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Model for Developing Trust in Construction Management

Permanent Link: http://ufdc.ufl.edu/UFE0024734/00001

Material Information

Title: Model for Developing Trust in Construction Management
Physical Description: 1 online resource (288 p.)
Language: english
Creator: Zuppa, Diodoro
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2009

Subjects

Subjects / Keywords: construction, model, trust
Design, Construction, and Planning -- Dissertations, Academic -- UF
Genre: Design, Construction, and Planning Doctorate thesis, Ph.D.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: The construction industry is facing a number of challenges related to low productivity rates, uncertain profits and low adaptation rates of new technologies. Trust between contracting parties on construction projects is viewed as an important strategy to address these and other problems. This research focused on identifying the factors found on construction projects that weakened or strengthened trust between stakeholders. A thorough literature review of leadership approaches, trust models and leadership and trust in construction was completed. The leadership literature found that effective leadership was dependent on trust. The review of the trust models confirmed this finding and provided insights regarding the nature of developing trust. The construction literature provided additional insights and the necessary context of trust on construction projects. The methodology applied in the research first developed a comprehensive framework containing a number of factors that could impact trust on construction projects. The applicability of the framework was tested. The factors in the framework were prioritized and reduced with the use of a preliminary survey. The revised prioritized framework provided the basis for the research questions and survey questions. The survey was administered by phone with fax and email support. The survey results were analyzed using advanced statistical methods. The statistical results were developed in a preliminary trust model. The model was tested by validating cases studies. The results of the case studies were incorporated to develop a revised and final trust model for contracting parties on construction projects. The survey respondents were characterized as highly educated males with over 20 years of construction experience holding senior positions. Through the use of descriptive statistics, correlation analysis, Chi-Square Goodness of Fit Test, Chi-Square Test of Independence, and validating case studies each trust factor was identified as weakening trust, strengthening trust or requiring trust. The major findings indicated that face-to-face communications strengthened trust; the over use of e-mail weakened trust; honoring informal and formal agreements was the key antecedent of trust; time was the key performance indicator; construction management was enhanced by high levels of trust and trust could increase the bottom line of construction projects.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Diodoro Zuppa.
Thesis: Thesis (Ph.D.)--University of Florida, 2009.
Local: Adviser: Issa, R. Raymond.
Electronic Access: RESTRICTED TO UF STUDENTS, STAFF, FACULTY, AND ON-CAMPUS USE UNTIL 2010-08-31

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2009
System ID: UFE0024734:00001

Permanent Link: http://ufdc.ufl.edu/UFE0024734/00001

Material Information

Title: Model for Developing Trust in Construction Management
Physical Description: 1 online resource (288 p.)
Language: english
Creator: Zuppa, Diodoro
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2009

Subjects

Subjects / Keywords: construction, model, trust
Design, Construction, and Planning -- Dissertations, Academic -- UF
Genre: Design, Construction, and Planning Doctorate thesis, Ph.D.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: The construction industry is facing a number of challenges related to low productivity rates, uncertain profits and low adaptation rates of new technologies. Trust between contracting parties on construction projects is viewed as an important strategy to address these and other problems. This research focused on identifying the factors found on construction projects that weakened or strengthened trust between stakeholders. A thorough literature review of leadership approaches, trust models and leadership and trust in construction was completed. The leadership literature found that effective leadership was dependent on trust. The review of the trust models confirmed this finding and provided insights regarding the nature of developing trust. The construction literature provided additional insights and the necessary context of trust on construction projects. The methodology applied in the research first developed a comprehensive framework containing a number of factors that could impact trust on construction projects. The applicability of the framework was tested. The factors in the framework were prioritized and reduced with the use of a preliminary survey. The revised prioritized framework provided the basis for the research questions and survey questions. The survey was administered by phone with fax and email support. The survey results were analyzed using advanced statistical methods. The statistical results were developed in a preliminary trust model. The model was tested by validating cases studies. The results of the case studies were incorporated to develop a revised and final trust model for contracting parties on construction projects. The survey respondents were characterized as highly educated males with over 20 years of construction experience holding senior positions. Through the use of descriptive statistics, correlation analysis, Chi-Square Goodness of Fit Test, Chi-Square Test of Independence, and validating case studies each trust factor was identified as weakening trust, strengthening trust or requiring trust. The major findings indicated that face-to-face communications strengthened trust; the over use of e-mail weakened trust; honoring informal and formal agreements was the key antecedent of trust; time was the key performance indicator; construction management was enhanced by high levels of trust and trust could increase the bottom line of construction projects.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by Diodoro Zuppa.
Thesis: Thesis (Ph.D.)--University of Florida, 2009.
Local: Adviser: Issa, R. Raymond.
Electronic Access: RESTRICTED TO UF STUDENTS, STAFF, FACULTY, AND ON-CAMPUS USE UNTIL 2010-08-31

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2009
System ID: UFE0024734:00001


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70e0a22729531e8209d2e3b37b7b12482378b9bc







MODEL FOR DEVELOPING TRUST IN CONSTRUCTION MANAGEMENT


By

DIODORO ZUPPA


















A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY

UNIVERSITY OF FLORIDA

2009


































2009 Diodoro Zuppa



































To Julia









ACKNOWLEDGMENTS

I would like to acknowledge a number of individuals for their assistance in the

completion of my dissertation. First, I would like to thank Dr. Casella for his assistance with the

statistical analysis in my research. Second, I would like to acknowledge Dr. Scicchitano and his

team at the Florida Research Center for their assistance in administering the telephone survey.

Third, I would like to acknowledge the individuals at the Shimberg Center for their support.

Fourth, I would like to express my gratitude to my dissertation committee: Dr. Issa, Dr.

Williamson, Dr. Lucas, Dr. Olbina, and Dr. Chow. More specifically, I would like to

acknowledge Dr. Issa, the chair of my committee, for being a valued academic mentor, setting

high standards, creating a rewarding Ph.D. experience and exposing me to a number of academic

opportunities; Dr. Williamson for her continual guidance, encouragement and funding the

telephone survey and SPSS training required to complete my dissertation; Dr. Lucas for the

insightful discussions regarding the human impacts on construction projects; Dr. Olbina for her

support and feedback; and Dr. Chow for his participation and encouragement. Fifth, I would like

to thank my parents and my sisters for their encouragement. Sixth, I would like to give a special

thanks to Dr. Williamson for providing me the many forms of support and encouragement

throughout the process. Her commitment to my academic, professional, and family success was

greatly appreciated. Last, I would like to express my deepest gratitude to my wife and my

daughter. I would like to thank Patricia for her unwavering encouragement and creating the

opportunity to pursue my goals, and Julia for making the journey more enjoyable than I thought

possible.









TABLE OF CONTENTS

Page

A C K N O W L E D G M E N T S .......................................................................................... .............. 4

L IST O F T A B L E S ............................................................................................... . 8

LIST OF FIGURES .................................. ......... 12

ABSTRACT ................................................. .............. 15

CHAPTER

1 IN TRODU CTION ....................................................... ............. ....... ....... 17

1.1 N eed for R research .............. ............. ............... ....... .. .......... .. 17
1.2 Challenges Specific to U.S. Construction Industry.............................. ........... 19
1.3 M ain R research Focus ............................................... ... .... ............ .. 20

2 L ITE R A TU R E R E V IE W ....................................................................... ......................... 24

2.1 Leadership ........................................................................ ........ 24
2.1.1 D efining Leadership ................ ........................................... .............. 24
2.1.2 The Difference between Leadership and Management............................ 25
2.1.3 Trait A approach ................................................... .... .. .......... .. 27
2 .1.4 B eh av ior A p p ro ach .......................................................................................... 3 1
2.1.5 The N eeds A pproach...................................................... ........... .............. 35
2.1.6 Situational A pproach...................................................... ........... .............. 39
2.1.7 Transform national Approach .................................................... ...... ....... 43
2.1.8 Team A approach .............................................. ........ .. .......... .. 47
2.1.9 L leadership Sum m ary ............................................... ............................ 48
2 .2 T ru st ............................ ... .............................................................................................. 4 9
2.2.1 D definition of Trust .................................................. ................ ............ 49
2.2.2 Trust Focused Compendiums of Papers...................................... ................. 49
2.2.3 Trust Focused Dedicated Journal Editions.................................................... 58
2.2.3.1 Trust in the Business Environm ent............................. .................... 58
2.2.3.2 Trust w within organizations .............................................................. 65
2.2.3.3 Trust in human resource management .......................................... 67
2.2.3.4 Trust in organizations .............. ...... ......................... ........... 71
2.2.3.5 Trust among personnel .............. ...... .......................... .......... 74
2 .2 .3.6 T rust in m marketing .................................................... .... .. .............. 77
2.2.4 K ey Trust R research ....................................................................... 83
2.2.5 Trust in V irtual Environm ents ........................................ ....... .............. 97
2.2.6 Breach of Psychological Contract and Trust........................... .......... 101
2.2.7 Summary: Integrated Model of the Trust Process................ .... ............. 103
2.2.7.1 Orientation phase ........... .. .............................................. ....... 103
2.2.7.2 Evaluation phase ................................................. ..... ......... 106









2.2.7.3 Action phase .............. ........................ .. ........ .. ............. 109
2.2.7.4 Outcome phase.................................. .............. 110
2.3 Trust in Construction M anagem ent...................................... .......................... 111
2.3.1 K ey Perform ance Indicators..................................... .......................... 111
2.3.2 Leadership Skills.................... .... .................... ............................ ........ 112
2.3.3 Core Com petencies ............................... ... .................................... 113
2.3.4 Productivity .......................... ................... 114
2.3.5 Benefits of Trust .................................. ...... ...... .. .... ........... 115
2.3.6 Antecedents of Trust ............... ......... ...... .............. 115
2.3.7 T rust and P artnering ...................... .. .. .................... .................... .............. 115
2.3.8 Trust and Team s ........................ .... ................ ...... .. ............ 116
2.3.9 Trust and Information and Communication Technology............................ 116
2.3.10 Trust Frameworks and Models From the Construction Literature .............. 118
2.3.11 Sum m ary ........................................ 120

3 M E T H O D O L O G Y .............................................................................. .......................... 180

3.1 Framework of Trust Factors........... .... ............................ 182
3.2 Scenario Test.............. ........................ ......... .... ............ .. 182
3.3 P rioritizing the F actors......... ......... ......... ......... ........................ .............. 182
3.4 Research Questions .............. ............ ........ ............. 184
3.5 Survey Instrument ..................................... ..... .............. ............. 184
3.6 Statistical Analysis and Preliminary Trust Model .............................................. 185
3.7 Validating Case Studies and Revised Trust Model ............. ............ 186

4 RESULTS 195

4.1 Survey Respondent Characteristics................................... 195
4.2 Survey Results.......................................... ............ 196
4.3 C correlation A analysis .......... ...................................... ........................ .......... 198
4.4 Chi-Squared Goodness of Fit Test.................... ........... .............. 200
4.5 Chi-Squared Test for Independence................................................ ... ................ 203
4.6 L ogistic R egression .............................. .................... .. .. .... ..... .. ............ 204
4 .7 T ru st M o d el ............ ......... .. ............. .. .................................................. 2 0 4
4 .8 V alidating C ase Studies ..................................... .................................................. 205
4.9 R revised Trust M odel ................ ........... .................... .... ....................................... 212
4.10 Comparison to Other Leadership and Trust Models............................................ 214
4.11 Comparison to Construction Specific Trust Models............................................ 216

5 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ...................................... 252

5 .1 S u m m a ry .................................................................................................................... 2 5 2
5.2 Conclusions ......... .. ....... ......... .......................................... 257
5.3 R ecom m endations .......... ...... ....... .. ...... ......... ................... 259

APPENDIX

A TRUST FRAMEWORK SCENARIO TEST ........................................................... 262









B C A R E E R FA IR SU R V E Y ........................................................................ .................... 266

C FIN AL SU RVEY IN STRU M EN T......................................................................... ..... 267

D LETTER TO PERSPECTIVE SURVEY PARTICIPANTS............................................... 271

L IST O F R E F E R E N C E S ................................................................ ...................................... 272

B IO G R A PH IC A L SK E T C H ........................................................................ ........................ 288














































7









LIST OF TABLES

Table page

1-1 Ranking of Computer use by industry in 2006 .......... ............................................ 22

1-2 Ranking of Private Sector Industries According to the Lowest Median Years of Employee
Tenure ................................................... .......... 22

1-3 Employed Workers by Alternative Work Arrangements in 2005 .................................. 23

2-1 Comparing Leadership and M management ............. ................... ........... .............. 121

2-2 Com paring Leaders and M managers ........................................... .................... ...... 121

2-3 Summary of the Trait Approach ........... ... .............. .............. 122

2-4 Summary of the Behavior Approach ...................................... .............. 123

2-5 Overview of Corresponding Theory of Needs................. ............ ........... .......... 124

2-6 Description of Different Power Bases .................. ....... ........... .... .......... .. 126

2-7 Sum m ary of the N eeds Approach......................... ........ ........................ .............. 127

2-8 Major Findings in Cognitive Resource Theory ...................................... 128

2-9 Sum m ary of the Situational A pproach................................................. .................... 131

2-10 Factors of Transformational and Transactional Leadership ................... ............ .. 132

2-11 Sum m ary of the Transform national Approach ................................................................. 134

2-12 Comparison of Team Effectiveness Criteria........... ................................ .............. 135

2-13 Summary of Leadership Approaches........................................... 136

2-14 D definitions of T rust................................ ...................................................... 137

2-15 Form s and Facades of Trust ....................................................................... 139

2-16 Phases of Alliance Development and Evolution of Trust............................................... 139

2-17 Sources of Intentional R liability .................................................................................. 140

2-18 Sources of R eliance....................................................... .. .. .... ..... .. ............ 140

2-19 Sum m ary of Com pendium of Papers..................................... .......................... ......... 140









2-20 Form of Dependence, Risks, Qualities of Trustworthiness and Mechanism of Trust .... 141

2-21 Trust Building Processes, Base Disciplines, and Underlying Behavioral Assumptions 144

2-22 Sum m ary of Academy of M anagem ent................................... .................................... 146

2-23 Risk Reduction in Different Alliance Types....................... ...... .............. 147

2-24 Sum m ary of Organizational Studies ...................................................... ........... ... 148

2-25 Summary of International Journal of Human Resource Management............................ 149

2-26 Summary of Organizational Science ................................... 150

2-27 Sum m ary of Personnel Review.................... ................................... ......................... 150

2-28 Summary of European Journal of M marketing ............................................................. 152

2-29 Comparison of the Behavioral Definitions of Trust ....................................................... 153

2-30 Trust A ntecedents ......... ......................... ... ....... .......... 155

2-31 M managing Trust: Sample Insight From the Literature ........................................ ...... 157

2-32 Theoretical Approaches to Trust Development..................... ...... ............... 159

2-33 Comparison of Types of Trust ..................................................................... 160

2-34 Sum m ary of K ey Journal A articles ............................. .................................................. 163

2-35 Summary of Trust in Virtual Environm ents ............................................................. 166

2-36 Sum m ary of Trust and Psychological Trust.............................................. ... ... .............. 167

2-37 Examples of Cyclical Development of Trust.................. ....................................... 170

2-38 Key Performance Indicators in the Construction Industry ............ ....... ............. 170

2-39 Use of Leadership Approaches in Construction ..................................................... 171

2-40 Leadership Skills for Project Managers in Construction............................................... 172

2-41 Core Competencies of Project Managers in Construction................ ... ............ 173

2-42 Benefits of Building and Maintaining Trust in Construction ............. .............. 174

2-43 The Antecedents of Trustworthiness in Construction................................. .............. 175

2-44 Partnering Success Factors in Construction............... ................. ......... 175









2-45 Success Factors of Teams in Construction .............. ...... ......................................... 176

2-46 Benefits of Using Technology in Construction .................................... .............. 176

2-47 Factors of Success for Using Technology and Virtual Collaboration in Construction... 177

2-48 Relationship-Based Trust Framework ................................................................. 177

2-49 Processes in Construction That Require Trust.......................................... .... .. .............. 179

3-1 F ram ew ork of T rust F actors................................................................................... 188

3-2 Categories of Trust ..................................... ................. .......... ................ 192

3-3 R research Questions .................. .................. .................. ......... .............. .. 194

4-1 Communication Type Correlation Matrix .............................................................. 226

4-2 Document Type Correlation M atrix..................................................... 226

4-3 Trustworthiness Correlation M atrix..................................................... 227

4-4 Stakeholder Correlation M atrix ............................. .... ................................... 227

4-5 KPI Correlation M atrix ............................................................. .............. 227

4-6 Contract Type Correlation M atrix .............. ......................................................... 228

4-7 Pre-construction and Design Phase Correlation Matrix......................... .............. 228

4-8 Construction Phase Correlation Matrix .................... ........................................ 228

4-9 M management Correlation M atrix.................... ............................... ........................... 228

4-10 Chi-Squared Goodness of Fit Test Results: Communication Method......................... 229

4-11 Chi-Squared Goodness of Fit Test Results: Document Type.............. ................ ... 229

4-12 Chi-Squared Goodness of Fit Test Results: Trustworthiness ...................................... 229

4-13 Chi-Squared Goodness of Fit Test Results: Stakeholder............................................... 230

4-14 Chi-Squared Goodness of Fit Test Results: KPIs....................................... ................ 230

4-15 Chi-Squared Goodness of Fit Test Results: Contract Type.......................................... 230

4-16 Chi-Squared Goodness of Fit Test Results: Pre-construction & Design Phase............ 230

4-17 Chi-Squared Goodness of Fit Test Results: Construction Phase.............................. 230









4-18 Chi-Squared Goodness of Fit Test Results: Management.................... ............. 231

4-19 New Categories ............. .... ............................... ............... ....... 231

4-20 Results of Chi-Squared Test for Independence .................................... .............. 232

4-21 Significant R relationships ...... .. ............. ........................................ .............. 233

4-22 Case Study 1 ........ ..................................... ............... 236

4-23 Case Study 2 ........ ..................................... ............... 237

4-24 Case Study 3 ........ ..................................... ............... 238

4-25 Case Study 4 ........ ..................................... ............... 239

4-26 Case Study 5 ........ ..................................... ............... 240

4-27 Case Study 6 ........ ..................................... ............... 241

4-28 Case Study 7 ........ ..................................... ............... 242

4-29 Case Study 8 ........ ..................................... ............... 243

4-30 Case Study 9 ........ ..................................... ............... 244

4-31 Comparison of the Different Trust Models................ ............................... 249

4-32 Uniqueness of the Revised Trust Model to the Trust Models in the Construction
L literature ................. ..................................... ........................... 25 1









LIST OF FIGURES


Figure Pae

2-1 Follower Behavior Based on Strongest Need................................. ............ 124

2-2 Sequence of Actions for a Leader to Identify the Strongest Needs of a Follower......... 125

2-3 Leader Roles in the Path-Goal M odel...... ......................................................... 129

2 -4 S itu action al L ead ersh ip .................................................................................................... 13 0

2-5 Transformational Leadership and Transactional Leadership ............. ................ 133

2-6 T eam L leadership M odel ................................................................................................. 135

2-7 Detailed M odel of Initial Trust Formation ...................................... ........ .............. 141

2-8 Integrating Trust and Distrust: Alternative Social Realities................ .................... 142

2-9 A Process Model of Opportunistic Betrayal ........................................................ 143

2-10 Exchange Framework of Initiating Managerial Trustworthy Behavior......................... 143

2-11 Trust and Control in Strategic Alliances.............................. .................. 144

2-12 Proposed Model of National Culture and the Development of Trust ............................ 145

2-13 Integrated Framework of Trust, Control, and Risk in Strategic Alliances ................... 147

2-14 Dispositional and Situational Determinants of Trust in Two Types of Managers ........ 148

2-15 The Relational Exchanges in Relationship Marketing............................................. 151

2-16 The KMV Model of Relationship Marketing ............. ................................ ............ 151

2-17 Trust and Reliance in Business Relationships .................................... .............. 152

2-18 Derived Path Coefficients Based on Structural Equation Analysis of the Theoretical
Model ........................................ .............. 154

2-19 P proposed M odel of T rust ................................................................................................ 156

2-20 The Cyclical Trust-Building Loop for Collaboration............. ..... ................. 156

2-21 Managing Trust: Summary Implications for Practice ............... ............. .............. 158

2-22 Stages of Trust D evelopm ent...................... ................. ................... .............. 161









2-23 The Continuum of Degrees of Intra-Organizational Trust .................................... 161

2-24 A D epiction of the Trust Process ................................................................. .... 162

2-25 Antecedents of Virtual Collaboration ..................................... ......................... ......... 164

2-26 Taxonomy of Trust Information ................................ .............. 164

2-27 Components of the Conceptual Framework in the Context of E-commerce................ 165

2-28 Developed Research Model for Investigating Online Trust ................. ............... 166

2-29 Integrated Model of the Trust Process............. ............... .............................. 168

2-30 Different Forms of Trustor and Trustee Relationships................................................ 169

2-31 The Continuum of Degrees of Trusting Action........................................................ 169

2-32 Pinto et al. 2008 Trust M odel ................................................ ............................. 178

2-33 W ong et al. 2008 Trust M odel ........................ ................................ ........................... 178

2-34 Jin et al. 2005 Trust M odel ................................................... .............................. 179

3-1 Overview of M methodology ................................ ........................................... 187

3-2 The Gender, Position and Years of Experience of Survey Respondents..................... 192

3-3 The Survey Respondent's Company Type, Construction Type and Annual Volume.... 192

3-4 Ranking of Trust Factor Categories........................... .......................... .............. 193

3-5 Ranking of the Need of Trust in Different Phases of Construction............................ 193

4-1 Survey Respondent Characteristics: Type of Construction ................... .... ........... 218

4-2 Survey Respondent Characteristics: Company Type............................ .............. 218

4-3 Survey Respondent Characteristics: Company Volume........................ .............. 219

4-4 Survey Respondent Characteristics: Role in Company ............................................ 219

4-5 Survey Respondent Characteristics: Years of Experience.............................. 220

4-6 Survey Respondent Characteristics: Education Distribution............................... .... 220

4-7 Survey Respondent Characteristics: Age Distribution .............................................. 221

4-8 Survey Respondent Characteristics: Gender Distribution ........................................ 221









4-9 Rankings of Communication M ethod.................................... ........................... ........ 222

4-10 R ankings of D ocum ent Types...................................................................... ........ ... 222

4-11 R ankings of T rustw orthiness ........................................ ............................................ 223

4-12 R rankings of Stakeholders ............................................ ............................................. 223

4-13 Rankings of Key Performance Indicators............................. .............. 224

4-14 Rankings of Contract Types...... ................................... 224

4-15 Rankings of Pre-Construction and Design Phase ..................................................... 225

4-16 Rankings of Construction Phase ......... ................. ......... ..................... .............. 225

4-17 Rankings of M anagem ent Skills ......... ................. ......... ..................... .............. 226

4-18 Trust Factors Tested for Trust Model .............................. 233

4-19 Categories of Trust Factors............................................................ .............. 234

4-20 Prelim inary Trust M odel .......................................... ....................... .............. 235

4-21 Trust Model for Contracting Parties on Construction Projects ............. ............... 245

4-22 Detailed Trust Model for Contracting Parties on Construction Projects..................... 246

4-23 Pinto et al. 2008 Trust M odel ................................................ ............................. 247

4-24 W ong et al. 2008 Trust M odel ........................ ................................ ........................... 247

4-25 Jin et al. 2005 T rust M odel ........................................... ............................................ 248









Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy

FACTORS IMPACTING TRUST BETWEEN CONTRACTING PARTIES ON
CONSTRUCTION PROJECTS

By

Diodoro Zuppa

August 2009

Chair: R. Raymond Issa
Major: Design, Construction, and Planning

The construction industry is facing a number of challenges related to low productivity

rates, uncertain profits and low adaptation rates of new technologies. Trust between contracting

parties on construction projects is viewed as an important strategy to address these and other

problems. This research focused on identifying the factors found on construction projects that

weakened or strengthened trust between stakeholders.

A thorough literature review of leadership approaches, trust models and leadership and

trust in construction was completed. The leadership literature found that effective leadership was

dependent on trust. The review of the trust models confirmed this finding and provided insights

regarding the nature of developing trust. The construction literature provided additional insights

and the necessary context of trust on construction projects.

The methodology applied in the research first developed a comprehensive framework

containing a number of factors that could impact trust on construction projects. The applicability

of the framework was tested. The factors in the framework were prioritized and reduced with the

use of a preliminary survey. The revised prioritized framework provided the basis for the

research questions and survey questions. The survey was administered by phone with fax and e-

mail support. The survey results were analyzed using advanced statistical methods. The









statistical results were developed in a preliminary trust model. The model was tested by

validating cases studies. The results of the case studies were incorporated to develop a revised

and final trust model for contracting parties on construction projects.

The survey respondents were characterized as highly educated males with over 20 years

of construction experience holding senior positions. Thorough the use of descriptive statistics,

correlation analysis, Chi-Square Goodness of Fit Test, Chi-Square Test of Independence, and

validating case studies each trust factor was identified as weakening trust, strengthening trust or

requiring trust. The major findings indicated that face-to-face communications strengthened

trust; the over use of e-mail weakened trust; honoring informal and formal agreements was the

key antecedent of trust; time was the key performance indicator; construction management was

enhanced by high levels of trust and trust could increase the bottom line of construction projects.









CHAPTER 1
INTRODUCTION

The construction industry, which is characterized by uncertainty, complexity and urgency,

currently faces a number of obstacles (Telem et al. 2006; Dainty et al. 2005; Turner and Muller

2003). Construction projects in particular present some of the most challenging arenas within

which to apply advanced information and communication technologies and project management

techniques (Dainty et al. 2005). The circumstances surrounding construction projects have

resulted in a number of negative impacts including low productivity rates, low adaptation of new

technologies, low profit margins, high number of claims, high number of delays and high

number of safety infractions. The consequences of not creating more efficient construction

projects and construction teams are significant considering the U.S. construction industry

employs close to 8 million people and accounts for over $1 trillion(8%) towards the gross

domestic product (2008 U.S Statistical Abstract).

1.1 Need for Research

Trust and leadership can significantly contribute to the success or failure of construction

projects. Hyvari (2006) found that a project manager's leadership ability accounted for

approximately 76% of a project's success and 67% of a project's failure. Other studies have

showed that a project manager without leadership skills can increase the unexpected transaction

costs by 25% if he/she was unable to effectively clarify misunderstandings (Levitt 2007).

However, effective leadership is dependent on trust between contracting parties. "Leadership

without mutual trust is a contradiction" (Bennis 2003, page 131). Trust is imperative in building

successful teams, adopting new technologies, reducing costs and improving the bottom line of

construction projects (Lui et al. 2006; O'Connor and Yang 2004; Fong and Lung 2007). Trust

also has a direct link to reducing costs and saving time (Construction Industry Institute 1993).









Trust is the lubrication that makes it possible for organizations to work. It's hard to
imagine an organization without some semblance of trust operating somehow, somewhere.
Trust is the glue that maintains organization integrity. Like leadership, trust is hard to
describe, let alone define. We know when it is operating and when it is not. We cannot say
much more about it expect for its essentiality (Bennis and Nanus 1985, page 43).

Scholars in construction tend to frame research questions from technical dimensions. They

focus on new technologies, processes, techniques, and materials while failing allocate the same

levels of research to understanding the human dimensions involved in the construction process

(Turner and Muller 2005). Construction research lags behind other fields of research in how

leadership and trust building (human dimension) skills impact the success (profit, costs,

schedule, quality, safety) of construction projects. A a special issue for its 50th Anniversary, the

Journal of Construction Engineering and Management outlined a number of pressing research

areas. Developing new construction specific management models that assist construction

professionals in bridging the gap in values, beliefs, norms and work practices of individuals on

construction projects across the globe were among the top priorities (Levitt 2007). The special

issue also stressed the importance of improving leadership, communication, and trust building

skills to compliment and support technical skills (Russell et al. 2007). Other research has stressed

the importance of using the combination of advanced technology and trust based relationships

(Ho 2009; Kim et al. 2009, Yeung et al. 2009). However, scholars have found that the impacts of

the factors leading to good leadership and strong trust specific to construction projects have not

been researched to the same degree as in other industries (i.e. financial, business, government,

educational) (Turner and Muller 2005). There is a need to evaluate leadership and trust theories

in the context of the construction industry and to develop construction specific leadership and

trust models. Recent trust research in the construction literature has focused on the Asian

construction industry (Jin and Ling 2005; Jin and Ling 2006). The focus of this research is to

help mitigate the lack of leadership and trust research in the U.S. construction industry.









1.2 Challenges Specific to U.S. Construction Industry

Many leadership and trust models discussed in the literature have been developed without

considering the unique context of the U.S. construction industry. Using information from the

U.S. Bureau of Labor Statistics an overview of the U.S. construction industry is provided.

Safety. The construction industry has the worst safety record for all industries analyzed by

the Bureau of Labor Statistics. For instance, in 2005, the construction industry experienced 1,186

or 21% of fatal work injuries out of 5,702 total fatal work injuries in the U.S. This was the most

of any industry (about one out of every five fatal work injuries recorded). The construction

industry also had the highest nonfatal injuries and illnesses incident rate for all private industries.

It had 414,900 nonfatal injuries and illnesses. This translated into an incidence rate of 6.3

(injuries or illnesses) per 100 full-time workers while the average incident rate for private

industries was 4.6 per 100 full-time workers (Department of Labor, Bureau of Labor Statistics,

2007).

Computer use. According to the Bureau of Labor Statistics, the construction industry has

the lowest use of computers and the second lowest use of the Internet of private industries

studied. Twenty-eight per cent (28%) of employees in the construction industry use computers at

work and 21% use the Internet at work (Table 1-1) (Department of Labor, Bureau of Labor

Statistics, 2007)

Employee tenure. The construction industry is saddled with one of the lowest levels of

employee tenure rates of all private sector industries. Table 1-2 shows that in terms of median

number of years, employees in the construction industry remain with an employer for 3 years.

This can be considered short compared with the manufacturing (5.4 years) and transportation and

utilities industries (4.9 years). The low level of employee tenure is coupled with the highest









average weekly hours worked (38.6 hours per week) compared to other industries (Department

of Labor, Bureau of Labor Statistics, 2007).

Alternative and contingent employment arrangements. The number of alternative

workers identifies the portion of workers in an industry that have non-typical employment

arrangements (Department of Labor, Bureau of Labor Statistics, 2007). Table 1-3 ranks the

percent of independent contractors, on-call workers and workers provided by contract firms

according to industry. Construction ranks the highest or the second highest in use of each type of

temporary employee (Department of Labor, Bureau of Labor Statistics, 2007).

Regulatory complexity. The construction industry is burdened by numerous regulatory

requirements. For instance, as construction project managers in the United States attempt to

delivery successful projects they are faced with over "44,000 jurisdictions at the state and local

government levels that regulate building design, construction, and renovation through a

confusing, diverse, and, at times, conflicting array of codes, standards, rules, regulations, and

procedures" (Russell et al. 2007, page 662).

Summary of Characteristics of Construction Industry. The analysis in this section

compared the construction industry to other private sector industries. Using data from the U.S.

Census Bureau and the Bureau of Labor Statistics, it was evident that the construction industry

faces high regulatory complexity, high turnover, a large number of temporary employees, poor

safety record and low use of computers.

1.3 Main Research Focus

The main focus of this research centered on developing a construction specific trust model. The

model is aimed at improving trust between contracting stakeholders on construction projects.

The model incorporates a set of prioritized factors found on construction projects that were

linked to weakening or strengthening trust. The range of construction specific factors were









associated with communication methods, document types, types of stakeholders, expectations,

key performance indicators, contract types, management skills and the processes found in each

phase of the construction process. These also acted as supplementary research questions. The end

result of the trust model was intended to assist in addressing the challenges facing the U.S

construction industry while enhancing the bottom line of construction projects and their

stakeholders.











Table 1-1. Ranking of Computer use by industry in 2006
% of Computer R% of Internet
Rank Industry Rank Industry
Use Use
1 Financial activities 82.4 1 Financial activities 68.9
2 Information 77.5 2 Information 67.5
Business & Business &
3 68.4 3
professional services professional services 57.1
Education and health Education and health
4 62.2 4
services services 42.8
5 Manufacturing 51.9 5 Manufacturing 39.1
Transportation and
6 Wholesale trade 51.1 6 Transportation and
utilities 33.7
Transportation and
7 Transportation and 47.6 7 Wholesale trade
utilities 32.7
8 Mining 42.5 8 Mining 31.8
9 Leisure and hospitality 30.4 9 Construction 21.0
10 Construction 28.1 10 Leisure and hospitality 17.6
Source: Department of Labor, Bureau of Labor Statistics, 2007


Table 1-2. Ranking of Private Sector Industries According to the Lowest Median Years of
Employee Tenure


Rank
1
2
3
4
5
6
7
8
9
10
Source: United


Occupational Category Median Years
Leisure and hospitality 1.9
Construction 3.0
Wholesale retail 3.1
Professional and business services 3.2
Mining 3.8
Financial activities 4.0
Education and health services 4.0
Transportation and utilities 4.9
Nondurable Goods Manufacturing 5.4
Manufacturing 5.5
States Department of Labor, Bureau of Labor Statistics, 2007











Table 1-3. Employed Workers by Alternative Work Arrangements in 2005
Workers
Provided
Independent On-call Provided
Rank Industry np Rank Industry o Rank Industry by
Contractors Workers Contract
Contract
Firms
Education and Public
1 Construction 22.0 1 33.8 1 16.6
health services administration
Professional
2 and business 21.3 2 Construction 12.2 2 Construction 16.5
services
Financial Leisure and Education and 1
3 10.4 3 10.4 3 15.7
activities hospitality health services
Transportation
4 Other services 9.9 4 an ti 8.4 4 Manufacturing 14.1
and utilities
Professional Professional
5 Retail trade 8.9 5 and business 7.7 5 and business 10.4
services services
Education and Financial
6 8.7 6 Retail trade 5.6 6 6.8
health services activities
Leisure and Leisure and
7 Leisue a 4.5 7 Manufacturing 4.8 7 eisu an 4.5
hospitality hospitality
8 Transportation Public Transportation
and utilities administration and utilities
9 Manufacturing 3.2 9 Other services 3.8 9 Information 4.0
Agriculture &
Agriculture & Financial Wholesale
10 related 2.6 10 3.4 10 3.4
industries activities trade
industries
Wholesale Wholesale
11 ol 2.1 11 e 2.1 11 Retail trade 3.1
trade trade
12 Information 2.0 12 Information 1.8 12 Other services 0.3
Public Agriculture &
13 administration 0.3 13 Mining 1.0 13 related 0.2
administration
industries
Source: Department of Labor, Bureau of Labor Statistics, 2007









CHAPTER 2
LITERATURE REVIEW

The literature review is organized in three sections. The first section reviews leadership

theory in the field of business management. The second section focuses on trust literature from

the disciplines of psychology and business management. The third section analyzes the topics of

leadership and trust specific to construction management, which include key performance

indicators, teams and information technology.

