Swift trust and distrust in strategic partnering relationships: key considerations of team-based designs.

Abstract

We explore the integration of trust and distrust as defined by Lewicki, McAllister, and Bies (1998) with its effects on team-based designs. A hypothetical long-term contract simulation was used to study trust and distrust through a medium-term, qualitative analysis. Results indicate that teams respond differently to trust and distrust perceptions in the development of contracts. Discussion of the Lewieki et al. (1998) model demonstrates that while trust served to loosen formalities between teams and led to higher perceived quality, the presence of distrust led to the development of competition between teams, higher inter-team accountability and lesser perceived quality.

Introduction

Organizations have not only been witness to but active participants in a major phenomena over the past twenty years: the increasing use of teams to develop and implement long-term contracts used in outsourcing organizational work (Adler, 2004; Barthelemy & Adsit, 2003; Benfratello & Sembenelli, 2002; Boswell, 2000; Cohen & Bailey, 1997; Paladino, Bates & da Silveira, 2002; Schilling & Steensma, 2001). An assumption behind outsourcing is that trust improves communication and cooperation between teams in the accomplishment of organizational work (Boon & Holmes, 1991; Dasgupta, 1988; Jeffries & Reed, 2000; Mayer, Davis & Schoorman, 1995).

While it is clear that research has indicated a need for trust in partnering relationships, the study of how trust and distrust affect inter-team based designs is clearly understudied and, thus, underdeveloped. The purpose of this paper is to contribute to our understanding of the effects of trust and distrust perceptions on inter-team processes and outcomes. Using Lewicki, McAllister, and Bies's (1998) model of trust and distrust, we studied groups in a capstone business course to more fully understand how inter-team interactions are affected by the perception of simultaneous trust and distrust.

This paper investigates two fundamental assumptions with regard to trust and distrust. First, we explore the basis for understanding how inter-team relationships are affected by simultaneous trust and distrust. Given the fast-paced nature of today's work environment, the formation of 'swift' trust and distrust implies that teams have to make quick decisions based on interdependence of work between teams. This study also provides a fundamental assessment of how simultaneous trust and distrust perceptions affect the formality and boundaries of inter-team interactions. Since teams are being used more frequently and for more varied types of work, an investigation of Lewicki et al.'s (1998) model is long overdue. Do trust and distrust work together as hypothesized by Lewicki et al. (1998)? This study provides insight into how teams parlay perceptions of trust and distrust into a future partner relationship.

The Integration of Trust and Distrust in Long-Term Contracting

Outsourcing typically involves some degree of negotiation between teams and research in the outsourcing of organizational work providing an intricate blend of information regarding team adaptation and communication (Adler, 2004; Bell, 1990; Helewitz, 2003; Robinson & Volkov, 1998). Outsource teams integrate individual, team, functional and organizational norms in negotiating long-term contracts (Bazerman, 1983; Knorr & Knorr, 1978; Lacity & Willcocks, 1998; Niederman, Brangeay, & Wetherbe, 1991), yet these teams are constrained by contextual factors like trust and distrust.

Teams develop long-term contracts based on perceptions of trust and distrust. The concepts of trust and distrust have been researched for over 40 years with an emphasis on the intentions and behaviors of those in which a trading relationship exists (Deutsch, 1960; Hosmer, 1995). Key to understanding trust and distrust is the fact that these concepts are two unique conditions, not opposite ends of the same continuum (Luhmann, 1979). Consequently, there are unique elements of teams that contribute specifically to both the growth and decline of trust and distrust.

Partners may collaborate, but they may also compete and this leads to simultaneous trust and distrust (Rousseau, 1995). Trust and distrust are thus defined as positive and negative expectations, respectively, of another partner's future conduct while one's organization is vulnerable in the partnership (Boon & Holmes, 1991). These expectations are firmly established in how team members perceive a partnership with regard to the extent their own livelihood can benefit or be harmed. While team dynamics are worthy factors that affect simultaneous development of trust and distrust perceptions, most organizational contracts depend on inter-team interactions to design and fulfill organizational work (Lewicki et al., 1998). Examples of simultaneous trust and distrust perceptions are provided in Table 1 as adapted from the Lewicki et al. (1998) model.

Levels of Trust and Distrust in Relational Contracting

Early definitions of individual levels of trust are explained as a "belief in the goodness of others" (Erickson, 1950), or as "an expectancy that is held by an individual or group that the word ... of another individual or group can be relied upon" (Rotter, 1980). Follow-on development of the trust concept included the confident expectation of the trustor that the trustee will help the trustor reach a goal in an environment of risk and uncertainty (Mayer, Davis, & Schoorman, 1995). This environment of risk and uncertainty is also what provides the basis for trust and distrust in teams.

Zand (1972) refers to trust at the team level as generalized expectations for all team members. A key task of team members is to integrate varying individual trust and distrust expectations into a team-level perception of trust and distrust. Therefore, we define trust as one group's positive perceptions of another group's conduct while in a working relationship. Similarly, distrust is one group's negative perceptions of another team's conduct while in a working relationship (adapted from Boon & Holmes, 1991).

The perceptions of trust and distrust form the basis for hard and soft contracting in relational contracting as described by Williamson and Ouchi (1981). The authors suggest that hard contracting is required when contract requirements are explicit. Soft contracting is used when contract terms are less specific, measurable, and clearly stated, and usually in the form of tacit agreements. The underlying premise in relational contracting is that teams choose between hard and soft contracting as a framework to do work based on their perceptions of trust and distrust. This may not be a valid assumption without careful thought on how team processes affect the development of contract requirements. Hard contracting is more precise and definitional in the terms that bound a business partnership. Soft contracting tends to be less stringent and more informal, many times succumbing to the social dynamics of the business relationship. Thus, soft contracting may have many more ambiguities in contractual terms but also more opportunities for off-contract partnering and conflict resolution. Hard and soft contracting compose two competing views on how a partnership, as a relationship, should be arranged or governed (Schilling & Steensma, 2001; Zuckerman & Higgins, 2002).

Consideration of trust and distrust in relational contracting is required because these conditions affect how requirements are written in the contract (Jeffries & Reed, 2000). A long-term contract is nothing more than a medium by which the partnership is framed and subsequently governed. Teams performing the task of developing a contract based on perceptions of trust and distrust greatly influence how teams interact and whether contracts end up 'hard' or 'soft' (Adler, 2005). Since teams form and adjourn quickly and regularly, Meyerson, Weick, and Kramer (1996) suggest that organizational members develop' swift trust' perceptions based on little time to acquire information about an individual, team or organization.

Swift Trust and Distrust in Team-Based Designs

Swift trust, a term coined by Meyerson et al. (1996), can be the result of temporary teams who are thrown together to work on important, complex tasks. Teams are typically dependent on other teams but there is little time to determine if another team has a poor past performance (Ancona & Caldwell, 1992). As Meyerson et al. (1996) stated, in order to trust a temporary group, the members must "wade in" as opposed to waiting until experience shows if a team is trustworthy. Swift trust and distrust are, of necessity, formed quickly to manage issues of uncertainty, risk, and perceptions between teams. Based on the concept of temporary team-based designs, swift trust and distrust develops because of the diversity of team membership, limited history working together and task non-routineness, complexity and interdependence (Meyerson et al., 1996).