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Journal of Business Ethics

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03-11-2016

Firm Status and Evaluators’ Trust: The Many Ways to Trust a Firm

Authors: Fei Song, Alex Bitektine

Published in: Journal of Business Ethics | Issue 2/2018

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Abstract

The decision to trust encompasses evaluation of multiple information cues that are used by evaluators to make inference about the trustee’s qualities and capabilities. The information about the social status of the trustee firm is one of such cues available to evaluators. Yet the relationship between perceived social status of the trustee and the evaluator’s trust remains underexplored. In two experimental studies, we (1) find a non-linear relationship between a firm’s status and the evaluator’s trust, and (2) test theorized mechanisms that can explain this relationship. The paper reveals that firms having low, middle, and high status are not only trusted differently, but are trusted for different reasons: qualities, such as perceived benevolence and integrity, mediate higher trust for middle-status firms, while trust for high-status firms is mediated by ability and integrity. The findings thus suggest that in the assessment of an organization’s trustworthiness, the relative importance of a particular virtue, such as ability, benevolence, or integrity, varies depending on the status position of that organization.

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It should be noted that the observed organizational properties that can cue status (such as size, structure, practices, etc.) can also be used to make other types of social judgments (e.g., reputation or legitimacy). At the same time, different types of judgments can lead to largely the same organizational outcomes (e.g., improved performance, greater survival chances, or better access to resources). As a result, neither antecedents of status, reputation, or legitimacy, nor the observed behavioral consequences of these social judgments, allow researchers to clearly distinguish between these constructs. The major distinction between different judgment types thus lies in their content.

It should be noted that the presence of a sufficiently strong incentive for deviance, limited visibility of actors’ actions, and a moderately stable social hierarchy have all been identified as propitious conditions for middle-status conformity (see Dittes and Kelley 1956; Kelley and Shapiro 1954, p. 668; Pettit et al. 2010; Phillips and Zuckerman 2001).

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Title: Firm Status and Evaluators’ Trust: The Many Ways to Trust a Firm
Authors: Fei Song
Alex Bitektine
Publication date: 03-11-2016
Publisher: Springer Netherlands
Published in: Journal of Business Ethics / Issue 2/2018
Print ISSN: 0167-4544
Electronic ISSN: 1573-0697
DOI: https://doi.org/10.1007/s10551-016-3334-0

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