2.1 Leadership

The leadership section of the literature review begins with an attempt to define leadership.

It continues with a discussion on the differences between leadership and management. The

section concludes with a review of the main leadership approaches, which include trait,

behavioral, needs, contingency, transformational and team. In describing the different leadership

approaches the terms "leader" and the "follower" are used. This connotation does not imply a

hierarchical relationship. It simply provides a distinction between the entities in the leadership

process.

2.1.1 Defining Leadership

Leadership is a universal phenomenon in humans and examining it is one of the world's

oldest pursuits (Bass 1990). Leadership research has revealed over 130 different definitions

(Burns 1978), making it "one of the most observed and least understood phenomena on earth"

(Burns 1978, page 2). Bass states that "there are almost as many different definitions of

leadership as there are persons who have attempted to define it" (Bass 1990, page 11). Burns

(1978) also points out that it is important to have different definitions of leadership to address the

contextual difference in which leadership is used. For instance, the meaning of leadership might









be different in the financial services industry compared to the meaning of leadership in the

construction industry.

Although scholars have failed to agree on a definition of leadership, some common

ground exists. First, leadership is an intended interaction between a leader and a follower

(individual, group or organization) with the relationship between the leader and follower not

necessarily hierarchical in nature. Second, the interaction between the leader and the follower is

a process that is context specific where the leader influences or inspires the follower to achieve

mutually beneficial goals. Third, the leader has the ability to effectively adapt to changing

situational variables. Fourth, the process of influence is based on the most important needs of the

follower creating an enthusiastic, commitment by both parties. Last, the leader and follower are

both transformed, changed or have experienced growth by the process of leadership (Hackman

and Johnson 1991; Hersey et al. 2001; Northhouse 2001; Yukl 2002; Burns 1978; Bass 1990).

2.1.2 The Difference between Leadership and Management

Although a manager (or a project manager in the construction industry) is sometimes

called a leader, the act of leading (leadership) is different than the act of managing (management)

(Covey 1989; Kotter 1990; Bass 1990; Zaleznik 1992; Bennis 2003). Leadership and

management are complementary yet distinct making it difficult to define leadership (Caldwell

2003). Leadership could include management, but management does not necessarily include

leadership (Bass 1990). This permits the potential conflict between these two functions where

managing may hamper leadership development and leadership may disrupt the effectiveness of

managers (Covey 1989; Zaleznik 1992). "Strong management alone can create bureaucracy

without a purpose, but strong leadership alone can create change that is impractical. Effective

managers must also be leaders and leaders must manage" (Yukl and Lepsinger 2004, p. 10). The

necessity for leadership and management must find a balance that enables construction









companies to thrive in a constantly evolving and highly unpredictable industry (Cheng et al.

2007; Dainty et al. 2005; Odusami, 2002).

Leadership is more of an art (Covey 1989) that focuses on inspiring and aligning people

to a company's vision while management focuses on more traditional measures linked to the

company's bottom line (Kotter 1991). Leadership is a social process within a network of

complex relationships which forms a constantly evolving community. As people in this

community interact conflicts between personal values, beliefs and needs arise. A leader sees past

the conflicts and aligns the individuals into an effectively functioning community focused on the

same goal. Leadership creates new beliefs, patterns and actions while management is used to

adapt to this change by establishing stability and predictability (Barker 1997). Leadership

creates the vision for change and management translates the vision into actions (Caldwell 2003).

Other researchers go so far to argue that mangers and leaders are different types of
people, managers being more reactive and less emotionally involved, and leaders being
more proactive and more emotions involved. The overlap between leadership and
management is centered on how they both involve influencing a group of individuals in
goal attainment. (Northouse 2001, page 12)

As indicated in Tables 2-1 and 2-2, management includes the functions of planning,

budgeting, organizing, staffing, controlling, problem solving, and focusing on the short term

bottom line. Leadership includes the functions of establishing direction, aligning people,

motivating, producing change, and inspiring trust for the long term (Kotter 199; Bennis 2003). In

the construction industry the function of management would be defined by budgeting,

scheduling, and performance measuring (Menches and Hanna 2006; Cox et al, 2003; Chua et al.

1999) where leadership would be defined by constantly improving (Spatz 1999) team building

(Skipper and Bell 2006) and trust building (Bulter and Chinowsky 2006).









In contrast, other scholars challenge the distinction between leadership and management.

They argue that the main focus of any organization is the achievement of goals and whether they

are accomplished by management or leadership makes no difference. Even managers that are

insensitive and lower employee morale can still achieve good results (Andersen 2006). In the

construction industry these goals are referred to key performance indicators (Cox et al. 2003) or

measures of project success (Hughes et al. 2004). However, scholars and researchers argue

because of the unique conditions of the construction industry sound management (Cox et al,

2003) and leadership (Skipper and Bell 2006; Dainty et al. 2005) are essential to success of

construction companies.

2.1.3 Trait Approach

The leadership trait approach section discusses the great man theory, leadership traits

between 1904 and 1947, leadership traits between 1948, and 1970 and the five factor model.

Great Man Theory. The pursuit of identifying personality traits of "great leaders" has

been a goal of scholars since the beginning of time. Confucius in 500B.C. and Aristotle in

300B.C. proposed ideal traits for leaders (Muller 2007). At the beginning of the 20th Century the

great man theory emerged and focused on the special traits of great leaders that aided them in

achieving extraordinary accomplishments regardless of the situation (Chemers 1997).

The great man (or leader) theory suggests that certain individuals are born with superior

traits that allow them to achieve "great things" or change the course of history. These traits could

be in the form of a deep passion for power, a sense of mission, an unbounded reserve of energy,

or an iron will. The word leadership is derived from the verb act which is believed to have two

distinct components, the function of giving commands (leader or beginner) and the function of

executing (follower or finisher). The leader depends on the followers to complete the commands

and the followers depend on the leader to initate the commands. Historically, the strength of the









leader was in the original initiative and risk, not in the execution. The lager in magnitude the

accomplishment the larger the mythological image of the leader became (Jennings 1960).

Great leaders separate themselves from average leaders by their ability to excel in

situations where high degrees of personal risk and personal initiatives are required (Jennings

1960). "The greatest leaders have this ability to turn situational incompatibilities into assets. The

situation can be shaped by the force of the great leader to the same extent that the weak leader

can be shaped by the force of situation," (Jennings 1960, pagel5).

Leadership traits. The trait approach to leadership emerged from the great man theory.

"The term trait refers to a variety of individual attributes, including aspects of personality

temperament, needs, motives and values" (Yukl 2002, page 176). A leader's traits, which are

inherited and learned, are transferable from situation to situation (Hersey et al. 2001). The needs

and motives of a leader guide, energize and sustain their behavior. These needs can be

physiological (hunger) or emotional (achievement). Values influence the leader's preference,

perceptions and choice of behavior. They are internalized and determine right from wrong,

ethical from unethical. Skills, which can be considered traits, refer to the ability to accomplish

something in an effective manner. Skill can also be classified as technical, interpersonal and

conceptual in nature (Yukl 2002).

Leadership traits 1904-1947. Stogdill (1948) completed a through review of leadership

studies (throughout various groups, business, educational, gangs etc.) in the time period of 1904

to 1947. The review found the following organization of common successful leadership traits:

capacity (intelligence, alertness, verbal facility, originality, and judgment), achievement

(scholarship, knowledge and athletic accomplishments), responsibility (dependability, initiative,

persistence, aggressiveness, self-confidence, and the desire to excel), participation (activity,









sociability, cooperation, adaptability and humor), status (socioeconomic position and popularity)

and situation (mental level, status, skills, needs and interests of followers, objective to be achieve

and so on). Moreover, Stogdill (1948) found that the situation determined which traits and skills

would be required by the leader.

Leadership traits 1948-1970. Following up his previous research, Stogdill completed an

additional review of leadership traits and skills from leadership literature in the time period of

1948 to 1970. Stodgill found that determination, persistence, self confidence and ego strength to

be important leadership traits and interpersonal competence became more important as the

necessary technical skills had been mastered. Stogdill concluded that every leader had

distinguishable natural traits that separated them from followers, every situation had different

demands, and the result of the interaction between the traits and situations, which was the most

pressing challenge in proactive leadership, was unknown. The driving force between traits and

the situation was fulfillment of individual needs in the situation. This process continues whether

the needs can be fulfilled or there is just a hope of fulfilling the needs (Bass 1990).

The five factor model of personality variables. The five factor model of personality or

the "Big Five" personality variables was an attempt to create a common group of traits that

predicted successful job performance for leaders. Research on the Big Five predominantly

focused on the business sector. An additionally goal for the Big Five was to create a common

language for leadership trait theory and provide a basic level for analysis (Digman 1990).

Goldstein (1999) defined the Big Five variables as: emotional stability (calm, secure, and non-

anxious) or conversely not neuroticism; extroversion (socialable, talkative, assertive, ambitious,

and active); openness to experience (imaginative, artistically sensible and intellectual);

agreeableness (good natured, cooperative, and trusting); conscientiousness (responsible,









dependable organized, persistent, and achievement oriented). Additional scholars such as Hughes

(1992) added other variables to the Big Five including values, achievement and rugged

individualism.

Although there is some general agreement in the literature about the value of the Big Five

personality variables, conflicting results exist regarding the importance of each particular

variable. Robertson et al.'s (2000) findings indicate that conscientiousness is the best predictor

while others found achievement (Hough 1992) agreeableness and emotional control (Smith and

Canger 2004) as the most important variables. Barlow et al. (2003) found that the required

leadership skills and traits change according to the level of the organization and the experience

of the leader. Anderson (2006) stated that traits of leaders could not explain organizational

performance and that leadership and management is not about possessing special traits but

instead it is about action.

Clusters of traits and skills forming other competencies. Recently, other competencies

have evolved from the interconnection and clustering of a number of leadership traits and skills.

These competencies include emotional intelligence (emotional maturity, self-confidence), social

intelligence (perceptiveness and behavioral flexibility), ability to learn, adapting to the changing

internal and external environments. These competencies require a number of traits and skills to

be present at the same time (Yukl 2002). The major strength of the leadership trait approach is

that it can be applied to all types of individuals, at all levels and in different situations. The major

weakness of the leadership trait approach is that there is no definitive list of "leadership traits"

and identification of traits is viewed as highly subjective (Northouse 2001).

Summary of trait approach. Traits of great leaders have been studied since the beginning

of time (Muller 2007). There is some agreement amongst scholars that leadership traits could be









predictors of job performance and project success. Yukl (2002) proposes that leaders wanting to

be effective should know their traits by understanding their strengths and weaknesses,

developing relevant skills, and selecting subordinates that address their weaknesses. It is

important that leaders know the influence their inherent and learned personality traits have on

their followers in work situations. Table 2-3 provides a detailed summary of the trait approach to

leadership.

2.1.4 Behavior Approach

The behavior leadership approach differs from the leadership trait theory by focusing on

how leaders behave rather than whom leaders are (Northhouse 2001). Behavior in leadership

refers to how individuals act or responds to their environment. Although behaviors are seen to be

unconscious they are thought to be learned and unlearned. This section reviews the Ohio State

leadership studies, the University of Michigan leadership studies and the managerial grid

leadership model.

The Ohio State leadership studies. The Ohio State leadership studies were an extensive

undertaking involving several disciplines and focusing on the situational determination of leader

behavior on the group as opposed to the individual (Stogdill and Coons 1957). The instrument

used in the studies was the Leader Behavior Description Questionnaire. The questionnaire began

with 1,800 items which were further broken down to 150 items and then classified into 9

dimensions of leadership behavior. The 9 dimensions included: integration (acts which tend to

increase cooperation among group members or decrease cooperation among them);

communication (acts which increase the understanding and knowledge about what is going on in

the group); production (acts which are oriented toward volume of work accomplished);

representation (acts which speak for the group interaction with outside agencies); fraternization

(acts which tend to make the leader a part of the group); organization (acts which lead to









differentiation of duties and which prescribe ways of doing things); evaluation (act which have to

do with distribution of rewards or punishments; initiation (acts which lead to changes in group

activities; domination (acts which disregard the ideas or persons of members of the group)

(Fleishman 1953).

Research results showed that the previous nine dimensions of research could be further

simplified into two dimensions, employee focused and work focused. The authors concluded that

leadership behavior either focused on building relationships (consideration) or completing work

(initiating structure) (Stogdill and Coons 1957).

University of Michigan leadership studies. At approximately the same time as the Ohio

State leadership studies (early 1950s) the Institute of Social Research at the University of

Michigan conducted a number of long range studies focusing on human relations in group

organization. One segment of the study centered on the relationships between clerical workers

and their supervisors in the home office of the Prudential Insurance Company (Katz et al. 1950).

A second segment of the study focused on railroad gangs and their foreman. The purpose of the

studies were to discover the relationships between supervisory attitudes and behaviors, group

productivity, worker moral and compare the findings between the clerical workers and the

railroad gangs (Katz et al. 1951).

The study of clerical workers and their supervisors compared high performing sections to

low performing sections. High performing sections were found to receive general rather than

close supervision, they had a greater sense of pride in their work and their supervisors were more

employee oriented than production oriented (Katz et al. 1950).

The study of railroad gangs and their supervisors found similar results to the study of

clerical workers. Foremen of high performing gangs were to found to be sensitive to the work









and personal needs of gang members. They showed interest is the worker's off the job problems

and were constructive rather than punitive in their attitude towards the worker's mistakes. High

performing foremen also spent more time on leading than on working (Katz et al. 1951).

In a followed up research paper to the University of Michigan Studies Katz and Kun

(1952) further described that individuals are a part of many interlocking social systems. The

systems are work related and non-work related and each system has its own pattern of rewards

and punishments set up by different individuals or groups of individuals with different goals and

intentions. The authors stated that it is a mistake to think that workers are only part of a work

social system and it is important to understand that as the individual's involvement in these

social systems change, the individual's values, attitudes, perceptions, and motives will also

change. (Katz and Kun 1952)

Likert (1961), Director of the Institute for Social Research, University Michigan,

concluded that successful supervisors were effective communicators primarily focused on the

human aspects work related challenges. Likert defined communication as a complex process

involving many dimensions, transmitting, receiving and interpreting information. Leadership is

a relative process where leaders must adapt their behavior to expectations, values, and

interpersonal skills of other individuals. This applies to within the organization, outside the

organization and at all levels. As a result no specific style, behavior or communication strategy

will work in all situations (Likert 1961). In summary, the University of Michigan research found

that task oriented behavior, relations oriented behavior and participative leadership differentiated

effective from non-effective leaders (Yukl 2002).

Managerial grid. Blake and Mouton's Managerial Grid (1985) further expanded the two

dimensions put forth in the Ohio State leadership studies (task focused and relationship focused)









and created a Managerial Gird. The Managerial Grid has the levels of concern for production on

one axis and levels of concern for employees on the other axis. Levels of concern refer to the

character and strength of the assumptions behind the leader's leadership style. Blake and Mouton

outlined five leadership styles: county club management (focus on relationship), impoverished

management (no focus on relationship or task), authority-obedience (focus on task), organization

management (focus on relationship and task) and team management (commitment to relationship

and task from both leader and follower). The authors concluded that the team leadership style,

which gained a commitment from both leader and follower on the importance of the relationship

and the task, was most effective. The Managerial Grid model also stated that leaders make

subjective appraisal of situations which include assumptions based on experiences,

organizational policies and personal values, which guide behavior and constitute a personal

leadership theory or style (Blake and Mouton 1985). "The foundation for understanding

managerial leadership is in recognizing that a boss's actions are directed by assumptions

regarding how to use authority to achieve organization purpose with and through people" (Blake

and Mouton 1985, page 9).

Strengths and weaknesses of the behavior leadership approach. The strength of the

behavioral approach is that it adds to the trait approach and is supported by many empirical

studies. However, not having a universal list for effective leadership behaviors is a weakness

(Northouse 2001).

Summary of behavioral approach. The leadership behavior theory focuses on how a

leader behaves instead of what traits the leader possesses. Effective leaders are both people and

task focused and they have the ability to gain commitment from their followers (Blake and

Mouton 1985). Table 2-4 provides a detailed summary of the behavioral approach to leadership.









2.1.5 The Needs Approach

This approach describes the importance of follower needs, leader communication and

leader power.

Understanding the follower's needs. A follower's behavior is dependent on two factors,

their needs in a particular situation and the changing strength of these needs. Every individual

has a unique set of needs that may or may not be evident to the follower or the leader. These

needs could be conscious and/or subconscious making them difficult to identify. Generally,

needs are categorized by maintenance needs or a growth needs. Maintenance needs are essential

for all individuals and are building blocks for growth needs. Table 2-5 illustrates that

maintenance needs includes items related to physiology (food) safety (shelter) and social contact

(friendship). Growth needs typically emerge once the maintenance needs are sufficiently

satisfied and these could include the need for achievement and self-esteem. Maintenance and

growth needs are interconnected and change according to the situation, stage of life, career, etc.

(Hersey et al. 2001; Maslow 1970).

The behavior of a follower is based on his or her strongest need in a particular situation.

The strength of needs are in continual fluctuations and are based on past experiences

(Expectancy Theory), future expectations/probability of success (Availability Theory) ( Hersey

et al 2001), present situation (Lewin 1945) and the position of the need on the

satisfied/unsatisfied continuum (Maslow 1970). These four factors continually interact to create

the strongest need at a particular time. Past experiences, positive and negative are based on

Vroom's Expectancy Theory and states that past experiences (positive and negative) strengthen

or weaken a need based on its probability of being accomplished. Future expectations is based

Availability Theory and implies that perceived limitations in the environment will also support

and hinder the strength of a need. Maslow showed that as need becomes satisfied it looses its









strength and other needs emerge, whereas an unmet need influences behavior to a greater degree.

However, Expectancy Theory and Availability Theory qualifies this statement according to the

perceived probability of success. As the probability of success approaches 100% or 0% the

motivation for this need decreases because the high likelihood and high unlikelihood of

achieving the need is less motivating (Heresy et al. 2001).

As a follower acts, the need gets closer or further away to fulfillment. If the follower

continually faces blocks to satisfying the need, frustration arises and the strength of the need

either increases or decreases. Continually frustration leads to a change in the strength of the need

according to the perceived probability of success. As the need approaches fulfillment or

satisfaction other needs strengthen and emerge influencing or re-prioritizing behavior (Heresy et

al. 2001). This process is explained in Figure 2-1.

By understanding the driving factors of the follower's behavior, leaders can become more

conscious of their leadership approach. Figure 2-2 describes the leadership approach for a leader

when the goal is to align actions with followers needs. The first step for a leader is to identify the

follower's strongest needs and select the leadership approach accordingly (Bennis 2003; Potter

1990). Once the leadership approach (or combination of approaches) is determined, a leadership

attempt can be made. If the leadership attempt is successful, the leader will achieve the desire

outcome. If the leadership attempt is not successful, the leader will not achieve the desired

outcome. In the case of failure, the leader must focus again on identifying and aligning actions to

the needs of the follower in order to influence or spark action in the follower (Maslow 1970;

Hersey 2001).

Leader communication. Communication is based on the transfer of verbal and nonverbal

symbols. Depending on the unique make up of individuals (past experiences, culture, religion,









etc) the interpretation of symbols and the value assigned to them is arbitrarily generated. This is

what makes humans unique and communication complex. The goal of communication is to

create a shared reality between the sender and receiver of symbols (Hackman and Johnson 1991).

Dean Bamlund, a noted communication scholar, identified five basic principles of the

human communication process. The first principle suggests that communication is a dynamic

ever-changing process that begins with the experiences, skills, feelings and characteristics of the

people involved. The second principle states that communication is circular in nature. This

implies the individuals involved the communication process are simultaneously senders and

receivers of symbols. The notion that communication is complex and involves the understanding

and negotiation of shared interpretations is the third principle. The forth principle states that

communication is irreversible, once a message is sent and interpreted, it can not be taken back.

The fifth principle is that communication encompasses the total personality of the individuals

involved in the communication. (Hackman and Johnson 1991)

Hackman and Johnson (1991) listed seven communications skills for leaders to effectively

influence followers. The skills included: developing perceptions of credibility (competence,

trustworthiness dynamism), developing and using power bases effectively, making effective use

of verbal and nonverbal influence, developing positive expectations for others, managing change,

gaining compliance, and negotiating productive solutions. From a communication stand point,

leaders are made not born, and are required to be aware of how their communication style is

perceived by the follower (Hackman and Johnson 1991).

Use of power. A leader's effectiveness in motivating and influencing followers, in a large

part, is determined by the follower's of leader's use of power (Yukl 2002). French and Raven

(1959) define power in terms of influence which causes changes in a person's behavior,









opinions, attitudes, goals, needs, values and other aspects of the their psychological field. Before

influencing or motivating can be attempted, a leader uses one of seven power bases. These power

bases are reward, coercive, legitimate, referent, expert (French and Raven 1959), information

(Pettigrew 1972), connection (Hersey et. al 1979) and ecological (Yukl 2002) (Table 2-6). Some

authors further categorize the power bases into position power and personal power (Yukl 2002).

The power of leaders is determined by their ability to produce a result aligned with the

needs of the followers (Petigrew 1972). Every individual, consciously or subconsciously, defines

the range of power they will allow the leader. If the leader proceeds beyond this range, the

leader's power with the individual decreases. Every time a leader attempts influence or exercises

power two forces are put in motion, a directing and an opposing force. The follower will be

influenced by the force that is perceived more powerful (French and Raven 1959).

The stronger the needs or values of a follower in a particular situation, the more power

the leader can exert and the more power the follower will tolerate. The relationship of power is

determined by the follower's strongest need in a particular situation and the follower's

perception of the extent of the leader's power. Therefore the leader needs to know the

motivational bases of followers (strongest) which will define the domain of influence

(Cartwright 1965).

The strength and form of power a leader has in a particular situation is dependent on the

strongest need of the follower. The range of power varies from case to case and situation to

situation. Using power outside the range decreases the power. Some bases of power have more

potential for follower resistance, frustration (coercive power) and some have more potential for

increased follower satisfaction (referent and expert power) (French and Raven 1959).









Yukl (2002) argues that power and influence are separate constructs. The power base and

the extent of power effects influence tactics. Yukl defines nine influence tactics: rational appeal,

appraising, inspirational appeals, consultation, exchange, collaboration, personal appeals,

ingratiation, legitimating tactics, pressure and coalition tactics. Yukl and Tracey (1992) in a

study on influencing followers found rational persuasion, inspirational appeal, and consultation

as the most effective influence tactics. Pressure tactics, similar to coercive power were usually

ineffective, resented and a socially undesirable (Yukl and Tracey 1992). Charbonneau (2004)

found that rational persuasion and inspirational appeals may increase the perception of

transformation leadership style. Even with these findings, it is important to note that influence

attempts can use any sequence of influence tactics and can be effective dependant on the

situation.

Summary the needs approach. This approach highlighted the importance of leader's

ability to identify and align with the strongest needs of the follower in a particular situation.

Additionally, this section illustrated that how a leader communicates and how a leader uses

power or influence tactics will also have impact the leader's effectiveness (Table 2-7).

2.1.6 Situational Approach

The contingency and situational approach to leadership discusses the LPC contingency

model, the cognitive resource theory, the path goal theory and the situational model of

leadership.

LPC contingency model. The LPC contingency model matches leader traits and

situations. Using the least preferred coworker (LPC) score the leader is first categorized as being

relationship focused or task focused. Second, using three situational variables, leader-member

relations, task structure and position power (in order of importance), the situation is determined

to be highly favorable, moderately favorable or least favorable. Highly favorable situations









comprise good member-relations, structured tasks and strong position power. This increases the

leader's control and influence of the situation. Fielder, the originator of the LPC contingency

model found that relationship oriented leaders are more effective in moderately favorable

situations, where task oriented leaders are more effective in highly and least favorable situations

(Fiedler 1964; Fielder 1967). "Task motivated leaders perform best in situations in which their

control is either very high or relatively low, while relationship-motivated leaders perform best

when their influence and control are moderate" (Fiedler 1995, page 455).

Fiedler (1967) found that stress and intelligence could be factors that prevented the

appropriate fitting of leadership style and task situation. For instance, if the leader's style did not

match the context the leader would experience stress causing an immature intelligence. More

specifically, in high-stress situations effective leaders were more task oriented and in moderate

stress situations effective leaders were more relationship oriented. In low-stress situation the

leader's intelligence contributed more to group effectiveness, while group intelligence

contributed more in high stress situations. The major challenge with this theory is that it does not

explain extremes and exceptions (Fielder 1967).

The contingency model has a number of conceptual weaknesses. First, it is uncertain how

the LPC score affects the group or if it remains constant over time. Second, the model provides

traits and not behaviors, which creates an obstacle for training. Lastly, it is unclear how the

model proposes to improve leadership, since traits are assumed unchangeable; changing the

situational variables (employee-relations, task structure and position power) is problematic; and

the LPC is inappropriate for fitting the leader to the situation (Yukl 2002).

Cognitive resources theory. Cognitive resources theory of leadership explores the

relationship between group effectiveness and the use of cognitive resources such as experience









and intellectual abilities. The theory states that the group's performance is determined by the

interaction of the leader's intelligence and experience (traits), leader behavior, interpersonal

stress, and group tasks (situation) (Fiedler and Garcia 1987). Interpersonal stress moderates the

relationship between leader intelligence and the subordinate. Causes of stress could include

conflicts with subordinates, demands without adequate resources and support, role conflict with

superiors and frequent work crises (Yukl 2002).

The cognitive resource theory found that that under stress-free conditions intelligence

was the main factor of group influence and effective. Under high stress conditions, experience

was the main factor of group influence and effectiveness (Fiedler and Garcia 1987). "The theory

postulates that there is interference between the intellectual process and experience that is we

cannot at the same time apply logical, analytic, or creative thinking to a problem while reacting

to it automatically on the basis of over-learned skills, knowledge and behavior" (Fiedler 1995,

page 456). Table 2-8 shows the major findings in cognitive resource theory (Fiedler and Garcia,

1987).

Path goal theory. The path goal theory of leadership attempts to explain how a leader's

behavior affects the satisfaction, motivation, and performance of a follower. The path goal theory

focuses on the formal relationship of superiors and subordinates (House 1971).

According to this theory, leaders are effective because of their impact on [followers']
motivation, ability, to perform effectively and satisfactions. The theory is called Path -
Goal because its major concern is how the leader influences the [followers'] perceptions of
their work goals, personal goals and paths to goal attainment, the theory suggests that a
leader's behavior is motivating or satisfying to the degree that the behavior increase
[followers'] goal attainment and clarifies the paths to these goals (Hersey et al 2001, page
111).

Followers are motivated with a leader's behavior if the behavior satisfies an immediate or

future need, complements the follower's environment or it leads to effective performance. Path

goal differs from other leadership contingency theories by emphasizes the fit between leadership









style and the follower's characteristics and work environment. Other leadership contingency

theories emphasize the match between leadership style and a particular situation or leadership

style and the development level of subordinates (House and Mitchell 1974) (Figure 2-3).

Situational leadership theory. Situational leadership is the interplay of the three

continuums, leader task behavior, leader relationship behavior and the follower readiness. These

factors determine which leadership style will be most effective in a particular situation. Figure 2-

4 describes continuums of leader behaviors, styles and decision styles along with follower

readiness. According to the range of follower readiness (high, moderate or low willingness and

ability) and the demands of the situation (relationship or task) the leader can diagnosis and match

which leadership style, behavior and decision style will be most effective (Hersey et al. 2001).

Although aspects of the situational model are useful (Hersey et al 1979; Vecchio 1987), other

aspects are problematic (Blank et al. 1990; Graeff 1997;Fernandez and Vecchio 1997).

Summary of situational approach. The situational leadership approach aims to match

leader behaviors with situational variables (Table 2-9). Generally the leader's behavior rests on a

continuum of high or low relationship oriented behavior or task oriented behavior. Depending on

the situational variables the leader will choose their behavior (relationship or task) accordingly.

Situational variables are also on continuum ranging from high to low. The major situational

variables were leader intelligence, follower readiness (willingness and ability), task clarity, and

follower reward. The strength of the situational approach is that it is practical, easy to use and

understand. However, is lacks a strong body of research and does not explain how different

situational factors change over time.









2.1.7 Transformational Approach

The transformational leadership approach section will review transactional and

transformational leadership, leader-member exchange theory, emotional intelligence and servant

leadership.

Transactional and transformational leadership. Burn (1978) describes the difference

between transactional and transformational leadership. He indicates that transactional leadership

is when "Leaders approach followers with an eye to exchanging one thing for another.... such

transactions comprise the bulk of the relationships among leaders and followers, especially in

groups, legislatures and parties" (Burns 1985, page 4). Bums states that transformational

leadership transpires when:

The transforming leader recognizes and explains the existing or demand of a potential
follower. But beyond that the transforming leader looks for potential motives in
followers, seeks to satisfy higher needs and engages the full person of the follower. The
result of the transforming is a relationship of mutual stimulation and elevation that
coverts followers into leaders and may covert leaders into moral agents (Bums 1985,
page 4)

Bass (1985) argues that transformation leadership motivates followers to do more than

the expected in three different ways. First, leaders raise the consciousness of followers in

accordance with the importance and value of specific goals. Second, leaders influence followers

to transcend self interest for the interest of the team or organization. Third, leaders assist

followers to fulfill their higher needs (Bass 1985).

Transformational leadership builds on the previous leadership approaches in an

integrative and constructive manner (Bums 1985). Transformational leadership attempts to

explain behavior that moves followers beyond the expected outcomes (transactional leadership).

Transactional leadership is not focused on catering to the individual needs of followers or the









personal development of the follower. Its main concern is on the exchanging things of value to

advance the leader's interest (Northouse 2002).

Bass and Avilio (1993) describe the major components of transformational and

transactional leadership. They state that idealized influence, inspirational motivation, intellectual

stimulation, and individualized consideration comprise the factors of transformational leadership.

Contingent reward and management by exception comprise transactional leadership (Table 2-

10).

Tichy and DeVanna (1986) explained transformational leadership as the process that

inspires followers to accomplish great things. This approach stresses that leaders are required to

understand and address the needs of followers. The authors outlined the need for revitalization,

creation of vision, and institutionalizing changes as the major steps in the approach. The

elements of transformational and transactional leadership work together to create performance

beyond the expectations of the parties involved in the relationship (Figure 2-5). This happens

when the self interests of both the leader and the follower are transcended for the interests of the

organization (Bass 1985).

The transformational leadership approach has strong intuitive appeal and has received

considerable attention form researchers. It goes beyond the transactional leadership model by

promoting growth in followers. However, it can lack conceptual clarity and it is similar to the

trait approach, which might be seen as elitist in nature (Northouse 2001).

Leader Member Exchange Theory. The Leader Member Exchange Theory (LMX) states

that exchanges between leaders and followers are both material and psychological (emotional).

This suggests that exchanges are both transactional and transformational or evolve from

transactional to transformational. The theory sets out to explain the relationship or the









interactions between the leader and the follower. This removes the focus from the leader (traits

and skills), the follower (behavior) and context (situational) (Garen and Uhl-Bien 1995).

The development of the LMX theory took place in four stages. The first stage found that

"contrary to prevailing assumptions of the Ohio State and Michigan studies of effective

supervision (average leadership style) many managerial processes in organizations were found to

occur in a dyadic basis, with managers developing differentiated relationships with professional

direct reports" (Garen and Uhl-Bien 1995, page 226). LMX showed no support for the average

leadership style previously postulated. The Research also showed that different followers formed

different perceptions of the same leader. For instance, the leader was both trustworthy and not

trustworthy depending on the follower. Scholars explained the reason for this as resource

constraints put on managers, which forced them invest time with a select group of followers

instead of the entire group of followers (Garen and Uhl-Bien 1995).

The second stage of LMX theory showed that the higher the quality of the leader follower

exchange, the more positive the benefits for the leader, follower and organization that were

realized. As a result, effective leadership processes were dependent on high quality social

exchange relationships. The third stage of the LMX theory focused on the attempt of creating

high quality exchanges between all followers. The authors stressed the importance of making an

offer to all followers to engage into a high quality relationship, which evolved from stranger

partnership (no influence) to acquaintance partnership (limited influence) to maturity influence

(almost unlimited influence). As the partnership matures, the influence is reciprocal and the

mutual trust and respect is extremely high. The fourth stage moves beyond the dyadic

relationships and focuses on the groups (Garen and Uhl-Bien 1995).









Brower et al. (2000) studied relational leadership based on LMX and interpersonal trust.

They found that there was a constant feedback loop between the leader and the follower in which

they subjectively evaluated each other based on trust criteria (ability, benevolence and integrity).

