Trust, Justice and Ethics 7

Learning Goals What is trust, and how does it relate to justice and ethics? In what three sources can trust be rooted? What dimensions can be used to describe the trustworthiness of an authority? What dimensions can be used to describe the fairness of an authority’s decision making?

Learning Goals, Cont’d What is the four-component model of ethical decision making? How does trust affect job performance and organizational commitment? What steps can organizations take to become more trustworthy?

Trust, Justice, and Ethics Reputation – prominence of the company’s brand in the public mind and the perceived quality of its goods and services Trust – willingness to be vulnerable based on expectations about the other’s actions and intentions Justice – perceived fairness of an authority’s decision making Ethics – degree to which behaviors are in accordance with generally accepted moral norms

Trust Disposition-based trust – a general propensity to trust others (or not) Cognition-based trust - rooted in a rational assessment of the authority’s trustworthiness Affect-based trust – depends on feelings toward the authority that go beyond any rational assessment

Disposition-Based Trust Has less to do with the authority and more to do with the trustor General expectation that the words, promises, and statements of individuals and groups can be relied upon Shaped from both genetics and environment Trust propensity levels in the United States are relatively high, compared to those in Europe and South America

Trust Propensities by Nation Figure 7-2

Cognition-Based Trust With experience or observation, trust begins to be based on cognitions we‘ve developed about the authority Trustworthiness is defined as the characteristics of a trustee that inspire trust Ability Benevolence Integrity

Track Record Ability – the skills, competencies, and areas of expertise that enable an authority to be successful in a particular area Benevolence – the belief that the authority wants to do good for the trustor, apart from any selfish or profit-centered motives Integrity – the perception that the authority adheres to a set of values and principles that the trustor finds acceptable “Walk the talk”

Affect-based Trust More emotional than rational We trust because we have feelings for the person in question Sometimes acts as a supplement to the other types of trust An emotional bond develops, and feelings for the trustee increase our willingness to accept vulnerability

Factors that Influence Trust Levels Figure 7-1

Justice Distributive justice – the perceived fairness of decision outcomes Procedural justice – the perceived fairness of decision-making processes

Procedural Justice Rules Voice Correctability Consistency Bias suppression Representativeness Accuracy

Procedural Justice Don’t people just care about the outcomes that they receive? Distributive and procedural justice combine to influence employee reactions. When outcomes are bad, procedural justice becomes enormously important. Procedural justice tends to be a stronger driver of reactions to authorities than distributive justice.

Interpersonal Justice Reflects the perceived fairness of the treatment received by employees from authorities Fostered when authorities adhere to: Respect rule – treat employees in a dignified and sincere manner Propriety rule – refrain from making improper or offensive remarks Taken to extremes, interpersonally unjust actions create abusive supervision

Informational Justice Reflects the perceived fairness of the communications to employees from authorities Fostered when authorities adhere to: Justification rule – explain decision-making procedures and outcomes in a comprehensive and reasonable manner Truthfulness rule – communications are honest and candid

Ethics Research on ethics seeks to explain… Why people behave in a manner consistent with generally accepted norms of morality Why they sometimes violate those norms

The Four-Component Model of Ethical Decision Making Figure 7-6 INSERT ONCE REVISED

The Four-Component Model of Ethical Decision Making Moral awareness occurs when an authority recognizes: A moral issue exists, or An ethical code is relevant to the situation Moral intensity – the degree to which the issue has ethical urgency Potential for harm Social pressure Moral attentiveness – the degree to which people chronically perceive and consider issues of morality in their experiences

The Four Component Model of Ethical Decision Making Moral judgment – the process people use to determine whether a course of action is ethical or unethical Cognitive moral development theory As people age and mature, they move through several stages of moral development Each is more mature and sophisticated than the prior one

The Four Component Model of Ethical Decision Making Moral judgment, cont’d Preconventional stage – Viewed in terms of the consequences of actions for the individual Conventional stage – Referenced to expectations of one’s family and society Principled (or postconventional) stage – Referenced to a set of defined, established moral principles

The Four Component Model of Ethical Decision Making Philosophers have identified a number of moral principles that serve as prescriptive guides for making moral judgments. Consequentialist Utilitarianism Egoism Non-consequentialist Ethics of duties Ethics of rights Virtue ethics

The Four Component Model of Ethical Decision Making Moral intent reflects the degree of commitment to the moral course of action. The distinction between awareness or judgment and intent is important Many unethical people know and understand that what they’re doing is wrong—they just choose to do it anyway. Moral identity —the degree to which a person self- identifies as a moral person Moderates the effects of moral judgment on ethical behavior.

Importance of Trust Positive relationship with performance Increases an employee’s ability to focus Influences citizenship behavior and counterproductive behavior Allows employees to develop social exchange relationships, instead of economic exchange relationships, with their employers Economic exchange relationships Narrowly defined, quid pro quo obligations Specified in advance Explicit repayment schedule. Social exchange relationships Vaguely defined obligations Open-ended and long-term in repayment

Application: Social Responsibility Corporate social responsibility – acknowledges that the responsibility of a business encompasses the economic, legal, ethical, and citizenship expectations of society A company’s obligations do not end with profit maximization. Organizations have an obligation to do what is right, just, and fair and to avoid harm.