The teacher was instructed to deliver a shock to the learner every time an incorrect answer was selected (e.g., grass) and then to repeat the correct paired word (in an effort to “teach”). Prior to reaching 150 volts, the learner would utter an occasional low grunt. However, at 150 volts the learner would insist, with a cry of pain, that he wanted the experiment to stop. If the teacher showed any resistance to continuing, the researcher would follow an experiment protocol and insist that the teacher had to continue. As the experiment progressed, the teacher would hear the learner desperately plead to be released or even complain about having a heart condition (again, based on Milgram’s specific experiment protocol). Once the 300-volt level was reached, the learner would bang on the wall and demand to be released. Beyond this point, the learner would become completely silent for the remaining questions (Milgram 1969, Werhane et al. 2011).
- 5.
Freeman and McVea address this problem in their 2005 essay “A Names and Faces Approach to Stakeholder Management,” but they have not developed this very rich idea extensively.
- 6.
Unfortunately, ExxonMobil and its other partner, the World Bank, have had to deal with Idriss Déby, the president of Chad and a genuinely untrustworthy individual who simply cannot keep his promises.
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Werhane, P.H., Hartman, L., Archer, C., Bevan, D., Clark, K. (2019). Trust After the Global Financial Meltdown. In: Bevan, D.J., Wolfe, R.W., Werhane, P.H. (eds) Systems Thinking and Moral Imagination. Issues in Business Ethics(), vol 48. Springer, Cham. https://doi.org/10.1007/978-3-319-89797-4_23
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