When trust is rooted in a rational assessment of the authoritys trustworthiness it is called?

Chapter 7 – Trust, Justice, and Ethics

An organization’s reputation reflects the prominence of its brand in the minds of the public and the perceived quality of its goods and services. Top performers want to work at organizations with clean reputations, in part because they want to protect their own personal image (78% of people would prefer a good reputation and average salary then at a company with a low reputation and high salary).

Reputations depend on trust, which is the willingness to be vulnerable to an authority based on positive expectations about the authority’s actions and intentions. It is rooted in the belief that a trustee is trustworthy and will act in a way that benefits the trustor and protect him or her from exploitation and harm. Trust only becomes an issue when an individual is dependent on and vulnerable to the actions of another party. Actually making yourself vulnerable (e.g. by buying shoes or accepting a job) is risk, but trust reflects the willingness to take that risk.

Justice reflects the perceived fairness of an authority’s decision making. Justice concepts can be used to explain why employees judge some authorities to be more trustworthy than others. When employees perceive high levels of justice they believe that the authority’s decisions are fair. Ethics reflects the degree to which the behaviours of an authority are in accordance with generally accepted moral norms. When employees perceive high levels of ethics, they believe things are being done the way they should or ought to be done. Ethics concepts can be used to explain why authorities decide to act in a trustworthy or untrustworthy manner.

Trust

Trust is rooted in different kinds of factors. Sometimes trust is disposition-based, meaning that your personality traits include a general propensity to trust others; sometimes it is cognition based, meaning that it is rooted in rational assessment of the authority’s trustworthiness; and sometimes trust is affect- based, meaning that it depends on feelings toward the authority that go beyond any rational assessment.

Disposition based trust has less to do with the authority and more to do with the trustor. Some trustors are high in trust propensity, a general expectation that the words, promises, and statements of individuals and groups can be relied upon. These individuals are inherently trusting, even before a trustee’s trustworthiness has been earned. Trust propensity is a product of both nature and nurture. The nation in which we live also affects our trust propensity (Sweden, China, Netherland, and Canada were all quite high especially when compares to Europe and South America).

Disposition-based trust guides us in cases when we don’t yet have data about a particular authority. Eventually we gain enough knowledge to gauge the authority’s trustworthiness, defined as the characteristics or attributes of a trustee that inspire trust. At that point, our trust begins to be based on cognitions we’ve developed about the authority, as opposed to our own personality or disposition. We judge the trust track-record of an authority based on ability, benevolence, and integrity. Ability is defined as the skills, competencies, and areas of expertise that enable an authority to be successful in some specific area (e.g. for doctors or lawyers). Benevolence is defined as the belief that the authority wants to do good for the trustor, apart from any selfish or profit-centred motives. Benevolent authorities care for their employees, are concerned about their well-being, and feel a sense of loyalty to them (a good example is the mentor-protégé relationship). Integrity is defined as the perception that the authority adheres to a set of values and principles that the trustor finds acceptable. When authorities have integrity, they are of sound characters and have good intentions and strong moral discipline.

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Unfortunately, only 20% of senior managers act in accordance with their words. Rank and file employees lie more frequently when communicating by email because there are no nervous ticks to give them away.

The third form of trust, affect-based, isn’t rooted in reason but rather in emotion. We trust because we have feelings for the person in question (we really like them and have a fondness for them). The three types of trust supplement each other, and usually start with trust propensity and then knowledge about ability, benevolence, or integrity and finally sometimes an emotional bond develops.

Justice

Justice provides behavioural evidence that an authority is trustworthy. Employees can judge the fairness of an authority’s decision making along four dimensions: distributive justice, procedural justice, interpersonal justice, and informational justice.

Distributive justice reflects the perceived fairness of decision-making outcomes. Employees gauge distributive justice by asking whether decision outcomes, such as pay, rewards, evaluations, and work assignments, are allocated using proper norms. In most situations the proper norm is equity, with more outcomes allocates to those who contribute more inputs. The equity norm is judged to be the fairest choice in situations in which the goal is to maximize the productivity of individual employees. In team- based work, building harmony and solidarity can be as important as individual productivity and an equality norm is fairer. When the welfare of an employee is a critical concern, a need norm may be fairer.

