Edited by Angela A. Stanton, Mellani Day and Isabell M. Welpe
4. Using brains to create trust: a manager’s toolbox Paul J. Zak and Amos Nadler WHY TRUST IS ESSENTIAL In 2009 people’s trust in US businesses fell to 38 percent from 58 percent a year earlier, the lowest level since records have been kept (Edelman Trust Barometer, 2009). And the bigger the business, the lower the trust. Perhaps this is unsurprising as monthly layoffs are comparable to Super Bowl attendance and consumers are hoarding their money like thirsty wanderers in the dry economic desert. Egregious institutional and individual indiscretions have marred the business landscape, prompting the frequent use of the word ‘crisis’. While politicians design the next multibillion dollar ‘bailout’ plan, managers of belt-tightening organizations have a more immediate problem: how to maintain employee motivation when pink slips are flying, and at the same time how to sustain customer loyalty. Distrust undercuts effective management because when trust is low, employees are less likely to understand and react to a manager’s goals. In 2009 60 percent of employees reported that they needed to hear information three to five times before believing it. Equally worrisome, only 17 percent of employees in 2009 trusted statements made by a CEO (ibid.). Without trust, organizational goals will literally fall on deaf ears. At the same time, economic downturns are precisely when managers have more latitude to make organizational changes in order to staunch hemorrhaging profits. An additional concern is that reductions in trust often occur outside a manager’s awareness, pulling down productivity. This hidden effect...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.