What is Trust in Business - Coursework Example

What is trust? Introduction Humans view trust from different perspectives in both real and practical situations. This path of perceiving trust is usually long in theoretical, mathematical or formal model. For this reason most of the people leave it midway. Nevertheless those that continue with this path take different routes and thus the path is not unique. In this paper the author presents his own way of how he perceives trust. The author has also gone further to explain the importance of trust in business ethics and the consequences of mistrust within business circles. Definition of Trust According to an English Merrriam- Webster dictionary, “trust is assured reliance on the character, ability, strength or truth of someone or something.” However everybody has their own definition of the word. Generally trust is a word that is used to show the relationship between individuals. In different domains trust has different meanings. For instance, in sociology a person is said to trust in another if they have accepted to rely on them. According to law, trust is a legal arrangement where one manages property on behalf of the other party. In business trust is the belief that a company will deliver on expectations or its promises. Business financial institutions such as banks are said to be trust companies (Steve, 2007). Author’s Point of View Human beings learn to trust somebody or something if the subject behaves as they expect. They do this by developing a sophisticated policy as they interact with each other. A good example is when a patient visits a doctor whom they have never interacted with before. The title Dr. on the badge of this person is enough to make one trust them for their health and get hopes that they are now in the right hands. In case the patient is treated by this doctor and their health deteriorates they feel the need to re evaluate the trust they had accorded them (Steve, 2007). This is because the patient becomes suspicious and then needs further proof of the doctor’s competencies. In doing this, one may ask friends if they know about the doctor or even ask the doctors associations if they know him. Further still one can rely on the yellow pages to see if they are recognized globally. This shows that human beings use complex dynamics of trust depending on past experiences, observation or better still recommendations from trusted parties. In developing trust to someone or something the context is also very important (Luu, 2012). A good example is where an individual can be highly trusted in the field of IT and the same individual cannot be trusted in matters for example related to catering. This shows that a subject can only be trusted from what is observed or based on past experiences. In every situation of trust there is always an equal measure of risk. The two are inseparable. An example is when one trusts a friend and they even go to an extent of lending them money believing that the money will be given back. A person can lend their friend small amounts of money such as 10 dollars and have the trust that they will be paid back (Stephen & Rebecca, 2006). The same person may lack trust with the same person of being paid back an amount that is too high like one million dollars. This is because the risk is evident and clearly too high. Another important point is that trust is transitive. The following case scenario shows how this is possible. Jane is a diabetic patient who has travelled all over looking for a diabetes specialist. Several people have recommended Doctor Chris to her but she has never met this Doctor before. As a result of the trust that is reported by her friends about this doctor she has also developed her own value of trust (Stephen & Rebecca, 2006). This shows that despite the fact that Jane has never met this doctor and neither did she have any experiences from him before she has the courage to trust him from experiences of others. This is however bound to change if she gets a different experience from the same doctor and thus need to re-evaluate her trust. It is also possible that the same trust is retained if she confirms that the doctor is an expert as described by others. In this, she can also transfer this trust to other people if she feels contented by the services of the doctor. Trust evolves with time. In the above case scenario it is very possible that Jane will increase her trust to the friends who recommended her to the doctor if she feels satisfied with the doctor’s services. In doing this she will always go back to them when she has a problem to seek for advice (Stephen & Rebecca, 2006). Again, if she feels disappointed by the doctor who was recommended to her, her trust to the friends might decrease and she might never rely on them for any advice. When making decisions one does not only rely on trust, but also the risk involved is computed and combined to the value of trust. Trust in Business Ethics In terms of business ethics, trust is most important when dealing with clients, stakeholders and even employees. For any business to survive and succeed there must be trust. This is because it is important when it comes to relationships. It is very dangerous for anyone when others lose trust in them as their chances of survival in that particular group are reduced. In businesses today there is the challenge of building trust among the workers and the management (Tolvanen, 2012).Consequently the working environment has become highly un conducive and this have resulted to high employee turnover and this means use of more resources than earlier planned. Trust in ethical conduct is important. How a person carries themselves in their work places determines how much trust he/she earns from the rest of the workmates. In today’s world a statement like “just trust me” is unacceptable. Trust is earned and cannot be demanded. In business clients and stakeholders get trust from the integrity and honesty demonstrated by the business party. A good example is when clients know that in case they disclose their confidential information it will not be disclosed to other parties without prior consultation. This gives them much trust on the individual (Tolvanen, 2012). Relationships that are built on trust give the business a competitive advantage and ensure survival of the business because trust is rare to find. A good example is a case of a health institution where sensitive information concerning patient’s health is given. In case a patient goes to a clinic and later learns that their colleagues know of their health status, they totally lose trust for that facility. This means that they can never go back there and they even influence others not to attend such a place. As had been mentioned earlier, trust is transitive and the same is true when it comes to mistrust. A person who expresses dissatisfaction with such a facility to the friends or relatives makes them develop their own value of mistrust (Stephen & Rebecca, 2006). Transparency is highly important in developing and maintaining business relationships. Lack of transparency is damaging to the business. An employee who is not transparent in his dealings is costly to a business as he will always write memos to defend himself. This means that they have to constantly use valuable resources such as materials and time which could have been used in growing the business. Another important level of trust is holding oneself accountable in all actions that are undertaken within business relationships. A business that lacks trust cannot achieve its objectives. This is because without trust, no legal agreement can be made, strategic relationships fail and this means that business structure is damaged (Luu, 2012). In a business where there is trust among the players, it becomes easier to make decisions because legal contract is not always required every time a decision need to be made. Trust enhances creativity, reduces running cost of business and makes the relationship more fun thus motivating the employees. Trust is even more important where there is a knowledge gap and uncertainty. In the business world no one is an expert of everything. This means that when they need products and services that are not within their area of expertise they will always gather information from those they trust. In this, they trust the person’s or the company’s integrity and they only want to deal with someone who is competent enough. This shows that a company that delivers to its promises and is competent enough will always take the competitive advantage. In addition a business may be competitive enough in terms of what they offer but its employees may lack integrity and be unethical in their dealings. This goes back to the point mentioned earlier that context is also very important in matters of trust (Steve, 2007). Conclusion Human beings have different perceptions of what trust entails and most of them do not even complete their definition. Those who do, take different routes depending on their different models. In this paper the author has given his own perception of what trust is with demonstrations of different scenarios. It has clearly been demonstrated that human beings develop trust if they accept somebody or something and more so if the subject delivers on their expectations. In business ethics, trust is a key determinant of the survival of any business. It is clear that trust is even more important where there is uncertainty and knowledge gap. This is because the person in need of a company’s goods or services will gather information from friends about the competence of a certain company and that is what they will base their decision on. References Luu, T. (2012). The Linkages among Leadership, Trust, and Business Ethics. Social Responsibility Journal, 8 (1), 133 – 148 Stephen, R., Rebecca R. (2006). The Speed of Trust: The One Thing That Changes Everything. New York: US. Simon and Schuster publisher Steve, V. (2007). What is Trust Worth? Retrieved June 11, 2012, from http://qn.som.yale.edu/content/what-trust-worth Tolvanen, J. (2012). Trust, Business Ethics and Crime Prevention. Business Law Journal, 4, 10-25 Read More