TRUST AND ITS SIGNIFICANCE I:What is Mistrust,Trust and business,Three levels of trust

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Conflict Management HRM624

Lesson 18

TRUST AND ITS SIGNIFICANCE I

Quotations

Don't trust anyone over thirty.

Jerry Rubin (1938 - 1994) U.S. activist and author.

Complexity and trust go together...the more firms downsize and outsource, the more they need

partnerships, alliances, and joint ventures.

Peter Keen U.S. business executive.

"It takes years to build up trust, and only seconds to destroy it."

Author unknown

According to one prominent theory, there are three levels of trust: (i) calculus-based trust, (ii) knowledge-

based trust, and (iii) identification-based trust. In this lecture we study and analyze these three levels of

truest.

What is Trust?

Trust can be defined as a state of mind in which a person believes that another person intends to be helpful

and, accordingly, that it is appropriate to take risks in the relationship.

Trust can be described as a basic component of human relationships. It plays vital role in the improvement

of quality of every relationship. Different people define the phenomenon of trust according to their own

perspectives. The behaviors essential to maintaining a constructive or cooperative relationship involves an

element of risk. To risk the open communication and altruistic behavior that makes cooperative sharing of

tasks possible, each disputant must believe that the other will not exploit the situation. The attitude that

allows this risk taking behavior is called `trust'.

Trust: But such a trust may not be good

Conflict Management HRM624

What is Mistrust?

You may be deceived if you trust too much, but you will live in torment if you don't trust enough.

Frank Crane

Mistrust is not the absence of different forms of trust. It is a separate and distinct phenomenon. Disputants

in a state of mistrust are actively motivated to protect themselves from the other disputant. Lack of trust is

like having uncertainty while mistrust is considered as a state in which one individual actively believes that

the other is likely to harm him or her.

Trust is difficult to establish when mistrust is present. Lack of trust entails uncertainty whereas mistrust

operates to make disputants believe that they will harm each other. Mistrust is associated with aggressive

behavior and the escalation of destructive conflict.

Trust and business

Business relationship is designed for people who must be involved in a relationship but who have very low

levels of trust in each other.

A business relationship has following components:

1. Explicit and detailed agreement

2. Formality

3. Restraint of emotional expression

4. Balanced, neutral facilitating and evaluation

If you succeeded in building mutual trust with your business partner, it will serve as a strong foundation that

will free you to respond together to the unexpected, which is essential for mutual creativity in conflict

resolution.

Business is too complex to expect ready agreement on all issues, and trust, thus, does not imply easy

harmony. "However, in a trusting relationship, conflicts motivate you to probe for deeper understanding

and search for constructive solutions.

Trust creates good will, which sustains the relationship when one firm does something the other dislikes.

Having trust gives you confidence in a relationship and makes it easier to build even more.

Trust and conflict

When one puts faith and trust in another, and that confidence is broken, it can create an emotional response

that elevates to conflict.

To trust someone is to place a high confidence level that the relationship will not be compromised in any

way...that I can expect you to do what you say. A trusting relationship leads to feelings of confidence and

security.

A breach of trust unleashes our strongest emotions that frequently lead to conflict.

Breach of trust and its consequences

Even a single threat to mutual trust can turn a cooperative relationship into an escalating competition.

When trust is threatened, the mistrustful person suspects that the other may harm or exploit him or her,

and risky behaviors, such as information and effort sharing, are abandoned as dangerous. Moreover, a

mistrustful person in a conflict is likely to see his or her own well being as dependent on self-defense.

Mistrust is therefore associated with aggressive behavior and the escalation destructive.

Conflict Management HRM624

Trust, mistrust and conflict

Three levels of trust

The levels of trust are given below

(1) Calculus-based trust

(2) Knowledge-based trust

(3) Identification-based trust

Some forms of trust are hard to establish

Some forms of trust are more useful than others.

Calculus-based trust

The first and most basic level of trust is called calculus-based trust. It is based on knowledge of the

consequences of compliance or noncompliance. In legal disputes, the calculus-based trust is more

commonly used. It is used in settlement agreements and court judgments.

The incentives that can produce calculus-based trust are as varied as the individuals involved in the conflict,

and they do not always involve money.

Disputants are made aware of the fact that refusal to comply with settlement provisions can mean being

hauled into court made to produce information about assets and enforced to sell property.

These threats of inconvenience and penalty are usually enough to promote compliance and to create

minimal levels of peace of mind in those insisting on their inclusion.

Calculus based trust is the easiest type of trust to create. Calculus-based trust is not required if other higher

levels trusts are attainable and appropriate for the situation.

Calculus based Trust at a glance

· Trust based on knowledge that the other person won't want to incur the consequences of betrayal

· Narrow applicability to the action for which consequences are in place

· Easiest type of trust to establish (you just need a contract)

Knowledge based trust

The second level of trust is known as knowledge based trust. It is on one disputant's knowledge and

understanding of the other disputant.

Conflict Management HRM624

For example if a woman needs to leave her children with their regular baby sitter while she attends a

business meeting she can trust that the baby sitter will keep them safe because of her long standing history

of having them so in the past. Mother may also have knowledge of the baby sitter's background, skills,

education, and apparent values, as displayed in numerous social contexts in which the mother has observed

in the past. Knowledge-based trust is usually unwarranted in new relationships, in very short relationships,

and in relationships that are caught-up in competition cycle. It can be understood by the example of a

reliable employee.

After a period of effective functioning, we may convert calculus-based trust into knowledge-based trust.

This type of rust is based on knowledge of the other person's habits, traits, attitudes, principles, and values.

Knowledge based Trust at a glance

· Trust based on knowledge of the other person's habits, traits, attitudes, principles, and values

· Applicability to all actions about which relevant characteristics of the person are known

· Establishment depends on knowing the other person well enough to acquire relevant knowledge.

Identification based trust

The highest level of trust is identification-based trust. It is founded on the disputant's sense of identification

with one another because the disputants identify with one another, they tend, as do all groups with a sense

of solidarity to see themselves as being "as one" in their goals, values, and needs. Thus it is intrinsically

satisfying to a disputant in a relationship characterized by an identification based trust to meet the perceived

needs of the other disputant. In intimate relationships such as those between family members, preserving

identification based trust is more important than the specific substantive agreements reached. For example

two spouses who are arguing over the best color to paint a bed room generally have a much greater need to

preserve their mutual sense of identification with one another than to resolve the issue of the paint color.

Business organizations (some MNCs for example) that indoctrinate their new employees into the company,

and devote resources to building company spirit, are exploiting the advantages of this type of trust. In

intimate relationships, this is the most important trust.

Sometimes, the desire to establish identification-based trust may be damaging (for example, the divorcing

couple). Establishing identification based trust is very difficult; it requires a period of intimacy, partnership

during a crisis, or another intense interconnection.

Identification based Trust at a glance

· Trust based on a sense of identification, or "oneness," with the other person

· Broad applicability to entire relationship.

· Establishment is very difficult: requires a period of intimacy, partnership during a crisis, or another

intense interconnection.

Summary

Trust is an important behavioral character of individuals and companies. It can enhance efficiency and can

reduce undue formalities. It creates pleasant feelings among participants in a conflict or among those who

are in business partnerships.

As there are three levels of trust (calculus-based trust, knowledge-based trust, and identification-based

trust), the first one is easiest to establish and the last one is the most difficult to establish. However, higher

the level of trust between individuals, companies, or even countries; higher the outcome of the

relationships. It is an important personal attribute and also a great social asset. If people trust each other in a

system or society, the life becomes joyous and happy for all of us.

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