They found that trust was context and situation specific (Brower et al. 2000). Dunegan in his

research found that the perception of the leader (image management) influenced the LMX and

trust between the leader and follower. If the leader was perceived to have the ability to satisfy the

follower's needs the possibility of trust improved (Dunegan 2003).

In summary, the LMX theory focuses on the special, unique relationships leaders creates

with others. If these relationships are characterized by mutual trust and respect, the goals of the

leader, the follower, and the organization are all advanced. This demonstrates the importance for

leaders to strive for high-quality relationships with followers.

Emotional intelligence. Daniel Goleman (1998) argued that emotional intelligence is the

third part of effective leadership. The other two parts are intellectual intelligence and expertise.

He proposed that organizations now compete with people instead of products and this is what

makes emotional intelligence important. Goleman defines emotional intelligence using the

following five elements self-awareness, motivation, self-regulation, empathy and adeptness in

relationships and asserts that any leadership approach must include these elements (Goleman

1998).

Servant leadership approach. Greenleaf (2002) defines servant leadership as the leader

who serves the highest priority needs of the follower first. He states that the person who is a

servant leader is a servant first and a leader second. Servant leadership emphasizes listening to

learn and communicating with the intention of connecting with the follower's own experience. A

person who is a leader first, is predominately concern with their own needs. However, a servant









leader first listens and learns about the follower's highest priorities. With an accurate

understanding, the servant leader then communicates the vision with the intention of linking the

follower's own experience and imagination with the vision. Greenleaf believes this can not be

done without trust in the leader. Additionally, the more challenging and complex the goal, the

more trust in the leader is required (Greenleaf 2002).

Summary of transformational leadership approach. A summary of the transformational

leadership approach is presented in Table 2-11.

2.1.8 Team Approach

Team leadership. The team leadership approach is fairly new and does not benefit from

amounts of empirical research the other leadership approaches have received. "Teams are

organizational groups composed of members who are interdependent, who share common goals,

and who must coordinate their activities to accomplish these goals" (Northouse 2002, page 169).

The major obstacle in team effectiveness is leader effectiveness. Northhouse (2002) defines four

types of leadership functions for groups within internal and external dimensions. These functions

include: diagnosing group deficiencies (monitoring/internal), taking remedial action to correct

deficiencies (executive action/internal), forecasting impeding environmental changes

(monitoring/external), and taking preventative action in response to environmental changes

(executive action/external). By analyzing these four functions it is clear that team leaders are

required to monitor the internal and external situation, implement the appropriate strategies and

apply behavioral flexibility to match the complexity of the situation to ensure team effectiveness

(Northhouse 2002; Lafosto and Larson 2001). Table 2-12 compares the team effectiveness

criteria suggested by Hackman and Walton (1986) with those determined by Larson and LaFasto

(1989).









Team leadership is an ongoing process that requires leaders to receive information,

understand it, and communicate it a manner that is meaningful for the team (Hackman and

Johnson 1991). If trust is absent, it is highly likely that team will loose it effective. The

required trust must also evolve with the team over time (Dyer 1995). Other essential elements of

teams are having a common purpose, interdependence, mutual influence and face-to-face

communication (Hackman and Johnson 1991). Costa et al. (2001) conducted research with 112

teams that tested the relationship between trust and perceived task performance, team

satisfaction, relationship commitment and stress. The results showed that trust was positively

linked to relationship commitment, team satisfaction and task performance. The study also found

that stress and trust were negatively related. Janssens and Brett (1997) in their study of

transnational teams also showed that trust was important in teams and Herzog (2001) identified

trust as a success factor in effective teams and collaborations. Figure 2-6 presents a team

leadership model suggested by House et al. (2001). The model explains the mediating decisions

and the internal (task and relational) and external (environmental) functions of the team leader.

2.1.9 Leadership Summary

Leadership is a complex process that is difficult to define. It involves the ongoing

interaction of inherent personality traits, preferred behavioral styles, unsatisfied needs,

unpredictable situational variables and transformational goals and outcomes. Although a

common definition of leadership does not exist, many of the definitions describe the intended

interaction between the leader and follower, the importance of mutual goals, the ability to adapt

to situational variables, the skill of basing influence strategies on the strongest needs of

followers, and the being transformed by the process. Table 2-13 further summarizes the findings

in the leadership section. In conclusion, despite the number of different approaches to leadership,

effective leadership is dependent on trust between the leader and the follower.









2.2 Trust

The literature on trust is extensive and challenging to organize around themes and topics.

Dietz and Hartog (2006) identified a number of compendiums of papers, dedicated journal

editions and key journal articles. This section is organized by the compendiums, journal editions

and articles identified by Dietz and Hartog with the addition of trust in virtual environments and

trust in breach of psychological contracts.

2.2.1 Definition of Trust

In approximately 50 years of research, scholars have not agreed on a definition of trust.

Table 2-14 lists a selection of cross-discipline trust definitions. The common elements of these

definitions are positive expectations, vulnerability, risk, interdependence, subjective

psychological state of mind and the changing nature of the definition according to context

(situation) and/or discipline (Lewicki et al. 2006).

2.2.2 Trust Focused Compendiums of Papers

This section reviewed one foundational piece of trust research and three additional

compendiums of papers on trust research. The foundational work is by Lunmann (Trust and

Power, 1979) and is often cited as the foundation for trust theory (Schoorman et al 2007;

McAllister 1995; Vangen and Huxham 2003). The compendiums of papers are by Gambetta

(1988), Lane and Bachmann (1998), and Nooteboom and Six (2003) and are cited by Dietz and

Hartog (2006) as important to field of trust research.

Compendium on trust and power (Luhmann 1979). Luhmann (1979) in Trust and

Power, postulates that trust enables action by minimizing fear of loss or fear of making the

wrong decision. Trust reduces the complexity associated with the freedom of behavior and

choice individuals experience in society. Without some form of trust in some mechanism,









individuals would be burdened by society's complexity and paralyzed by fear and inaction

(Luhmann 1979).

Trust reduces social complexity by going beyond available information and generalizing
expectation of behavior in that it replaces missing information with an internally
guaranteed security. It thus remains dependent on other reduction mechanisms developed
in parallel with it for example those of law, of organization and, of course, those of
language, but cannot, however, be reduced to them. Trust is not the sole foundation of the
world; but a highly complex but nevertheless structured conception of the world could
not be established without a fairly complex society, which in turn could not be
established without trust (Luhmann 1979, page 94).

Trust is developed by gaining familiarity with the past, present and future. The action of

trust takes place in the present while contemplating past experiences and expecting or gambling

on the certainty of future outcomes. The decision to trust is the subjective blending of knowledge

and ignorance and anyone who abuses trust will be burdened with more complexity (Luhmann

1979).

In every case [trust] rests on the structure of the system which confers trust...the
readiness to trust is an important instance of ... the absorption of complexity through
structures that can relieve the burden of action. (Luhmann 1979, page 83)

As society evolves and new uncertainty and complexity arises, familiarity and trust are

required to evolve as well. Subsequently, the forms and structures that allow trust to develop are

constantly evolving, changing and adapting to a subjective (individual, group, organizational,

societal) view of the world. Individuals can trust and distrust simultaneously, in a number of

things, at different levels and for different purposes (Luhmann 1979).

Distrust generally functions at the same time of trust. Distrust is also a strategy that

reduces complexity. Individuals who are distrustful distill the complexity of the world and

limitless amount of information by negation until these items are manageable. However, using

distrust to reduce complexity can be more burdensome due to the increased reliance of

information and the challenge of narrowing the information down to a manageable level. Distrust









is manifested by distributing behaviors. Distrust is also controlled by a subjective process similar

to trust. Luhman states that distrust can not be totally eliminated but it must not be allowed to

overcome trust. When distrust occurs, it must be seen an anomaly, an accidental or an

insignificant occurrence and not be permitted to gain momentum and be destructive.

In summary, Luhmann argues that the many forms of trust reduce the complexity of the

world. Without trust, even though subjective, in some form of societal structure, individuals

would be overly burdened by fear and paralyzed to act (Luhmann 1979).

Compendium on trust (Gambetta 1988). Scholars in Gambetta's compendium of

articles, Trust, offered a number of different perspectives on trust. Desgupta (1988) asserted that

trust was central to all transactions and outlined seven key points for understanding the

development of trust. First, trust can only develop when appropriate consequences for breaching

contracts and agreements have been established. The second point stated that the enforcement

agency must also be trustworthy. Third, trust between persons and agencies were interconnected.

Fourth, the promise made by the trustee must be credible (avoid blind trust). The fifth point

described the importance of observing the world from the other person's perspective. Even

though trust did not have a unit of measure, its value can be measured was the sixth point. The

point was that trust emerged out of the inability to monitor the actions of others (Desgupta 1988).

Williams (1988) discussed the importance of knowing the motivations of individuals for

the purpose developing cooperation and trust. Williams defined four different types of

cooperative motivations, two macro-motivations (egoistic and non-egoistic) and two micro

motivations (egoistic and non-egoistic). Egoistic macro-motivations implied that the individuals

cooperated due to fear of sanctions from a higher level of authority (i.e. Government). Non-

egotistic macro-motivations were found in the moral or ethical dispositions of individuals where









there was a sense of duty to a higher level entity (i.e. Country) to cooperate. An egoistic micro-

motivation to cooperate was based on the self-interest of that individual to cooperate in specific

circumstances. A non-egoistic micro-motivation to cooperate implied cooperation in certain

occasions based on an individual's predisposition. Williams concluded that most individuals

were motivated by a combination of macro and micro motivations and it was the responsibility

of the trustor to identify the trustee's motivations (Williams 1988).

Luhmann contemplated the relationship between familiarity, confidence and trust. He

stated that all individuals created familiarity in their environments. Even when individuals

encounter unfamiliar circumstances, they explained it with familiar symbols and experiences

(Luhmannl988). "Trust is a solution for specific problems of risk. But trust has to be achieved

within a familiar world" (Luhmann 1988, p. 95). Luhmann continued with a comparison of the

subtle differences between confidence and trust. In a state of confidence, individuals refrain from

considering alternatives and react to a disappointment with an external attribution. In a state of

trust, an individual chooses a course of action despite possible consequences and attributes

failures internally. Trust and confidence can affect one another and can act as antecedents for one

another. "Trust is an internal calculation of external conditions which creates risk. Trust is based

in a circular relation between risk and action, both being complementary requirements."

(Luhmann 1988, p. 100). The assessment of risk in any situation is highly subjective and

dependent on the trustor's perception (Luhmann 1988).

Gambetta suggested that trust was the basis for a number of important functions, but

warned that an over abundance of trust can de detrimental. This notion was supported by

Baeson's work in the compendium. Even though organizations required basic forms of trust to

exist, increasing trust and cooperation would not necessarily improve effectiveness of









organizations. His research showed that increasing trust could also promote undesirable

circumstances. (i.e., promoting trust and cooperation among criminals or terrorists) not to

mention the potential costs to competition. Gambetta and Baeson explained how competition

benefited organizations and how an over abundance of trust might have negative consequences.

The answer was to balance trust, cooperation and competition (Gambetta 1988, Baeson 1988).

"Even to compete, in a mutually non-destructive way, one needs at some level to trust one's

competitors to comply with certain rules."(Gambetta 1998, p. 214). Understanding this principle,

organizations instituted a number of different constraints in an attempt to maintain the optimal

balance of trust, cooperation and competition.

Gambetta explained that the problem of trust was essentially one of communication.

Individuals need to know about each other motives in order to trust them. Individuals generally

do not believe that everyone will cooperate and therefore fear being taken advantage of.

Gambetta supports this notion by quoting Hume:

When each individual perceives the same sense of interest [motive] in all his fellows, he
immediately performs his part of any contact, as being assured that they will not be
wanting in theirs. All of them, by concert enter into a scheme of action, calculated for
common benefit, and agree to be true to their words ...interest is the first obligation to the
performance of promises. (Gambetta 1988, p. 227)

Gambetta concluded his compendium by stating that trust, in different degrees, was

existent in most human experiences.

Trusting a person means believing that when offered the chance he or she is not likely to
behave in a way that is damaging to us, and trust will typically be relevant when at least
one party is free to disappoint the other, free enough to avoid a risky relationship and
constrained enough to consider that relationship as an attractive option. (Gambetta 1988,
p. 218)

Trust entailed an entire continuum of degrees ranging from blind trust to distrust between agents.

At the core of trust is uncertainty or ignorance. Trustors do not have full knowledge regarding









the behaviors, motives or future responses of trustees. "Trust is a tentative and intrinsically

fragile response to our ignorance a way of coping with the limits of our foresight... [and] a

device for coping with the freedoms of others" (Gambetta 1988, p. 218).

Compendium on trust with and between organizations (Lane and Bachmann 1998).

Lane and Bachman's (1998) compendium, Trust Within and Between Organizations, focused on

trust within and between organizations in a global business environment. In the introductory

chapter, Lane set the context by discussing the pre-conditions of trust, types of trust and the level

of trust analysis. The preconditions of trust were described as the existence of uncertainty and

risk; interdependence between the trustor and trustee; and vulnerability to opportunistic behavior.

The different types of trust included calculative trust (expectations based on self interest of cost

and benefits), value or norm based trust (shared common values and norms), and cognition based

trust (common understanding of social rules, which included process based trust, character based

trust, and institutional based trust). Lastly, trust research transpired in four different levels,

micro-level (between individuals and between organizations), institutional level (institution as

the source of trust), system level (legal, education, political), and societal level (collective values

and norms) (Lane 1998).

Sydow (1998) described the factors surrounding inter-organizational trust (trust between

organizations) in a global market place. He conducted his analysis using the concept of inter-

organizational networks defined as long-term institutional arrangements among distinct but

related organizations based on trust. It was found that several economic benefits were believed to

be associated with using trust as the control system in these networks. These benefits included

reducing transaction costs, adapting collective strategies, coordinating economic activities, and

openly exchanging information and learning. Sydow also outlined six factors that supported trust









as the control mechanism between organizations in a network. These factors were: frequency and

openness of communication; interacting and exchanging in many different ways; openness of

relationships; balanced autonomy and dependence; small number of similar (values and norms)

firms in the network; and similar firm structures (Sydow 1998).

The decision to use power disguised as trust can be tempting for organizations. Power

can reduce the risk of trust by mandating cooperation, compliance and predictability. Although

the power approach reduces risk, it also reduces creativity, innovation and collaboration, items

that trust promotes. At times it is difficult to accurately decipher "trust" from "illusionary" trust.

Consequently, it is important to incorporate the power relations of the situation when assessing

trust in the relationship. Table 2-15 shows the different relationships between trust and power.

Understanding interests, aligning interests, sharing meanings, open communications, and

identifying when power instead of trust are used are the most important factors of distinguishing

trust from power (Hardy et al 1998).

Sako (1998) focused his research on how trust improved business performance. He

argued that trust reduced transaction costs, aligned governance structures, increased returns on

investments (i.e. new systems, higher standards), and improved learning, innovation and

continuous improvement. Specifically, it was "goodwill" trust (concerned for the well-being of

other parties) that had largest impact on performance. Sako's findings also recommended

focusing on trust enhancers, such as providing important information, rather than safe guarding

against potential opportunistic behavior (Sako 1998).

Liebeskind and Oliver (1998) reported how commercial interests have transformed the

nature of trust relationships between academic researchers in molecular biology. The researchers

found that trust was not neutral to the interest of individuals or institutions. Existing trust









relationships were impacted by the interests of new parties, which changed the previous

alignment of interests and values. As new interests entered existing trusting relationships, a new

formulation occurred which had the potential to cause conflict or even the severance of

relationships (Liebeskind and Oliver 1998).

Thus trust is not best viewed as a fixed or given commodity that exists within a specific
social community or network of relationships, but rather should be understood to be the
output of dynamic exchange relationships that are fuelled by individual interests, as well
as being the lubricant for the formation of new exchange relationships. Thus, exchange is
both embedded in trust, and engenders its formation (Liebeskind and Oliver 1998, page
140).

Deakin and Wilkinson (1998) discussed the relationship between the legal system and

inter-organizational trust. The legal system in many instances provided the environment that

enabled trust to develop. At times it acted as the catalyst that triggered intermediate institutions

(trade associations and standard setting organizations) to translate the meta-values of the legal

system into standards for the business community. Additionally, the legal system established

sanctions that protected against opportunistic or uncooperative behavior and provided regulatory

reform that encouraged economic productive (Deakin and Wilkinson 1998).

Marsden (1998) focused on the constraints (or rules) that enhanced trust in employment

relations. These constraints included rules on work (job description and tasks), tools (skills

required to execute the tasks), competence (function of completing work) and qualification

(functional qualifications). The challenge in defining rules is always finding a balance between

flexibility and control. Trust can develop around any set of the rules, but where there is less

opportunity to monitor and protection against opportunistic behavior more trust is required.

Marsden's research also showed the importance of defining the obligations and roles of both the

employee and the employer as well as the scope of the authority associated with each rule and









role. These definitions provided the conditions that enabled trust to transform into high trust

(Marsden 1998).

Child's (1998) research focused on the phases of international strategic alliance

development and the evolution of trust in each phase. Table 2-16 shows that as strategic alliances

develop, the form of trust transformed from self interest-based to common interest-based.

Bachmann (1998) concluded by stating, "The foremost problems relating to the analysis of

trust seem to be connected to the understanding the role of the institutional environment in which

business relations are embedded" (Bachmann 1998, page 298). Consequently, economic activity

and trust are highly dependant on the nature of the institutional environment in which they

interact. The authors in this compendium have used an array of different terms to conceptualize

trust and illustrated the difficulty of finding suitable words or concepts that describe the multi-

dimensional aspects of trust. When researching trust it is important to consider the impact that

power has on the relationship in question. Bachmann also reasserted the importance of a strong

socio-legal framework in creating a stable institutional environment that encourages "good faith"

business activities as opposed to adversarial business activities (Bachmann 1998).

Compendium by Nooteboom and Six (2003). The research presented by Noteboom and

Six (2003) in Trust Process in Organizations, involved a multi-disciplinary approach to examine

the causes and foundations of trust in organizations. Anything can be trusted (person, team,

organization, law etc). Individuals can at the same time extend trust and distrust to the same

object in different contexts and for different reasons. The trustworthiness of objects change in

different situations and consequently the trust extended to these objects change as well. The

mediating factors associated with the changing nature of trust are the interests (values, norms,

etc.) of the parties involved in the relationship (exchange) and trust process that enabled the









effectively learning interests (values, norms, calculations) of each party in the relationship.

Environmental (situational) mechanisms promoting and supporting the learning of interests by

providing security enhances the trust building process (Nooteboom and Six 2003).

Nooteboom and Six (2003) indicated that reliability and reliance were also important

factors of organizational trust (Table 2-17 and Table 2-18). Individuals must be both reliable to

each other and reliant on each other. The Tables discuss the tensions that were found in trust

relationships (egotistical vs. altruistic; control vs. trust), the level of trust analysis (Macro and

Micro), and the general behaviors in each situation. Trustors or trustees that feel betrayed or

taken advantage of will show their discontent in a number of obvious ways. It is important that

other members of the relationship pick up on these cues. Nooteboom and Six concluded their

work on trust by stating that, "Trust is a four-place predicate: someone (trustor) trusts some-thing

or someone (trustee) with respect to something (competence, intentions) depending on conditions

(Nooteboom and Six 2003, page 225).

Summary. Table 2-19 shows the summary of the compendiums discussed in this section.

2.2.3 Trust Focused Dedicated Journal Editions

This section reviews six different dedicated journal editions with articles published in the

Academy of Management Review; Organizational Studies, Organizational Science, International

Journal of Human Resource Management, Personnel Review and European Journal of

Marketing.

2.2.3.1 Trust in the Business Environment

Rousseau et al. (1998) examined the definition of trust; the nature (static or dynamic) of

trust; the status of trust (cause, effect or mediator); and the levels of trust analysis. An across-

discipline review of the literature showed that there was no common definition of trust.

However, there was common ground in that trust was a psychological state of mind, involved









risk, and required the interdependence of the trustor and trustee. Trust was also considered a

dynamic phenomenon that was either building, stabilizing, and dissolving while being

considered either a cause (independent, choice), an effect (dependent, institutional arrangements)

or an interaction (moderating role) (Rousseau et al. 1998).

Rousseau et al. (1998) defined four different forms of trust (deterrence, calculative,

relational and institutional). Deterrence-based trust was considered a low level of distrust and a

substitute of for control. The trustee was judged as trustworthy owing to sanctions or other

mechanisms instituted to minimize the cost of a violation. Calculus-based trust manifested where

risk was continually monitored and a rational choice based on credible information and the belief

of positive gains could be made by the trustor. This type of trust was limited to specific

exchanges. Relational trust or affective trust was established on repeated interactions between

the trustor and the trustee. The trusting decision incorporated information from within the

relationship and concern of the trustor and trustee were reciprocated. The repeated positive

interactions fulfilled expectations and strengthened the willingness to take risks. The last form of

trust described by Rousseau was institutional based trust. This form of trust created the

environment (of structures, rules, standards, etc.) for calculative and relational trust to develop

on the individual, team, organizational, or societal level. The forms of trust changed as the

interests of the individuals involved change and as the structures of the institutions change

(Rousseau et al. 1998).

McKnight et al. (1998) investigated the paradox of high initial trust in some relationships.

They described the paradox as how do two individuals without any prior knowledge of each

other build trust in their initial meeting. Figure 2-7 presents a detailed model of initial trust and

illustrates the interaction between disposition to trust, the cognitive process, institutional-based









trust, trusting belief (trustworthiness) and trusting intention. As two individuals approach a new

trusting relationship, they encounter each others disposition to trust. This comprises their trusting

stance (developed in childhood) and faith in humanity (general outlook). The individual's

dispositions filter into the institutional based trust consisting of structural assurances (rules and

procedures) and situational normality (stable environmental conditions). Next, the institutional

based trust joins with the cognitive processes of categorization (making unfamiliar circumstances

familiar) and illusions of control (perceiving more power than actual). Together they feed into

the trusting belief. The trusting belief is a judgment of trustworthiness based on the criteria of

benevolence, competence, honesty and predictability. Together these four factors, influenced by

the previous variables, form the trusting intention of initial trust between unfamiliar individuals.

Through the process, individuals search and interpret information that matches their beliefs and

views with the intention of creating the desired or expected results. Individuals tend to consider

misjudgments as isolated cases and assess the next relationship in a similar manner (McKnight

1998).

Sheppard and Sherman (1998) conceptualized trust with four distinct and ordered forms.

These forms included shallow dependence, shallow interdependence, deep dependence and deep

interdependence. Table 2-20 shows the four forms of trust according to the associated risk,

qualities of trustworthiness, mechanisms for trust, relational mechanisms and institutional

mechanisms. Sheppard and Sherman (1998) argued that relationships vary in terms of depth and

forms and were categorized as having shallow or a deep interdependence or dependence. In turn,

each category determined the type of risks, trustworthy criteria and trust mechanisms appropriate

for the specific relationship (Sheppard and Sherman 1998).









Lewicki et al. (1998) found that individuals had simultaneous reasons to trust and distrust

in relationships. This illustrated that trust and distrust were separate constructs and not the

opposite ends of the same continuum. Both trust and distrust could exist simultaneously in

relationships. Figure 2-8 shows the constructs of trust and distrust.

The opposite of trust is not distrust their antecedents and consequences are separate and
distinct, they can occur at the same time... [the] increase in distrust can serve the purpose
of enabling emergence of greater trust in social systems. Trust depends on the
inclinations toward risk being kept under control and on the quota of disappointments not
becoming to large...if this is correct than a system of higher complexity which needs
more trust, also needs at the same time more distrust (Lewicki et al. 1998, page 451).

Lewicki et al. also indicated that the keys to remedying distrust in work organizations was

to match skills with requirements, provide appropriate information for work requirements, design

jobs that consider human limitations in processing information, and align personal and

organizational values.

Elangovan and Shapiro (1998) presented a model of the process of betrayal or more

specifically opportunistic behavior in trusting relationships. Betrayal was defined "as a voluntary

violation of mutually known pivotal expectations of the trustor by the trusted party (trustee)

which has the potential to threaten the well-being of the trustor" (Elangovan and Shapiro 1998,

page 548). The scholars stated that the intent of the betrayer was the most critical factor in the act

of betraying or opportunistic behavior. Additionally, they outlined several key considerations in

discussing betrayal. They described the requirements of betrayal as deliberately violating

important expectations that were accepted by both parties, and the betrayal transpired through

action and not just thought. Again, it was important to decipher the intent of the violation. A

trustee genuinely willing to meet the trustor's expectations but unable to was not considered

betrayal. A trustee not wanting or choosing not to meet the trustor's expectations for their own

personal interests was considered a betrayal. Figure 2-9 shows a process model of opportunistic









behavior that leads to betrayal. It begins with triggers which advance into the assessment of

benefits, relationships, and principles. These filter through judgments of benevolence and

integrity and form the motivation to betray. At this point, the penalties related to betraying are

assessed and the coalescence of the variables in the model determined the perceived degree of

opportunistic behavior or betrayal (Elangovan and Shapiro 1998).

Whitener et al. (1998) examined trust in an attempt to identify the antecedents of

managerial trustworthiness in an economic exchange process. "Managerial behavior is an

important influence on the development of trust in relationships between mangers and

employees. We define managerial trustworthy behavior as volitional action that are necessary

though not sufficient to engender employee's trust in them" (Whitener at al. 1998, page 516).

Figure 2-10 shows the exchange framework in initiating managerial trustworthy behavior. The

process begins with three sets of factors, organizational, relational, and individual. These factors

feed into the managerial trustworthy behavior, which consists of behavioral consistency,

behavior integrity, sharing and delegation of control, communication and demonstration of

concern. Lastly, four boundary conditions (received similarity, perceived competence, employee

propensity to trust and task interdependence) are brought into the exchange to develop the

employee perceptions of trust. The Figure 2-10 also shows the cognitive process of the employee

in assessing the manager's trustworthiness (Whitener et al. 1998).

Das and Teng's (1998) examined trust and control in developing partner cooperation in

alliances (for a more detailed review of this topic see Das and Teng in the Organizational

Science section of this document). Das and Teng (1998) indicated that trust and control came

together and affected one another in trusting relationships. Figure 2-11 shows the relationship

between trust and control as it related to confidence in partner cooperation. The figure shows that









control mechanisms affect the trust level and the control level. The trust building activities affect

the trust level, which in turn affect the control level. The control level and trust level determine

the confidence in cooperation among partners (Das and Teng 1998).

Donely et al.(1998) defined five trust building processes along with their underlying

behavioral assumptions and primary base description with originating discipline (Table 2-

21).The trust building processes and the underlying behavioral assumptions described by Donely

et al. (1998) are more detailed that the processes presented by Rousseau et al. (1998) or Lewicki

et al. (1998).

Additionally, Figure 2-12 shows a model of developing trust based on national culture.

The model incorporates a number of findings from the other papers in the Academy of

Management Journal including the importance of cognitive and non-cognitive processes, values

and norms and trust bases on institutions, organizations and individuals (Donely et al. 1998).

Bigley and Pearce (1998) developed a problem-centered organizing framework of trust.

The scholars organized their findings in three main groupings of trust research: interactions

among unfamiliar actors, interactions among familiar actors within ongoing relationships, and

organization of economic transactions.

Three perspectives assisted in understanding the trust process in interactions among

unfamiliar actors. These perspective were dispositional, behavioral decision and institutional.

Each individual has their own disposition to trust or distrust. As these individuals become more

familiar with one other, the information they obtained trough their interaction becomes the major

driver in the trust process. The second perspective focused on the behaviors of unfamiliar actors

in trusting relationships. This perspective stressed the importance of situational factors, influence









behaviors and trust levels. The third perspective drew attention to the role of the institutional

framework that shaped the trust relationship between the actors.

Interactions among familiar actors were defined by the gathering of knowledge or the

forming of bonds between each actor. Organization of economic transactions and its governance

interacted with trust and impacted the perception of risk for individuals involved in the

relationship (Bigley and Pearce 1998).

Jones and George (1998) focused on the emotional elements of trust in organizations. Trust

was described as a psychological construct based on the interplay of people's values, attitude and

moods and emotions. The simultaneous interaction of values, attitudes and moods and emotions

determined the evolving and changing states of trust and distrust in organizations and teams.

Values created an experience of trust by forming trust disposition and the criteria for evaluating

the trust relationship. Values determined what was preferred and not preferred (Jones and George

1998).

We propose that psychologically, the multidimensional experience of trust evolves from
the interactions among people values, attitudes, moods and emotions. Values provide
standards of trust that people strive to achieve in their relationships with others, attitudes
provide knowledge of another person's trustworthiness, and current moods and emotions
are signals or indicators of the presence and quality of trusting a relationship (James and
George 1998, page 535).

When aligned and working together these factors transformed conditional trust to

unconditional trust. Trust evolved when trusting parties were assured in each other values,

attitudes and emotions and moods (Jones and George 1998).

A summary of the journal articles presented in the Academy of Management special

edition on trust is outlined in Table 2-22.









2.2.3.2 Trust within organizations

Although organizations require trust to operate effectively, trust within organizations take

many forms, which are both apparent and non-apparent to the members of organization. For

instance, creating predictability is the predominant function of trust in organizations. However,

as the desired level of predictability is obtained, the role of trust becomes less apparent to the

organizational members and fades into the background. The conscious awareness of trust appears

again when the once predictable organizational environment changes or threatens its current

structure or form. For example, bureaucracies were effective at creating trust amongst managers

until its form was threatened and the predictability of it structure was lost. All forms of trust are

fragile and have to be reaffirmed consistently. Specifically, trust needs to be reaffirmed more

with lower level employees than higher level employee because of the lower levels of trust (Grey

and Garsten 2001).

In the recent times of the "continual change" mantra, trust and predictability was found in

the common language and values of organizational restructuring rather than the once predictable

hierarchical and bureaucratic structures of organizations. This included the predictability

surrounding the goals of flexibility, customer service, professionalism, profit and quality. This

also rendered individuals potentially controllable and hence trustworthy. Additionally, Grey and

Garsten discovered that a faction of organizational leaders viewed trust as a way to control

employees and obtain their desired results (Grey and Garsten 2001).

Reed (2001) showed how a critical realist approach was useful in analyzing trust/control

relations. The dimensions of trust and power in governing organizations shaped the dimensions

of expert power within organizations. In defining trust, the researcher stressed the importance of

aligning values and norms to support collaboration within uncertain environments (Reed 2001).









The concept of trust is taken to signify and present a coordinating mechanism based on
shared moral values and norms supporting collective cooperation and collaboration
within uncertain environments. Control is taken to refer to a coordinating mechanism
based on asymmetric relations of power and domination to which conflicting
instrumental interests and demands are overriding contextual considerations (Reed 2001,
page 201).

Trans-organizational relationships, with the goal of long-term cooperation, were dominated

by trust and power. Trust in organizations can take many forms, such as contract trust,

competence trust, goodwill trust, calculus trust, knowledge based trust and identification based

trust. Trust minimized uncertainty and complexity, but created risk. Misplacing trust and its

associated costs created risk that organizations intended to circumvent. Legal norms and

sanctions that created stable work conditions, standards of expertise and rules and procedures

were mechanisms that reduced the risk of trust and enabled trans-organizational relationships to

flourish. These mechanisms also created the perception of trustworthiness which also fostered

valuable relationships (Bachmann 2001) although they could also be perceived as a form of

control.

Power, which was seen to be a prerequisite for trust, was another method that managed

risk, complexity and uncertainty. Generally, in environments characteristic of instability and

unbearable risk, the use of power over trust was preferred. Relationships with low levels of

regulation exhibited more power dominant mechanisms than trust dominant mechanisms. The

relationship between trust, power and control changed depending on the institutional structures

within and between the organizations (Bachmann 2001).

Knights et al. (2001) found that control was a precondition of trust in virtual forms of

organizations. Control was seen as a precondition of trust, where strict security rules make

virtual environment more trustworthy and fosters trust development (Knights et al. 2001).









Das and Teng (2001) focused on trust, control and risk in strategic alliances. Their research

was a continuation of the work reviewed in the Academy of Management section of this

document. The integrated framework presented in Figure 2-13 illustrated that trust and control

were two distinct methods for reducing risk in strategic alliances. The framework showed that

trust was more intrinsic and comprised goodwill trust and competence trust. Control was more

active and comprised behavior control, output control and social control. Trust and control both

lead to the reduction of relational risk and performance risk (Das and Teng 2001). Das and Teng

(2001) also described different methods for reducing relational and competence risk by different

alliance types (Table 2-23).

Summary. A summary of the journal articles presented in the Organizational Studies

special edition on trust is outlined in Table 2-24.

2.2.3.3 Trust in human resource management

William et al.(2003) in their examination of the employee's perception of a manager's

trust, power and mentoring, found certain communication skills increased trust. The

communication skills that actively increased trust were active listening; self disclosure; small

talk; and the manager's ability minimize the perception of managerial power. Relational

communication skills characterized by the supportive and emphatic face management of

employees were also found to enhance trust. Overall, managers were required to relate to their

subordinates in terms of their values, interests and needs that exhibited trust and not power or

control. Communication styles that discouraged trust included the use of power, coercion,

inability to listen, and negative face management (communication that was perceived as

diminishing the value or worth of the recipient). The challenge for managers was the perceptual

gap in terms of how the manager perceived his communication skills and how the subordinates

experienced his communication skills. Consequently, it is the manager's responsibility to ensure









their communication with subordinates builds trust and not distrust. Employees needed to view

the manager as an "in-group" individual and not an "out-group" individual (Willemyns et al.

2003).

