Managing Knowledge-Based Organizations Through Trust

This chapter provides a comprehensive basis for understanding the role of trust in knowledge management and systems in organizations. The point of departure is the resource and knowledge-based theories of an enterprise that place knowledge generation as the primary source of wealth and social well-being. The authors show the crucial role of the intangible factors of trust, knowledge and information as related to the social capital and the development of the intellectual capital of an organization. The multidisciplinary nature of the concept of knowledge management and of trust is examined by a thorough review of literature. Trust is seen as a situational and contextual phenomena whose impact on the development of an organizational culture and climate and on success with collaborating is explored as related to the relational, cognitive and structural dimensions of social capital. The overall aim is to sustain strategic capability in the networked mode of performing. The importance of normative trust, shared values and shared meanings is stressed as a frame of reference to organizational behaviour and in communities of practice, but also the role of swift trust is highlighted. The authors provide ideas for empirical research to develop theory of the strategic management of knowledge and information and outline implications for practices for the organizational development.

Trust in Technology Partnerships

In this chapter the concept and phenomenon of trust with special focus on technology partnership formation is explored. Complementary partnerships are believed to be a key element both in knowledge creation for technological development itself and in leveraging the value of technological knowledge. Knowledge creation is social in nature, and social exchange is a core process in knowledge creation, where voluntary communication based on trust is critical. The aim of this chapter is to increase the understanding of trust both as a concept and as a phenomenon. The conceptualization of trust is derived basically from the literature and developed further by data from an empirical study by Blomqvist (2002) on trust in asymmetric technology partnerships. On the basis of these analyses a four-dimensional conceptualization of trust is formed. Trust is an actor’s expectation on the other party’s capability, goodwill and self-reference, which needs to be confirmed by experience. Thus trust is increased by — and decreased by the lack of — these components in parties’ actual behavior and communication. The authors show also some operative methods for building trust.

Self-Organization and New Hierarchies in Complex Evolutionary Value Networks

This chapter, with a broad theory building goal, addresses these two questions: “how the new network-based forms of coordination emerge, and how can they change the management of value exchange dynamics on complex cognitive networks?” We can find a useful answer by using an interdisciplinary approach. New institutions do not form through costless trust and order-for-free self-organization (the invisible hand of the market), but are managed as complex evolutionary value networks. This conceptual framework can help managers to design more cooperative structures and nodes to negotiate network structure and power. The design of the network matters. The network is the locus of learning but also the locus of social negotiation. The new institutions can be designed, even if this design looks more like a monitorial learning process and a design of the infomediation infrastructure than the well structured plans of old-fashioned management. The new network governance forms, and the logics that wants to build organizations as flexible and loosely-coupled systems of self-organized peripheries, also require that we build a new “ethics of network management” agenda.

Managing Cognitive and Affective Trust in the Conceptual R&D Organization

In today’s knowledge-based and competitive economy, research and development (R&D) efforts are increasingly geographically distributed across multiple institutions. This chapter explores the management of cognitive and affective trust and distrust within a new type of geographically distributed and multi-institutional R&D organization, called the conceptual organization. Both cognitive and affective trust are important to the conceptual organization because it relies on collaboration among individual members to achieve its goals, and collaboration is not possible without cognitive or affective trust. Data from a two-year case study of a conceptual organization illuminates how the organization’s structure, use of power and information and communications technology (ICT) shape and are shaped by cognitive and affective trust. Tightly-coupled collaboration appears to only emerge in situations where high cognitive and affective trust simultaneously exist, and no collaboration will emerge in situations with high cognitive and affective distrust exist. In comparison, limited collaboration emerges when affective trust and cognitive distrust exist concurrently, and competitive collaboration appears to emerge when cognitive trust and affective distrust exist concurrently. Different mechanisms to manage the collaboration emerged in these situations. These results help inform our understanding of cognitive and affective trust and distrust, and their management in R&D.

