EGOS Standing Working Group on Organisational Trust

Sub-theme 3 - Authority, Prices and Trust: The Coordination of Relationships Within and Across Organizational Boundaries

29th EGOS Colloquium, 3–5 July 2013, Montreal (Canada)

More than twenty years ago, Bradach and Eccles (1989) suggested analyzing control and coordination in and between organizations as complex phenomena where three different mechanisms are intertwined: authority, prices and trust. All three mechanisms facilitate coordination and control because they enable exchange partners to form expectations about one another’s future behaviour.

Authority provides the power to hold people accountable for their actions and to influence directly what they do and how they do it. Thus authority enables individuals or firms to present behavioural options to their exchange partners as limited by fiat. Prices, for example, in the form of performance-contingent rewards or as transfer-prices, are also a powerful instrument to form expectations of exchange partners because they orient the exchange partners’ behaviour towards predetermined objectives. Finally, trust is based on positive expectations of the intentions or behaviour of another actor in a situation where the actions of this other party are neither completely determined by fiat nor clearly aligned by incentives (Rousseau, Sitkin, Burt, & Camerer, 1998; Zand, 1972).

While our understanding of authority and prices, and in the last two decades of trust, has grown tremendously we still have not adequately tackled the call of Bradach and Eccles (1989) to analyze the interplay of these mechanisms. For example, in trust research a vivid debate has developed on the trust/authority inter-relationship, that is, whether trust and authority (in the form of formal control) are positively or negatively related (Bachmann, 2001; Mellewigt, Madhok, & Weibel, 2007; Weibel, 2007). Yet, knowledge is still lacking on the conditions and the specific situations which determine the inter-relationship, and we still do not know enough about why trust and authority sometimes act as substitutes and sometimes as complements. Even less developed are discussions on how authority (in the form of power) and trust are related or how trust and prices may be inter-linked.

Against this background, the aim of this track is to encourage and inspire discussions on the combination of authority, prices and trust in and between organizations. We seek contributions that analyze the interaction effects among these mechanisms, disentangle conditions under which these combinations have positive rather than negative effects and help to understand why such relationships and dynamics evolve. Examples of relevant questions to be addressed by this sub-theme include the following:

  1. How are formal control and trust in the organization (or between organizations) related? Under which conditions are formal control and trust in the organization positively related and when are these mechanisms negatively related?
  2. Which types of control and which control configurations are conducive to building trust in the organization (or between organizations)?
  3. Can and, if so, in what way can formal controls repair trust in organizations?
  4. What is the impact of regulations (standards, controls) at the individual level: do they make behaviour more  trustworthy? How do they influence individual motivation? Can they undermine (or strengthen) processes of trust building, and why and under which conditions would this be the case?
  5. What are the effects of price formation on trust between exchange partners? Which type of price formation encourages or inhibits the development of trust in interorganizational collaborative relationships as well as in relationships within organizations and work teams?
  6. What is the effect of performance- contingent rewards on trust? How does this type of reward enable or undermine cooperative trust-based relationships (e.g between team members, between teams or between larger organizational units)?
  7. In what ways can a façade of trust mask the deliberate use of power? And how are trust and power related in empowerment initiatives?

Convenors

Prof Antoinette Weibel, University of Konstanz, Germany, Email antoinette.weibel@uni-konstanz.de
Prof Reinhard Bachmann, University of Surrey, UK, Email r.bachmann@surrey.ac.uk
Thomas Mellewigt, Free University of Berlin, Email ls-mellewigt@wiwiss.fu-berlin.de

References

Bachmann, R. (2001). Trust, power and control in trans-organizational relations. Organization Studies, 22(2), 337-365.

Bradach, J. L., & Eccles, R. G. (1989). Price, Authority, and Trust: From Ideal Types to Plural Forms. Annual Sociological Review, 15, 97-118.

Mellewigt, T., Madhok, A., & Weibel, A. (2007). Trust and formal contracts in interorganizational relationships  -  substitutes and complements. Managerial and Decision Economics, 28(8), 833-847.

Rousseau, D. M., Sitkin, S. B., Burt, R. S., & Camerer, C. F. (1998). Introduction to Special Topic Forum: Not so Different After all: A Cross-Discipline View of Trust. Academy of Management Review, 23(3), 393-404.

Weibel, A. (2007). Formal control and trustworthiness - never the twain shall meet? Group & Organization Management, 32(4), 500-517.

Zand, D. E. (1972). Trust and managerial problem solving. Adminstrative Science Quarterly, 17(2), 229-239.