Abstract
The last years of the 20th Century have been somewhat contradictory with respect to values like loyalty, trust or truthfulness. On the one hand, (often implicitly, but sometimes very explicitly), self-interest narrowly defined seems to be the dominant force in the business world, both in theory and in practice. On the other hand, alliances, networks and other forms of cooperation have shown that self-interest has to be at least "enlightened".
The academic literature has reflected both points of view, but frequently in an ambiguous way, since the concepts of loyalty and trust are somewhat elusive and equivocal. This paper attempts to analyze the concept of loyalty in depth, examining the different conceptions about the word that can be found in the literature. We begin by going to the management classics (specifically, Follett, Barnard and Simon), and we then turn to the anthropological approach of Pérez López (1993), with its built-in ethical analysis, and show how trust and loyalty are crucial to the development of organizations. We end by suggesting in what ways loyalty and trust can be created and fostered in organizations.
This is a preview of subscription content, access via your institution.
References
Anderson, C.: 1997, 'Values-based Management', Academy of Management Executive 11(4), 25–46.
Antony, R., J. Dearden and V. Govindarajan: 1992, Management Control Systems, 7th. Edition (Richard D. Irwin, Homewood, IL).
Barnard, C. I.: 1938, The Functions of the Executive (Harvard University Press, Boston).
Bidault, Francis and J. C. Jarillo: 1997, 'Trust in Economic Transactions', in F. Bidault, P. Y. Gomez and G. Marion (eds.), Trust, Firm and Society (Macmillan Business, London), pp. 81–94.
Carbone, J.: 1997, 'Loyalty: Subversive Doctrine?', Academy of Management Executive 7(3), 80–86.
Cole, C. L.: 2000, 'Building Loyalty', Workforce (August), 44–48.
Evans, B.: 2000, 'Does Loyalty Still Matter?', Information Week (May 22), 176.
Follett, M. P.: 1920, 'The Individual in Society', Chapter Ten in Graham, 1996.
Follett, M. P.: 1925, 'How Must Management Develop in Order to Become a Profession', Chapter Eleven in Graham, 1996.
Follett, M. P.: 1927, 'Management as a Profession', in Henry C. Metcalf, A. W. Shaw Co. (eds.), Business Management as a Profession, Chapter IV (Publisher, Chicago), pp. 73–87.
Graham, Pauline (ed.): 1996, Mary Parker Follett, Prophet of Management (Harvard University Press, Boston).
HRfocus: 2000, 'Why Loyalty is Not Enough', 77(11), 14–15.
Jensen, M.: 1994, 'Self-Interest, Altruism, Incentives and Agency Theory', Journal of Applied Corporate Finance 7(2), 40–45.
Kanungo, R. and J. Conger: 1993, 'Promotion Altruism as a Corporate Goal', Academy of Management Executive 7(3), 37–48.
Kreps, D.: 1990, 'Corporate Culture', in J. Alt and K. Shepsle (eds.), Perspectives on Positive Political Economy (Cambridge University Press, Cambridge).
Melé, D.: 2001, 'Loyalty in Business: Subversive Doctrine or Real Need?', Business Ethics Quarterly 11(1), 11–26.
Pérez López, J. A.: 1993, Fundamentos de la Dirección de Empresas (Rialp, Madrid).
Powers, E. L.: 2000, 'Employee Loyalty in the New Millennium', SAM Advanced Management Journal 65 (Summer), 4–9.
Randall, D. M.: 1987, 'Commitment and the Organization: The Organization Man Revisited', Academy of Management Review 12(3), 460–471.
Reichheld, F.: 1996, The Loyalty Effect: The Hidden Force Behind Growth, Profits And Lasting Values (Harvard Business School Press, Boston).
Reichheld, F.: 2001, Loyalty Rules. How Today's Leaders Build Lasting Relationships (Harvard Business School Press, Boston).
Rosanas, J. M.: 2002, On the Decision-Theoretic Foundations of Trust, mimeo, IESE, University of Navarra.
Sen, A.: 1977, 'Rational Fools: A Critique of the Behavioral Foundations of Economic Theory', Philosophy and Public Affairs 6, 317–344.
Sharf, S.: 2000 'Loyalty Lost. What Happened to Career Paths and Promotion from Within?', Ward's Auto World, Detroit, 36(7) (July), 21.
Sheppard, D.: 2000, 'Is Loyalty Dead?', Executive Excellence 17(6), 17.
Simon, H.: 1947, Administrative Behavior (The Free Press, New York).
Simon, H.: 1964, 'On the Concept of Organizational Goal', Administrative Science Quarterly 9(1) (June), 1–22.
Watson, S.: 2000a, 'End of Job Loyalty?', Computerworld (May 15), 52–53.
Watson, S.: 2000b, 'Why Staffers Stay?', Computerworld (May 22), 56–57.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Rosanas, J.M., Velilla, M. Loyalty and Trust as the Ethical Bases of Organizations. Journal of Business Ethics 44, 49–59 (2003). https://doi.org/10.1023/A:1023238525433
Issue Date:
DOI: https://doi.org/10.1023/A:1023238525433