Trust, Organizations and the Digital Economy

Theory and Practice

Joanna Paliszkiewicz, Kuanchin Chen, Joanna Paliszkiewicz, Kuanchin Chen

• Publisher: Routledge
• Year: 2021
• Print ISBN: 9780367762148
• eBook ISBN: 9781000455441
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Trust is a pervasive catalyst of human and business relationships that has inspired interest in researchers and practitioners alike. It has been shown to enhance engagement, communication, organizational performance, and online activities. Despite its role to cultivate cooperation, knowledge-sharing, and innovation, trust through digital means or even trust in digital media has presented new opportunities and challenges in society. Examples include a wider and faster dissemination of trust-influencing messages, and richer options of digital cues that engage, disrupt, or even transform how trust is formulated. Despite that, trust helps people to live through risky and uncertain situations, and the many capabilities enabled on the digital platforms have made the formation and sustaining of trust very different compared to traditional means.

Trust in today's digital environment plays an important role and is intertwined with concepts including reliability, quality, and privacy. This book aims to bring together the theory and practice of trust in the new digital era and will present theoretical and practical foundations. Trust is not given; we must work to build it, but it is a very fragile and intangible asset once built. It is easy to destroy and challenging to rebuild.

Researchers, academics, and students in the fields of management, responsibility, and business ethics will gain knowledge on trust and related concepts, learn about the theoretical underpinnings of trust and how it sustains itself through digital dissemination, and explore empirically validated practice regarding trust and its related concepts.

Part I
Trust: Theoretical Foundations

1 The Meaning and Interdisciplinary Nature of Trust in the Digital Economy – Future Directions

Joanna Paliszkiewicz¹, Jerzy Gołuchowski², and Kuanchin Chen³

¹ Warsaw University of Life Sciences

² University of Economics in Katowice

³ Western Michigen University

DOI: 10.4324/9781003165965-1

Introduction

Trust has long been recognized as a key catalyst for the success of many human activities. Researchers and practitioners have explored the meaning and nature of trust for decades (e.g., Mayer et al., 1995; Paliszkiewicz, 2013; Paliszkiewicz & Koohang, 2016). The role of trust in the digital economy is even more significant because communication cues that are often present in face-to-face interactions are minimal or even nonexistent in the virtual world. Trust is essential in building employee commitment (Eikeland, 2015; Lewicka & Krot, 2015), loyalty (Costigan et al., 1998), communication and knowledge exchange (Malhotra & Murnighan, 2002; Young & Daniel, 2003; Tyler, 2003; Li et al., 2010; Hakanen & Soudunsaari, 2012; Bencsik & Juhasz, 2020), effective implementation of strategies (Doney et al., 1998), learning (Koole, 2020), and organizational performance (Paliszkiewicz et al., 2014; Paliszkiewicz et al., 2015; Koohang et al., 2017).

The aim of this chapter is to present the meaning and interdisciplinary nature of trust in the digital economy based on a critical literature review and propose opportunities for future research in this area. In this chapter, the definitions of trust and future research are presented, drawing findings from disciplines such as psychology, sociology, economy, management, and information systems (e-commerce, virtual communities, artificial intelligence, and security policy). The chapter concludes with the limitations of the study and general future directions.

The Definition and Future Directions of Trust in Different Disciplines

Psychology

In psychology research, trust is related to personality and how that personality functions in human interactions. For example, trust is described by Rotter (1967) as an expectancy, belief, or feeling that is deeply rooted in personality and has its origins in an individual’s early psychosocial development. Personality psychologists such as Wrightsman (1966) have viewed trust as a personality trait that reflects the general expectancies of others’ trustworthiness. This form of trust relates to a person’s innate nature that characterizes the person’s propensity to trust, which is empirically verified as an antecedent of trust (Liao et al., 2011).

According to Gibb (1978), trust is very close to love and instinctive. People differ in terms of how much and when they are willing to trust (Das & Teng, 2004). Yakovleva et al. (2010) defined trust as a dyadic construct in which one party’s behavior influences the other party’s perceptions and actions. More research is needed concerning personality and propensity to trust, especially to technology and artificial intelligence (AI). As AI increasingly performs the tasks that were once performed by humans, fear of being replaced by AI lingers. However, opportunities abound for both humans and AI to contribute what they excel at doing in a symbiosis way. Despite this goal-oriented perspective that centers on both parties’ benefits, it also takes the proper psychological processes and personality traits to build successful collaboration. Further research should explore how trust is developed in this symbiosis or other human–AI relationships.