Young and Daniel (2003) conducted in depth interviews that examined the emotional

(affectual) experience of trust rather than the cognitive calculativee) experience of trust

frequently cited in other trust research. The scholars found that trust and distrust emerged from

both emotions and cognitive calculations of risk. Various situational factors, such as the flow of

information, had numerous effects on the emotional and cognitive reactions of trust in the

workplace. The organizational culture and the historical experience of employees were

discovered to be particularly influential in determining the perceived trustworthiness of the

organization and the levels of trust and/or distrust found within the organization. Obstacles to

forming trust included barriers to interpersonal interactions, differences in goals between

management and employees, institutionalized disempowering beliefs, and the perceived

impersonalized or faceless institution. The main solution to these barriers to trust rested on

improving the communication styles of managers that enabled them to build personal

relationships with employees. Managers needed to read the emotional cues on of employees

more accurately in assisting the facilitation of trust. Trust created trust and distrust created

distrust and this relationship was found to be a self-supported, increasing or decreasing spiral

(Young and Daniel 2003).

Gould Williams (2003) established that human resource practices were powerful predictors

of trust and organizational performances. The author's research showed that different human

resource practices had different results and these practices should be aligned to the

organization's values, culture, and goals. Overall, human resource practices communicated the









organization's degree of trust with its employees in terms of it perceived control, rules and

rewards (trustworthiness). This also suggested that it was a good strategy for organizations to

regularly reevaluate their human resource strategies to confirm their effectiveness in

accomplishing desired outcomes (Gould-Williams 2003).

Payne and Clark (2003) surveyed 398 people employed in two UK service organizations to

determine the impact of dispositional and situational factors on the employees' trust in line

managers and senior managers. The scholars hypothesized that dispositional factors would

impact trust to a greater degree in senior managers and situational factors would impact trust to a

greater degree in line managers. They discovered that trust in both types of managers was best

predicted by a combination of dispositional and situational factors. Figure 2-14 outlines the

situational and dispositional determinants of trust in line managers and senior managers. The

model shows that situational factors were comprised of role-set satisfaction, job satisfaction,

confusing job, supportive environment, difficult job, challenging job and controlling boss.

Dispositional factors were comprised of anxiety, generalized trust in others. Payne and Clack

noted that direct experience over time with line managers or senior managers tend to override the

dispositional factors of these managers (Payne and Clark 2003).

Using data from a recent Australian workplace survey (2,000 work places and over 19,000

employees) Morgan and Zefane (2003) examined the effects of several types of major

organizational change (technological, structural and work role) with employee involvement. The

results of their study varied according to types of employee involvement and organizational

change. Reducing trust and increasing perceived risk were significant structure changes (i.e.

downsizing) and lack of opportunity to participate in decision making. Direct and open

involvement supported by communication with high level managers lowered perceived risk and









increased trust. Employees reacted mostly to organizational change that directly impacted their

well-being, job security, wage, work/family balance, or job satisfaction (positively or

negatively). Managers were required to manage trust in ways that lead to institutional stability.

For managers to increase system trust (institutional trust), they first needed to establish personal

trust with employees. In this fashion, trust had it best chance to be reciprocated (Morgan and

Zefane 2003).

Kiffin-Peterson and Cordery (2003) surveyed 218 employees in 40 self-managing work

teams to examine the relationship between trust and team effectiveness. The scholars established

that the situational factors were stronger predictors than dispositional factors on an employee's

preference for teamwork. Two situational factors in particular, trust in co-workers and trust in

management, had the strongest effects. This suggested that even if an employee had a high

trusting character (disposition), without trust in management and co-workers, the employee

would be hesitant to trust the team members. As a result, managers were required to demonstrate

their trustworthiness and the trustworthiness of team members if they wanted effective team

work (Kiffin-Petersen and Cordery 2003).

Blunsdon and Reed (2003) analyzed how trust was impacted by different aspects of work

(social and technical), different occupational composition and different types of industries. The

results of the study showed that trust levels were determined by the features of the workplace as

was the employee's disposition and experience of trust. This implied that trust indicators were

not transferable from one industry to the other or from one work place to the other (Blunsdon

and Reed 2003).

Summary. A summary of the articles discussedin this section are shown in Table 2-25.









2.2.3.4 Trust in organizations

Stewart (2003) tested the cognitive trust transfer process across WWW using hyper test

links. The major finding of their research was that the initial trust beliefs of an unknown target

increased as the perceived interaction of the unknown target and a trust target increased. The

closer associated the unknown targets were with the trusted targets, the more trusted or

trustworthy the unknown targets became. There was a correlation between perceived interaction

and perceived similarity that was transferred through hyper links and increased or decreased the

trust associated with unknown entities. Stewart (2003) established that institutional factors

(institutional-based trust) associated with safeguards were important factors for transferring trust.

In sum, the nature of trust over the WWW was calculus-based and the initial trust with unknown

target was highly associated with the perceived ties with a trust target (Stewart 2003).

Becerra and Gupta (2003) studied data from 157 dyadic relationships among 50 senior

mangers in a multinational corporation to examine the antecedents of organizational trust and

effects of communication frequency on the trusting relationships. As the communication between

the trustor (manager) and the trustee (subordinate) increased, the trusting disposition (inherent

characteristic) of the trustee in the eyes of the trustor became less important as a determinant of

the trustee's trustworthiness. When communication frequency was low between the trustor and

the trustee, the trustee's trust disposition became more important as a determinant to trust.

As communication grows, individual predispositions loose relevance in favor of
organizational context in which trustee and trustor are immersed. Perceived
trustworthiness is initially in the eye of the beholder, but as the frequency of
communication increases, the specific interests and linkages to the organization of both
trustor and trustee become more important. Context is critical to understanding trust
(Becerra and Gupta 2003, page 42)

The specific drivers of trustworthiness included the individual's interests within organization,

organizational tenure, decision making autonomy, and the connection with the organization. The









scholars also illustrated the subjective nature of trust and its psychological state of mind. Similar

to individuals, organizations have trust antecedents. In low communication environments, the

degree of trust changes as attitudes change (disposition), in high communication environments

the degree of trust changes as the context changes (Becerra and Gupta 2003).

The goal of McEvily et al.'s (2003) work was to "connect the psychological and

sociological micro-foundations of trust with the macro-bases of organizing". Since trust was

based on expectations, the trustor defines the trustee's trustworthiness by his intentions, motives

and competencies. Trust influenced the organizing principle either by structuring (i.e. system-

based trust) or by mobilizing (i.e. individuals act according to perceived degrees of

trust).Structuring also implied how trust was transferred in the relationship or throughout the

environment. A key component of the transfer between two unknown parties was a trusted third

party (trust is transferred at the individual level although it might be through a system). The basis

of mobilizing was knowledge sharing. Trust decreased the preference to protect against

opportunistic behavior and increased the amount and quality of knowledge shared (McEvily et

al. 2003).

Dirks and Ferrin (2003) examined the impact of reward structures on trust. Rewards are

seen as powerful tools for altering the beliefs, perceptions and behaviors of individuals. The

scholars found that reward structures had a strong impact on trust in terms of self-perception,

social perception and suspicion in the organization. In terms of a mixed reward structure based

on cooperative and competitive rewards, the perceived trustworthiness of the individual offering

the reward had a strong effect on the how the reward was interpreted. If there were low levels of

trustworthiness, the rewards were perceived with suspicion. Consequently, the perceived motives









behind the organization's reward structures had an indirect effect on the trust level within the

organization (Ferrin and Dirks 2003).

Huff and Kelley (2003) surveyed 1,282 mid level managers from large banks in Japan,

Korea, Hong Kong, Taiwan, China, Malaysia and U.S. to examine the differences in trust levels

between individualists and collectivist cultures. The researchers measured individual propensity

to trust, internal trust (trust within the organization) and external trust (organization's trust with

suppliers, customers, etc.). The findings showed that U.S. bank mangers had higher propensity

trust levels, higher external trust levels (customer and suppliers), but lower inter-organizational

trust levels compared to Asian bank managers (Huff and Kelley 2003).

Carson et al. (2003) studied 129 firms engaged with outside contractors for research and

development and found that the effectiveness of governance-based on trust (no legal remedies

for opportunistic behavior) was dependent on the ability of the partners to accurately read and

learn about each other's behaviors and interests. Accurately assessing the trustworthiness of

exchange partners was dependent on information processing ability. This limits the probability of

misplacing trust and being exposed to opportunistic behavior. The ability to communicate

effectively by learning and reading each others interests and behaviors increased the success of

the execution phase of the relationship. As the ability to process task and relationship

information more accurately increased, the success of the relationship increased and firms used

governance structures based on trust more frequently. Additionally, as the use of trust based

governance structures increased, collaboration within the partnership increased. Trust based

governance structures (lack of legal remedies for opportunistic behavior) stressed the importance

of accurately assessing the exchange partner's trustworthiness by learning and effectively

processing information regarding behaviors, interests and task requirements (Carson et al. 2003).









Dyer and Chu (2003) surveyed 344 supplier-automaker exchange relationships in the U.S.,

Japan and Korea. Dyer and Chu found that transaction costs (monitoring and enforcing) were

reduced by perceived trustworthiness. Suppliers that had low trustworthiness had more face to

face interactions or redundant communications due to lower negotiation efficiency, less

confidence in information provided, and high levels of contracting. Since transaction cost

represented 30 to 40 percent of economic activity, low trustworthiness can considerably increase

transaction costs. Another impact of high trustworthiness was the increase of information sharing

in the relationship. The scholars argued that other governance mechanisms (contracts) are still

necessary to protect against misplaced trust, but they do not create the value and the competitive

advantage that a high level of trustworthiness creates. In conclusion, trust was seen to increase

performance by decreasing transaction costs and increasing the quality of information shared

(Dyer and Chu 2003).

Child and Mollering (2003) surveyed 615 Hong Kong firms with managing operations in

mainland China to examine the effect of context on trust. "The research confirmed the

importance of contextual confidence in institutions for building trust" (Child and Moller 2003,

page 69). Child and Mollering found that institutional based trust had a strong correlation with

organizational performance and that main land China could be well serviced by adapting active

trust practices with organizations (Child and Mollering 2003).

Summary. A summary of articles discussed in this section is is outlined in Table 2-26.

2.2.3.5 Trust among personnel

Gilder (2003) examined the differences in trust between contingent workers (n=33) and

core workers (n=31). Core employees showed higher commitment levels to the team and the

organization and displayed more favorable work related behaviors than contingent workers.

Employees that trusted company polices were more committed and stayed with the company









longer. This study showed that employees with different terms of employment have different

attitudes and behavior responses to teamwork and organizational policies implying that

management needs different strategies for different types of employees (Gilder 2003).

Kerkof et al. (2003) used longitudinal data from 75 work Dutch councils to determine

relational determinants of trust. The results of the study showed that trust was more linked to

relational trust factors as opposed to calculative (instrumental) trust factors. This suggested that

trust was a social commodity reflecting the quality of the relationship rather than the perceived

benefits of the relationship outcomes. Other findings focused on individuals with low

hierarchical or perceived power in organizations. These individuals had lower levels of trust and

were more cynical about trust. However, trust was perceived to be more important to them and

based on the quality of the relationship compared to individuals with higher perceived power

(Kerkof et al. 2003).

Ferres et al. (2003) used focus groups and surveys to examine manager-subordinate

relationships within a large Australian organization. A precursor to this study was the results of

the annual organizational survey that indicated that the trust levels in mangers were low. The

study findings showed that as perceived organizational support increased, the perceived levels of

trust in managers increased. Additionally, the turnover intent decreased and commitment

increased. This illustrated that trust in mangers did not solely depend on the behavior or

character of the managers, it also depended on the situational factors such as company policies,

procedures and rules specifically focused on organizational support and procedural justice.

"Trust does not come from a paycheck, it has to be earned" (Ferres et al., page 583).

According to Tyler (2003) social trust based on inferences of the motives, characters and

intentions of other individuals involved in the trust relationship has become the most important









form of trust in organizations that promote effective growth. Social trust taps into the motives

and interests instead of making judgments about predictability and competence. Tyler (2003)

used an example of a medical doctor to clarify the point. It is difficult to know the competence of

a doctor but one can make an inference about the doctor's sincerity and integrity about doing his

best to help the patient. A supporting factor of social trust is procedural justice (system or

institutional trust). It is difficult to know about someone's competence but inferences on whether

the trustee is working in the best interest of the trustor can be made. Theses inferences are not

about predicting future behavior, but about knowing motivations for the behavior. If the

motivations of the trustee were perceived to be in the best interest of the trustor, a negative

behavior was more tolerable and trust could still be in tact. However, if the motivation of the

trustee was perceived to be not in the best interest of the trustor, a perceived negative behavior

would be interpreted as a distrustful act. This new form of trust focused on gaining buy-in from

employees instead of trying to shape the behaviors of employees through incentives or sanctions

(Tyler 2003).

Bijlsma and Bunt (2003) completed a case study of a hospital with 1,800 employees in a

mid-sized Dutch town with the goal of identifying a parsimonious set of antecedents for trust in

managers. In most trust relationships, individuals search for certain behaviors they feel will

lower their personal, team or organizational risk. The scholars found that the combination of

support, guidance, monitoring, and openness were significant predictors of trust in managers

(Bijlsma and van de Bunt 2003).

Costa (2003) used survey data from 112 teams (359 individuals) from 3 different

healthcare organizations in the Netherlands to examine the impact of trust on perceived task

performance, team satisfaction, and organizational commitment (attitudinal and continuance).









Trust was found to be an important factor for functional teams. However, teams with a short life

cycle (fixed amount of time or specific projects) identified more with the project at hand than the

members of the team. This finding stressed the importance of system or institutional trust rather

than personal trust for short term teams. Teams with a long term life cycle identified more with

the team members and in turn, the team members had more effect on work satisfaction. Other

results showed the multi-component of structure of trust. Trust within work teams was positively

link with the performance, cooperation and positive attitudinal commitment to the organization.

In summary, the antecedents to trust in team members included team member performance,

cooperation, and attitudinal commitment to the organization (Costa 2003).

Summary. A summary of the articles discussed in this section is shown in Table 2-27.

2.2.3.6 Trust in marketing

Arnott (2007) set the context of the special journal edition by defining trust as "a belief in

the reliability of a third party, particularly when there is an element of personal risk." Trust was a

major component of the belief or non-belief of business and brand promises. Arnot described

that there were three determinants of trust, integrity, benevolence and credibility. It was believed

that high business trust lead to favorable outcomes such as more profits and increased customer

loyalty. However, these business relationships were in a constant state of flux (uncertainty,

complexity, etc.) making trust difficult. E-business with its increased likelihood for opportunism,

inappropriate behavior and identity theft, added an additional dimensions to the challenge of trust

(Arnott 2007).

Morgan and Hunt (1994) proposed the commitment-trust theory of relationship marketing.

Relationship marketing evolved from the importance of developing effective networks and

adapting to the changing requirement of success in the global market place. The theory included









concepts such as relational contracting, relational marketing, working partnerships, symbiotic

marketing, internal marketing and co-marketing alliances (Morgan and Hunt 1994).

For most global businesses, the days of flat-out predatory competition is over... In place
of predation, many multi-national companies are learning that they must collaborate to
complete... However competitive a particular industry may be, it always rests on a
foundation of shared interests and mutually agreed upon rules of conduct...business
almost always involves mutually trusting groups, not only corporations themselves but
networks of suppliers, service people, customers, and investors (Mogan and Hunt 1994,
page 20).

Morgan and Hunt (1994) explained ten forms of relational exchanges in relationship

marketing in which commitment and trust are central elements. Figure 2-15 explains the ten

forms. These forms were broken up into supplier partnership, internal partnerships, buyer

partnership and lateral partnerships. The suppler partnerships were further subdivided into goods

suppliers and service suppliers; lateral partnerships were sub-divided into competitors, non-profit

organizations, government; buyer partnerships were further sub-divided into intermediate

customers and ultimate customers; and lateral partnerships were further sub-divided into

competitors, non-profit organizations and government. This illustrated inherent challenges of

building trust simultaneously with a number of different exchange relationships (Morgan and

Hunt 1994)

Morgan and Hunt (1994) developed the Key Mediating Variable (KMV) model of

relationship marketing. Figure 2-16 explains the proposed model. The model showed that

relationship commitment was positively effected by relationship termination costs, relationship

benefits and shared values. Trust was positively impacted by shared values, communication, but

negatively impacted by opportunistic behavior. The model in Figure 2-16 also shows the positive

and negative outcomes of trust and relationship commitment (Morgan and Hunt 1994).









Moorman et al. (1993) defined trust as a "willingness to rely on an exchange partner in

whom one has confidence" (page 82). The scholars tested their theory on 779 users of market

research. They found that trust in the market research information depended on five antecedents.

These antecedents were individual user characteristics (job experience and firm experience);

perceived researcher interpersonal characteristics (research abilities and motivations, non-

research abilities and motivations); perceived user organizational characteristics (organizational

structure, culture and user location); perceived inter-organizational/interdepartmental

characteristics (power, culture location); and perceived project characteristic (importance level,

customization level).

Moorman et al. (2003) determined that interpersonal factors of the researcher were the

best predictors of trust. More specifically, researcher integrity, willingness to reduce research

uncertainty, confidentiality, expertise, tactfulness, sincerity, congeniality and timeliness were

strongly associated with trust. Out of the above mentioned factors, the researcher's perceived

integrity was the most important predictor of trust. The scholars' findings were contrary to

traditional marketing research by including both a psychological component (confidence in the

exchange partner) and a sociological component (willingness to rely on the exchange partner).

This finding portrayed trust as an exchange relationship rather than set of personal characteristics

(Moorman et al. 1993).

Moorman et al. (1992) investigated the role of trust between knowledge users and

knowledge providers. They surveyed 779 users of market research information. Moorman et al's

findings were similar to the findings of Moorman et al. 1993. They found that trust facilitated the

quality of the relationship process and not necessarily the utilization of the research. Trust









directly facilitated the exchange processes and indirectly improved the end result (Moorman et

al. 1992).

Elliot and Yannopoulou (2007) investigated trust in brands. The researchers conducted 14

in-depth interviews of an average duration of one hour with seven females and seven males, 25

through 40 years old. Before discussing their results, the scholars described the relationship

between familiarity, trust and confidence. "Familiarity, confidence and trust are three modes of

exerting expectations about the future based on personal experience and culture; at familiarity

habit predominates; as risk increases trust is necessary, and over time trust reverts to confidence"

(Elliot and Yannopoulou 2007, page 991).

Trust by its nature is unstable and fragile. Its status can change with every

disappointment or satisfaction and as a result the relationship changes accordingly.

Trust evolves out of past experiences and prior interactions. It also develops in stages of
moving from predictability to dependability to trust and eventual and sometimes faith.
This represents a hierarchy of emotional involvement which reaches trust when people
make an emotional involvement in another person. The basic requirements for predictable
are some experience of consistency of behavior from which we can build a knowledge
base. Dependability requires further experience and involves a move away from specific
behaviors to more generalized set of beliefs which are vested in a person. The move is
likely to depend heavily on the accumulation of evidence from a limited and diagnostic
set of experiences involving risk and personal vulnerability. Trust requires a move from
reliance on rational cognition to reliance on emotion and sentiment and developing
intimacy, which lead to an investment of emotion in the person. (page 990)


The findings of the study revealed that when customers faced low risk and low price in

the product they were buying, familiarity was sufficient for a buying action. However, when

perceived risk increased and price levels increased, consumers look for confidence and

dependability for functional brands but consumers required trust to purchase symbolic brands

(Elliot and Yannopoulou 2007).









Sichtmann (2007) conducted 308 face-to-face interviews (in Germany) to analyze the

antecedents and consequences of trust in a corporate brand.

Trust is defined as the belief in which a consumer in a purchase situation is characterized
by uncertainty, vulnerability, lack of control and the independent -mindedness of the
transaction partners relies on, to the effect that a company identified as a corporate brand
will deliver a good or service at the quality which the consumer expects, on the basis of
experiences which the consumer has made in the past. Page 1001

The results of Sichtmann's research showed that competency and credibility were important

antecedents. Trust also strongly influenced purchase intentions, marketing success and word of

mouth behavior. Since, customers were able to verify competency and credibility, trust exerted a

stronger influence on customers rather than non-customers. This suggested that managers should

continue to focus on developing competence and credibility with current customers and explore

other strategies with non-customers (Sichtmann 2007).

Doney et al. (2007), using a literature review and qualitative surveys, tested factors of

trusting relationships between buyers and suppliers in a global, business to business services

context. The model confirmed the positive influence of the following trust building behaviors:

social interaction, open communications, customer orientation, service quality, perceived value

and buyer wealth. Buyers assessed trustworthiness also by the tangible aspects of the service

offerings and social interactions.

This supports study findings that the key to achieving longevity and business expansions
to create a service atmosphere that promotes a buyer's trust of their service provider. In
order to build trust, our study suggests that service providers invest in both the social and
economic aspects of the transaction ... such as open communication and customer
orientation.(Doney et al. 2007, page 1110)

Salespeople required training in techniques that identified fulfilled consumer needs leading to a

trusting relationship (Doney et al. 2007).









Mouzes et al. (2007) used gaps in the literature to develop a conceptual model of trust and

reliance in business relationship. Figure 2-17 presents the conceptual model developed by

Mouzes et al. In the model trust referred to open communication, social interaction and technical

competency; reliance referred to business objectives, contractual documents, and monitoring and

sanctioning behavior. The model conjectured that both high inter-personal trust and high inter-

organizational reliance were required for stable business relationships. Inter-personal trust on its

own was in sufficient. Expedient relationships required mainly high inter-organizational reliance

and not trust. Trust was more important at the inter-personal level where reliance was more

important on the inter-organizational level. Relationships between organizations were based

more on mutual interests than trust. The model also showed the difference between interpersonal

trust and inter-organizational trust, the former was dependent on people and the latter was reliant

on systems (Mouzes et al 2007).

Kingshott and Pecotich (2007) surveyed 34 distributor firms to identify the role that

psychological contracts played in managing customer relationships. Psychological contracts are

highly subjective perceptions of reciprocal obligations that are promissory in nature relying on

perceived terms of an agreement. The study showed that violation of psychological contract

terms reduced the level of trust in relationships with distributors. During the socialization

process, it was imperative that the terms of a psychological contract were obtained, understood

and confirmed. This enabled members of the relationship an opportunity to gain a better

understanding of each others' psychological expectations and a better chance to maintain trust

(Kingshott and Pecotich 2007).

Summary. A summary of the articles discussed in this section is shown in Table 2-28.









2.2.4 Key Trust Research

Deutsch (1958) used a two person non-zero-sum game with college students to test which

factors relating to risk and trust. Trust required a strong need or motivation that encouraged risk

taking behavior even with the exposure of potential undesired consequences. Deutsch made a

number of conclusions about the formation of trust. First, certain social situations would not

occur without mutual trust between two individuals. Second, mutual trust would not occur unless

each person was openly supportive each other's welfare. Third, mutual trust can occur in

situations with the following factors: open communication, understanding of the other person's

behaviors, perceived power to protect against unintended consequences or the presence of a third

party that can moderate the situation (Deutsch 1959).

Rotter (1967, 1971 and 1981) framed his research in social learning theory. Social learning

theory inferred that individuals have expectancies in each situation and their expectancies will be

based on past experiences with similar situations. Rotter's focus was mainly on trust in social

situations and found that higher trusting people were less likely to lie, cheat or steal and more

likely to be happier and friendlier. The researcher also found that contrary to popular belief,

higher trusting people were not gullible and were adept at discerning who to trust and who not to

trust (Rotter 1967, 1971, 1981).

Zand (1972) explained the spiral-reinforcement relationship between trust, information,

influence and control. Zand explained that groups typically faced two challenges, one was the

task or the problem and the other was how the group members interrelated to solve the problem.

High initial trust by the trustor (or leader) increased the quality, accuracy and timeliness of

information shared with the trustee in regard to the problem at hand. This facilitated a positive

mutual influence in terms of decision making, procedures and outcomes, which lead to enhanced

interdependence and less procedure control. Initial trust was reinforced and augmented as









additional mutual confidence was garnered and effective decisions were made. However, a

decreasing reinforcing spiral of trust transpired with low initial trust, inefficient information

sharing, lack of influence and poor decisions. "The pattern of spiraling reinforcement requires all

members of the group to hold similar intentions to trust... trust as behavior conveys appropriate

information, permits mutuality of influence, encourages self-control, and avoids abuse of the

vulnerability of others" (Zand 1972, page 238).

Shapiro (1987) added a new element to the discussion of trust. In the context of economic

affairs, she argued that trust was "a social relationship in which principals (trustor)-for

whatever reason or state of mind-invested resources, authority, or responsibility in an agency

(trustor) to act on their behalf for uncertain future return" (Shapiro 1987, p. 626). The trustor

lacking the expertise of the trustee is unable to keep the trustee accountable and therefore offers

the trustee an opportunity to inappropriately take advantage of the trust. It light of this

uncomfortable challenge, trustors protect themselves with a number of coping strategies. First,

they abstain from engaging in these types of relationships. Second, they attempt to spread their

risk and thereby minimize their potential maltreatment by the trustee. Third, they only deal with

trustees they have dealt with, have a social relationship with, or have good reputations. The last

coping strategy was where trustors felt they had some control of the behavior of the trustee

(Shapiro 1987).

To protect against vulnerabilities in social relationships with high level trustees (i.e.,

agencies, banks, insurance companies, hospital, etc.), individual trustors rely on "guardians" of

trust. The guardians of trust institute a number of procedural norms, structural constraints and

policing mechanisms designed to maintain trust between trustors and trustees. However, since

guardians have the same opportunities to maltreat principals (trustors) as previously identified









for lower level trustees, "who guards the guardians of trust?" Shapiro answered this question

with, trust. This illuminates the paradox of proceduralism and trust. Controlling trustees (agents)

to protection the trustor (principal) against mistreatment, an acknowledgement of distrust is

institutionalized (Shapiro 1987).

Sitkin and Roth (1993) explored the effectiveness of legalistic remedies for trust and

distrust. They began by describing four trust measures. The first measure was the attributes of

individuals and focused the individual's trustworthiness. The second measure of trust was

behavior and implied the link between high trust and cooperation, and low trust and competition.

Situational features, interdependence and uncertainty was the third measure. The fourth measure

referred to institutional arrangements such as legalistic remedies (i.e. contracts, rules, procedures,

etc.) (Sitkin and Roth 1993).

Sitkin and Roth (1993) discussed the effectiveness of legalistic remedies for trust and

distrust. Evidence showed that legalistic remedies fostered distrust in some contexts and trust in

other contexts. In an attempt to clarify, Sikin and Roth defined two types of trust. One based on

reliability in a specific context and the other based on values in a global context. A violation of

the first type of trust (reliable in a particular context) lowered trust but did not necessarily foster

distrust. It was found that an individual can repeatedly violate trust in a particular context and

still be trusted. However, a violation of trust based on incongruent values (second type of trust)

fostered distrust and was unable to be remedied by legalistic mechanisms. Legalistic remedies

were effective to create trust in specific contexts but ineffective to create trust in environments of

conflicting or incongruent values (Sitkin and Roth 1993).

Hosmer (1995) paper's attempted to provide a unified definition of trust and provided a

comparison of the behavioral definitions of trust (Table 2-29). Hosmer argued that there were









five common components in trust definitions. First, trusting person had positive expectations

about the behavior or outcome on the part of the trustee. A second common component was the

"expectation that the loss if trust is broken will be much greater than the gain when trust is

maintained; otherwise, the decision to trust would be simple economic rationality ... and the

probability that trust will be broken is both unknown and outside the control of the trusting

individual; otherwise the decision to trust would be simple economic rationality" (Hosmer 1995,

page 390). Third, trust definitions discussed the need for cooperation to achieve certain benefits.

However, cooperation could be forced (contracts and controls) or voluntary. Fourth, trust was

difficult to enforce even with the existence of contracts, hierarchical controls, legal requirements

and professional obligations. Fifth, there was a base assumption of a duty to protect the rights

and interests of others. In summary, Hosmer offered the following definition "Trust is the

reliance by one person, group or firm upon a voluntarily accepted duty on the part of another

person, group or firm to recognize and protect the rights and interests of all others engaged in a

joint endeavor or economic exchange (Hosmer 1995, page 393).

McAllister (1995)used a sample of 194 mangers and professionals from various industries

in cross-functional dyadic relationships to examine the nature of inter-personal trust. He found

two principle forms of interpersonal trust, cognitive-based and affect-based trust. Cognitive-

based trust referred to the trustor's perception about the reliability and dependability in relation

to the trustor's interests. Affect-based trust referred to a reciprocated interpersonal care and

concern between the trustor and trustee. Affect-based trust included emotional bonds and

genuine care for each others well being. Figure 2-18 describes McAllister's model and associated

findings. Firstly, the model illustrated each form of trust has it own antecedents and patterns of

behavior. Secondly, cognitive based trust was necessary before affect based trust could develop.









This also indicated that the prevalence of cognitive trust was higher than affect based trust.

Third, affect-based trust led to the actions of manager need-based monitoring, manger affiliative

citizenship behavior and manger assistance citizenship behavior. These actions influenced the

outcomes of peer performance and manger performance (McAllister 1995).

Mayer et al. (1995) developed an integrative model of organizational trust. In developing

their model the scholars conducted an extensive review of trust antecedents (Table 2-30).

Benevolence, ability and integrity appeared most frequently in the literature and together

explained a major part of trustworthiness. Figure 2-19 outlined Mayer et al.'s proposed model of

trust. First, the model illustrated the three antecedents of trustworthiness (ability, benevolence

and integrity) and how they feed into the decision to trust. Second, the model showed how the

trustor's propensity affected each antecedent of trustworthiness and the decision to trust. Third,

the decision to trust was evaluated according to the perceived risk. This evaluation determined

whether a risk taking action was executed. Last, this process formed the outcomes of trust and in

turn influenced the perceived trustworthiness of the trustee. Positive outcomes lead to positive

perceptions of trustworthiness and negative outcomes lead to negative perceptions of

trustworthiness (Mayer et al 1995).

Whitener (1997) investigated the impact of Human Resource (HR) activities on employee

trust. Major findings included: explained compensation decisions increased trust; perceived

fairness and accuracy in performance appraisal systems increased trust; and violations of

psychological contracts decreased trust. On the individual level, supervisor trust increased as that

supervisor engaged in open and clear communication that lead to fair outcomes in performance

appraisals, compensation and assessments. Group level trust increased as the quality of

information increased, group interactions reinforced expectations, and opportunistic behavior









was restrained. Trust on the organization level increased as strategic and innovative HR activities

(such as quality circles, work/family initiatives, grievance procedures) were implemented and

supported by open communication and commitment (Whitener 1997).

Kramer (1999) assessed the trust literature. He categorized his findings by: the images of

trust in organizational theory, the bases of trust, the benefits of trust, and the barriers to trust.

Kramer found two main images of trust, trust as a psychological state and trust as choice

behavior. Although the definition of trust continued to change depending on the perspective or

discipline, scholars tended to agree that trust was a psychological state comprised of several

interrelated cognitive processes and orientations. "First and foremost, trust entails a state of

perceived vulnerability or risk that is derived from individual's uncertainty regarding the

motives, intentions, and prospective actions of others on whom they depend (Kramer 1999, page

571). Researchers have argued that the psychological state of trust was made up of cognitive,

affective (emotional) and motivational components. A second image of trust was one of a choice

making decisions and observable behaviors. The trust image of choice behavior was separated by

rational and relational based choices. Rational or calculative choices were considered the most

influential in organizational science and developed by sociology, economic and political theory.

These types of choices were considered a conscious calculation of positives (gains) and

negatives (losses, risk) determined by an internal value system. In the rational trust model it was

important to have a clear understanding of the individual's interests and values. A criticism of

the rational trust model was that it does not consider the emotions of individuals, hence the

relational model of trust. The relational trust model furthered the conceptualization of trust to

include social and situational factors that influenced trust as well as a calculative orientation

towards risk (Kramer 1999).









Kramer found six main bases of trust, which included dispositional, history, third party,

category, role, and rule. Dispositional-based trust referred to the character or the tendency of an

individual in regards to trust. Individuals have different dispositions to trust which can be related

to their beliefs and early trust building experiences. History-based trust referred to previous

interactions with trusting individuals. This depended on the judgment of trustworthiness based

on expectations since complete knowledge was difficult to obtain. Third party as conduits of

trust referred to individuals that could advance or stall the development of trust due to their

reputation, credibility, power and control of information. Category based trust implied that an

individual gained trustworthiness because of membership or association with a certain

categorization within the organization. Role based trust depersonalizedd trust) referred to the

knowledge of an individual has because of their role within the organization and not as a result

of an individuals capabilities, dispositions, motives and intentions. Researchers argued that role

based trust implied trust of the system of expertise (i.e. engineering) and not the person

(engineer) that is trusted (Kramer 1999).

The benefits of trust were both personal and collective. Trust was regarded as an

important element for civic engagement. Trust was seen to reduce transaction costs by

minimizing the need to negotiate every changing detail. Trust fostered cooperative, altruistic and

extra-role behavior which further enhanced goal accomplishment and improved well being

within the organization (Kramer 1999).

Many barriers of building and maintaining trust were predicated on the notion of

perceived opportunistic behavior leading to distrust and suspicion. Actions that were against an

individual's interests or values tended to lead to suspicion and distrust. A person who

experienced distrust acts differently than a person who experienced trust. Certain organizational









technologies such as excessive monitoring devices, security devices can deter trust and promote

distrust, even though they might have had the opposite intention. If people feel coerced into

complying, resentment and distrust escalates. Breach of the psychological contract can also act

as a barrier to trust. Breach in a psychological contract was explained as a subjective experience

where the organization failed to meet its obligations from the perspective of the employee. The

last factor of trust that Kramer considered was the fragility of trust. It was easier to destroy trust

than to create it. Actions that were considered anti-trust held more weight and more difficult to

repair than actions considered pro-trust (Kramer 1999).

