Developing Trust in Virtual Teams

Background

Trust has received significant recognition as a phenomenon worthy of detailed study in organizational and management studies (Dirks & Ferrin, 2001). In organizations, individuals must often act under uncertainty with ambiguous and incomplete information. This lack of explicit knowledge introduces risk and thus the requirement for trust. Accordingly, trust is defined as the willingness of a party to be vulnerable to the actions of another party (Mayer et al., 1995) based on a state of a positive, confident, though subjective, expectation regarding the behavior of somebody or something in a situation that entails risk to the trusting party (Baba, 1999; Cook & Wall, 1980; Currall & Judge, 1995).

Numerous scholars agree that trust is highly beneficial for the functioning of organizations. Trust “is at the heart of knowledge exchange” (Davenport & Prusak, 1998, p.35). High levels of trust are also key to effective communication (Dodgson, 1993) as they “improve the quality of dialogue and discussions … [that] facilitate the sharing of … knowledge” (Ichijo, von Krogh, & Nonaka, 2000, p.200), and committed relationships (ibid). The centrality of trust is further accentuated by its absence: “mistrust ... makes success harder to attain” (Kanter, 1994, p.105) as it weakens relationships, increases dependence on less information, compromises rational and unprejudiced analysis and exploration, and undermines learning (Luhmann, 1979). Furthermore, it has been recognized that if trust is not prominent, this may lead to dissatisfaction, absenteeism, and even intention to quit (Cunningham & MacGregor, 2000). At the inter-organizational level, trust also plays a vital role since it is found to affect the degree of cooperation among participating parties (Grabowski & Roberts, 1998; Newell & Swan, 2000). This is particularly important for virtual organizations. The business motivation for virtual arrangements is the potential for increased value-added and competitive advantage from the enhanced knowledge stock and core competencies, which are deemed to accrue to such networks (Alavi &Leidner, 2001).

Clearly, there is little dispute over the significance of trust in the organizational literature. However, there seems to be little agreement on how trust is developed and maintained in both the traditional and the virtual organizational literature.

In the traditional literature on trust where face-to-face communication is the norm, trust develops as the degree of familiarity with other people increases; i.e., the more we get to know others, the more likely it is that we trust them (Lewicki & Bunker, 1995,1996). Lewicki and Bunker (1996) take the view that trust varies over time and takes on a different character at the various stages (early, developing, and mature stages) of a relationship, as we not only begin to feel more comfortable with other people as we spend more time with them, but also as our knowledge of their integrity and competence improves. Based on this view, Lewicki and Bunker (1996) suggest three categories of trust, each corresponding to a different stage of the relationship: