Trust management (managerial science)

Definitions

Trust management can be conceptualized in two ways, the process by which an individual becomes trustworthy and second, the process of assessing the reliability of other individuals. Both concepts of trust are considered as equally significant in the context of trust management.

Becoming trustworthy on a personal level is a significant criterion of success and survival as it allows cooperation and collaboration between the individual and other people. Thus it is an important principle as it common for a majority of people attempt to build up a "fake image" of their reliability for personal benefits. Having the ability to assess the reliability of other individuals is equally as important as being trustworthy oneself. Through being able to detect reliability, one can make better decisions and employ trust in the right people.

Taking these two aspects together, the following definition of trust management can be formulated:

“The activities of creating systems and methods that allow relying parties to:

1. Make assessments and decisions regarding the dependability of potential transactions involving risk

2. Allow players and system owners to increase and correctly represent the reliability of themselves and their systems.”

Trust is a container concept used in a broad variety of disciplines. Much work has been done in the field of psychology, sociology, economics, political sciences, philosophy, anthropology and management sciences. Simply defining "trust" is a milestone in the management sciences. One can barely speak of coherent research in the field of trust and trust management.

For trust management defined above, there are some crucial assumptions as follows:

1. Some suspicion is often well-founded in competitive organizations; as in the course of unforeseeable political circumstances, the cost of misplaced trust can have a disastrous effect,

2. In a potentially uncertain, dangerous and risky environment people need to know very well who can be trusted and under what circumstances. Moreover, it is essential to see the necessity of being aware of potential dangers.

The essence of trust management is not only to trust but to decide to what extent to trust-- and how to create and develop trusting relationships.

When there is a trust deficit a climate of resignation ensues. It brings on consternation and makes it hard to concentrate on agreed targets. People tend naturally to limit these effects and create "trust substitutes to counteract the climate of uncertainty generated by these effects". These equivalents of trust are as follows:

1. Providentialism – meaning supernatural forces, fortune, God or metaphysical forces.

2. Corruption – predicting and having control under the other’s people's actions using bribes, favors, favoritism and so on.

3. Pressure – directly and unconditionally controlling the other’s people's actions.

4. Isolation (ghettoization) – separating certain ethnical, religion or professional groups in unfavorable and threatening its environment, with strong internal loyalty strengthened by Xenophobia and lack of tolerance for the others.

5. Paternalism – considered as going in search of strong authority, leader – „quasi father” – who assures missing order, hierarchical harmony and predictability of the group’s life.

6. Externalization – meaning transferring trust in other external groups or communities together with a tendency to idealize the procedure of operations, organizational solutions or total quality of an institution of a targeted group.

7. Excessive assistance of legal institutions – when businessmen do not trust each other, they need formal means to secure the transaction (for instance, detailed contracts, bank guarantees, employing certifying notary, and tendency to sue).