Vangen and Huxham (2003) proposed that trust was important for nurturing and fostering

the collaborative process into a competitive advantage in global market place. Figure 2-20

described the trust building loop for effective collaboration. The Figure illustrated the cyclical

nature of trust in nurturing collaboration. Each positive outcome builds on itself incrementally

over time in a trust building loop. A challenge of nurturing collaboration was that collaboration

was typically initiated between parties without trust or without the time to develop trust. This

made modest expectations and a small win approach important in the trust development process.

Table 2-31 provided examples of how trust was managed. Figure 2-21 showed the implications

managing trust in collaboration relations. Depending on the goal of collaboration (ambitious or

modest) there were a number of corresponding strategies. The keys to effective collaborative

processes were managing the perception of risk and continuous attention to nurturing activities.

Challenges of facilitating an effective collaborative process included unequal power relations

and the need to protect the interest of their organizations (Vangen and Huxham 2003).

Elangovan et al. (2006) interviewed 120 senior level managers to assess the relationship of

trust violations and the erosion of trust in dyadic relationships. Trust was measured pre and post









violation. The intention behind the trust violation had the strongest impact on whether trust

eroded and distrust increased. Trust eroded more when the trustee was perceived as "not willing"

rather than "not able" to fulfill expectations. The key distinction was the intention of "not

wanting" versus "not able". The study also found that a maximum of two violations would be

tolerated before trust eroded. Additionally, the less experience the trustee had the more forgiving

a trustor would be. Even though this study measured cognitive states and not actual behaviors, it

demonstrated the importance of constantly meeting the trustor's expectations (Elangovan et al.

2006).

Lewicki et al. (2006) organized the existing work on trust into four broad approaches

(behavioral approach and psychological approach comprised of uni-dimensional, two-

dimensional and transformational). Theses approaches were described in Table 2-32. The table

described how these approaches were defined, measured, at what level does trust began and what

caused the level of trust to change over time.

Additionally Lewicki et al. (2006) provided a list of variables that could have caused the

level of trust to change over time. The variables were composed of a number of psychological,

behavioral and contextual factors. These variables included personality traits of the trustor (e.g.

trust propensity); personality traits of the trustee (e.g. trustworthiness as defined by ability,

benevolence, integrity, reputation, sincerity); characteristics of the past relationship between the

parties (e.g. patterns of successful cooperation); characteristics of their communication processes

(e.g. threats, promises, openness of communication); characteristics of the relationship form

between the parties (e.g. close friends, authority relationships patterns in a market transaction,

etc.); and structural parameters that govern their relationship between the parties (availability of

communication mechanism, availability of their parties) (Lewicki et al. 2006).









Three major types of trust have been identified by Lewicki et al (2006). Descriptions of

calculus-based (deterrence) trust, knowledge-based trust, and relational-based (identification)

trust were provided in Table 2-33. Calculus-based trust was focused on economic exchanges and

was sustained through consequences. The consequences, costs or retributive action were a

deterrent for not acting in a distrustful manner. This type of trust typically existed in

relationships with very few interactions. Knowledge-based trust implied that the parties had

enough information about each other that their behaviors were predictable and supported their

interests. This type of trust developed after frequent interactions between the parties. Relational-

based trust was the full internalization of the parties trust building criteria. Each party fully

understood their expectations and needs and acted in the other party's best interest. Trust

developed in stages, beginning with calculus-based trust and ending with relational based trust.

However there is no guarantee that a relationship will progress from one relationship to the other

(Lewicki et al 2006). Figure 2-22 explained the different types of trust and their relation with

time. Lewicki et al. (2006) stated a certain amount of distrust and particularly the avoidance of

blind trust can be important components of healthy organizations.

A number of challenge areas were associated with measuring trust. A major

inconsistency was that many researchers failed to relate the measures of trust to the definition of

trust. There were instances in the literature where researchers were measuring parameters

unassociated with their definition of trust. A second challenge was that very few trust measures

were used more than once. One researcher found that out of 119 trust measures published, only

11 had been used more than once. A reason for this lack of repetition of trust measures was

attributed to the diversity of the trust targets (subordinates, managers, peers, team members, etc)

and the contexts (different industries, organizational structures and environmental conditions).









Additionally, many measures provided little information about the validity of the construct. The

Likert-type scale psychological approach was used in this trust research. However, it was

questionable whether this type of instrument can capture the complexity of the trust dynamics

over time. This method restricted the range of the responses available to the respondent of the

study. As a result, Lewicki et al. "encourage researchers to consider employing complimentary

methods in including diary accounts, narratives, critical incident techniques, in-depth interview,

case studies and communication analysis" (Lewicki et al. 2006, page 1014).

Dietz and Hartog (2006) investigated the different measures of trust with the goal of

providing consistency and validity in the process of measuring trust. Although they identified

three areas of trust research (trust within organizations or intra-organizational; trust between

organizations or inter-organizational; and trust between organizations and their customers or

marketing), their work focused on trust within organizations (between employees and their

employers or co-workers). Their approach included an across discipline review of the forms,

degrees and processes of trust (Dietz and Hartog 2006).

The three most common forms of trust were trust as a belief, decision and action. Trust as

a belief referred the subjective, optimistic and aggregated set of beliefs and/or judgments

regarding the trustworthiness of the trustee and the expected benefits the trustor would receive as

a result of trusting the trustee. Trust and trustworthy were explained as two different constructs,

where trustworthiness dealt with perceived personality traits and trust dealt with an action.

Trustworthiness did not imply corresponding trusting action. The most common antecedents of

trustworthiness were ability, benevolence, integrity and predictability. However, trustworthy

antecedents could change depending on the situation, context or judgments of the trustor.

Antecedents were viewed as interdependent and their precise make up and weighting depended









on the trustor, situation and context. This implied that the same individual can be viewed as

trustworthy and untrustworthy in different contexts or situations (Dietz and Hartog 2006).

The sources of a trust belief were based on the characteristics of the trustor,

characteristics of the trustee and the characteristics of the relationship. The characteristics or trust

disposition of individuals caused individuals to be more or less trusting. Trust disposition was

found highly influential in the early phases of a relationship, but with the accumulation of direct

experience and first hand knowledge, its influence diminished over time. Other factors that were

considered sources of trust included work environment, deepness of the relationship, stage of the

relationship, national cultural and situational factors (institutional framework, contracts,

legislation, regulation, code of conduct, etc) (Dietz and Hartog 2006)

The second form of trust was the decision to trust. This decision was based on the

subjective belief that the trustee was worthy of trust and that there would be a positive future

outcome. The third form of trust was the action of trust. For the trustor to engage in trust, he/she

must engage in risking taking behaviors. This was also a sign to the trustee that he was being

trusted. This trust action was separate from the trustor's propensity to trust and the trustee's

response to the trusting action.

Dietz and Hartog (2006) proposed five different degrees of trust (Figure 2-23). These five

degrees of trust ranged from distrust (deterrence-based) to complete trust (identification-based).

The evaluations that comprised the different degrees of trust were cognitive based or affective

based, with cognitive acting as a precondition for affective trust. Figure 2-24 shows the multi-

dimensional, integrated framework of the trust process based on the work of Mayer et al. (1995)

and Ross, and LaCroix, (1996) (Dietz and Hartog 2006).









Dietz and Hartog (2006) identified a number of implications for researching and

measuring trust. They outlined the following five major research questions: "which form of trust

is being measured (i.e. a belief, a decision, or trust-based behavior); what is the content of the

belief (i.e. ability, benevolence, integrity and predictability); what is/are the sources of the belief

(i.e. the characteristics of the trustee, the trustor, their relationships, and broader situational

constraints); and what is the identity of the referent (i.e. who is being trusted) (Dietz and Hartog

2007, page 565). The researchers also offered a number of methodological observations. First,

trust measures should measure more than just trustworthiness. Second, when measuring

trustworthiness it was important to determine the ranking or proportions of each antecedent.

Third, the source of the trustor's decision to trust should be identified. Fourth, it was important to

clearly identify the trustee because trust can vary between relationships. Fifth, the wording of

trust measures should be positive and they should not include the word trust (Dietz and Hartog

2006).

Dietz and Hartog (2006) also completed a review of 14 trust measures cited in the

literature from 1995-2004 and found the importance of tapping into different work scenarios and

contexts that might influence trust. A number of 14 trust measures had difficulties in

distinguishing the trustor and the trustee, who was trusting and who was being trusted. The

following were the most common types of relationships measured: "between an employees) and

immediate managerss; between an employee and one immediate work colleague; between an

employee and his employer or with management representing the employer; between an

employee and the rest of the organization; between the organizational departments; multiple

relationships throughout the organizations" (Dietz and Hartog 2006, page 570). It is imperative

that trust measures related directly to the definitions used or implied in the research. Lastly,









Dietz and Hartog suggested that longitudinal studies of trust, which were highly infrequent,

could provide interesting results (Dietz and Hartog 2006).

Schoorman et al's (2007) original article was published in 1995 and was cited over 1100

times. Their current article reviewed the past, present and future of trust research. The first

change made in the scholars' earlier research was defining trust as part of a relationship and not

solely as a trait-like dispositionall) quality. They argued that since trust changed across

relationships and contexts it should be viewed more in terms of a relationship rather than a

predisposition. The antecedents (ability, benevolence, integrity) of trust between organizations

(higher levels) focus mainly on integrity. At lower levels of trust (interpersonal, groups and

within organizations) all three antecedents, integrity, and benevolence ability are considered

important. These antecedents increased the perceived willingness to take risks. Therefore trust

can develop on a number of levels (Schoorman et al. 2007). In relationships, assessments of

trustee's ability and integrity take place fairly quickly and the assessment of benevolence takes

place over time. There are two ways of dealing with risk. One method was by trust and the other

was by control systems.

Trust and controls systems are not mutually exclusive...when the risk in a situation is
greater than trust (and the willingness to take risk) a control system can bridge the
difference by lowering the perceived risk to a level that can be managed by
trust...However, if there is a very strong system of controls in an organization, it will
inhibit the development of trust. Not only will there be few situations where there is any
remaining perceived risk but trustworthy actions will be attributed to the existence of
control system rather than to the trustee. Thus the trustee's actions that should be
interpreted as driven by benevolence or by integrity may be viewed simply as responses
to control systems (Schoorman et al. 2007, page 347).

Schroomann et al. concluded their research with the discussion of a number of new trust

dimensions: affect or emotion, violation and trust repair, cross-cultural, and context-specific

(Schoorman et al. 2007).









Colquitt et al (2007) used a meta-analysis of 132 independent samples to summarize the

relationship between risk taking and job performance. They described four main constructs of

trust: behavioral intention (internal action, judging), positive expectations of others, personality

trait (disposition), and cooperation for risk taking. It was found that all three dimensions of

trustworthiness (benevolence, integrity and ability) had unique relationships with trust. However,

benevolence, integrity and ability had high inter-correlations, which could affect regression

weights in the measuring their relationships to trust. Trust propensity was seen as a factor that

helped the trustor move past trustworthiness and engage in trusting actions. Colquity et al. (2007)

concluded that trust was vital component of effective relationship in organizations.

Summary. A summary of the journal articles presented in this section is shown Table 2-

34.

2.2.5 Trust in Virtual Environments

Penteli and Duncan (2004) conceptualized trust development in temporary virtual teams. In

this type of environment, trust is required to develop quickly without the benefit of time

(traditional trust models).

Virtual teams are composed of geographically dispersed individuals who interact through
interdependent tasks guided by a common purpose with links strengthened by webs of
communication technologies. In this way virtual work is carried out across time and
space as well as across organizational boundaries; moreover apart, from organizational
difference, team member and the type of requirements of the project may vary as an
individual shifts from one virtual team to another" (Pentali and Duncan 2004, page 424).

A benefit to virtual environments was that it enabled organizations to project a number of

different images to suit the different needs and priorities of their audiences (employee,

customers, shareholders). This allowed organizations to maintain simultaneous trustworthiness

with a number of targets (Penteli and Duncan 2004).









Trust in a virtual environment with temporary teams became impersonalized and

discontinuous. The quick trust development process in temporary teams focused on competence

and clear roles. However, this type of trust was fragile and highly influenced by the initial

communication and the work of the team coordinator (Penteli and Duncan 2004).

In the pre-script phases teams member employed impression management behavior to

secure an image of trustworthiness based on competence. This typically translated into actions of

meeting deadlines, sharing information, observing and setting guidelines. This type of trust was

called situated trust and was developed jointly and often in the asynchronous computer mediated

interaction of these players. Contractual agreements (formally scripted) influence trust

development and performance in virtual teams by varying roles, triggering interactions and

enabling interactions to continue. The co-scripted, re-scripted and unscripted interactions

influenced trust development by fostering mutual understanding and commitment within the

virtual temporary team (Penteli and Duncan 2004)

The increasing pressure to perform within a short period of time with unfamiliar people
and within a computer-mediated environment makes the impression management
perspective vital to understanding the behavior and interactions of virtual team members.
The paper suggests that impressionistic behavior conveyed through computer-mediated
communication should be included in our understanding of trust within virtual teams
(Panteli and Duncun, page 437).

According to Peters and Manz (2007) in traditional collaborative and team structures

activities tend to be carried out in a centralized, hierarchical, formal fashion benefiting from a

homogenous culture where information is synchronous and usually bounded by the organization.

In contrast, virtual structures are decentralized, flat and informal. They tend to be characterized

by multi-cultures, heterogeneity and relying on asynchronous information not bound by the

organization. Collaboration is a process that aims to go beyond communication and strait

teamwork. The collaborative process requires a collective responsibility for outcomes and joint









ownership of decisions made by interdependent members of a team. However, collaboration can

be limited by expertise, time, money, or competition. Peters and Manz (2007) define team

collaboration as:

The existence of mutual influence among members that enables open and direct
communication, resulting in conflict resolution, and support for innovation and
experimentation. Team members must have an open mind and be willing to listen to, and
trust in, their teammates. They must also possess the ability to deal with conflict
productively and be supportive rather than authoritative in the team environment (Peters
and Manz 2007, page 119).

Trust, shared understanding and depth of relationships were considered the antecedents of

virtual collaboration (Figure 2-25). Although there were many types of trust, cognitive based

trust was the most effective in virtual collaborations. This type of trust was based on rational

reasoning (cost and benefits) such as technical expertise. However, cognitive trust did not

explain initial trust. An individual's trust propensity or personality based trust was a strong factor

in determining initial trust. Trust among team members created a perceived sense of security for

dependency and collaboration (Peters and Manz 2007). Shared understanding, also known as

shared mental models, provided a clear sense of strategic direction aiming to alleviate the

inherent uncertainty when collaborating virtually. A shared understanding created a vested

interest for all team members about the outcomes produced by the team (Peters and Manz 2007).

The last antecedent for virtual collaboration was depth of relationship. The major obstacle for

building or deepening relationships virtually was the lack of personal interaction. The inability to

see facial expressions and body language were inherent challenges in virtual collaboration

(Peters and Manz 2007).

Developed relationships, shared understanding and trust were important antecedents of

virtual collaboration. The combination of these three factors was believed to increase innovation









and performance of virtual teams. An additional factor was aligning the collaboration with the

interests of the participants. (Peters and Manz 2007).

Brown et al. (2004) investigated the relationship between trust and the willingness to adopt

information systems (IS) and collaborate with others in virtual contexts. The virtual collaboration

literature discussed three dimensions trust. The first dimension was trust in terms of social

characteristics of the parties involved in the collaborative relationship (prior familiarity,

reputation, competence, and ability). The second dimension was trust as immediate outcome of

the collaborative processes (judgments of reliability, openness, integrity, trustworthiness, and

benevolence). The last dimension was trust as institutional (social norms, legal structures, and

privacy policies) (Brown et al. 2004)

Trust promotes cooperation, collaboration and comfort in virtual environments.

In virtual interaction, trust is likely to be particularly important, because collaboration can
be effective only if both parties enter into it with a willingness to open themselves to one
another and cooperate in carrying out a task, solving a problem, and learning [36].
Collaboration requires intensive interaction that creates dependencies parties could exploit
if they so desired. Trust is the glue that binds collaborators by fostering faith that both
parties will contribute and not behave opportunistically. (Brown et al. 2004, page 117)

Trust and distrust form self-re-enforcing cycles, where trust leads to more trust and

distrust leads to more distrust. When individuals enter a new environment without any prior

information about the parties, their disposition to trust has a major influence on the initial degree

of trust within the collaborative relationship. A person's trust disposition is comprised of

personality traits which affect collaboration by determining their initial openness to innovation

and learning new learning new technologies. When entering a new virtual collaborative

environment with strangers, collaborators were generally more cautious until they compiled

more information about the other collaborators. An individual's disposition to trust influenced

their response to the circumstances they encountered and these responses impacted the









effectiveness of the team. High trust teams appeared to enter the relationships with higher

propensities to trust and collaborate (Brown et al. 2004).

Coetzee and Eloff (2005) provided a list of trust information items required in web

services. Figure 2-26 outlines the taxonomy of trust information for web service providers. The

taxonomy was broken up into structural information and belief information. This implied that

web services providers preferred to reduce risk by interacting with honest, competent,

predictable and benevolent partners (Coetzee and Eloff 2005).

Salo and Karjaluto (2007) developed a conceptual framework of end user trust in online

environments based on internal and external factors. The researchers discussed six main

elements of trust described in Figure 2-27. These included: trusting beliefs (trustworthiness)

trusting intention (being vulnerable), trusting behavior (risk taking), system trust (impersonal

structure that supports trusting intentions, structural assurances and situational normality),

dispositional trust (situational construct of trusting stance and belief in people) situation decision

to trust (certain situations give rise to trust even if the trustee is not trustworthy). Figure 2-28

shows the conceptual model of building end user trust in an online environment and describes

trust as a multifaceted construct. The Figure also shows the interaction between internal and

external variables that influenced the decision to by of a web site visitor and the importance of

third party validation (Salo and Karjaluto 2007).

2.2.6 Breach of Psychological Contract and Trust

Robinson (1996) used longitudinal data collected from 125 newly hired managers to

examine trust between employers and employees and experiences associated with the breach of

psychological contracts. The data for the study was collected over a two-and-a-half-year period

at three different points in time: after new hires accepted and negotiated an offer of employment;

after 18 months on the job; and after 30 months on the job.









The psychological contract is defined as an individual's beliefs about the terms and
conditions of a reciprocal exchange agreement between that person on another party...the
present conceptualization focuses on individuals' beliefs in and interpretation of a
promissory contract. Unlike formal or implied contracts, the psychological contract is
inherently perceptual, and thus one party's understanding of the contract may not be shared
by the other (Robinson 1996, page 575).

A breach in a psychological contract is a subjective experience based on a selective

perception that judges the actions of the employer subjectively within a particular context.

Consequently, the employee's trust in the employer influenced the employee's recognition of a

breach. The results of the study showed that employees with high initial trust in employers

experienced less decline in employer trust after a breach than employees with low initial trust.

Low initial trustworthiness generally leads to more pronounced breaches in psychological

contracts. Trust creates more trust by influencing behavior and perceptions. Subsequently, it is

important for mangers to illicit the psychological interests, values and expectations of new

employees and manage these factors throughout the term of employment.

Robinson and Rousseau (1994) investigated the perceived violation of the psychological

contracts of 128 subjects. The subjects were surveyed twice, immediately following recruitment

and two years later. The researchers noted that psychological contracts were a necessary

component of employment relationships and represented a set of promises committing one to

future action. Without psychological contracts and the promise of future exchange there was no

motivation from either side to contribute to the relationship. The results of their survey found

that 54% of the respondents had their psychological contract violated by employers. They also

found that violations correlated positively with turnover and negatively with trust. These findings

stressed the importance of understanding the psychological contracts of new employees.









2.2.7 Summary: Integrated Model of the Trust Process

Trust is a multi-faceted process with a number of different components and stages. Much

of the trust literature stems from the fields of psychology, management, marketing and

sociology. The model presented in Figure 2-29 was the result of an extensive literature review

comprised of four different compendiums of papers, six different dedicated journal editions

containing numerous articles and several other frequently cited journal articles. The model in

Figure 2-29 is separated into four distinct phases, each one building on one another.

2.2.7.1 Orientation phase

The orientation phase assesses the initial risk associated with the trust process. The

components of the orientation phase are filtered by the subjective and hierarchical perception of

the trustor. The need for trust is followed by the identification of the trustee, the determination of

desired outcome, a review of the current relationship, and an assessment of the existing trust

systems. The major questions asked during the orientation phase are: Do I need trust; Who or

what am I trusting; Why am I trusting or what is my payoff; What do I know about the trustee,

and What is in place to protect me?

Trustor's subjective and hierarchical perception. Scholars have found that trust is a

subjective process that is different for each individual (Rousseau et al. 1998). Each party enters a

trust relationship with different interests, values and needs that have a subjective hierarchy of

importance (Elliot and Yannopoulou 2007) that act as a perceptual lens in which each component

of the orientation phase is experienced.

Requirement of trust. Before the trust process begins an exchange relationship exists

between two or more parties (Desgupta 1988). Even though a number of different factors could

influence the perception of risk, exchanges that involve the perceived risk require trust

(Gambetta 1988).









Thus trust is not best viewed as a fixed or given commodity that exists within a specific
social community or network of relationships, but rather should be understood to be the
output of dynamic exchange relationships that are fuelled by individual interests, as well
as being the lubricant for the formation of new exchange relationships. Thus, exchange is
both embedded in trust, and engenders its formation (Liebeskind and Oliver 1998, page
140).

The determination of risk and the need to engage in trusting action is subjective making it

a different process for each entity involved in an exchange relationship (Luhmann 1979). Before

an entity engages in trusting action a need for trust must be established. This implies that the

trustor cannot achieve the desired outcome without the aid of the trustee where the actions of the

trustee are uncontrollable. If a need is not established a trustor prefers to avoid trusting action

with the objective of protecting again opportunistic behavior (Dietz and Hartog 2006).

Trustee defined. Once the need for trust is established within the exchange relationship,

the form of the trustor and the trustee become evident. A trustor, the party that engages in the act

of trusting and a trustee, the party that becomes the target of the trust, could have several

different forms. A trustor, a trustee or both could take the form of an individual, employee,

manager, customer, group, department, organization, etc. These forms of trustors and trustees

could be within organizations, teams or groups or between organizations, teams or groups.

Additionally, a party could be both the trustor and the trustee simultaneously depending on the

context (Lewicki et al. 2006). For instance, on a construction site a general contractor could act

as the trustor of sub-contractors but the trustee of the owner. The number and combinations of

different trustors and trustees are endless. Figure 2-30 shows some of the more common forms of

trustor and trustee and combinations found in business related exchange relationships.

Trustor evaluation criteria. As the trustor contemplates engaging in trusting action,

positive expectations and desired outcomes are defined and projected on the Trustee. These

positive expectations act as the unofficial terms (from the trustor point of view) between the









trustor and trustee and the payoff for the trustor for taking the risk in trusting the trustee. The

trustor defines the criteria that the trustee's actions will be evaluated against and to the degree

that these expectations are met or not met (from the perspective of the trustor) will determine

whether trust strengthens or weakens (Rousseau et al. 1998). An ongoing challenge is that the

trustor's evaluation criteria are not always shared with the trustee or could change according to

context or phase of the trust process.

Relationship review. With an understanding of the desired outcomes from the exchange

relationship, the trustor reviews the existing relationship with the trustee. This review is made up

of three different components. The first component focuses on cognitive and emotional

experiences that enable that categorization of the trustee. These experiences include quality of

information sharing, witnessed opportunistic behavior and shared interests (McEvily et al. 2003).

If the relationship is new (i.e. first-time virtual collaborators), categorization has little relevance.

However, if the trustor and the trustee have had previous relations, the trustor's experiences

(positive or negative) will have more a significant impact on moving the trust process forward

(Dietz and Hartog 2006). The second component reviews associations, memberships and

affiliations with trusted third parties (Kramer 1999). These items are complimentarily or

disparaging. The significance of the association, membership or trusted third party is decided by

the trustor (Coetzee and Eloff 2005) and hold a higher importance in new and virtual

relationships by creating the perception of protection against potential opportunistic behavior

(McEvily et al. 2003). The last component of the review is the perceived dependency on the

trustee. As the perceived dependency on the trustee increases, the degree of trust required

increases and the perceived risk increases (Sheppard ad Sherman 1998). Again this is amplified

in new or virtual relationships.









Existing trust systems. The next component of the orientation phase in the trust process is

assessment of the existing trust systems or mechanisms. Trust systems are aimed at protecting

against the costs of misplaced trust and opportunistic behavior of the trustee (Bachmann 2001).

In every case [trust] rests on the structure of the system which confers trust...the
readiness to trust is an important instance of ... the absorption of complexity through
structures that can relieve the burden of action. (Luhmann 1979, page 83)

The system of trust could be on a number of different levels including societal, national,

institutional, organizational, departmental, group, and individual (Gambetta 1988; Bigley and

Pierce 1998); and in a number of different forms, contracts, HR policies, penalties, etc. In some

contexts, these systems are termed "guardians of trust" (Shapiro 1987). The trust systems are

viewed reliable if they provide predictability and reliability (Grey and Garsten 2001, Gould-

Williams 2003). The more predictable and reliable the trust systems, the lower the perceived risk

and more comfortable the trusting parties (Grey and Garsten 2001).

2.2.7.2 Evaluation phase

If the orientation phase of the trust process results in a determination of acceptable risk, the

trust process progresses to the evaluation phase. If the orientation phase results in a

determination of unacceptable risk, the trust process remains in the orientation phase.

Disposition factors (initial trust). A trustor's trust disposition or propensity to trust refers

to the natural openness or comfort a trustor has in trusting others (Cloquitt et al. 2007). The

disposition of a trustor can comprise many different facets, including personal traits, past

experiences, personal motives, values, interests and culture (Payne and Clark 2003). Mckight et

al.(1998) found that trust disposition can be important for initial trust including the initial trust

founding new relationships. However, as interaction increases and more information is gained,

trust disposition becomes less of a factor in developing trusting relationships.









As communication grows, individual predispositions loose relevance in favor of
organizational context in which trustee and trustor are immersed. Perceived
trustworthiness is initially in the eye of the beholder, but as the frequency of
communication increases, the specific interests and linkages to the organization of both
trustor and trustee become more important. Context is critical to understanding trust
(Becerra and Gupta 2003, page 42)

A trustor's disposition to trust can be one of the most important factors leading to trusting

action in certain environments (Payne and Clark 2003; Kiffin-Petersen and Cordery 2003;

Blunsdon and Reed 2003). Depending on the context, the degree of influence of the individual's

trust disposition varies and cannot always be assumed transferable from context to context

(Kramer 1999). For instance, in virtual environments where collaborating parties have no prior

working relationship, an individual's trust disposition can have a considerable impact on the

initial trust level. However, its impact changes with the level of interaction.

Trustworthy factors (trust belief). Before a trustor engages in trusting action, a

determination of the trustworthiness of the trustee is completed. Meyer et al (1995) conducted an

extensive review of trust antecedents and found that benevolence, ability and integrity were cited

frequently as antecedents of trustworthiness. Benevolence refers to the degree the trustee is

willing support the trustor beyond profit motives. Ability pertains to a specific domain and refers

to the skills, competencies and characteristics that enable an individual to excel. Integrity

involves the trustor's perception that the trustee abides by a set of principles that support by the

trustor (Mayer et al. 1995). More recent studies have added competency (closely related to

ability), credibility, and predictability as other significant antecedents of trustworthiness

(Sichtmann 2007; Dietz and Hartog 2006).

Trust as a belief (trustworthiness) refers to a subjective, optimistic and aggregated set of

beliefs and/or judgments regarding the trustworthiness of the trustee and the expected benefits

the trustor would receive as a result of trusting the trustee. Trust and trustworthy are explained as









two different constructs, where trustworthiness deals with perceived personality traits and trust

deals with an action. Trustworthiness does not imply corresponding trusting action. The

antecedents of trustworthiness are viewed as interdependent and their precise composition and

weighting depends on the trustor's disposition and context. This implies that the same individual

has the potential to be trustworthy and untrustworthy according to the context (Dietz and Hartog

2006).

Alignment factors (trust alignment). The alignment of personal interests, values and

needs of the parties involved in the trust relationship is at the core the trust building process

(Gambetta 1999; Jones and George 1998; Nooteboom and Six 2003; Kiffin-Petersen and

Cordery 2003; Carson et al. 2003). Gambetta (1988) explained that the problem of trust was

essentially one of communication with the goal of aligning interests, values and needs. The

ability to communicate effectively by learning and reading each party's interests and behaviors

increases the potential of trusting action. "The concept of trust is taken to signify and present a

coordinating mechanism based on shared moral values and norms supporting collective

cooperation and collaboration within uncertain environments" (Reed 2001, page 201). However,

it is not only the interests, values and needs that need to be aligned, but the most important

(hierarchical) interests, needs and values. This is an element that is lost in research. Contextual

mechanisms promoting and supporting the learning of interests, values and needs advances the

trust building process (Nooteboom and Six 2003). This infers that even if an employee has a high

trusting character (disposition), without the alignment of interests, values and needs the

probability of trusting action is unlikely (Kiffin-Petersen and Cordery 2003).

Intention factors (trust intention). The intention to trust is different from engaging in

trusting action. The trustor could have established a firm intention to trust, but still not engage in









trusting action (Lewicki et al. 2006). The intention to trust is based on the information gathered

to date. If the perceived vulnerabilities and risks are tolerable and the payoffs are worthwhile, the

intention to trust or the willingness to take risks manifests (Dietz and Hartog 2006). "First and

foremost, trust entails a state of perceived vulnerability or risk that is derived from individual's

uncertainty regarding the motives, intentions, and prospective actions of others on whom they

depend" (Kramer 1999, page 571). This perceived vulnerability and risk exhibits itself in a

number of different degrees and levels that are evaluated by the trustor in accordance with their

trust disposition and hierarchical interests, values and needs. "Trusting a person means believing

that when offered the chance he or she is not likely to behave in a way that is damaging to us"

(Gambetta 1988, p. 218).

2.2.7.3 Action phase

The action phase is focused on risking taking and engaging in trusting action. Schoorman et al

(2007) indicated that there two ways of dealing with risk. One method was by trust and the other

was by control systems.

Trust and controls systems are not mutually exclusive...when the risk in a situation is
greater than trust (and the willingness to take risk) a control system can bridge the
difference by lowering the perceived risk to a level that can be managed by
trust...However, if there is a very strong system of controls in an organization, it will
inhibit the development of trust. Not only will there be few situations where there is any
remaining perceived risk but trustworthy actions will be attributed to the existence of
control system rather than to the trustee. Thus the trustee's actions that should be
interpreted as driven by benevolence or by integrity may be viewed simply as responses
to control systems (Schoorman et al. 2007, page 347).

Trustor engages in trust action and risk taking. Trusting action entails an entire

continuum of degrees ranging from blind trust to distrust. The forms of trust change with the

interests and risk tolerance of the trustor (Rousseau et al. 1998) while lacking full knowledge

regarding the behaviors, motives or future responses of the trustee (Gambetta 1988). Trusting









action by its nature is unstable and fragile. Its status can change with every disappointment or

satisfaction and as a result the relationship changes accordingly.

Trust evolves out of past experiences and prior interactions. It also develops in stages of
moving from predictability to dependability to trust and eventual and sometimes faith.
This represents a hierarchy of emotional involvement which reaches trust when people
make an emotional involvement in another person... The move is likely to depend heavily
on the accumulation of evidence from a limited and diagnostic set of experiences
involving risk and personal vulnerability (Elliot and Yannopoulou 2007, page 990).

Dietz and Hartog proposed five different degrees of trusting action (Figure 2-31). These

five degrees of trust ranged from distrust (deterrence-based) to complete trust (identification-

based). Each degree has a corresponding degree of risk and expectation. For instance in

deterrence-based trust there is minimal risk and expectations, while in identification-based trust

there is more risk but more expectations (Dietz and Hartog 2006).

2.2.7.4 Outcome phase

Trustor evaluates outcomes. Using the expectations and outcomes defined in the

orientation phase, the trustor evaluates the outcome of his trusting action. On a high level, if the

outcomes match the expectations trust is strengthened and the exchange based on trust will

continue. If the opposite occurs trust will erode and the trusting action will be refrained

(Rousseau et al. 1998). The intention behind the trust violation has a strong impact on whether

trust erodes and distrust increases. Trust erodes more when the trustee is perceived as "not

willing" rather than "not able" to fulfill the trustor's expectations (Elangovan et al. 2006).

Elangovan and Shapiro (1998) discussed the process of betrayal and opportunistic

behavior in trusting relationships. Betrayal was defined "as a voluntary violation of mutually

known pivotal expectations of the trustor by the trusted party (trustee) which has the potential to

threaten the well-being of the trustor" (Elangovan and Shapiro 1998, page 548). They stated that

the intent of the betrayer was the most critical factor in the act of betraying or opportunistic









behavior. Additionally, they outlined several key considerations in discussing betrayal. They

described the requirements of betrayal as deliberately violating important expectations that were

accepted by both parties, and the betrayal transpired through action and not just thought. Again,

it was important to decipher the intent of the violation. A trustee genuinely willing to meet the

trustor's expectations but unable to was not considered betrayal. A trustee not wanting or

choosing not to meet the trustor's expectations for their own personal interests was considered a

betrayal (Elangovan and Shapiro 1998).

Trust cycle: Strengthened or weakened. Vangen and Huxham (2003) discussed the

cyclical trust building loop for collaboration. Trust builds on trust in upwardly cycle or spiral

while facilitating collaboration and distrust builds on distrust with a downwardly spiral while

disempowering collaboration. Table 2-37 further shows the cyclical development of trust and

how trust can be managed through out it cycles.

