Abstract
Trust is a fundamental aspect of the moral treatment of stakeholders within the organization–stakeholder relationship. Stakeholders trust the organization to return benefit or protections from harm commensurate with their contributions or stakes. However, in many situations, the firm holds greater power than the stakeholder and therefore cannot necessarily be trusted to return the aforementioned duty to the stakeholder. Stakeholders must therefore rely on the trustworthiness of the organization to fulfill obligations in accordance to Phillips’ principle of fairness (Business Ethics Quarterly 7(1), 1997, 51–66), particularly where low-power stakeholders may not be fully consenting (Van Buren III, Business Ethics Quarterly 11(3), 2001, 481–499). The construct of organizational trustworthiness developed herewith is presented as a possible solution to the problem of unfairness in organization–stakeholder relations. While organizational trustworthiness does not create an ethical obligation where none existed before, stakeholders who lack power will likely be treated fairly when organizational trustworthiness is present.
Article PDF
Similar content being viewed by others
Avoid common mistakes on your manuscript.
References
Axelrod, R. & Hamilton, W. D.: 1981, ‘The evolution of cooperation.’ Science, 211 (4489), 1390-96.
Bachmann, R.: 2003, ‘Trust and power as means of co-ordinating the internal relations of the organization: A conceptual framework.’ In B. Nooteboom & F. Six (Eds.) The trust process in organizations. Empirical studies of the determinants and the process of trust development. Cheltenham: Edward Elgar. pp. 58-74.
Bailey, T.: 2002, ‘On Trust and Philosophy.’ In BBCi (ed.) The Philosophy of Trust. London: Open University.
Blois, K. J.: 1999, ‘Trust in business to business relationships: An evaluation of its status.’ Journal of Management Studies, 36 (2), 197-215.
Burt, R. S.: 1997, ‘The contingent value of social capital.’ Administrative Science Quarterly, 42, 339-65.
Burt, R. S.: 1999, ‘Entrepreneurs, distrust, and third parties.’ In L. L. Thompson, J. M. Levine & D. M. Messick (Eds.) Shared cognition in organizations. Hillsdale, NJ: Lawrence Erlbaum. pp. 213-43.
Caldwell, C. & Clapham, S. E.: 2003, ‘Organizational trustworthiness: An international perspective.’ Journal of Business Ethics, 47 (4), 349-64.
Chiaburu, D. S. & Lim, A. S.: 2008, ‘Manager trustworthiness or interactional justice? Predicting organizational citizenship behaviors.’ Journal of Business Ethics, 83 (3), 453-67.
Ciulla, J. B.: 2001, ‘Carving leaders from the warped wood of humanity.’ Canadian Journal of Administrative Sciences, 18 (4), 313-19.
Coleman, J. S.: 1990, Foundations of social theory. Cambridge, MA: Harvard University Press.
Collier, J.: 1998, ‘Theorising the ethical organization.’ Business Ethics Quarterly, 8 (3), 621-54.
Conger, J. A., Kanungo, R. N. & Menon, S. T.: 2000, ‘Charismatic leadership and follower effects.’ Journal of Organizational Behavior, 21 (7), 747-67.
Creed, W. E. D. and R. E. Miles: 1996, ‘Trust in organizations: A conceptual framework linking organizational forms, managerial philosophies’, in R. M. Kramer and T. R. Tyler (eds.), Trust in Organizations: Frontiers of Theory and Research (Sage, Thousand Oaks, CA), pp. 16–38.
Currie, G. & Kerrin, M.: 2003, ‘Human resource management and knowledge management: Enhancing knowledge sharing in a pharmaceutical company.’ International Journal of Human Resource Management, 14 (6), 1027-45.
Donaldson, T.: 1982, Corporations and morality. Englewood Cliffs, N.J.: Prentice-Hall.
Duchon, D. & Drake, B.: 2009, ‘Organizational narcissism and virtuous behavior.’ Journal of Business Ethics, 85 (3), 301-08.
Evan, W. M. & Freeman, R. E.: 1993, ‘A stakeholder theory of the modern corporation: Kantian capitalism.’ In T. L. Beauchamp & N. Bowie (Eds.) Ethical Theory and Business. Englewood Cliffs, NJ: Prentice Hall. pp. 97-106.
Frooman, J.: 1999, ‘Stakeholder influence strategies.’ Academy of Management Review, 24 (2), 191-205.
Fukuyama, F.: 1995, Trust: The social virtues and the creation of prosperity. New York: Free Press.
Greenwood, M.: 2007, ‘Stakeholder engagement: Beyond the myth of corporate responsibility.’ Journal of Business Ethics, 74 (4), 315-27.
Hosmer, L. T.: 1995, ‘Trust: The connecting link between organizational theory and philosophical ethics.’ Academy of Management Review, 20 (2), 379-403.
Kaufman, A., Zacharias, L. & Karson, M. J.: 1995, Managers vs. owners: The struggle for corporate control in American democracy. New York: Oxford University Press.
Lafer, G.: 2005, ‘The critical failure of workplace ethics.’ In J. W. Budd & J. G. Scoville (Eds.) The Ethics of Human Resource Management and Industrial Relations. Champaign, Il.: Labor and Employment Relations Association. pp. 273-97.
Lewicki, R. J. and B. B. Bunker: 1996, ‘Developing and Maintaining Trust in Work Relationships’, in R. M. Kramer and T. R. Tyler (eds.), Trust in Organizations: Frontiers of Theory and Research (Sage, Thousand Oaks, CA), pp. 166–195.