Citizens' Trust in Ministries

Citizens have many roles in our contemporary liberal democracies. From these roles one is to trust or mistrust governmental agencies. They must trust them, at least to a certain extent, because they experience in their own lives deleterious consequences of badly-designed public policies. They must distrust them, again to a certain extent, because a fear of distrust keeps policy-makers on alert about how their policy ideas might change public opinion. This chapter is the infrequent empirical analysis of citizens’ trust and mistrust in ministries as central policy-makers in Finland. It is based on the national survey. It shows that citizens are suspicious of most of the ministries in terms of developing public services, regulation, financial transfers, and citizen orientation. According to the empirical results ministries should be aware of public failure and quickly rethink their priorities and policy-styles. This chapter stresses the need to reinvent policy-making and its political culture. Democracy will severely deteriorate if public authorities will not take on this challenge.

Usability of Websites Contributing to Trust in E-Commerce

Lack of security and trust is considered the biggest barrier to the increase of business-to-consumer e-commerce. In this chapter the authors aim at gaining insights of how online vendor design and usability relate to people’s opinions of the trustworthiness of shopping online. Additionally, common concerns regarding trust and security are explored both theoretically, based on existing literature, and empirically in a pilot study. The results showed that the most common concern among the respondents is online payment. The respondents valued detailed information of the products, of the processing and delivery of orders. Also the familiarity of products and vendors and easy-to-use online stores were appreciated. In e-business, quality design and good usability of vendors’ websites can be seen as a means to diminish the customer’s potentially risky situation. From the customer’s viewpoint, in turn, these can be taken as the indicators of quality and the vendor’s competence which reduce uncertainty and predict trust in e-commerce environment.

Interpersonal Trust in Online Partnerships

In this chapter, trust is treated as a form of tacit knowledge that can be made explicit to some extent by means of knowledge management techniques such as codification and pattern matching. The authors explore the issue of representing interpersonal trust by means of a case study. This describes the development of an online platform to support partnership among small firms where remoteness, and/or lack of time, preclude the long-term build-up of trusting relationships. The authors argue that in such a situation, infrastructure and process may be designed to support trustful interaction. They review a number of empirical studies of interpersonal trust that suggest that judgments about trust in the early stages of the formation of partnerships are indicative of relationship quality in subsequent stages. Such assessments may be seen as “representations” of trust. A specification to support such assessment is described.

Trust as Capital

Trust is an old idea and it has come back again. We believed that proper management and information systems, a correctly designed organizational structure, and well-oiled processes will solve our problems and facilitate us to attain our objectives. We were wrong because we forgot people’s deep psychological needs for trust and fear of mistrust. This chapter argues that trust as capital is more important for people and organizations than financial capital as money and human capital as knowledge. Strong trust helps people to make better use of small amount of money and knowledge than mistrust can of great amount of money and knowledge. If human interaction is based on strong mistrust no amount of money or knowledge help people to settle down their differences. The message of this chapter is that the stronger people trust each other the easier it is for management to lead, practitioners to develop, and employees to work efficiently and creatively. With trust conflicts can be solved without troubles or bad aftertaste. Customers are likely to favor companies in which they trust. Trust opens possibilities, mistrust closes them. It is the greatest challenge for management and people dealing with information systems.

Trust Building as a Management Strategy

This chapter explores trust as a management strategy by applying Henry Mintzberg’s idea of strategy thinking as seeing. Trust building has been described by paying attention to trust building process, trust principles, and trust imperatives. Strategic thinking has been divided into elements and trust building has been included into these elements. The author discusses what it means to see trust ahead, behind, above, below, beside, beyond, and through in organizations. She states that trust is a strongly situational phenomenon and related to the organization’s past and present where also such issues as tacit organizational knowledge and organizational culture have impacts. On one hand the chapter contributes to the existing literature on strategy development. On the other hand it should be of interest for practitioners because trust building as a management strategy is also a very practical issue.

A Belief-Based Model of Trust

In this chapter, we present a socio-cognitive analysis of trust. In this model trust is conceived as a crucial attitude useful for delegating or not a specific task, and it is strongly based on specific beliefs, and on different cognitive ingredients. Characterising the basic elements on which trust is founded is very important not only for a psychological view of this phenomenon but also for better understanding how this attitude works. This model allows to distinguish between internal and external attributions (to the trustee) and for each of these kinds of attribution it allows to distinguish among several sub-components: competence, disposition, unharmfulness and so on. The analysis of the trust concept tries to show the importance of its role in knowledge management and systems in organisations. Trust is strongly supported by the organisation roles and functions, but in order to really understand how organisations work it is necessary to explore such inter-relational notions as delegation and trust.