Procedural justice reflects the perceived fairness of decision-making processes. Procedural justice is fostered when authorities adhere to rules of fair process. One of those rules is voice, or giving employees a chance to express their opinions and views during the course of decision making. Correctability provides employees with a chance to request an appeal when a procedure seems to have worked ineffectively. These rules improve employees’ reactions to decisions because they give them a sense of ownership. This type of justice is also fostered when authorities adhere to four rules that serve to create equal employment opportunity: consistency, bias suppression, representativeness (do the procedures consider the needs of all groups), and accuracy (are procedures based on accurate information). Issues with equality and a wage gap fall into this area. When outcomes are good, people don’t spend time worrying about how fair the process was. However, when the outcomes are bad, procedural justice becomes more important. In fact, procedural justice is a stronger driver of reactions to authorities than distributive justice. This type of justice is a stronger predictor of satisfaction with supervision, overall job satisfaction, and organizational commitment than distributive justice.

Interpersonal justice reflects the perceived fairness of the treatment received by employees from authorities. This type of justice is fostered when authorities adhere to two particular rules. The respect rule pertains to whether authorities treat employees in a dignified and sincere manner, and the propriety rule makes authorities refrain from making improper or offensive remarks. Interpersonally unjust actions create abusive supervision, defined as the sustained display of hostile verbal and nonverbal behaviours, excluding physical contact (about 15% of employees face it). Abused employees report more strain and less satisfaction with their lives, and also engage in more counterproductive behaviours. A violation of these rules looms much larger than adherence to the rules.

Informational justice reflects the perceived fairness of the communications provided to employees from authorities. This type of justice is fostered when authorities adhere to two particular rules: the justification rule mandates that authorities explain decision making procedures and outcomes, and the truthfulness rule requires that those communications be honest and candid.

Ethics

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Research on ethics seeks to explain why people behave in a manner consistent with generally accepted norms of morality, and why they sometimes violate those norms. Ethics affects justice, which together also affect trustworthiness. Together with trust propensity and feelings towards the trustee, trust is affected. The study of business ethics has two primary branches: prescriptive, with scholars in philosophy debating how people out to act, and descriptive, with scholars relying on scientific studies to observe how people tend to act. The former model is used in law, medicine, and economics, while the latter is used in psychology.

Unethical behaviour is behaviour that clearly violates accepted norms of morality. There is also “merely ethical” behaviour, which adheres to some minimally accepted standard of morality (e.g. complying with the law and contracts). “Especially ethical” behaviours exceed some minimally accepted standard of morality. These might include charity or whistle-blowing, which occurs when former or current employees expose illegal or immoral actions by their organization.

Some behave ethically and others don’t. One set of answers for this is from social psychology and the four-component model of ethical decision making. This model argues that ethical behaviours result from a multistage sequence beginning with moral awareness, continuing on to moral judgment, then to moral intent, and ultimately to ethical behaviour. Unethical behaviour can also be triggered by characteristics of a person or the situation.

Moral awareness occurs when an authority recognizes that a moral issue exists in a situation or that an ethical code or principle is relevant to the circumstance. Sometimes authorities act unethically simple because they don’t know that ethics is relevant in a given situation so there is no debate. Moral awareness depends in part on characteristics of the issue itself, as some issues have more built-in ethical salience than others. A concept called moral intensity captures the degree to which an issue has ethical urgency. Moral intensity is driven by the potential for harm (specifically magnitude of consequences, probability of effect, temporal immediacy—how quickly the effect will come, and concentration of effect— will the consequences be concentrated on a few people or many) and if there is social pressure surrounding it (social consensus on whether it is unethical and proximity to the affected people). An act that violates a clear social norm is more morally intense than one that seems similar to what everyone else is doing. Moral awareness also depends on the way authorities observe and perceive the events that happen around them. A concept called moral attentiveness captures the degree to which people chronically perceive and consider issues of morality during their experiences. Cognitive psychology shows that people pay more attention to stimuli that are significant, vivid, and recognizable (these people face many moral issues in a typical day).

