Exploring interpersonal trust in the small business

Abstract

This thesis explores the influences of different types of interpersonal trust on the development of the business enterprise, and builds in part on the author's MSc dissertation, which found interpersonal trust to play a key pert in the decision making process. A key feature of the research is a focus on the notion of becoming, rather than that of being; of change over static presence. The research acknowledges the basic truth of the statement 'only perception gives knowledge of things' and therefore adopts a broadly interpretative approach throughout. This is in keeping with the subjective nature of the trust concept. The thesis discusses the nature of trust from a primarily sociological standpoint and develops its models mainly from discussions of trust in the management and organization literature. The field studies, while conforming to these epistemological and ontological presuppositions, utilise three different methods: semi-structured, taped interviews; longitudinal participant observation case study; and verbal protocol analysis, in order to apply and refine the theory of trust developed and thereby come to an understanding of the role and importance of interpersonal trust in the business enterprise. The thesis finds that interpersonal situational trust is central to small business development, and may be usefully construed as an a posteriori tacit knowledge which the trusting party uses in order to fill gaps in his explicit knowledge of a situation, thereby reducing its complexity and enabling cooperation. The link between trust and co-operation is teased out, and it is suggested that trust overcomes an individual's co-operation threshold for a situation, as determined by a set of identifiable co-operation criteria, enabling co-operative behaviour on the part of the individual. The combination of co-operation threshold and trust level outcomes for each of the individuals in the situation is thus said to determine whether or not co-operation occurs between them. It is argued, therefore, that trust is a prerequisite for co-operation, and that the stronger, more resilient the situational trust, the more likely it is that cooperation will occur. The thesis finds that a useful distinction may be drawn between trust which is based on familiarity with the trusted party and trust which is based on familiarity with the situation in which the trusting interaction occurs. It finds that the development of the latter type, termed Comprehensible Situational Cue Reliance-Based Trust is perhaps of most importance with regard to the effect of trust on business development. The thesis applies a process theory derived from the work of the metaphysician Alfred North Whitehead to the theory of trust which it utilises, and finds that interpersonal situational trust may be considered as 'an actual occasion in concrescence', thereby offering the potential for a philosophical reconceptualisation of trust in terms of a process metaphysic, instead of the more static philosophical presuppositions which have historically tended to underpin its theoretical development. The thesis concludes by suggesting that trust is the medium through which the entrepreneur is able to create and extract value from the environment, emphasises the indicative (as opposed to definitive) nature of its exploration, and identifies a number of areas for further research, including matched international comparisons of businesses in order to verify the applicability of the theories and models which it develops.