2.3 Trust in Construction Management

2.3.1 Key Performance Indicators

A review of the literature shows strong support for the key performance indicators (KPIs)

of a construction project to be profit, cost, quality and schedule (Table 2-38). Although studies

focusing on project managers find leadership and team building essential (Dainty, et al. 2004;

Odusami 2002; Spatz 1999), they are absent from the discussion on critical success measures

(Hughes et al.2004; Cox et al, 2003).

Cox et al. (2003) surveyed 64 construction industry professionals (executives and project

managers) in five different sectors (commercial, heavy civil, industrial, mechanical and

electrical) from large (ENR 100) midsize (ABCs) and small (ENR Regional Directory)

construction companies. The construction professionals were asked to rank the most important

performance indicator form of a list of 15 quantitative and qualitative indicators. The list









included: units per man-hour, dollar value associated with putting one complete unit place,

safety, worker turnover, resource management, cost (current vs budgeted cost) on-time

completion, absenteeism, quality control / rework, earned value reporting, percent complete, lost

time accounting, motivation, and punch list. Cox et al. found that the importance of key

performance indicators varied according to management's perspectives and there was substantial

difference between the perceptions of executives and those of project mangers. However, they

did find the following six indicators to be the most useful: quality control; on-time completions;

cost; safety; $/unit; and units/MHR. Other researchers indicated the importance of including

subjective and human measures in key performance indicators for construction projects (Hughes

et at. 2004; Menches and Hanna 2006).

2.3.2 Leadership Skills

Generally, the causes of failed projects in the construction industry are related to lack of

leadership. More specifically, the causes include lack of trust, communication, decision making,

information and time for planning (Uden and Naaranoja 2007). Poor communication and lack of

understanding tends to be at the core of project failures in the construction industry (Tah and

Carr 2001; Pinto and Mantel 1990). Table 2-39 shows the most recent studies in construction

using leadership approaches. It is evident that the full spectrum of leadership approaches has not

been tested in the construction industry. A common conclusion of these studies was that a project

manager's leadership approach impacts project results and different leadership approaches are

required for different project types or stages of construction (Muller and Truner 2007).

Complementing the studies on leadership approaches are studies on leadership skills. Table 2-40

shows a list of 15 leadership skills tested by various scholars. The results show that trust building

and clear communication are the most important leadership skills for project managers in

construction.









2.3.3 Core Competencies

Project managers in the construction industry are required to be experts in dealing with

unpredictable, complex circumstances that challenge their technical management skills and

leadership team building abilities (Dainty et al 2005). They are seen as CEOs of temporary

construction projects or business while applying flexibility to remain goal focused in each stage

of the project (Turner and Muller 2003). Table 2-41 shows the results of a literature review of the

core competencies of project managers in the construction industry. A project manager needs to

be able to adapt to different situations (environmental, regulatory, site, business), relate to the

different groups of people (internal, external, at different levels of expertise), and be technically

skilled to achieve the project's critical success measures. Leadership is viewed as the difference

between average project managers and excellent project managers.

Telem et al. (2006) in their research found that only a dynamic approach from a project

manager can absorb the dynamics (complexity, uncertainty and speed) of a construction project.

The authors observed 10 superior onsite construction project managers with the goal of

identifying how they dealt with the dynamic nature of a construction project. They found that on

the average project managers, in a calm and controlled manner, changed their mode of work

(meetings, site tours, phone call, computer and paper work, etc.) about every 5 five minutes;

changed their physical location every 15 minutes; and addressed 20 problems each day. The

authors concluded that superior project managers in construction adapted their managerial

approach to the factors they found on the project site (Telem et al, 2006). Dainty et al. (2006)

revealed that a project manager's ability to adapt to the dynamic and uncertain work environment

was related to self control and team leadership.









2.3.4 Productivity

Productivity is the ratio of the quantity of input to the quantity of output. In construction,
productivity is measured at different levels of detail for different purposes because
construction activities are normally labor intensive, productivity at the activity level is
frequently referred to as labor productivity, which measures the input as labor hours and
the output as installed quantities. Accordingly, productivity is measured by labor hours per
unit of work, with other resource inputs, such as equipment and overhead costs, generally
being correlated to labor hours (Song and AbouRizk 2008, page 786).

Song and AbouRizk's (2008) research investigated the challenges of measuring

productivity from historical records and found difficulties in identifying which factors had the

greatest impact on construction productivity. Ibbs (2005) researched the impact of construction

project changes on productivity. The scholar used data from 162 construction projects and

analyzed the changes in labor productivity from early, normal and late timing construction

changes. The projects analyzed in the research were a representative sample of the industry,

involving a wide range of sizes, different delivery systems, and industry sectors. The scholar

found that construction changes late in the project cycle had the strongest most negative impact

on productivity. The implications of Ibbs' finding were that early changes on construction

projects should be encouraged and late changes should be discouraged.

The success of a construction project, to a large extent, is determined by the ability of the
project team to manage the inevitable changes during the project. A change refers to a
deviation of a certain aspect of a project (such as design and specification, work schedule,
cost, and so on), (Sun and Meng 2009, page 1).

Sun and Meng's (2009) research provided a thorough review of the causes of changes and

the effects of changes on construction projects. The scholars use three different levels of

descriptions to depict the causes and effects resulting from construction changes. The causes of

construction changes were external (environmental, political, social, economic and technical),

organizational (process related, people related and technology related), and internal (client,

design, consultant, and contractor/subcontractor generated). Additionally, the research showed









that time, cost and people as the main effects of construction changes and points to the

importance of trust and leadership to effectively deal with these changes.

2.3.5 Benefits of Trust

The benefits of building and maintaining trust in the construction industry is well

documented. Trust minimizes conflicts, helps build teams and relationships, improves project

performance, improves cooperation, minimizes perceived risk and improves communication

(Table 2-42). These benefits are directly related to the three main competencies (relational,

situational, and technical) of project managers. The Construction Industry Institute (1993)

studied 262 construction projects in an attempt to identify a relationship between project costs

and trust. In the projects that reported the existence of high trust between contracting parties,

89% of the projects reported cost decreases.

2.3.6 Antecedents of Trust

Before trust can occur between two parties, the trustor must deem the trustee as

trustworthy. Studies in business identified the antecedents of trustworthiness as benevolent,

competence, and integrity (Colquit et al. 2007, Mayer et al. 1995). Studies in the construction

industry have tested a number of trustworthy antecedents. Table 2-43 shows that risk,

competency and cooperation tend to be the antecedents most frequently identified.

2.3.7 Trust and Partnering

Although partnering has many definitions, it is useful to consider it as a process

encompassing a set of practices designed to promote cooperation between contracting parties

(Anvuur and Kumaraswamy 2007). The benefits of partnering in construction are considerable

and include closer relationships, better product, improved cost control, improved time control,

reduced litigation, and lower administration costs (Chan et al. 2003). Table 2-44 discusses the

success factors for partnering. These success factors include trust, openness, competency,









teamwork and relational bonding. According to literature findings, trust is most frequently stated

success factor for partnering in the construction industry.

2.3.8 Trust and Teams

The construction industry has been widely criticized for its failure to form effective teams

(Baiden et al 2006). A literature review was conducted to identify the most important success

factors for teams in construction. Table 2-45 shows that the review of literature identified 6 main

factors, which include trust, open communication, clear objectives, shared values, commitment

to improve, and interdependency. Although all these factors are important, trust and open

communication were cited most often. This was similar to the results in the project manger

section where it was found that strong leadership, trust and communication skills helped project

managers succeed.

2.3.9 Trust and Information and Communication Technology

The benefits of technology to project performance in construction are evident. "Several

technologies may contribute significantly to project performance in terms of cost and schedule

success, particularly for certain types of projects. In addition, project schedule success is more

closely associated with technology utilization than is project cost success" (O'Connor and Yang

2004). Other studies confirm these findings by stating that benefits of technology include

improving coordination among team members; facilitating document transfer and handling;

reducing bottlenecks in communications; reducing number of claims; and enhancing

organization of updated records (Nitithamyong and Skibniewski 2006). Table 2-46 shows the

results of a literature review on the benefits of technology in construction.

Despite the benefits of technology, the construction industry lags behind other private

industries in the use of technology (Bureau of Labor Statistics 2007). Table 2-47 shows that trust

and commitment are the most cited success factors for using technology in construction. Without









building and maintaining trust, the probability of profiting from the benefits of trust is less likely

(Nuntasunti and Bemold 2006).

Erdogan et al. (2008) conducted nine case studies of construction firms in the U.K. and

found that each firm failed to achieve the full benefits of virtual collaborative environments.

"The reason for this is found to be focusing too much on the technical factors and ignoring or

underestimating the factors related to change, implementation, human, and organizational factors

and the roles of the management and end users," (Erdogan et al. 2008, page 234). Dossick and

Sakagami (2008) researched the success and failure factors related to virtual collaborative

environments in construction. The scholars stated that factors of success and failure could be

viewed from a number of different dimensions. These dimensions, each with a unique set of

factors to be considered, included government and industry, company, project, individual and

technical. Salem and Mohanty (2008) surveyed sixty-five construction professionals with the

goal of investigating the practices of construction project managers in regard to information and

communication technologies. The scholars found that challenges in using and implementing

virtual collaborative environments often related to the lack of financial evidence for its support.

Building Information Modeling. The concept of a Building Information Model (BIM)

has evolved for over 30 years (Eastman 2008) and originated from the need to have a digital

representation of the building process. Currently, BIM is characterized as a tool, process and/or

product that develops virtual intelligent models linked to other construction management tools

(i.e. schedule, estimates) that promote collaboration, visualization and constructability reviews

beneficial to all stakeholders throughout the lifecycle of the facility (Kymmell 2008; Succar

2009). However, there other aspects of BIM such as 3D modeling, interoperability, semantics,

clash detection and process integration. In practice BIM remains a difficult concept to define









(Aranda-Mena et al. 2008), which inhibits the collaborative process between stakeholders and

makes the measurement of its effectiveness difficult. For instance, architects and contractors

have context specific benefits and challenges associated with using BIM. Architects see BIM

improving coordination, design, productivity, and business opportunities, where contractors see

BIM improving schedules, estimating, show drawings, coordination, as built drawings and the

amount of request for information (Ernstrom 2006). Regarding challenges associated with BIM

architects view challenges associated with the learning curve, transition period and quality of

BIM practitioners where contractors view BIM causing new roles, submittal process and legal

and insurance implications source (Ernstrom 2006). These circumstances in adopting BIM for

improvements in the construction industry require strong leadership based on trust in the

technology and trust between contracting parties.

2.3.10 Trust Frameworks and Models From the Construction Literature

The construction literature has published very few trust related frameworks and models as

compared to the non-construction literature. This section will discuss the most recent trust

models and frameworks from the construction literature.

Yueng et al. (2008) researched relationship-based approaches to run construction

projects. The research focused was focused in Australia and used the Delphi survey technique to

formulate a model to assess relationship based construction projects. The survey results eight

KPIs to evaluate the success of relationship-based projects. The eight KPIs included: client's

satisfaction, cost performance, quality performance, performance, time performance, effective

communications, safety performance, trust and respect and innovation and improvement trust

(Table 2-48). The framework establishes a benchmark for measuring the performance of

relationship-based construction projects in Australia. (Yueng 2008).









Pinto et al. (2008) conducted an empirical study that investigated the impact of trust

between contractors and owners in 44 large construction projects in Northwest Canada. The

tested three main antecedents of trust: integrity, competency and intuitive. The research use

regression and path analysis to analyze the different effects of integrity-based trust, competency-

based trust and intuitive-based trust on enhancing the relationship between the project owner and

the contractor in the context of project success. The research findings indicated that trust has

different meanings for contractors and owners, different impacts on the satisfaction with the

working relationship between the two parties, and project success. Different bases of trust

(integrity, competence and intuitive) are valued differently by different stakeholders. Figure 2-32

shows how the different components of the owner's and contractor's trust combine to determine

the satisfaction with the working relationship and the success of the construction project.

Wong et al.'s (2008) study developed a framework for trust in construction contracting

for construction projects in Hong Kong. The authors reviewed literature from the fields of social

science, economics, business and management. The study categorized trust as system-based,

cognition-based and affect-based. The empirical results showed that all three forms were of equal

importance and mutually dependent for building trust. Figure 2-33 describes the three different

forms of trust. System-based trust comprised organizational policy, communication systems,

contracts and agreements; cognitive-based trust included interactions and knowledge; and affect-

based trust comprised of being thoughtful and emotional investments.

Jin et al. 2005 developed a framework aimed at fostering trust between contracting

parties on construction projects in China. The data was collected via face-to-face interviews with

construction professionals from two different projects. The results showed that relationships

between contracting parties changed with each different stage of construction. Additionally, the









inherent risk changed with each stage of construction resulting in a need for a different trust

fostering tool to reduce the inherent risk. Figure 2-34 shows the relationships between the project

development stage, the dominant relationship, the inherent risk and the trust fostering tools to

reduce inherent risks.

2.3.11 Summary

The construction literature stressed the importance of leadership and trust in managing

construction projects. Again, leadership, teams and adopting information and communication

technologies are trust based. Table 2-49 summarizes the different processes and goals in

construction described by the construction literature that require strong trust between contracting

parties.





Table 2-2. Comparing Leaders and Managers
Characteristics of Leaders
Innovates, develops, originates
Own person and original
Long-range perspective and challenges the
status quo
Eye is on the horizon
Focus is on people and inspires trust

Asks the questions what and why
Does the right thing
Source: Bennis 2003, page 39


Table 2-1. Comparing Leadership and Management
Processes Leadership
Establishing Direction developing
a vision of the future, often the
Creating an
e g an distant future, and strategies for
producing the changes needed to
achieve that vision
Aligning People communicating
the direction by words and deeds to
Developing a
n all those whose cooperation may be
human
S needed so as to influence the
network for
n r fr creation of teams and coalitions that
achieving the
S understand the vision and strategies,
agenda .
and accept their validity

Motivating and Inspiring-
energizing people to overcome
Execution major political, bureaucratic, and
Execution
resource barriers to change by
satisfying very basic but often
unfulfilled human needs
Produces change, often to a
dramatic degree, and has the
potential of producing extremely
Outcome useful change (e.g., new products
that customer want, new approaches
to labor relations that help make a
firm more competitive)
Source: Kotter 1990, page 6


Characteristics of Managers
Administers, maintains, imitates
Classic good soldier and a copy
Short-range view and accepts the status quo

Eye is always on bottom line
Focus is on systems and structures and relies
on control
Asks the questions how and when
Does things right


Management
Planning and Budgeting establishing
detailed steps and timetables for achieving
needed results, and then allocating the
resources necessary to make that happen

Organizing and Staff- establishing some
structure for accomplishing plan
requirements, staffing that structure with
individuals, delegating authority for
carrying out the plan, providing policies
and procedures to help guide people, and
creating methods or systems to monitor
implementation
Controlling and Problem Solving-
monitoring results vs. plan in some
details, identifying deviations, and then
planning and organizing to solve these
problems

Produces a degree of predictability and
order, and has the potential of consistency
producing key results expected by various
stakeholders (e.g., for customers, always
being on time; for stockholders, being on
budget)









Table 2-3. Summary of the Trait
Sections of Trait Approach

Definition of Traits and
Personality
(Yukl 2002; Hersy et al. 2001)


Great Man Theory
(Jennings 1960)



Leadership Traits 1904-1949
(Stogdill 1948)




Leadership Trait Research
1949-1970
(Bass 1990)






Big Five Personality Variables
(Goldstein 1999)







Clusters of Traits and Skills
Forming to Other Competencies
(Yukl 2002)



Strengths and Weaknesses
(Northouse 2001)

Summary


Approach
Summary of Findings
Leadership traits refers to a variety of individual attributes,
including aspects of personality temperament, needs, motives and
values that are transferred from one situation to next situation. A
leader's personality refers to the totality of distinct traits that
distinguish one leader from another leader.
Great leaders separate themselves by their ability to be excel in
situations where high degrees of personal risk and personal
initiative are required.
Differentiating Leadership traits:
capacity
achievement
responsibility
participation
status
situation
Every leader had distinguishable natural traits that separated them
from followers, every situation had different demands, and the
result of the interaction between the traits and situation were
unknown. Throughout this interaction the needs of the leader
follower and other contracting parties need to be fulfilled.
The Big Five traits are described as follows:
emotional stability (calm, secure, and non-anxious) or
conversely not neuroticism
extroversion (socialable, talkative, assertive, ambitious,
and active)
openness to experience (imaginative, artistically sensible
and intellectual)
agreeableness (good natured, cooperative, and trusting)
conscientiousness (responsible, dependable organized,
persistent and achievement oriented)
emotional intelligence (emotional maturity, self-
confidence),
social intelligence (perceptiveness and behavioral
flexibility),
ability to learn,
adapting to the changing internal and external
environments
Type of Skills: technical, conceptual and interpersonal
Major strength: applicable to all individuals, at all levels, at
various situations.
Major Weakness: no definitive list of "leadership traits".
It is important that leaders understand the influence of their innate
personality traits on individuals and work situations.









Table 2-4. Summary of the Beh,
Sections of Behavior
Approach
Definition of Behavior
(Northouse 2001)
University of Michigan
(Katz et al. 1950)
(Katz et al. 1951)
(Katz and Kun 1952)
(Likert 1961)


Ohio State Leadership Studies
(Stogdill and Coons 1957)

Managerial Grid
(Blake and Mouton 1985)


avior Approach


Summary of Findings


How the leader behaves and acts according to the situation or
environment.
High-performing leaders were more employee
oriented than solely production oriented. They were
sensitive to employee's work and personal needs.
They understand that employees were part of a
number of social systems in and outside the work
environment. Leaders invested time in understanding
an employee's values, attitudes perception and
motives and realized that these might change over
time. They showed interest is the employee's off the
job problems and were constructive rather than
punitive in their attitude towards the worker's
mistakes. This created a sense of pride in employees.
Leaders were effective communicators primarily
focused on the human aspects work related
challenges. Leadership is a relative process where
leaders must adapt their behavior to expectations,
values, and interpersonal skills of other individuals.
This applies to within the organization, outside the
organization and at all levels. As a result, no specific
style, behavior or communication strategy will work
in all situations.
Two dimensions for a leader to focus on, employee
focused or consideration and work focused or
initiating structure.
Effective leaders have a strong focus on two levels of
concern, production and employees. If a leader
focuses more on one than the other, the effectiveness
will be compromised.









Table 2-5. Overview of Corresponding Theory of Needs
Category Maslow Alderfer Herberg McClelland

Self-Actualization
Growth Growth Motivators Need for Achievement
Esteem

Social Relatedness

Maintenance Safety Hygiene Factors Need for Affiliation
Existence
Physiological

Source: Based on Hersey et al. 2001, page 73


Figure 2-1. Follower Behavior Based on Strongest Need





























Figure 2-2. Sequence of Actions for a Leader to Identify the Strongest Needs of a Follower









Table 2-6. Description of Different Power Bases
Power Base Categories Types of Description of Power Base Author
of Power Needs


Coercive Position
Power Power


Legitimate Position
Power Power


Referent Personal
Power Power


Expert Personal
Power Power

Information Position
Power Power


Connection Position
Power Power



Ecological Position
Power Power


Reward
Power


Position
Power


Maintenance


Maintenance



Maintenance



Growth



Growth


Maintenance



Maintenance




Maintenance


The follower complies in order to
obtain rewards controlled by the
leader.
The follower complies in order to
avoid punishments controlled by the
leader.
The follower complies because he or
she believes the leaders has the right
to make the request and the follower
as the obligation to comply.
The follower complies because he or
she admires or identifies with the
leader and wants to gain the leaders
approval.
The follower complies because he or
she believes the leader has special
knowledge.
The follower complies because he or
she believes the leader has access to
or control over important information.
The follower complies because they
want to gain favor with or not avoid
disfavor with of a powerful
connection the leader has.
The follower complies because he or
she believes the leader has control
over the physical environment,
technology or the organization of
work.


French and
Raven 1959

French and
Raven 1959


French and
Raven 1959


French and
Raven 1959


French and
Raven 1959

Pettigrew
1972


Hersey et al.
2001



Yukl 2002









Table 2-7. Summary of the Nee
Categories of Approach
Follower Needs
(Hersey et al. 2001)
(Maslow 1970)


Leadership Communication
(Hackman & Johnson)







Power Bases
(French and Raven 1959)
(Pettigrew 1972)
Hersey (2001)
(Yukl 2002)


ds Approach


Description


Two type of needs:
Maintenance Needs
Growth Needs
Leader is required to identify and align actions with the
follower's strongest need in the specific situation
Five principles of communication:
Dynamic ever-changing process
Circular in nature
Complex and involves the understanding and
Negotiation of shared interpretations
Irreversible
Encompasses the total personality of the individuals
involved in the communication.
A leaders power has eight different bases:
Expert
Referent
Reward
Coercive
Legitimate
Information
Connection
Ecological
Exercising power is at the core of influencing followers to
obtain the desired goal. The value the follower sees in the
intended goal, the more power and influence the follower
allows.









Table 2-8. Major Findings in Cognitive Resource Theory


Hypothesis
Intelligent leaders make better decisions and
plans
Directive leaders (task oriented) utilize their
intellectual abilities more
Leaders' intelligence does not contribute to
performance under stress
Intellectual contribution of directive leaders
is higher when group is supportive
Group member intelligence is effectively
used when the leader is nondirective and the
group is supportive
Intelligence is expected to contribute more
as the intellectual demands of the task
increase
Leaders' task-relevant abilities contribute to
task performance
LPC and situational control predict leader's
directive behavior


Special Limitations
In low stress situations

In high control situations

Especially if stress is
interpersonal
Under low stress

Under low stress


General but week, under low
stress

Complex

Requires knowledge of task
structure and other
situational factors


Confidence
Probable

High

High

Low to moderate

Low to moderate


High


Needs further
study
Moderate to high


Source: Fiedler and Garcia 1987, page 204












Increase Rewards


Leader defines what follower must
do to attain work outcomes





Leader clarifies follower's work
role




Follower has increased knowledge
and confidence to accomplish
outcomes


Leader defines what follower must
do to attain work outcomes




Leader matches follower's needs
to rewards if work outcomes are
accomplished




Leader increases value of work
outcomes for follower


Follower displays increased
effort and motivation


Organizational work outcomes
are accomplished


Figure 2-3. Leader Roles in the Path-Goal Model. Source: Hersey et al. 2001, page 112


Path Clarification

















Relationship Behavior
The extent to which a
leader engages in
two-way (multi-way)
communication,
listening, facilitating
behaviors socio-
emotional support:
giving support,
communication,
facilitating,
interactions, active
listening, providing
feedback


S3
Leadership Style: Participating
(encouraging collaborating,
committing) share ideas and
facilitate in making decisions
Leadership Behavior: high
supportive and low directive
behavior
Decision Style: leader and
follower-made decision with
encouragement from leader


S4
Leadership Style: Delegating
(observing, monitoring, fulfilling)
turn over responsibility fro
decisions and implementation
Leadership Behavior: low
supportive and low directive
behavior
Decision Style: follower-made
decision


S2
Leadership Style: Selling
(explaining, clarifying, persuading)
- explaining your decisions and
provide opportunity for clarification
Leadership Behavior: high
directive and high supportive
behavior
Decision Style: leader made
decision with dialogue and/or
explanation


S1
Leadership Style: Telling
(guiding, directing, establishing) -
provide specific instructions and
closely supervise performance
Leadership Behavior high task
and low relationship
Decision Style: leader-made
decision


Task Behavior


Low


(Directive Behavior)


Task Behavior
The extent to which the leader engages in defining roles is telling what, how, when, where,
and if more than one person who is to do what in: Goal setting, organizing, establishing
time lines, directing controlling


Follower Readiness
Ability: has the necessary knowledge, experience, and skill
Willingness: has the necessary confidence, commitment, motivation


High Moderate Low


R3 R2 R1
Abl Able but unwilling Unable but Unable and
oAble and wil or insecure willing or unwilling or
ooer directed Follower directed confident insecure
Leader Directed Leader directed


Figure 2-4. Situational Leadership. Source: Hersey et al. 2001, page 189


I


i









Table 2-9. Summary of the Situational Approach
Leadership
Approach Leader Traits Leader Behaviors Leadership Intervening
Situational Variables Variables
Vanables


Contingency
(Fiedler 1964
and 1967)

Cognitive
Resource
(Fielder and
Garcia 1987)
Path Goal
(House 1971)


* Task oriented
* Relationship
oriented

* Intelligence
Experience


Supportive
Directive
Achievement
Participatory


Situational
(Hersey et al.
2001)


* High task and
low relationship
* High task and
high relationship
behavior
* High relationship
and low task
behavior
* Low relationship
and low task
behavior


* Leader-member
relations
* Position power
* Task structure
* Leader
intelligence
* Leader stress
* Leader experience
* Follower lacks
confidence
* Ambiguous job
* Lack ofjob
challenge
* In correct reward
Follower Readiness
* Ability: has the
necessary
knowledge,
experience, and skill
* Willingness: has
the necessary
confidence,
commitment,
motivation


Expectations,
valences,
ambiguity y




Diagnosis,
flexibility









Table 2-10. Factors of Transformational and Transactional Leadership
Type of
Factor Leadership Description
Leadership
Idealized Transformational Idealized influence is defined by the follower's perceptions
Influence of leader's behavior. These leaders are respected trusted
(Charisma) and have referent power. The set high standards and
challenges goals that are achievable.
Inspirational Transformational Inspirational leaders offer emotional appeals to commit to a
Motivation shared vision and mutual goals.
Intellectual Transformational Intellectual stimulation is about encouraging followers to
Stimulation improve on old existing methods by innovating and
creating new ways. Followers are challenged to re-evaluate
their beliefs and values with the goals of creating desired
change and solving problems.
Individualized Transformational The leader dedicates time and energy to understanding and
Consideration respecting the unique needs of the follower.
Contingent Transactional The follower is reward for results. The rewards and results
Reward are clearly defined and agreed to by both leader and
follower. Leader uses positive reinforcement when
necessary.
Management Transaction Management by Exception is characterized by corrective
by Exception criticism and negative feedback. Leader generally remains
passive until action is need to make a correction.
Non- Laissez Faire Laissez faire leadership refers to absence of leadership.
Leadership Generally, decisions are delayed, no feedback is given, and
there is a lack of transactions and agreements.
Source: Bass and Avolio 1993














Intellectual
Stimulation


i ------


Figure 2-5. Transformational Leadership and Transactional Leadership. Source: Adapted from
Bass and Avolio 1993









Table 2-11. Summary of the Transformational A
Leadership Approach
Transformational Leadership
(Bass & Avolio 1993)
(Burns 1978)
(Bass 1985)







Transactional Leadership
(Burn 1978)







Leader Member Exchange Theory
Garen and Uhl-Bien 1995





Emotional Intelligence
(Goleman 1998)


Servant Leadership
(Greenleaf 2002)


Summary
Focuses on the higher motives on the follower
with the goal of creating a positive
transformational experience for both the leader
and follower with an outcome that exceeds
expectations.
Transformational leadership is comprised of:
idealized influence
inspirational motivation
intellectual stimulation
individualized consideration
Transactional leadership focuses on exchange
one thing for another thing. It is not as
concerned with the relationship or the added
growth in the way that transformational
leadership is concerned.
Transactional leadership comprises:
contingent reward
management by exception
Focuses on the exchange between the leader
and the follower.
Exchanges between leaders and followers are
both transactional and transformational
The higher the quality of exchange between the
leader and the follower, the more benefits there
are for leader, follower and organization
Essential part of leadership and skill for
modern leader
Requires to understand the emotions involved
in a situation and the dynamics of relationships
Leader serves and listens first
Learn learns about the follower's highest
priorities
Leader's communication aligns the follows
personal experience with work objectives
Leader requires trust









Table 2-12. Comparison of Team Effectiveness Criteria
Conditions of Group Effectives (Hackman & Characteristics of Team Excellence (Larson &
Walton, 1986) LaFasto, 1989)
Clear, engaging direction Clear, elevation goal
Enabling structure Results-driven structure


Enabling context
Expert coaching
Adequate support
Source: Northouse et al. 2002, page 167


Competent team members
Unified commitment
Collaborative climate
Standards of excellence
Principled leadership
External support


Figure 2-6. Team Leadership Model. Source: House et al. 2001, page 171










Table 2-13. Summary of Leadership Approaches
Leadership Focus of Approach Basis of Influence
Approach
Trit W t l i Leader's inherent personality
Trait Who the leader is
traits
Behavior What the leader does Leader's behavior
Identification of follower's
How the leader communicates and strongest needs and
Needs uses power to satisfy the strongest communication that using the
needs of the follower power base that maintains the
leader's trustworthiness
How the leader adapts the leadership Leader's behavior, follower
Situational style to the situation and the competency and situational
competency level of the follower variables
How leader matches the his or her
Contingency preferred leadership style to the Leader's style and situation
situation
Leader Member How the leader interacts or creates
Trust
Exchange exchanges with the follower
How the leader interacts with the
Transforfollower to create a growth experience Trust and strongest needs of the
Transformational
for the follower, leader and follower
organization.
Team How the leader interacts with the Trust
grTeam Toupst
group









Table 2-14. Definitions of Trust
Definition Author
"An individual may be said to have trust in the occurrence of an event if he Deutsch
expects its occurrence and his expectations leads to behavior in which he 1958, p. 268
perceives to have greater negative motivational consequences if the expectation is
not confirmed than positive motivational consequences if it is confirmed."
"Interpersonal trust is... as an expectancy held by an individual or a group that the Rotter 1967,
word, promise, verbal, or written statement of another individual or group can be p. 651
relied on."
"Trusting behavior...consist of actions that (a) increase one's vulnerability, (b) to Zand 1972,
another whose behavior is not under one's control, (c) in a situation in which the p. 300
penalty (disutility) one suffers if the other abuses that vulnerability is greater than
the benefit (utility) one gains if the other does not abuse that vulnerability."
"Trust (or symmetrically, distrust) is a particular level of subjective probability Gambetta
with which an agent assesses that another agent or group of agents will perform a 1988, p. 217
particular action, both before he can monitor such action (or independently of his
capacity ever to be able to monitor it) and in a context in which it affects his own
action."
"Trust as a belief, attitude, or expectation concerning the likelihood that the Sitkin and
actions or outcomes of another individual, group or organization will be Roth 1993,
acceptable or will serve the actor's interests ... trust [is] a psychological state of p. 368
positive expectations about another's motives and future actions."
"Interpersonal trust [is] the extent to which a person is confident in, and willing to McAllister
act on the basis of, the words, actions, and decisions of another. 1995, p. 25
"Willingness of a party to be vulnerable to the actions of another party based on Mayer et al.
the expectation that the other will perform a particular action important to the 1995, p. 710
trustor."
"Trust is the expectation by one person, group or firm of ethically justifiable Hosmer
behavior-that is, morally correct decisions and actions based upon ethical 1995, p.399
principles of analysis-on the part of the other person, group, or firm in a joint
endeavor or economic exchange."
"That one believes in and is willing to depend on, another party." This broken McKnight
down into trusting intention (one is willing to depend on the other person in a et al. 1998,
given situation) and trusting beliefs (one believes the other person is benevolent)." p. 473
"Trust is accepting the risks associated with the type and depth of the Sheppard
interdependence inherent in a given relationship. Relational form depth and risks and
are defined by shallow dependence, shallow interdependence, deep dependence Sherman
and deep interdependence." 1998, p. 422
"Confident positive expectations regarding another's conduct, and distrust in Lewicki and
terms of confident negative expectations regarding another's conduct." McAllister
1998, p.439
"Trust is a psychological state comprising the intention to accept vulnerability Rousseau et
based upon positive expectations of the intentions or behavior of another." al. 1998, p.
395
"The willingness to rely on another party and t take action in circumstance where Doney et al.
such action makes one vulnerable to the other party." 1998, p. 604









Table 2-14. Continued
Definition
"Confidence between the parties in an exchange of some kind-confidence that
they will not be harmed or put at risk by actions of the other party."

"Whatever else its essential features, trust is fundamentally a psychological state."

"Interpersonal trust [is] an individual's belief that another individual makes efforts
to uphold commitments, is honest, and does not take advantage given the
opportunity."
"Trust is defined as the willingness of a party (the trustor) to be vulnerable to
actions of another party (the trustee) based on the expectation that the trustee will
perform a particular action to monitor or control that other party."
"One party's confidence that the other party in the exchange relationship will not
exploit its vulnerabilities

"Trust is a conceptualized as an evolving affect, that is, an interacting set of
emotions and assessments that develop and change over time."
"Trust is the belief which a consumer in a purchase situation characterized by
uncertainty, vulnerability, lack of control and the independent -mindedness of the
transaction partners relies on, to the effect that a company identified as a corporate
brand will deliver a good serve at the quality which the consumer expects, on the
basis of experiences with the consumer has made in the past."
"Trust-a belief in the reliability of a third party, particularly when there is an
element of person risk."