Moral judgment, which reflects the process people use to determine whether a particular course of action is ethical or unethical. One of the most important factors influencing moral judgment is described in Kohlberg’s theory of cognitive moral development. This argues that as people age they move through various stages of moral development, with each stage more sophisticated than the prior one. People begin their moral development at the preconventional stage where right versus wrong is viewed in terms of the consequences of various actions for the individual. Next is the conventional stage where right versus wrong is referenced to the expectations of one’s family and one’s society. First family and then society. Since most adults are in this stage, it shows that moral judgment can be influences by organizational policies, practices, and norms. The most sophisticated moral thinkers reach the principled (or postconventional) stage. At this stage, right versus wrong is referenced is referenced to a set of defined, established moral principles (fewer of 20% of adults reach this stage). Philosophers have identified a number of moral principles that serve as prescriptive guides for making moral judgments. Multiple principles should be used. Consequentialist principles judge the morality of an action according to its goals, aims, or outcomes (these principles are sometimes termed teleological, after the Greek word for “goal”). The non-consequentialist principles judge the morality solely on its intrinsic desirability (these are sometimes called deontological, after the Greek word for duty or formalist due to their emphasis on formalized codes). Consequentialist principles are utilitarianism and egoism (markets limit egoist’s

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interests from harming others, by Adam Smith), and non-consequentialist principles are ethics of duties (if it fulfills the categorical imperative, (a) the act should be performable by everyone with no harm to society, (b) the act should respect human dignity, and (c) the act should be endorsable by others, by Kant), ethics of rights (if it respects the natural rights of others by John Locke and John Rawls), and virtue ethics (if it allows the decision maker to live a good life by being honest, wise, showing mercy, modesty, etc. by Aristotle).

Moral intent reflects an authority’s degree of commitment to the moral course of action. The distinction between awareness or judgment and intent is important because many people consciously do unethical behaviours because situations (e.g. unethical cultures) go against their moral convictions. Some people are able to resist situational pressures and stay true to their moral judgment due to a moral identity, which is the degree to which a person self-identifies as a moral person. Moral identity moderates the effects of moral judgment on ethical behaviour.

Relationships

Trust has a moderate positive effect on performance. Employees who are willing to be vulnerable to authorities tend to have higher levels of task performance because they can focus. They are also more likely to engage in citizenship behaviour and less likely to engage in counterproductive behaviour. This is because willingness to accept vulnerability changes the nature of the employee-employer relationship. Employees who don’t trust their authorities have economic exchange relationships based on narrowly defined, quid pro quo obligations that are specified in advance with an explicit repayment schedule. As trust increases, social exchange relationships develop based on vaguely defined obligations that are open-ended and long-term in their repayment schedule. These are characterized by mutual investment, such that employees go above and beyond their duties in exchange for fair and proper treatment by authorities. They trust their efforts will be rewarded.

Trust has a strong positive effect on organizational commitment. Employees who are willing to be vulnerable to authorities tend to have higher levels of affective commitment and higher levels of normative commitment. Trust has no effect on continuance commitment. This is because trusting an authority increases the likelihood that an emotional bond will develop.

Social Responsibility

Corporate social responsibility is a perspective that acknowledges that the responsibilities of a business encompass the economic, legal, ethical, and citizenship expectations of society. The foundation is profitability, but there are other obligations. The legal component says what is right and wrong in code and should be followed. This is the conventional level of moral development. The ethical component of CSR argues that organizations have an obligation to do what is right, just, and fair and to avoid harm. This is relevant to the organization’s benevolence and integrity and suggests that it has reached the principled level or moral development. The citizenship component argues that organizations should contribute resources to improve the quality of life in the communities in which they work. 

Which of the following dimensions of trustworthiness is defined?

What is trust and how does it relate to justice and ethics?

Which rule mandates that authorities explain decision making procedures and outcomes in a comprehensive and reasonable manner?

Which of the following drives cognitive based trust?