By fostering an atmosphere of trust, how can organisations overcome such problems as social loafing and opportunism?

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This paper will attempt a theoretical approach by analyzing literature in this field, and then apply appropriate theories to several organizational examples. In order to assess whether an organization placing emphasis on fostering an atmosphere of trust, can overcome opportunism amongst its workforce, the terms trust and opportunism must first be defined to ensure a common understanding. According to the Oxford English dictionary, trust is 'confidence in or reliance on some quality or attribute of a person or thing, or the truth of a statement.' From a management literature perspective this definition is not explicit enough. Definitions of trust abound in the literature are given in this topic. It seems that as 'trust is a very complex construct, with multiple levels, bases and determinants', it is difficult to produce a definitive definition.

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[...] Whilst it has been seen that trust can be a decisive weapon in overcoming the threat of opportunism, in real life it is not always so reliable. Towards the end of the 1990s we saw the collapse of several large banks, such as Tokushoku Bank and Yamaichi Securities in Japan, perhaps the key trigger for the South East Asia Crisis. “Sakura Ltd., the banking partner of the Misui keiretsu of which Toyota is a part, is now facing $ 5.6 billion in securities losses and $10 billion in defaulted loan debts” (Russ, 1999). [...]

[...] By fostering an atmosphere of trust, how can organisations overcome such problems as social loafing and opportunism? Contents I. Definitions of trust 3 Categorisation of trust II. Definitions of opportunism a. Prisoner's dilemma III. Limiting opportunism through trust a. Intra-organisational trust 1 Enron Delta Airlines b. Indicators of trust c. Inter-organisational trust Strategic alliances IV. Cultural influences a. Japan b. Germany V. The limitations of trust in overcoming opportunism a. [...]

[...] 83-103. Han, S.L., Wilson, D.T. and Dant, S.P. (1993). Buyer-Supplier Relationships Today. Industrial Marketing Management. v 22. pg. 331-338. Hardy, C., Phillips, N. and Lawrence, T. (1998) ‘Distinguishing Trust and Power in Interorganizational Relations: Forms and Facades of Trust in Christel Lane and Reinhard Bachmann', Trust Within and Between Organizations, Oxford: Oxford University Press. Hawley, J. [...]

[...] (Unknown) New Third Way', Prospect Magazine. Downloaded from www.netnexus.org/library/papers/plender.htm as at 8th December 2002 Rousseau, D., Sitkin, S., Burt, R. & Camerer, C. (1998). Introduction to special topic forum. Not so different after all: A cross-discipline view of trust. Academy of Management Review, v pg. 393-404. Russ, A. (1999) ‘Keiretsu in the Workplace - How it has Failed the Japanese.' Downloaded from www.nd.edu/~aruss/keiretsu.html as at 8th December 2002 Thomas, J. B. & Trevino, L. K. [...]

[...] However, this fails to address the existence of trust in relationships where goals are not common (Hardy et al., 1998). “Mayer et al. (1995) differentiated trust from constructs such as predictability, co-operation, and confidence” (Ford, 2001), stating that trust is: willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party” Other authors draw on a more psychological definition of trust: “Trust is not behaviour (e.g. [...]