Author
Jones and
George
1998, p. 531
Kramer
1999, p. 571
Ferrin and
Dirks 2003,
p. 19
Huff and
Kelley
2003, p. 82
Dyer and
Chu 2003,
p. 58
Young
2006, p. 439
Sichtmann
2007,
p.1001


Arnott
2007, p981










Table 2-15. Forms and Facades of Trust


Nature of co-
operation

Dynamics of co-
operation




Synergy,
innovation, and
risk






Power





Meaning




Implications for
research/practice


Spontaneous
Trust
Co-operation is
trust based
Co-operation
emerges
naturally,
through gamble


Trust emerges
spontaneously:
synergy is high:
risk is high



A win-win view
of power is
implicit although
power is largely
ignored


Shared meaning
already exists
between partners


Shared meaning
may not be as
spontaneous as it
may appear


Generated Trust Manipulation Capitulation


Co-operation is
trust based
Co-operation is
achieved through
management of
meaning

Trust is created
through equal
participation
which increases
synergy but also
increases risk


A win-win view
of power as
asymmetrical
power is
decreased

Shared meaning
is mutually
constructed by
all partners
Process of
creating shared
meaning is
difficult and may
involve conflict


Co-operation is
trust based
Co-operation is
achieved through
management of
meaning
Dominant
partner uses
symbolic power
to reduce risk
and to increase
predictability;
synergy is
reduced
A zero-sum view
of power prevails
as asymmetrical
power is either
maintained or
increased
Meaning is
shared but is
imposed by one
partner on
another
Relationship
may look like
trust when it is
based on power


Co-operation is
power based
Co-operation is
achieved through
dependency and
socialization
Subordinate acts
as a tool of
dominant
partner; risk to
dominant partner
is low; synergy
is low
A zero-sum view
of power prevails
as asymmetrical
power is either
maintained or
increased
Meaning is
shared but is
imposed by one
partner on
another
Power imbalance
may mean that
partners are not
as "independent"
a they appear


Source: Hardy et al 1998, page 79



Table 2-16. Phases of Alliance Development and Evolution of Trust
Phase of the alliance development Formation Implementation Evolution
over time
Evolution of bases for trust Calculative Cognitive Normative
Key element in trust development Calculation Predication Bonding
Source: Child 1998, page 252









Table 2-17. Sources of Intentional Reliability
Macro Micro
Egotistical Sanctions form authority (the law, god, Material advantage or self-interest;
leviathan, dictator, patriarch, shadow of the future, reputation,
organization), contractual obligation hostages
Altruistic Ethics: values, social norms of proper Bonds of friendship, kinship, routines,
conduct, moral obligation, sense of duty habituation
Source: Nooteboom and Six 2003, page 9

Table 2-18. Sources of Reliance
Macro Micro
Control Contracts, supervision Partner's dependence on value, hostages, reputation
Trust Norms, values, habits Routinization, empathy, identification, friendship
Source: Nooteboom and Six 2003, page 11


Table 2-19. Summary of Compendium of Papers
Author Summary
Trust reduces complexity and enables action and minimizes fear. Trust
Luhmann 1979
requires some form of system that fosters trust development.
Importance of knowing the trustee's interests and communicating in
Gambetta 1987 terms of these interests. Trust is a risk. Trust needs to be balanced with
competition (perceived form of distrust) for progress to take place.
The institutional environment in which business relations are embedded
Lane and Bachmann have a strong influence of the level of trust. The institutional framework
1998 (rules, policies, contracts, procedures etc.) can provide a stable basis for
the development of trust.
Trust is a four-place predicate: someone (trustor) trusts some-thing or
Noo m ad Sx someone (trustee) with respect to something (competence, intentions)
Nooteboom and Six
2003 depending on the conditions of the situation. Learning the interests of
the object of trust is an important factor of trust building process.
Individuals will send strong cues when they feel betrayed.































Figure 2-7. Detailed Model of Initial Trust Formation. Source: McKnight et al. 1998, page 476


Table 2-20. Form of Dependence, Risks, Qualities of Trustworthiness and Mechanism of Trust
Form of sks Qualities of Mechanism for Relational Institutional
Dependence Trustworthiness trust Mechanisms Mechanisms
Shaw In Discretion Historical
Shallow Indiscretion
Reliability Deterrence Fate control records,
dependence Unreliability Competence Enforcement
Competence Enforcement
Quadratic
Cheating Integrity
Deep control,
Dep Abuse Concern Obligation Network control.
dependence Socialization,
dependence Self-esteem Benevolence Socialization,
Selection
Communication
Shallow inter- Poor co- Predictability and information
dependence ordination Consistency Di y Cem
systems
Shared Strategic
Deep inter- M Foresight meaning, alignment,
deep inte- Intuition Internalization values, common
dependence anticipation .
S a Empathy products, membership,
goals discourse
Source: Sheppard and Sherman 1998, page 431











High Trust
Characterized by:
Hope
Faith
Confidence
Assurance
Initiative


Low Distrust
Characterized by:
No hope
No faith
No confidence
Passivity
Hesitance


High-value congruence
Interdependence promoted
Opportunities pursued
New initiatives


Casual acquaintances
Limited interdependence
Bounded, arms-length transactions
Processional courtesy


Low Distrust
Characterized by:
No fear
Absence of skepticism
Absence of cynicism
Low monitoring
No vigilance


Trust but verify
Relationships highly segmented and
bounded
Opportunities pursued and down-side
risks/ vulnerabilities continually
monitored

Undesirable eventualities expected
and feared
Harmful motives assumed
Interdependence managed
Preemption: best offense is a good
defense
Paranoia


High Distrust
Characterized by:
Fear
Skepticism
Cynicism
Wariness
Watchfulness
Vigilance


Figure 2-8. Integrating Trust and Distrust: Alternative Social Realities. Source: Lewicki et al.
1998, page 445


I











Current situational satisfaction rating


Penalty
Probability


Figure 2-9. A Process Model of Opportunistic Betrayal. Source: Elangovan and Shapirol998,
page 554


Organizational Factors

Organizational structure
HR polices & procedures
Organizational culture
I


Relational Factors

Initial interactions
Expectations
Costs of exchanges
I


Individual Factors

Propensity to trust
Self-efficacy
Values


Managerial Trustworthy Behavior

Behavioral consistency
Behavioral integrity
Sharing & delegation of control
Communication
Demonstration of control
Boundary Conditions

Perceived similarity
Perceived competence
Employee propensity to trust
Task interdependence y

Employee Perception of Trust



Figure 2-10. Exchange Framework of Initiating Managerial Trustworthy Behavior. Source:
Whitener 1998, page 519

























Figure 2-11. Trust and Control in Strategic Alliances. Source Das and Teng 1998, page 497



Table 2-21. Trust Building Processes, Base Disciplines, and Underlying Behavioral
Assumptions


Trust Building Process
Calculative: Trustor calculates the
costs and rewards of a target acting in
an untrustworthy way
Prediction: Trustor develops
confidence that a target's behavior
can be predicted
Intentionality: Trustor evaluates a
target's motivations


Capability: Trustor assesses a target's
ability to fulfill his or her promises

Transference: Trustor draws on proof
from which trust is transferred to a
target


Primary Base
Description
Economics (Dasgupta
1998; Williamson,
1985)
Social psychology
(Deutsch, 1960; Lewicki
& Bunker, 1995)
Social psychology
(Rempel & Holmes,
1986)
Sociology (Barber,
1983; Butler & Cantrell,
1984)
Sociology (Granovetter,
1985; Strub & Priest,
1976)


Underlying Behavioral Assumptions

Individuals are opportunistic and seek
to maximize self-interest

Individual behavior is consistent and
predictable
Individuals are geared toward others
as opposed to themselves (e.g.,
motivated to seek joint gain)
Individuals differ in their
competence, ability, and / or expertise
and, thus, the ability to deliver on
their promises
Individuals and institutions can be
trusted: connections in a network are
strong and reliable


Source: Donley et al. 1998, page 604




























Figure 2-12. Proposed Model of National Culture and the Development of Trust. Source:
Donely et al. 1998, page 602









Table 2-22. Summary of Academy of Management
Author Description
u e a No clear definition of trust, but common components of trust included risk,
Rousseau et al. '
(1998) interdependence and psychological condition. Deterrence-based trust,
calculus-based trust, and relational trust.
The paradox of high initial trust included trust based on disposition,
McKmnight et al.
c(1998) institution, cognition and beliefs. These and it subcomponents combined to
form the initial trusting intention of unfamiliar individuals.
Sheppard and The form of the relationship (deep or shallow interdependence or dependence)
Sherman (1998) determines the risk and trust mechanisms in the relationship.
Lewicki et al. Trust and distrust are separate constructs with separate antecedents that can
(1998) exist simultaneously.
Elangovan and Intent was considered the most important factor in which an action was
Shapiro (1998) considered a betrayal or an opportunistic behavior.
Whitener et al. Explained the antecedents of managerial trust worthy behavior and the
(1998) cognitive process of the employee in assessing the trustworthiness of the
manager.
Das and Teng Described the role of trust and control in developing confidence in partner
(1998) cooperation in alliances.
Donely et al. Described the trust building processes and their base disciplines and
(1998) underlying behavioral assumptions. Additionally, a trust building model
considering national culture was discussed.
Discussed four categories of trust: individual attribute, behavior, situational
Bigley and feature, and institutional arrangement. Three groupings of trust research:
Pearce (1998) interactions among unfamiliar actors, interactions among familiar actors
within ongoing relationships, and organization of economic transactions.
SThe authors proposed that the multidimensional experience of trust evolved
Geore ( from the interactions among people's values, attitudes and moods and
George (1998) emotions.











Trust
Goodwill Trust
Good faith, good
intentions and integrity

Competence Trust
Resources and
capabilities


Control
Behavior Control
Policies, training,
reporting
Output Control
Planning and
budgeting
Social Control
Decision-making
process


Risk Percetption
Relational Risk
Not having satisfactory
cooperation

Performance Risk
Objectives not achieve
despite satisfactory
cooperation


Figure 2-13. Integrated Framework of Trust, Control, and Risk in Strategic Alliances. Source:
Das and Teng, 2001, page 257



Table 2-23. Risk Reduction in Different Alliance Types
Trust Building and Control Mechanisms Joint Minority Equity Non-Equity
Ventures Alliances Alliances
Reducing Relational Risk
a) Goodwill trust-building
1. Establishing mutual interests High High High
2. Individual and team level trust High Moderate Moderate
3. Joint dispute resolution High High Moderate
b) Behavior control mechanisms
4. Policies and procedures High High High
5. Reporting structure High High Moderate
6. Staffing and training High High Moderate
c) Social control mechanisms
7. Decision making process High High High
8. Rituals, ceremonies, and networking High Moderate Moderate
Reducing Performance Risk
d) Competence trust-building
9. Proactive information collection High High High
e) Output control mechanisms
10. Setting objectives High High High
11. Planning and budgeting High High High
f) Social control mechanisms
12. Decision making process High High High
Source: Das and Teng, 1998, page 273










Table 2-24. Summary of Organizational Studies
Author Description
Grey and Garsten Organizations require predictability to build trust and grow.
Trust based on shared values and norms are important in supporting
collaboration within uncertain environments.
Trust and power formed the basis of organizational relationships. The
Bachmann (2001) institutional structure of the relationship will determine the dominance of
trust or power.
Knight et al. Control is a precondition of trust in virtual environments.
(2001)
Das and Teng Trust and control both have an important role in reducing the relational and
(2001) competence risk in strategic alliances.


Situational Factors

Role-set satisfaction
Job satisfaction
Confusing
Supportive Environment
Difficult job
Challenging job
Controlling boss


Dispositional Factors

Anxiety
Generalized trust in other




Intention to Trust:

Line Manager
Senior Manager


Figure 2-14. Dispositional and Situational Determinants of Trust in Two Types of Managers.
Source: Payne and Clark 2003, page 130









Table 2-25. Summary of International Journal of Human Resource Management
Author Description
The manager's communication skills were critical to building trust
s e a ( ) with employees. The main challenge is the perceptual gap of the
manager's perceived effectiveness and the actual experience of
employees.
Young and Daniel Trust and distrust comprised both cognitive and emotional (affectual)
Young and Daniel
(2003) components. Managers were required to adapt their communication
styles in order to foster trust and not distrust.
Human resource practices were strong indicators of trust and
Gould-Williams (2003) organizational performance. They should be aligned to the
organizations values, culture and goals.
Dispositional and situational factors make the management of trust
Payne and Clark (2003) complex. Both dispositional and situational factors are important for
trust in line managers and senior managers.
Any organizational change strains the trust in the organization. Open
Morgan and Zeffane and direct involvement with high level managers in the decision
(2003) making of the organizational change impacts trust within the
organization positively.
Kiffin-Peterson and Trust in management and co-workers is a stronger precondition than
Cordery (2003) disposition to trust for effective teamwork.
Workplace features impact trust levels similar to the individual's
Blundson and Reed disposition to trust and experience of trust. This suggests that trust
(2003) indicators might be transferable from industry to industry or
workplace to workplace.









Table 2-26. Summary of Organizational Science
Author Description
Stewart (2003) The major finding of their research was that the initial trust beliefs of
unknown target increased as the perceive interaction of the unknown
target and a trusted target increased.
Becerra and Gupta As communication frequency increased, individual predispositions
(2003) lost importance in favor of organizational context in which trustee
and trustor are immersed.
McEvily et al. (2003) Trust effects organizing by elements of structure and mobilization.
Ferrin and Dirks (2003) Reward structures in organizations have an indirect impact on trust by
questioning the motives behind the reward.
Huff and Kelley (2003) U.S. bank mangers had higher propensity trusts levels, higher
external trust levels (customer and suppliers), but lower inter-
organizational trust levels compared to Asian bank managers.
Carson et al. (2003) The key to research and development collaboration with a trust-based
governance structure is learning and accurately processing
information about the partner's behaviors, interests and task
requirements.
Dyer and Chu (2003) High levels of trustworthiness increased performance of exchange
relationships by decreasing transaction costs and increasing quality of
information shared.
Child and Mollering Increasing contextual confidence for instructions was the key for trust
(2003) development in main land China.


Table 2-27. Summary of Personnel Review
Author Description
Employees with different terms of employment have different
Gilder (attitudes and behavior responses to teamwork and organizational
Gilder (2003) .
policies. This suggests that management requires different strategies
for different types of employees.
Trust in Dutch work councils was based on the quality of relationship
Kerkof et al. (2003) and not necessarily the potential favorable benefits of the relationship
outcomes.
l et a. ( ) Organizational policies, and not solely the behavior and character of
Connell et al. (2003)
managers, have a strong impact on the trust level in organizations.
Social trust based on inferences of motives, characters and intentions
Tyler (2003) of other individuals has become the most important form of trust in
organizations that promote effective growth.
Bijlsma and van de Bunt The combination of support, guidance, monitoring, and openness are
(2003) significant predictors of trust in managers.
Antecedents to trust in team members included team member
Costa (2003) performance, cooperation, attitudinal commitment to the
organization.















Supplier Partnerships


Buyer Partnerships


Figure 2-15. The Relational Exchanges in Relationship Marketing. Source: Morgan and Hunt
1994, page 21


Shared Values



Commuication)---- +_


Opportunistic
Behavior


Acquiescence

+
ropensity to
Leave
--- +
Cooperation

S Functional
SConflict


Uncertainity


Figure 2-16. The KMV Model of Relationship Marketing. Source: Morgan and Hunt 1994
page 22










Hih Personal Stable
S H Relationship Relationship
I-
O

Fragile Expedient
L Low Relationship Relationship

Low High

Inter-organizational Reliance

Figure 2-17. Trust and Reliance in Business Relationships. Source: Mouzas et al., page 1024






Table 2-28. Summary of European Journal of Marketing
Author Description
Arnott (2007) Trust is not a simple continuum between trust and distrust. Trust
involves a number of factors and judgments.
Morgan and Hunt 1994 Trust is the basis of collaborating and competing effectively in the
new global market place.
Moorman et al. 1993 Trust incorporates both psychological components (confidence in the
exchange partner) and sociological components (willingness to rely
on the exchange partner). Trust was more about how the exchange
occurs than about the personal characteristics of the people who
participate in the exchange.
Moorman et al. 1992 Trust directly facilitates the exchange process and indirectly improves
the end result.
Elliot and Yannopoulou Consumers require trust to purchase symbolic brands that are riskier
(2007) and cost more.
Sichtmann (2007) Credibility and competence are the antecedents of trust in corporate
brands.
Doney et al. (2007) To maintain and grow business relationships it is important to invest
in the social and economic aspects of the relationship.
Mouzas et al. (2007) The scholar's conceptual model conjectured that both high inter-
personal trust and high inter-organizational reliance were required for
stable business relationships.
Kingshott and Pecotich It is important to illicit, understand and confirm the psychological
(2007) contracts in exchange relationships.









Table 2-29. Comparison of the Behavioral Definitions of Trust
Individl A s Optimistic expectations of the outcome of an uncertain even
Individual Actunder conditions or personal vulnerability.
Non-rational behavior based upon past experiences and future
Assumption
n forecasts.
Goal Intent Gain the ability to deal with complexity by eliminating many
Goal Intent
scenarios and alternatives.
Moral C t Interests of trusting person should be laced ahead of those of the
Moral Content
trusted person.
S Optimistic expectations of the behavior of a second person
Interpersonal Relatonhips under conditions of personal vulnerability and dependence.
Non-rational behavior, based upon characteristics and traits of
Assumption .
n both individuals.
Goal Intent Improve cooperation between individuals within a group or an
organization.
Moral Content An implicit promise from one person not to bring harm to the
Moral Content
other.
Optimistic expectations of the behavior of a stakeholder of the
Economic Transactions firm under conditions of organizations vulnerability and
dependence.
An Economically rational behavior, constrained by contracts and
Assumption
controls.
l I t Improve cooperation by the stakeholder within
Goal Intent
managers/stakeholders relationships.
Morl C t A genuine responsiveness to the needs of the other party in an
Moral Content
economic exchange.
ocl Sc s Optimistic expectations of the behavior of managers and
Social Structures .
professional under conditions of social vulnerability.
An Socially rational behavior, directed by informational
Assumption
requirements and informal obligation.
Goal Intent Increase cooperation between diverse elements of society.
Information rules have a normative content with "fair"
Moral Content .
standards and a "right" to act.
Source: Hosmer 1995, page 391

























Figure 2-18. Derived Path Coefficients Based on Structural Equation Analysis of the Theoretical
Model. Source: McAllister 1995, page 48









Table 2-30. Trust Antecedents


Authors
Boyle & Bonacich
(1970)
Butler (1991)

Cook & Wall (1980)
Dasgupta (1988)
Deutsch (1960)
Farris, Senner, &
Butterfield (1973)
Frost, Stimpson, &
Maughan (1978)
Gabarro (1978)
Giffin (1967)

Good (1988)

Hart, Capps, Cangemi,
& Caillouet (1986)
Hovland, Janis, &
Kelley (1953)
Johnson-George &
Swap (1982)
Jones, James, & Bruni
(1975)
Kee & Knox (1970)
Larzelere & Huston
(1980)
Lieberman (1981)
Mishra (In press)
Ring & Van de Ven
(1992)
Rosen & Jerdee (1977)
Sitkin & Roth (1993)
Solomon (1960)
Strickland (1958)


Antecedent Factors
Past interactions, index of caution based on prisoners'
dilemma outcomes
Availability, competence, consistency, discreetness, fairness,
integrity, loyalty, openness, promise fulfillment, receptivity
Trustworthy intentions, ability
Credible threat of punishment, credibility of promises
Ability, intention to produce
Openness, ownership of feelings, experimentation with new
behavior, group norms
Dependence on trustee, altruism
Openness, previous outcomes
Expertness, reliability as information source, intentions,
dynamism, personal attraction, reputation
Ability, intention, trustees' claims about how (they) will
behave
Openness/congruity, shared values, autonomy/feedback

Expertise, motivation to lie

Reliability
Ability, behavior is relevant to the individual's needs and
desires
Competence, motives
Benevolence, honesty
Competence, integrity
Competence, openness, caring, reliability
Moral integrity, goodwill
Judgment or competence, group goals
Ability, value congruence
Benevolence
Benevolence


Source: Mayer et al. Page 718










Factors of Perceived
Trustworthiness


Figure 2-19. Proposed Model of Trust. Source: Mayer et al. 1995, page 715


Form expectations about the future
of the collaboration based on reputation
or past behavior or contracts and agreements


Have enough trust, be willing to be vulnerable
and take a risk to initiate the collaboration


Figure 2-20. The Cyclical Trust-Building Loop for Collaboration. Source: Vangen and Huxham,
page 12











Table 2-31. Managing Trust: Sample Insight From the Literature
Expectation Cyclical
Trust Trust Building Risk Expectation C
Forming Development


(examples)
Trust is a means of
coping with
uncertainty (Butler
& Gill, 1995)
Trust is one of the
three primary
control mechanisms
which govern
economic
transactions between
firms (Bradach &
Eccles, 1989)

Trust is an enabling
conditions which
facilitates the
formation of
ongoing networks
(Ring, 1997)
A certain minimum
level of interfirm
trust is indispensable
for any strategic
alliance to be formed
and to function (Das
& Teng, 1998)
Some trust is
required to initiate
collaboration
(Webb, 1991)
Trust counteracts
fear of opportunistic
behavior (Gulati,
1998)


(examples)
Communication and
proactive
information
exchange form yet
another tactic to
boost trust among
partners (Das &
Teng, 1998)
The building of trust
requires a
willingness to
communicate over a
range of issues
(Webb, 1991)
Making adaptations
according to the
partnership is an
effective way to
develop trust (Das &
Teng, 1998)
Build trust through
ambiguous goals
with modest
expectations rather
than clear goals with
high expectations
(Butler & Gill,
1997)
Building trust
implies an
investment in the
time dimension of
relationships
(Murakami &
Rohlen, 92)
Communication
helps to build trust
because it provides
the basis for
continued interaction
(Leifer & Mills,
1996)


(examples)
Trust is a
mechanism to
reduce risk (Lane &
Bachmann, 1998)
Risk can be seen as
an opportunity to
build trust (Lyson &
Metha, 1996)
Most definitions of
trust regard risk as
the core of trust (Das
& Teng, 1998)
A type of
expectation that
alleviates the fear
that one's exchange
partners will act
opportunistically
(Gulati, 1991)
Trust is a risky
investment as it
extrapolates from
available info
(Luhmann, 1979)
In order to develop
trust, one needs to
take a risk first
(Strickland, 1958 in
Das & Teng, 1998)


(examples)
Trust is about
developing
commitment... of
giving and taking in
the future of the
promise that
something will be
forthcoming in
return (Vansian et al,
1998)
Trust enables actors
to mutually establish
specific expectations
about their future
behaviors (Lane and
Backmann, 1998)
Prior alliances
between firms is
likely to produce
trust (Zucker, 1986)
Trust is based on
expectations
embedded in the
history of trust
(Carlton & Lad,
1995)
A trust relationship
is only possible if
specific expectations
can be formed in one
hand fulfilled on the
other (Koenig &
Van Wijk, 1993)
One's belief and
expectation about
the likelihood of
having a desirable
action performed by
the trustee (Das &
Teng, 1998)


(examples)
Trust develops
gradually as the
parties move from
one stage to another
(Lewicki & Bunker,
1996)
I trust because you
trust (McAllister,
1995)
Where trust does not
exist, it may emerge
from formal and
informal processes
of transacting (Ring,
1997)
Trust begets trust
(Creed & Miles,
1996)
When one trust act is
reciprocated by
another, gradually a
durable basis for co-
operation can be
erected (Axelrod,
1984)
Through ongoing
interaction, firms
can learn about each
other and develop
trust (Shapiro, 1987)
Inter-firm trust is
incrementally built
as firms repeatedly
interact (Gulati,
1992)


Source: Vangen and Huxham 2003, page 9






















"Comprehensive"
Trust
Management

(ambitious
collaboration














"Small Wins"
Trust

(modest
collaboration)


Initiating the Trust Building Loop
(week trust)

Manage Risk as an integral part of trust
building


Sustaining the Trust Building Loop
(presence of trust)


Explore complexity of structure and aims e.g., Nurture, nurture, Nurture


by:
* Identifying with whom to network and build
trust
* Assessing sources of power and influence
* Exploring who can act
* Exploring differences in organizational
purposes
* Negotiating agreement on aims
* Exploring willingness and ability to enact the
agenda

Assess potential for achieving collaborative
advantage and whether associated risk can be
managed and (given choice) is worth taking


Adopt small win approach to trust building

Initiate trust with relevant partners and aims e.g.
by:
* Beginning to identify with whom to build trust
and
* Getting started by undertaking modest but
joint actions

Getting started without having to deal with all
aspects of trust building


Facilitate trust building cycle:
* Keep nurturing relationships by carefully
maintaining all aspect of the collaborative
process including communication, power
imbalances and credit recognition, joint
ownership, varying levels of commitment,
conflicting views on aims and agendas, and
so ....

Maintain a high level of trust to create the
basis for collaborative advantage


Manage instability

Manage dynamics and power imbalances e.g.
by:
* Keeping momentum when trusted members
leave the collaboration
* Putting efforts into fact tracking new
members into the trust building loop
* Recognizing the inevitable effect of power
imbalances on members actions
* Finding ways of ensuring hat shared power
is maximized

Sustain trust gained long enough to reach
and them work with a comfortable level of
trust


Figure 2-21. Managing Trust: Summary Implications for Practice. Source: Vangen and Huxham,
page 24


I











Table 2-32. Theoretical Approaches to Trust Development


Key Questions
How is trust
defined and
measured?
















At what level
does trust
begin?











What causes
the level of
trust (distrust)
to change over
time?


Behavioral
Defined in terms of
choice behavior,
which is derived
from confidence
and expectations;
assumes rational
choices measured
by cooperative
behaviors, usually
experimental games








Trust begins at zero
when no prior
information is
available. Trust
initiated by
cooperative acts by
the other, or
indication of his or
her motivational
orientation.



Trust grows as
cooperation is
extended or
reciprocated. Trust
declines when the
other does not
reciprocate
cooperation


Uni-Dimensional
Defined as confident
expectations and / or
willingness to be
vulnerable; includes
cognitive, affective,
behavioral intention
elements. Measured by
scale items where trust
ranges from distrust to
high trust. more frequently
measured in more face-to-
face and direct
interpersonal contexts.




Some argue that trust
begins at zero; others
argue for moderate-high
initial trust; initial distrust
is also possible. Factors
influencing initial trust
level may include
personality, cognitive and
asocial categorization
processes, role based
behavior, trustee
reputation, and institution-
based structures.
Trust grows with increased
evidence of trustee's
qualities, relationship
history, communication
processes, and relationship
type and structural factors.
Trust declines when
positive expectations are
disconfirmed


Two-Dimensional
Defined in terms of
confident positive and
negative expectations.
Involves measuring
different facets of
relationships.
Measured by scale
items where trust and
distrust are
interrelated but
distinct constructs;
each ranges from low
to high. Trust and
distrust begin at low
levels (given no
information about the
other).
Trust and distrust
begin at low levels
(given no information
about the other).










Reasons to trust and
distrust accumulated
as interactions with
other provide more
breadth and/or depth
or because of structure
of interdependence;
this could lead to
different combinations
of trust and distrust


Transformational
Defined in terms of
the basis of trust
(expected costs and
benefits, knowledge
of the other, degree
of shared values and
identity). Measured
by scale items where
trust is rated along
different qualitative
indicators of
different stages.





Trust begins at a
calculative-based
stage. Trust initiated
by reputation,
structures that
provide rewards for
trustworthiness and
deterrents for
defection




Trust grows with a
positive
relationships history
and increased
knowledge and
predictability of the
other and further
when parties come
to develop an
emotional bond and
shared values. Trust
declines when
positive expectation
are disconfirmed


Source: Lewicki et al., page 994









Table 2-33. Comparison of Types of Trust


Shapiro et al. 1992


Deterrence-based trust:
The potential costs of
discontinuing the relationship or
the likelihood of retributive
action outweigh the short-term
advantage of acting in a
distrustful way.
Knowledge-based trust:
Knowing the other so as to be
able to predict his or her behavior


Identification-based trust:
Fully internalizing the other's
preferences; making decisions in
each other's interest


Lewicki and Bunker 1995,
1996
Calculus-based trust:
A.. calculation.. of the
outcomes resulting from
creating and sustaining a
relationship relative to the
costs of maintaining or
severing it.
Knowledge-based trust:
Knowing the other
sufficiently well so that the
other's behavior is
predictable.
Identification-based trust:
Identification with the
other's desires and
intentions; mutual
understanding so that one
can act for the other.


Rousseau et al. 1998


Calculus-based trust:
Based on rational choice and
characteristic of interactions
based on economic exchange.
Derives not only form the
existence of deterrence but
because of credible
information regarding the
intentions or competence of
another.


Relational trust:
Derives from repeated
interactions over time.
Information available to
trustor from with the
relationship itself forms the
basis. Reliability and
dependability give rise to
positive expectations of the
other; emotion enters into the
relationship.


Source: Lewicki et al. 2006 page 1007
















Identification-Based Trust Develops


Stable Identification-Based Trust
A few relationships


Knowledge-Based Trust Develops


Stable Knowledge-Based Trust
Many relationships


Calculus-Based Trust Develops


Stable Calculus-Based Trust
Some relationships


Time


Figure 2-22. Stages of Trust Development. Source: Lewicki et al. 2006, page 1008


Deterrence- Calculus-based
based Suspicious, but
No trust at all, but benefits of trust
distrust outweigh costs


Knowledge-
based
Positive
confidence based
on prior
predictability


Relational-based
A stronger positive
confidence based
on shared
affection


Identification-
based
Extremely positive
confidence based
on converged
interests


4 Threshold of Real Trust-


Confident Trust

t t


Strong Trust Complete Trust

t


Macro-level evidence


Relationship-specific evidence


Figure 2-23. The Continuum of Degrees of Intra-Organizational Trust. Source: Dietz and Hartog
2006, page 563


Distrust


Low Trust











Input


Figure 2-24. A Depiction of the Trust Process. Source: Dietz and Hartog 2006, page 564









Table 2-34. Summary of Key Journal Articles
Author Description
Deutsch (1958) For trust to occur there is a requirement of a need or a motivation to
engage in risk taking behavior that could bring about an unwanted
consequence.
Rotter (1967, 1971 Rotter found four classes of variables important for analysis, behavior
and 1981) potential, expectations, values reinforcement value and situations.
Zand (1972) Explained the spiral-reinforcement relationship between trust,
information, influence and control, and its impact on decision making in
group situations.
Shapiro (1987) To protect against vulnerabilities in social relationships with various
trustees (i.e., agencies, banks, insurance companies, hospital, etc.)
individual trustors rely on "guardians" of trust.
Sitkin and Roth Explored the effectiveness of legalistic remedies for trust and distrust.


(1993)
Hosmer (1995)


McAllister (1995)



Mayer et al 1995

Whitener (1997)
Kramer (1999)


Vangen and Huxham
(2003)
Elangovan et al. 2006

Lewicki et al. 2006
Dietz and Hartog
(2006)

Schoorman, Mayer,
and Davis (2007)
Colquit et al. (2007)


Compares a number of definitions to identify its common elements and
form a new definition adequate for various fields.
Found two principle forms of interpersonal trust, cognitive-based and
affect-based trust. Cognitive based trust refers to reliability and
dependability and affect-based trust refers to emotional bonds and
genuine care for each others well being.
Defined benevolence, ability and integrity as the antecedents of
trustworthiness.
Trust influences the effectiveness of HR practices.
"Trust entails a state of perceived vulnerability or risk that is derived
from individual's uncertainty regarding the motives, intentions, and
prospective actions of others on whom they depend".
Trust was important for fostering and nurturing the collaboration
process in a competitive advantage.
A trustor is willing to tolerate a maximum of two violations before trust
is eroded.
Discussed how trust is defined measured, and how it changes over time.
There is much confusing when using trust measures and it is important
that these measures relate direct to the definitions implied in the
research.
Trust was part of a relationship and not a trait like quality.

Trust has a strong relationship with work performance in the
organizations.




























Figure 2-25. Antecedents of Virtual Collaboration. Source: Peters and Manz 2007, page 120









Trust Information



Structural Information Belief Information

Legal l Honesty

Assurances Competence

Security Predictability

SIdentity Benevolence
Integrity

SConfidentiality
SBest Practice

Figure 2-26. Taxonomy of Trust Information. Source: Coetzee and Eloff 2005, page 501












Behavioral
External Factors Beliefs Attitude Intentions Outcome Relationship Devilment


lb.
la. Internet usage 1c.
Prior experience beliefs Attitude
toward use of
using the
internet Perceived vendor Web
usefulness of site
Web vendors

Perceived ease 5. Relationship Development
of use of Web
site


2a. 2b.
Prior experience Trusting beliefs
in internet 3. Intention to 4. Forms of Trust Nature of
exchange Belief in the use vendor Visit vendor dependence mechan- relation-
relationship benevolence of Web site Wed site on Web isms ships
vendor
web vendor
Communication
affecting Belief in the
internet integrity of web
exchange vendor
relationship
Belief in the 2c.
Disposition to competence of Trustworthy of
trust web vendor Web vendor

Institution- Belief in the
based trust predictability of
web vendor



Figure 2-27. Components of the Conceptual Framework in the Context of E-commerce. Source:
Salo and Karjaluto 2007, page 612 (based on Salem et al. 2005)









Internal Factors


Figure 2-28. Developed Research Model for Investigating Online Trust. Source: Salo and
Karjaluto 2007, page 616





Table 2-35. Summary of Trust in Virtual Environments


Author
Penteli and Duncan
(2004)

Peters and Manz (2007)

Brown et al. 2004

Coetzee and Eloff
(2005)
Salo and Karjaluto
(2007).


Description
"The paper suggest that impressionistic behavior conveyed through
computer-mediated communication should be included in our
understanding of trust within virtual teams".
The antecedents of effective collaboration in virtual teams are trust,
depth of relationship and shared understanding.
The trust propensity of individuals impacts the effectiveness of
virtual collaboration.
Web services providers prefer to reduce risk by interacting with
honest, competent, predictable and benevolent partners.
The internal and external trust variables in online environments
influence the decision to buy of a web site visitors, and illustrate the
importance of third parties for building long lasting relationships.









Table 2-36. Summary of Trust and Psychological Trust
Author


Description


Robinson (1996) A breach is a psychological contract is less pronounced by an
employee, if there is there was high initial trust in the employer.
Robinson and Rousseau It is important to illicit the psychological contract of new employees.
(1994)












1. Orientation Phase


Relationship Review


Categorization
Association, Members
& Trusted Third Party

SRequired Dependency

What do I know about the
trustee?


Trustor Reviews
Existing Trust
System

What is in place to
protect me?


