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Trust across Disciplines

Trust & social capital - Regarding economics

Trust constitutes an important source for social capital within social systems. This is true both if "social capital" refers to the corpus of values within the entire society and if it indicates the resources of a certain organization.

Economics focused on the second sense of "social capital": as any other value that every organization owns, trust is a resource that must be mantained, exploited and nurtured.

Roderick Kramer

Within organizational settings, trust as a form of social capital has been discussed primarily on three levels, including its constructive effects on 1. reducing transaction costs within organizations, of both intra- and interorganizational, 2. facilitating appropriate (i.e. adaptive) forms of deference to organizational authorities, and 3. increasing spontaneous sociability among organizational members. [...]

[Let's consider the reduction of transaction costs.] From a psychological perspective, one way in which trust can function to reduce transaction costs is by operating as a social decision heuristic. Social decision heuristics represent behavioral rules of thumb actors use when making decisions about how to respond to various kinds of choice dilemma situations they encounter. [...] 

Heuristics that predicate presumptive trust (i.e. that are generous with respect to giving others the "benefit of the doubt" when "noise" or uncertainty regarding their trustworthiness is present) can produce substantial increases in both individual and joint payoffs - at least within the context of ecologies in which reasonable numbers of other trustworthy actors are present.

Another important stream of organizational research has examined the relationship between trust and various forms of voluntary deference within hierarchical relationships in organizations. Although hierarchical relationships assume varied forms (e.g. leader-follower, manager-subordinate, and employer-employee), the centrality of trust within such relationships has long been recognized.

From the standpoint of those in positions of authority, trust is crucial for a variety of reasons. First, if organizational authorities have to continually explain and justify their actions, their ability to effectively manage would be greatly diminished. Second, because of the costs and impracticality of monitoring performance, authorities cannot detect and punish every failure to cooperate, nor can they recognize and reward every cooperative act. As a result, efficient organizational performance depends on individuals' feelings of obligation toward the organization, their willingness to comply with its directives and regulations, and their willingness to voluntarily defer to organizational authorities. In addition, when conflict arises, trust is important because it influences acceptance of dispute resolution procedures and outcomes. Research has shown that individuals are more likely to accept outcomes, even if unfavorable, when individuals trust an authority's motives and intentions.

Francis Fukuyama

Fukuyama argued that one of the most important manifestations of trust as a form of social capital is the spontaneous sociability such trust engenders. When operationalized in behavioral terms, spontaneous sociability refers to the myriad forms of cooperative, altruistic, and extra-role behavior in which members of a social community engage, that enhance collective well-being and further the attainment of collective goals.

Within organizational contexts, spontaneous sociability assumes many forms. Organizational members are expected, for example, to contribute their time and attention towards the achievement of collective goals, they are expected to share useful information with other organizational members, and they are expected to exercise responsible restraint when using valuable but limited organizational resources. [...]

Trust enhances individuals' willingness to engage in various forms of spontaneous sociability, but in complex and often unexpected ways. In assessing the generalizability of this finding, it should be noted that there also exists evidence that the efficacy of trust for solving large-scale collective-action dilemmas of this sort may be limited. [...] Although trust is important in predicting civic engagement, trust alone is not always enough. Instead, people's level of participation in their communities depends also on perceptions regarding the efficacy of their actions. [...]

Social capital is an instantiated informal norm that promotes cooperation between two or more individuals. The norms that constitute social capital can range from a norm of reciprocity between two friends, all the way up to complex and elaborately articulated doctrines like Christianity or Confucianism. They must be instantiated in an actual human relationship: the norm of reciprocity exists in potentia in my dealings with all people, but is actualized only in my dealings with my friends. By this definition, trust, networks, civil society, and the like which have been associated with social capital are all epiphenominal, arising as a result of social capital but not constituting social capital itself.

References

Kramer, R. (1999). Trust and Distrust in Organizations: Emerging perspectives, Enduring Questions. Annual Review of Psychology. 50, 569-598.

Fukuyama, F. (1995). Trust: The Social Virtues and the Creation of Prosperity. Penguin. London.

Fukuyama, F. (1999). Social Capital and Civil Society. The Institute of Public Policy. George Mason University. Retrieved online.

Other perspectives on social capital

This topic is studied in sociology too.