Lipton, M. and W. Savitt: 2007, ‘The Many Myths of Lucian Bebchuk’. Virginia Law Review 93, 733–758.
Mayer, R. C., Davis, J. H. & Schoorman, F. D.: 1995, ‘An integration model of organizational trust.’ Academy of Management Review, 20 (3), 709-34.
McAllister, D. J.: 1995, ‘Affect- and cognition-based trust as foundations for interpersonal cooperation in organizations.’ Academy of Management Journal, 38 (1), 24-59.
Meyerson, D., K. E. Weick and R. M. Kramer: 1996, ‘Swift trust and temporary groups’, in R. M. Kramer and T. R. Tyler (eds.), Trust in Organizations: Frontiers of Theory and Research (Sage, Thousand Oaks, CA), pp. 166–195.
Mitchell, R. K., Agle, B. R. & Wood, D. J.: 1997, ‘Towards a theory of stakeholder identification and salience: Defining the principle of who and what really counts.’ Academy of Management Review, 22 (4), 853-86.
Moon, J., Crane, A. & Matten, D.: 2005, ‘Can corporations be citizens? Corporate citizenship as a metaphor for business participation in society.’ Business Ethics Quarterly, 15 (Jul), 429-53.
Moore, G.: 1999, ‘Corporate moral agency: Review and implications.’ Journal of Business Ethics, 21 (4), 329-43.
Moore, G.: 2005, ‘Corporate character: Modern virtue ethics and the virtuous corporation.’ Business Ethics Quarterly, 15 (4), 659-85.
Mulford, M., Orbell, J., Shatto, C. & Stockard, J.: 1998, ‘Physical attractiveness, opportunity, and success in everyday exchange.’ American Journal of Sociology, 103 (6), 1565-92.
Nahapiet, J. & Ghoshal, S.: 1998, ‘Social capital, intellectual capital, and organisational advantage.’ Academy of Management Review, 23 (2), 242-66.
O’Dwyer, B.: 2005, ‘Stakeholder democracy: Challenges and contributions from social accounting.’ Business Ethics: A European Review, 14 (1), 28-41.
Ostrom, E.: 2000, ‘Social capital: A fad or a fundamental concept?.’ In P. Dasgupta & I. Serageldin (eds.) Social capital: A multi-faceted perspective. Washington, D.C: The World Bank. pp. 172-214.
Peccei, R. and D. Guest: 2002, ‘Trust, Exchange and Virtuous Circles of Co-operation: A Theoretical and Empirical Analysis of Partnerships at Work’, Research Paper 011. The Management Centre, King’s College, London.
Pfeffer, J. & Salancik, R.: 1978, The external control of organizations: A resource dependence perspective. New York: Harper & Row.
Phillips, R.: 1997, ‘Stakeholder theory and a principle of fairness.’ Business Ethics Quarterly, 7 (1), 51-66.
Pruzan, P.: 2001, ‘The question of organizational consciousness: Can organizations have values, virtues and visions?’. Journal of Business Ethics, 29 (Feb):271-84.
Putnam, R. D.: 1995, ‘Bowling alone: America’s declining social capital.’ Journal of Democracy, 6 (1), 65-78.
Ring, P.: 1996, ‘Fragile and resilient trust and their roles in economic exchange.’ Business and Society Review, 35 (2), 148-75.
Ring, P. & Van de Ven, A.: 1992, ‘Structuring cooperative relationships between organizations.’ Strategic Management Journal, 13 (7), 483-98.
Rousseau, D. M.: 1995, Psychological Contracts in Organizations. Thousand Oaks, CA: Sage.
Slinger, G.: 2000, ‘Essays on Stakeholders and Takeovers.’ Department of Applied Economics. Cambridge: Cambridge University.
Stoney, C. & Winstanley, D.: 2001, ‘Stakeholding: Confusion or utopia? Mapping the conceptual terrain.’ The Journal of Management Studies, 38 (5), 603-26.
Swift, T.: 2001, ‘Trust, reputation and corporate accountability to stakeholders.’ Business Ethics: A European Review, 10 (1), 16-26.
Van Buren III, H.: 2001, ‘If fairness is the problem, is consent the solution? Integrating ISCT and stakeholder theory.’ Business Ethics Quarterly, 11 (3), 481-99.
Van Buren III, H. & Greenwood, M.: 2008, ‘Enhancing employee voice: Are voluntary employer-employee partnerships enough?’. Journal of Business Ethics 81(1): 209-21.
Van Buren III, H. & Greenwood, M.: 2009, Stakeholder Voice: A Problem, a Solution, and a Challenge for Managers and Academics. Philosophy of Management 8(3): 15-23.
Weaver, G. R.: 2006, ‘Virtue in organizations: Moral identity as a foundation for moral agency.’ Organization Studies, 27 (3), 341-68.
Wicks, A. C., Berman, S. L. & Jones, T. M.: 1999, ‘The structure of optimal trust: Moral and strategic implications.’ Academy of Management Review, 24 (1), 99-116.
Williamson, O. E.: 1993, ‘Calculativeness, trust, and economic organization.’ Journal of Law and Economics, 36 (1), 453-86.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Greenwood, M., Van Buren III, H.J. Trust and Stakeholder Theory: Trustworthiness in the Organisation–Stakeholder Relationship. J Bus Ethics 95, 425–438 (2010). https://doi.org/10.1007/s10551-010-0414-4
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-010-0414-4