Sociology

Sociologists described trust as a part of the social structure and base for any relationship (e.g., Garfinkel, 1967; Granoveter, 1985; Shapiro, 1987). Work by Fukuyama (1995), Lincoln (1990), and Fisman and Khanna (1999) suggests that approaches to trust are related to national and social culture. Sztompka (1999) described trust as the expectation that other people, groups, or institutions with whom we interact will act in ways conducive to our well-being. Shapiro (1987, p. 626) defines trust as “a social relationship in which principals […] invest resources, authority or responsibility in another to act on their behalf for some uncertain future return”. Rousseau et al. (1998) defined social trust as the willingness to accept the vulnerability to others’ actions based on positive expectations regarding those others’ intentions and/or behavior. Differences in trust can be specific to a country or culture (Zaheer & Zaheer, 2006). Although cross-cultural studies on trust have been popular (Bond & Forgas, 1984; Zhang & Bond, 1993), trust also varies across other levels of human societies (country, society, culture, region, religion, and organization). The interwoven relationships across multiple of these levels still require further investigations. Trust is particularly relevant in the digital era because collaborations are performed across one or more of these societal levels. This kind of research is essential to drive successful international business relations and enhance collaborations between people and various organizations.

Economics

Trust is also of interest in economics. For example, Anderson and Naurus (1990) defined trust as a firm’s belief that another firm will perform actions resulting in positive outcomes for both firms and not take unexpected actions that would result in negative consequences. Sako (1992) considered trust to be a state of mind, an expectation held by one trading partner about another who will behave or respond in a predictable and mutually acceptable manner. According to Ganesan (1994), trust is the willingness to rely on an exchange partner in whom one has confidence. James (2002) described trust as an expectation that people will not be exploited by others, which exists when there are no strong incentives for people to behave opportunistically. According to Bromiley and Cummings (1992), trust reduces transaction costs. The literature review confirmed that trust substantially affects economic growth, and it is a necessary factor for economic development (Zak & Knack, 2001).

Trust in economics is often a calculated trust that factors risk into the trust equations, predicts another actor’s behavior or expectations, and maximizes benefits for involved parties. Further study is needed in this calculative trust, perceived risk, and prognosis of people’s behavior in a virtual environment.

Management Science

Trust is an essential concept in management (Grudzewski et al., 2007), including trust and team performance (Lin et al., 2016), collaboration (Leung et al., 2013), integration (Morita & Burns, 2014), communication and knowledge management (McAllister, 1995;Lewis & Weigert, 1985), and leadership (Koohang et al., 2017). In management, trust is conceptualized as an individual’s state of mind. Mayer et al. (1995, p. 712) characterized trust as “the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other party will perform a particular action important to the trustor”. Paliszkiewicz (2013) defined trust as the belief and optimistic expectation that another party will act in such a way that it is beneficial to the trusting party and will act reliably and behave or respond in a predictable and mutually acceptable manner.

In management, further studies are needed to explain the factors influencing trust-building in organizations and between employees, especially in the virtual environment. It would be interesting to evaluate how and why trust changes over time. Research is also needed to expand on the dark side of trust and trust breaches. Future research can examine the main effects as well as mediators and moderators of organizational trust.

Information Systems Research

Trust in information systems research has been shown in different domains, such as e-commerce (Papadopoulou et al., 2003; Liao et al., 2011; Xiao et al., 2016), virtual communities (Leimeister et al., 2006), artificial intelligence (Chen et al., 2008; Liou et al., 2016), and security policy (Koohang et al., 2020).

Trust in E-commerce

In e-commerce, trust is recognized as the bedrock for customer retention (Papadopoulou et al., 2003) that affects a consumer’s intention to transact and share information (Liao et al., 2011). It is even more critical in electronic transactions than in the traditional market (Xiao et al., 2016). Trust in e-commerce concerns more about the transactional process and the parties involved (Kassim & Abdullah, 2008). Pavlou (2003, p. 106) described trust in e-commerce as “a belief that allows consumers to willingly become vulnerable to Web retailers after having taken the retailers’ characteristics into consideration”.

Understanding how trust is built and maintained dominates research in e-commerce because the switching cost for consumers to switch among different e-stores is low (Xiao et al., 2016). According to the aforementioned study, reputation, communication, familiarity, information quality, security, privacy, ease of use, and usefulness are often factors affecting trust for inexperienced buyers. In contrast, better support for service quality and system quality are the two most important factors that influence trust for experienced buyers (Kim et al., 2004; Chang & Chen, 2008; Jairak 2014; Ajzen 2002). Trust is essential for e-business’s success not only in attracting new customers but also in retaining them (Mouriuchi & Takahashi, 2016).

Several ideas for future research can be suggested in this area. It would be interesting to evaluate how and why trust levels change over time. For example, how long do previous service encounters play a role in trust-building? How does trust vary across product or service life cycles? A final area for future research relates to a systematic approach to understanding customer perceptions and attitudes in virtual environments in different cultures.

Trust in Virtual Communities

The virtual community is comprised of members who share an interest, repeatedly interact, generate shared resources, develop governance policies, demonstrate reciprocity, and share cultural norms (Preece, 2000). Turban et al. (2006, p. 737) defined a virtual community as “a group of people with similar interests who interact with one another using the Internet”. It is easier to create a websit...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Dedication
• Contents
• List of Tables
• List of Figures
• Editors
• List of Contributors
• Foreword
• Foreword by Fatih Çetin
• Preface
• Part I: Trust: Theoretical Foundations
• Part II: Trust in the Digital Economy: Issues and Challenges
• Index