Trust has become an important issue for businesses due to factors like globalization and job insecurity. Businesses need trust to reduce costs, facilitate cooperation, unlock knowledge, and promote loyalty. Trust is defined as an optimistic attitude involving risk, and varies between individuals. It depends on a history of interactions and can be weak or strong. Ethics plays a key role in building trust through openness, competence, integrity, benevolence, and reputation. Organizations can enhance trustworthiness through communication, transparency, personnel management, and employee assistance programs. Overall, ethical behavior is crucial for developing trust in businesses.

1. BUILDING TRUST
WITH ETHICS
CHAPTER 13
Business Ethics
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2. LEARNING OBJECTIVES
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At the end of this chapter students will be able to
discuss and illustrate the:
1. Reasons why trust has become an issue of
concern in business
2. Nature of trust and why businesses need trust
3. Distinction between trust and trustworthiness
4. Relationship between trust and ethics
5. Role that ethics can play in the cultivation of trust
within organizations.

3. INTRODUCTION
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We only really become aware of trust as an
issue when it is abused.
A state of distrust is a disturbing condition that
can threaten existing relationships and
practices. a lot has been written about trust in
recent years. this seems to indicate that all
sorts of relationships of trust are being
challenged in our society

4. THE LOSS OF TRUST IN BUSINESS
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A number of factors have served to undermine trust in
business
i. globalization the absence of shared histories,
values, and experiences has meant that some of
the traditional sources of trust have disappeared
ii. less job security: this has been caused by various
factors
iii. flatter company structures: flatter organizations
with fewer layers of authority and flexible job
descriptions have become common

5. WHY BUSINESS NEEDS TRUST
 Distrust is expensive: the price of distrust for business lies in
the cost of the control mechanisms that have to be introduced
 Trust facilitates co-operation: new forms of work that have
emerged in the global economy pose new challenges to
organizations in terms of trust
 Trust unlocks knowledge: the ability of an organization to
attract and retain people with expert knowledge has become
vital for its success.
 Trust promotes loyalty: when someone honours your trust
you feel loyalty to that person and their goals.
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6. WHAT IS TRUST?
 Defined as the optimistic attitude displayed by a person pursuing a goal in
taking the risk of relying on another person in order to attain that goal
 Trust is a social phenomenon:
it presupposes more than one actor and is closely tied up with
relationships we have with people who influence us
 Trust is a process:
trust is not a single event. trust is based on a history of interaction
 Trust can be weak or strong:
 trust can either be tentative or it can be enduring.
 Trust is always a risk:
in trusting another person is placing myself at the mercy of another. for
this reason trust always represents a risk to the trustor
 Trust varies from person to person:
it depends on our feelings of optimism or pessimism about others.
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7. The Concept of Trust in Islam
Trust: A basis for human relations
Human relations must be based on
trust, especially when it comes to the
vital issues related to life and to
people's economic, social, and
financial welfare
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8. The Concept of Trust in Islam
Upholding trust is a virtue
believers as ones who uphold their trusts and
covenants, including the public and private
trusts, as well as the covenants they
undertake in all the issues related to their
public and private lives
Allah wants people to live the deep sense of
trust. He wants people to have regard for one
another according to conduct and not outer
appearance
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9. TRUST VERSUS TRUSWORTHINESS
Trust is an action
Where trust is an action taken by a trustor,
trustworthiness is a characteristic of a trustee
People who display characteristics such as
openness, competency, integrity, and
benevolence are judged to be more trustworthy
than those who lack these qualities.
This suggests that trustworthiness can be
developed and enhanced.
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10. PERSONALAND IMPERSONAL
TRUST
Impersonal trust refers to trust in institutions or social
practices
Personal trust: Relationships between persons
 Uni-directional trust:
There is an asymmetry of power. One person is
the trustor and relies upon the other person who is
the trustee.
The trustee has power over the trustor in the sense
that the trustee is in a position to harm the
interests of the trustor, whilst the interests of the
trustee are not at stake.
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11. PERSONALAND IMPERSONAL
TRUST
Impersonal trust refers to trust in institutions or
social practices
Personal trust: Relationships between persons
Bi-directional trust
Refers to trust-relations where two parties
have to trust each other. Each party relies
upon the other to attain their goals
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12. THE ETHICAL DIMENSION OF TRUST
 Trust and Ethics always go hand-in-hand.
 To make sense of the morality of trust, it is useful to
distinguish between the internal morality and the external
morality of trust.
The internal morality of trust: lies in the moral nature of
the interaction between the trustor and the trustee. Here, to
honour trust, the trustee must respond positively to the
goals that the trustor has entrusted in her or him.
The external morality of trust: The external morality of
trust refers to the impact of a trusting relationship on
people outside that relationship
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13. THE ROLE OF ETHICS IN BUILDING TRUST
i. Openness: refers to how freely
managers make information available to
their subordinates
ii. Competence: refers to the knowledge
and skills needed by managers to
influence the domain for which they are
responsible
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14. THE ROLE OF ETHICS IN BUILDING TRUST
iii. Integrity: we regard a person as someone
with integrity when the person consistently
acts in an ethical manner
iv. Benevolence: benevolence is demonstrated in
actively doing what is good for others
v. Reputation: a person’s reputation consists of
the perceptions that others accumulate over
time of him or her. a reputation is thus
developed through a history of interactions
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15. ORGANISATIONAL FACTORS
THAT ENHANCE TRUSTWORTHINESS
Communication strategies
Procedural transparency
Personality and management style
People management
Employee assistance programs (EAPs)

16. CONCLUSION
Ethical behaviour can contribute to the
level of trust in an organization and can
open it up to the benefits associated with
such trust. It is crucial, though, that trust
and ethical behaviour should not be
regarded as mere managerial tools
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