S Unacceptable Risk

S2. Evaluation Phase


I Acceptable Risk
L~iiI


Initial Reaction to Trusting Action is Created By Trustor Trust Disposition (Initial Trust)
Traits, past experiences, motives, values, interests and culture influence trust disposition. Trust disposition creates a filter in which the
trust process is viewed. Trust Disposition can vary according to context.
Trustor Determines Trustworthiness of the Trustee (Trusting Belief)
Trustworthy antecedents (i.e., competency, integrity, benevolence) are influenced by context and expectations.
VI


-- No, Trustee is Not Trustworthy


S Yes, Trustee is Trustworthy


Trustor Considers Other Factors Effecting Trusting Action (Trust Alignment)
These factors include context, alignment of interests and values, open communication, frequency of communication, quality of information sharing and
perceived power & control.


Negative Alignment


Positive Alignment


Trustor Makes Decision on Trusting Action Trust (Trust Intention)
The trustor decides to become vulnerable and be exposed to risk.


No, trusting action is not worth the risk


Yes, trusting action is worth the risk


3. Action Phase

Trustor Engages in Trusting Action (Trust Action)
Degrees of trust action defined by deterrence, calculus, knowledge, relational, identification.

4. outcome e Trustee Reacts to the Trusting Action of the Trustor
4. Outcome Phase

Trustor Evaluates Outcomes of Trusting Action and Trustee's Intention
The outcome of the trusting action will be assessed against the original positive expectations projected on the trustee as well as the trustee's intentions.


Negative Outcome Negative Intention

Trust is Weaken


Positive Intention Positive Outcome


Trust is Strengthened


Figure 2-29. Integrated Model of the Trust Process.


Subjective and
Hierarchical
Perception
Of Trustor


Trust is
Required to
Begin or
Improve an
Exchange
Relationship




Do I need trust?


Trustee
Defined







Who or what am I
trusting?


Trustor Defines
and Projects
Expectations,
Outcomes and
Evaluation
Criteria on
Trustee

Why am I trusting?
What is my
payoff?











Trustor: Different Forms


Figure 2-30. Different Forms of Trustor and Trustee Relationships


Deterrence- Calculus-based
based Suspicious, but
No trust at all, but benefits of trust
distrust outweigh costs


Knowledge-
based
Positive
confidence based
on prior
predictability


Relational-based
A stronger positive
confidence based
on shared
affection


Identification-
based
Extremely positive
confidence based
on converged
interests


4 Threshold of Real Trust-


Confident Trust

t t


Strong Trust Complete Trust

t


Macro-level evidence


Relationship-specific evidence


Figure 2-31. The Continuum of Degrees of Trusting Action. Source: Dietz and Hartog 2006,
page 563


Distrust


Low Trust


Trustee: Different Forms









Table 2-37. Examples of Cyclical Development of Trust
Authors Example
Lewicki & Bunker, 1996
Lewicki & Bunker, 1996 Trust develops gradually as the parties move from one stage to
another
McAllister, 1995 I trust because you trust
Ring, 1997 Where trust does not exist, it may emerge from formal and informal
processes of transacting
Creed & Miles, 1996 Trust begets trust
Axelrod, 1984 When one trust act is reciprocated by another, gradually a durable
basis for co-operation can be erected
Shapiro, 1987 Through ongoing interaction, firms can learn about each other and
develop trust
Gulati, 1992 Inter-firm trust is incrementally built as firms repeatedly interact
Source: Vangen and Huxham 2003, page 9



Table 2-38. Key Performance Indicators in the Construction Industry
Author Profit Cost Schedule Quality Safety
Menches and
Hanna, 2006
Hughes et al., -
2004
Cox et al, 2003
Chua et al.,
1999
Parfitt et al.,
1993
Sandivo et al.,/
1992










Table 2-39. Use of Leadership Approaches in Construction
Au r Behavior/ Transformational & Emotional Competency/
Author
Style Transactional Intelligence Skills
Muller and Turner 2007
Liu and Fang 2006
Skipper and Bell 2006
Bulter and Chinowsky
2006
Chan and Chan 2005
Giritli and Oraz 2003
Odusami et al. 2003
Spatz 1999
Rowlinson et al. 1993










Table 2-40. Leadership Skills for Project Managers in Construction
Muller and Skipper Butler and Liu and Chan and Odusami Spatz
.Chan and Odusami Spatz
Skills Turner and Bell Chinowsky Fang
2007 2006 2006 2006
Builds Trust
Communicates
Clearly
Aligns Values
Emotional
Awareness
Motivates Staff
Learns
Continuously
Improve
Continuously
Creates
Opportunities
Listen
Effectively
Shares Work
Experiences
Mentors and
Coaches
Shares Power
Shares
Technical
Expertise
Creates a Vision
Decision
Making
Team Building









Table 2-41. Core Competencies of Project Managers in Construction
Author Situational Relational Technical Leadership
Cheng et al. 2007
Telem et al. 2006
Menches & Hanna
2006
Dainty et al. 2005
Chan et al. 2004
Dainty et al. 2004
Odusami 2002
Spatz 2000
Edum-Fotwe &
McCaffer 2000
Dulaimi and Langford
1999
Gushgarl et al. 1997
Ceran et al. 1995
Rwelamila 1993
Goodwin 1993










Table 2-42. Benefits of Building and Maintaining Trust in Construction
Minim s Relationship Improves Minimizes Improves
Minimizes Improves Improves
Authors M /Team Project Iro Perceived
Authors Conflicts / Tea Project Cooperation eivd Communication
Building Performance Risk
Lui et al.
2006
Jin and
Ling 2005-
2
Jin and
Ling 2005
Ngowi and
Pienaar
2005
Kadefors
2004
Huemer
2004
Vaaland
2004
Zaghloul
and
Hartman
2003
Wong et al.
2000









Table 2-43. The Antecedents of Trustworthiness in Construction
Liu and Jin and Jin and
u ad Lui et n an n and Huemer Vaaland Wong et
Antecedent Fang al. 2006 Ling 2005- Lingal. 2000
al. 2006 2004 2004 al. 2000
2005 2 2005
Reputation
Competency 4 4
Openness
Risk 9 9
Integrity
Concern
Company
Similarity
Intuition
Asset
Specificity
Power Sharing 4
Cooperation 4 4 4 4
Trust Building
Tools
Dominant
Relationship
Project Phases 1 1
Predictability '1



Table 2-44. Partnering Success Factors in Construction
Relational
Author Trust Openness Competency Teamwork
Bonding
Anvur and
Kumaraswamy
2007
Wong and
Cheung 2005
Wood and
Ellis 2005
Wong et al.
2005
Wong and -
Cheng 2005
Cheung et al.
2003
Lazar 2000










Table 2-45. Success Factors of Teams in Construction
Open Comm- Clear Shared Commitment to Inter-
Author Trust
unication Objectives Values improve dependency
Fong and Lung
2007
Baiden et al.
2006
Chow et al.
2005
Kumaraswamy
et al. 2005
Rahman and
Kumaraswamy
2005
Varvel et al.
2004
Spatz 2000



Table 2-46. Benefits of Using Technology in Construction
Improves Captures Improves
Improves Captures Improves Improves Improves Lowers Improves
Author Comm- Learning Information
Schedule Cost Quality Risk Gathering
unication Gathering
Nithithamyong
and
Skibniewski
2006
O'Connor and
Yang 2004
Reinhardt et al.
2004
Chan and
Leung 2004
Liberatore et
al. 2001
Saad and 1
Hancher 1998










Table 2-47. Factors of Success for Using Technology and Virtual Collaboration in Construction
Shared Culture & Shared
Author Trust Collaboration Commitment r
Language Vision
Uden and
Naaranoja 2007
Chiu et al. 2006 1 '
Nuntasunti and
Bernold 2006
Rezgui 2006 d
C liio\\ sl, and
Rojas 2003
Davy et al. 2001 d
Thorpe and Mead
2001


Table 2-48. Relationship-Based Trust Framework


Categories
Result-oriented objective measures








Result-oriented subjective measures






Relationship-oriented objective measures



Relationship-oriented subjective measures


Items
* Time performance
* Cost performance
* Profit and financial objectives
* Scope of rework
* Safety performance
* Environmental performance
* Productivity
* Pollution occurrence
* Quality performance;
* Professional image establishment;
* Client's satisfaction;
* Customer's satisfaction;
* Job satisfaction; and
* Innovation and improvement.
* Litigation occurrence and magnitude
* Dispute occurrence and magnitude
* Claim occurrence and magnitude
* Introduction of facilitated workshop
Trust and respect
* Effective communications
* Harmonious working relationship
* Long-term business relationship
* Top management commitment
* Employee's attitude
* Reduction of paperwork


Source: Yeung et al. 2009, page 60










Owner Trust
Competence Trust
Integrity Trust
Intuitive Trust

Satisfaction with working P
S-Projt
Relationships
Contractor Trust
Competence Trust
Integrity Trust
Intuitive Trust

Figure 2-32. Pinto et al. 2008 Trust Model. Source: Pinto et al. 2008, page 5


System-based Trust
Organizational policy
Communication system
Contracts and agreements

Cognitive-based Trust
Interaction
knowledge


TRUST


Affect-based Trust
Being thoughtful
Emotional investments
Figure 2-33. Wong et al. 2008 Trust Model. Source: Wong et al. 2008, page 824


ect Success





























Figure 2-34. Jin et al. 2005 Trust Model. Source: Jin et al. 2005, page 691


Table 2-49. Processes in Construction That Require Trust
Construction Subject Area Author
Cost Containment Construction Industry Institute (1993)
General Contracting Cheung et al. (2008)
Adoption of Relational Contracts Ling et al. (2006)
Successful Partnering Wong and Cheung (2005)
Adoption of Risk Management Tools Dikmen et al. (2008)
Successful Learning Organizations Chinowsky et al. (2007)
Effective Value Engineering Shen and Liu (2003)
Resolving Change Order Disputes Chen (2008)
Improved Procurement Procedures Pesamaa et al. (2009)
Improved Supply Chain Management Davies (2007)
Successful International Projects Han et al. (2007)
High Performing Teams Baiden et al. (2006)
Adopting of Information Technology Nikas et al. (2007)
Effective Proiect Management and Leadership Turner and Muller (2005)









CHAPTER 3
METHODOLOGY

A review of the construction literature related to trust research reveals a number of

common threads of research methodologies. Ling et al. (2006) used a literature review to develop

a questionnaire administered to construction professionals to identify the factors related to

relational contracting. Statistical analysis was carried out using SPSS and found support for the

researcher's core conceptualization of relational contracting (construction contracts need to

provide motivating incentives to be less adversarial).

Wong et al. (2008) used literature review findings to develop a framework regarding the

attitude towards trust in construction contracting. The data for the research was collected through

a questionnaire survey made up of questions based on the trust framework. The survey used a

seven-point Likert scale to evaluate 23 statements. The construct of the trust framework was

tested by a structured equation model. The results showed the varying importance of the different

elements of the proposed trust in construction contracting framework. The framework also

advances the understanding of trust in construction contracting and illustrated different elements

that need to be nurtured in order to build trust (Wong et al. 2008).

Pinto et al. (2008) used an extensive literature review of construction and non-construction

research to develop a conceptual framework for trust on construction projects. The elements in

the framework also acted as research hypothesis and were the basis for formulating survey

questions. The survey was administered to construction professionals and the results were

analyzed using a correlation matrix. The study offered a new perspective on the importance of

trust and inter-organizational relationships while serving as the starting point for future empirical

research regarding the importance of the antecedent factors of trust on construction projects

(Pinto et al. 2008).









Jin and Ling (2005) used an extensive literature review of construction and non-

construction literature to formulate a research framework and trust model. The framework

components also acted as research hypotheses. The hypotheses were tested by an industry wide

questionnaire survey. Using the survey results, the framework and model of trust were tested

using statistical procedures. The model and framework were refined and validated by in-depth

interviews with five industry experts. Jin and Ling (2005) suggested that construction clients,

consultants, and contractors may use the model and framework to foster trust and build

cooperative relationships. Initial reactions to the trust building model have been positive.

The research design presented was consistent with the research designs published in

construction management journals. Figure 3-1 outlines the different sections of the methodology.

The first step of the methodology was to use the literature review findings to construct a

comprehensive framework the encompassed factors found on construction projects that could

impact trust between contracting parties. The second step tested the framework by the

development of a hypothetical scenario illustrating how the results of the framework could be

used. Due to the extensiveness of the framework and the difficulty to test the numerous factors

described in the framework, a preliminary survey of construction professionals was conducted to

prioritize the factors. With the results of the preliminary survey, the fourth step was to develop

research questions from the prioritized factors. The fifth step composed a survey question for

each factor in the prioritized trust framework. Conducting a targeted survey of construction

professionals was the sixth step. The following step was to complete statistical analysis on the

survey results. This was followed by the development of a preliminary trust model and validating

case studies. Lastly, the preliminary trust model was revised in accordance to the case study

results.









3.1 Framework of Trust Factors

The literature review findings were used to construct a comprehensive framework

containing a number of factors found on a construction site that could impact trust. The

framework focused mainly on factors related trust as opposed to leadership because effective

leadership was found to be dependent on high levels of trust. The factors in the framework

included communication methods, document types, management skills, KPIs, stakeholders,

contract types, elements of different construction phases, and survey respondent characteristics.

Table 3-1 provides a complete list factors.

3.2 Scenario Test

In order to test the effectiveness and the applicability of the framework, a hypothetical

scenario test was created. The goal of the scenario test was to illustrate how the factors in the

framework could be utilized. The results showed that the factors in the framework play an

important in creating trust between contracting parties on construction projects. The scenario

illustrated the value in identifying each factor as a support or challenge to trust. Appendix A

provides an example of the scenario test.

3.3 Prioritizing the Factors

The trust factor framework shown in in Table 3-1 lists over 150 trust factors. After further

analysis and consideration it was decided that the number of trust factors in the framework

needed to be prioritized. In order to prioritize the factors a survey was conducted at the M.E.

Rinker, Sr. School of Building Construction's Career Fair in October 2008. Appendix B displays

a copy of the survey used at the Career Fair. The survey asked survey participants to us a five-

pint Likert scale to rank 12 categories of factors in terms of their importance to building trust on

construction projects. Table 3-2 lists the categories and provides a description of each category.

The 12 trust factor categories included: personal characteristics, type of stakeholder, work









experience, communication method, types of documents, number of change orders, performance

indicators, claims on project, contract type, project characteristics, project type, and perceived

trustworthiness. Additionally, the survey asked each survey respondent to rank the importance of

trust in each phase of the construction process (pre-construction, design, procurement,

construction, and close out).

In total 39 construction professionals attending the M.E. Rinker, Sr. School of Building

Construction's Career Fair completed the survey. Figures 3-2 and 3-3 describe the demographic

characteristics of the survey respondents. A majority, 94% of the survey respondents was male

while 6% were female (Figure 3-2). Fifty-four percent (54%) of the survey respondents were

project managers, 3% were owners, 17% were vice-presidents and 26% identified themselves as

"other" (Figure 3-2). In terms of years of work experience, 34% of survey respondents had 5 to

10 years of experience, 30% had less than 5 years of work experience, 21% had greater than 20

years of work experience and 15% had 11 to 20 years of work experience (Figure 3-2). A

majority, of survey respondents worked for general contractors (60%), performed commercial

construction work (68%), and worked for companies that had an annual volume greater than $50

million (43%) (Figure 3-3).

The survey asked construction professionals to rank the categories in terms of importance

to building trust on construction projects. Figure 3-4 displays the results of the trust factor

rankings. The results show that the most important categories pertaining to trust on construction

projects, as perceived by the survey respondents, was trustworthiness closely followed by

communication methods, claims on the project, key project performance indicators and the work

experience of individuals on the project.









The survey respondents were also asked to indicate the importance of trust in each

construction phase. The survey results showed (Figure 3-5) that trust was almost equally

important in each construction phase. The construction phase had the highest result (4.34),

followed by the procurement phase (4.33), the pre-construction phase (4.28) the design phase

(4.08), and the close out phase (4.05).

3.4 Research Questions

The research questions evolved from the main research focus discussed in section 1.3. The

main research focus was to identify the factors on construction projects that impacted trust

between contracting parties. The research questions are described in Table 3-3.

3.5 Survey Instrument

Survey design and preliminary planning. The first steps in designing a survey

instrument are drafting the preliminary sampling plan, preparing the questionnaire outline,

planning the preliminary operations and developing the preliminary analysis (Czaja and Blair

2005). The survey is organized according to the research questions and their sub-factors

described in the previous section. Each sub-factor had its own research question and was worded

in accordance with the trust literature (Dietz and Hartog 2006). The survey was administered

over the telephone with email and fax follow-up when necessary. The telephone survey was

administered by the Florida Survey Research Center at the University of Florida. The Florida

Survey Research Center also provided guidance on the wording of the survey questions.

Sample selection. Defining the population and selecting or constructing the sampling

frame are the two important components of creating probability samples. The sample selection

includes the sample size, selecting the sample, managing the sample, re-sampling the sample and

selecting the respondents (Czaja and Blair 2005). Defining the units of the analysis and the

boundaries of the sample population (demographic or geographic) are the key components of









defining populations for survey samples (Czaja and Blair 2005). This study focused on

construction professionals (project managers and executives) working for large U.S. construction

companies. Sampling frames are a list of resources that contain elements of the defined

population. The sampling frame used in this study was the 2008 ENR list of the top 400

Contractors in the United States. The goal of the sample size in this research was 50 survey

participants which is consistent with the construction management literature (Jin and Ling 2005;

Cox et al. 2003; Jin and Ling 2005).

Final survey instrument. The survey instrument was tested by experienced construction

professionals associated with the M.E. Rinker Sr., School of Building Construction at the

University of Florida. After the survey was revised was submitted to the Institutional Review

Board (IRB) at the University of Florida for approval. Appendix C provides a copy of the final

survey. The final part of the survey instrument design was the coding and filing of data. The

goals of this section were to reduce the data by editing, coding and cleaning data where

necessary and to prepare the data for statistical analysis. All data entry was checked for quality,

verification and validation. In total 56 surveys were completed over the telephone. In an effort

increase the number of survey completions, a letter from Dr. Issa, Director of Graduate and

Distance Education Programs at the M.E. Rinker, Sr., School of Building Construction,

University of Florida was sent via fax and e-mail to targeted individuals within the sample.

Appendix D provides a copy of Dr. Issa's letter. This action resulted in an additional 10

completed surveys for a sample size of 66.

3.6 Statistical Analysis and Preliminary Trust Model

The data generated by the survey was categorical and therefore required statistical analysis

appropriate for categorical information (Agresti and Finlay 1997). Descriptive statistics were

used to describe the demographic characteristics of the survey respondents. Non-parametric









correlation analysis was used to identify linear relationships between the factors. The chi-squared

goodness-of-fit test was used to determine which variables strengthened and weakened trust.

Chi-squared test of independence was used to identify the associative power of the factors.

Logistic regression was used to identify the predictive power of the factors detailed in the survey

instrument. The results of the statistical analysis were used to develop a preliminary trust model.

3.7 Validating Case Studies and Revised Trust Model

"In order for research to be considered scientific, the obtained information (data) must be

valid and reliable," (Sommer and So mmer 1997, page 3). Validity refers to the research

producing credible results. Research validity can be considered internally valid and/or externally

valid. Internal validity is the degree to which a procedure measures what it is supposed to

measure and external validity refers to the generalizability of the findings (do the results extend

beyond the immediate setting or situation). Additionally, the research should be reliable,

implying repeatability of the findings (Sommer and Sommer 1997).

The validating cases studies were designed and completed based on the parameters set out

in Yin (2003). A case study is an empirical inquiry that enables a researcher to cover contextual

conditions that are important in their area of study (Yin 2003). The case studies were used to

validate the trust model developed by the statistical analysis. The design of the validating case

studies included consistent units of analysis and criteria for interpreting the findings. The studies

made use of good questions, good listening and an adaptive and flexible approach. The

conversations were guided rather than structured and followed an opened ended nature. The goal

of the cases studies was to explain the survey findings (Yin 2003). The preliminary trust model

was validated and revised based on the case study findings.










Methodology

Framework of Trust
Factors
IV


Scenario Test


Prioritizing Trust
Factors

Research Questions

Survey Instrument &
Survey Administration

Statistical Analysis

Preliminary Trust
Model

Validating Case
Studies

Revised Trust Model


Figure 3-1. Overview of Methodology











Table 3-1. Framework of Trust Factors
Trustor Trustor Trustee Trustee Communi- Project Project Project Phases Trustworthiness
Character- Character- cation Indicators Character-istics Factors
istics istics


Descripti Personal
on Gender
Age
Exec-
utive Race
ENR top Ethnicity
400 Church
contract- (religion)
or Native
USA
language
education
Leisure
(golf, tennis,
hunting,
fishing, etc.)


Personal
Gender
Age
Race
Ethnicity
Church
(religion)
Native
language
education
Leisure (golf,
tennis,
hunting,
fishing, etc.)


KPIs
Productivity
Safety
Cost
Unit Cost
Quality
Profitability
Time


General
Contract Value
# of Subs
Duration
Procurement
(Negotiated, Bid)
Complexity
Dependency
Site Conditions
Accessibility (Space)
Weather
LEED Certified


External
Owner
Architect
Engineer
Construction
Manager
Sub-
Contractor
Supplier and
Vendor
Consultant


Literature
Risk protection
Reputation
Familiarity
(architect, owner,
etc)
Past experiences
Referral
Personal trust
Stance
Competence
Predictable
Reliable
Benevolent
Integrity
Similar interests
Similar values


Method
Face-to-face
Telephone
Cell Phone
E-mail
Letters
Pictures
Videos
BIM
Project
Website
PDF
documents


Pre-
Construction
Project scope
Environmental
1 impact
Site survey
Existing
survey
Hazardous
substances
Geotechnical
investigation
Permits
Preliminary
estimate
Preliminary
schedule
site logistics
planning












Table 3-1. Continued
Trustor Trustor Trustee Trustee Communi- Project Project Project Phases Trustworthiness
Character- Character- cation Indicators Character-istics Factors
istics istics


Work Internal Work Documents Claims Contract Type
Position/Role Project Position/Role Contracts Acceleration Lump Sum
Annual Manager Annual Specifications Construction Unit-Plus
Drawings changes
compensation Superintend Compensation hop drawings Change of sc Cost-lus
Shop drawings Change of scope
Years of ent Years of Permits Cumulative Cost-Plus Max.
experience Foremen Experience Job diary impact of change
Professional Engineer Professional Job site orders
designation Laborer Designation activity log Defective or
Control logs deficient contract
Skill level Safety Skill Level Purchase documents


orders Delay caused by
Field questions owner or
Submittals owner's agent
Transmittal Different site
letters conditions than
Subcontract described in the
modifications contract
Schedules document
Estimates, Unresponsive
As built contract
drawings administration
Warranties Weather


Design Other
Phases Financial
Estimate alignment (liens,
Scheduling retention,
Value progress
engineering payments, timing
Constructabili of payments)
ty review Social alignment
Site logistics (leisure activities)
LEED Corporate
compliance alignment (risk
analysis,
marketing,
bidding,
negotiation,
workload of
company)


Procurement
Estimating
Scheduling
Quality
Control











Table 3-1. Continued
Trustor Trustor Trustee Trustee Communi- Project Project Project Phases Trustworthiness
Character- Character- cation Indicators Character-istics Factors
istics istics


Technology
BIM
Tablet
computers
Computerized
schedules
Computerized
estimates
E-mail
Internet
Project
website


Change Orders
Design change
notice
Design change
proposal
Design change
verification
Engineering or
architectural
change notice
Field change
order
Field order
Impact
analysis


Technology
BIM
Tablet
Computers
Computerized
Schedules
Computerized
Estimates
E-mail
Internet


Safety
Management
Accident
prevention,
Substance abuse
Personal
Protection
Hazardous
material
Safety plan
Accident
Investigation
Reporting
requirements


Quality
Management
Standards
Testing
Inspections
Rework
Documentation
Corrections


Organization
Years of
operation
Type of
construction
Project size
Project
complexity
Revenue
Location of
work


Project
Close-Out
Construction
close out
Financial
close out
Contract close
out
As-built
drawings
Warranties
Test reports
Permits
Close-out log
PM's close
out
Punch list
Certificates of
completion


Organization
Years of
Operation
Type of
Construction
Project Size
Project
Complexity
Revenue
Location of
Work


Other
Drawings
Specificatio
ns
Reports
Computerize
d Estimate
Computerize
d Schedule
BIM
Other
Technology
(e-mail,
website,
voice mail,
video
conferencing
,etc)


Project Type
Commercial
Industrial
Heavy Civil
Residential
Healthcare
Government
Education
Retail
Entertainment
Hotels
Hospitals










Contract Documents
Complete contract
Complete drawings
Complete
specifications
Availability of
estimating resources


Personal
Gender
Age
Race
Ethnicity
Church (religion)
Native language
education
Leisure (golf,
tennis, hunting,
fishing, etc.)











Table 3-1. Continued
Trustor Trustor Trustee Trustee Communi- Project Project Project Phases Trustworthiness
Character- Character- cation Indicators Character-istics Factors
istics istics
Other
Labor
Availability
Labor Turnover
Equipment
Material
# of Change
Orders
# of Claims
Constructability
Review
PM Leadership
Teamwork
SPartnering
Permits
Financing










Table 3-2. Categories of Trust


Categories of Trust Factors
Personal Characteristics
Type of Stakeholder
Work Experience
Communication Method
Type of Document
Number of Change Orders
on Project
Key Performance Indicators
Claims on Project
Contract Type
Project Characteristics
Project Type
Perceived Trustworthiness


Gender


Female,
6%


Other,
26%


Male, 94%


Description of Categories
gender, age, education
owners, architects, engineers, suppliers
number of years, skill level
face-to-face, telephone, e-mail, collaborative technologies
paper documents, electronic documents, estimates, schedule
low number versus low number of change orders

cost, schedule, profit, quality
number
lump sum, unit-plus, etc
scale, complexity, space constraints
government or private
reliability, competence, cooperation, integrity, benevolence


Position

Owner, 3%


Years Of Experience


>20, 21%
VP, 17%
11-20,
15%


PM, 54%


-<5, 30%


5-10, 34%


Figure 3-2. The Gender, Position and Years of Experience of Survey Respondents


Company Type


Other, 6%
GC & CM,
25%

CM, 9%


3C, 60%


Construction Type
Com & Other, 9%
Ind. 7%

Heavy Civ.,
12%


Ind., 3%


Annual Volume

<$50m,
20%


$50m-
$99m, 9%


Dom.
69%


>$500m, a'
43%


$100m-
$499m,
28%


Figure 3-3. The Survey Respondent's Company Type, Construction Type and Annual Volume














Trustworthiness Factors 4.21

Communication Methods 3.9

Claims on Project 3. 85

Key Performance Indicators 3 77

Work Experience 3.74

Document Type 3.5)

Type of Stakeholder 3.5z

Contract Type 3.24

Number of Change Orders 3.16

Project Characteristics 3.11

Personal Characteristics 3.03

Project Type 2.95

0 1 2 3 4 5


Figure 3-4. Ranking of Trust Factor Categories




Pre-Construction
Phase 4.28

Design Phase 4.08


Procurement Phase 4.33


Construction Phase 4.34


Close Out Phase 4.05


3.9 4 4.1 4.2 4.3 4.4


Figure 3-5. Ranking of the Need of Trust in Different Phases of Construction










Table 3-3. Research Questions


Research Question
Does the communication
method impact trust?
Does the document type
impact trust?


Does the perceived
trustworthiness of the
individual impact trust?
Do KPIs impact trust?
Does the type of
stakeholder impact trust?
Does the contract type
impact trust?
Do the pre-construction
and/or design phase
impact trust?
Does the construction
phase impact trust?
Do management functions
require building trust?
Do demographic
characteristics impact
trust?


Sub-Factors
Face-to-face, email, telephone, website, BIM, video conferencing

Electronic, paper, signed contracts, complete drawings and
specifications, Building Information Model (BIM), project
website, electronic schedules and estimates, digital pictures and
videos
Pay on time, familiar, minimize risk, competent, reliable, caring,
similar values, socialize with, collaborate, not litigious, values,
similar skill set, years of experience
Productive, safety, costs, quality, profitable, schedule
Owner or owners' representative, designer, supplier/vendor,
construction managers, subcontractors
Lump sum contract, unit-price contract, cost-plus-fee contract

Pre-construction phase, constructability review, BIM to visualize
construction projects, value engineering

Change orders, a corrective change from a neutral 3rd party,
adequate and timely answer to a RFI, negotiation
Leadership, negotiation, claims, information technology, teams,
communication, information sharing
Company type, construction type, role, volume, age, education.
Years of experience, gender









CHAPTER 4
RESULTS

This section describes the results of the research. Descriptive statistics were used to

summarize the demographic characteristics of the survey respondents and the overall survey

findings. Spearman's rho nonparametric correlations were used to identify linear relationships

between the trust factors. Chi-squared for goodness-of-fit test was used to identify whether the

factors were perceived to strengthen or weaken trust on construction projects. The chi-squared

test for independence was used to identify associations between the trust factors and the survey

respondent characteristics. Logistic regression was used to build models and test the model's

predictive power.

4.1 Survey Respondent Characteristics

In total, 66 construction professionals completed the survey. Out of the 66 survey completions,

56 were completed over the phone and 10 were completed via fax or e-mail. Figure 4-1 shows

that 27% of the survey respondents were employed by companies that engaged in commercial

construction; 17% in heavy civil; 6% in industrial and 50% in commercial combined with at least

one additional construction type. Figure 4-2 shows the that 57% of the survey respondents

worked for general contractors, 17% for design/build construction companies, 20% for

construction management companies and 6% for other types of construction companies. Figure

4-3 illustrates that 64% of the survey respondents worked for construction companies with

annual volumes between $100 million and $499 million. Figure 4-4 points out that 33% of

survey respondents were owners or CEOs, 36% VPs or directors, 23% project manager and 6%

other. Figure 4-5 illustrates that 70% of the survey respondents had more than 20 years of

construction experience while 14% had 16 to 20 years of experience, 6% had 11 to 15 years of

experience, 2% had 5 to 10 years of experience and 8% had less than 5 years of experience.









Figure 4-6 shows that 59% of the survey respondents had a bachelor's degree, 30% a master's

degree, 2% an associate degree, 6% some college and 3% high school. Figure 4-7 shows that 5%

of the survey respondents were of the age 30 or younger, 15% ages 31 to 40, 32% ages 41 to 50,

36% ages 51 to 60 and 12% over the age of 60. Figure 4-8 illustrates that 92% of the survey

respondents were male and 8% were female. In summary, the survey respondents were highly

educated males holding senior positions with considerable experience in the construction

industry.

4.2 Survey Results

A total of 65 trust factors were tested. The trust factors were grouped into nine categories that

included: communication method, document type, trustworthiness, key performance indicator,

stakeholder, contract type, pre-construction and design phase, construction phase and

management. The survey respondents were asked to rank each factor in relation to building trust

on a 5-point Likert scale. In the communication method category face-to face communication

was most preferred by the survey respondents followed by telephone, e-mail, video

conferencing, BIM and project website (Figure 4-9). This points to the importance of face-to-

face communication on construction projects and supports the notion that the construction

industry is a laggard when it comes to adapting new technologies. The most preferred document

type was a signed contract followed by complete contract documents, electronic schedule and

estimates, digital pictures and videos, electronic documents, paper documents, BIM and project

website (Figure 4-10). Again these results support previous research findings that construction

professionals might feel uncomfortable with using advance technologies. Additionally, these

results show the importance of signed contracts and complete drawings and specifications for

good relations between contracting parties.









The trustworthy category tested a number of factors. The most preferred factor in terms

of trustworthiness on construction projects was being paid on time followed by reliability,

competence, collaborating effectively, not litigious, minimizing risk, similar values, caring,

familiarity, similar skills, similar experience, and socializing (Figure 4-11). The results of the

trustworthiness section stressed the importance of reliability, competency, collaborating

effectively and being paid on time. In terms of working with stakeholders, survey respondent

preferred working with owners or owner's reps followed by sub-contractors, designers, suppliers

or vendors and construction managers (Figure 4-12). The preference of working with the owners

signifies the importance of having direct access to decision makers and low preference of

working with construction managers suggests that construction professionals do not support

additional measures of control. Each key performance indicator (profit, cost, safety, productivity,

quality, schedule) was ranked similarly indicating the perceived importance of each in fostering

trust on construction projects (Figure 4-13). It was the similar case for the rankings of contract

types. Each contract type (cost-plus fixed fee, unit price, lump sum) had similar rankings among

the responses without any of them being clearly preferred in relation to trust (Figure 4-14). This

signifies the importance of trust on all contract types. In the pre-construction and design

category, it was perceived that the Pre-construction phase needed trust where the other factors of

value engineering, constructability review and BIM where less likely to create trust (Figure 4-

15). Similarly, survey respondents perceived trust to be important to the negotiation process

while timely request for information created trust. A high number of change orders and

inspection by neutral third parties had a negative association with trust (Figure 4-16). In the

management section trust was perceived to enhance communication, team building, leadership,









information sharing, minimizing claims. However, higher levels of trust was required for

effective use of information technology (Figure 4-17).

4.3 Correlation Analysis

Correlation analysis was used to describe the strength and direction of the linear relationships

between the trust factors. The data generated by the survey was categorical and required a

nonparametric correlation statistical procedure. The correlation matrices in this section used the

Spearman rho nonparametric correlation calculation and presented "rho values". Rho values (r

values) between .10 to .29 or -. 1 to -.29 refer to small correlations and weak relationships; r

values of .30 to .49 or -.30 to -.49 refer to medium correlations and medium strength

relationships; r values of .50 to 1.0 or -.5 to -.1 refers to a large correlations and represents

strong relationships (Pallant 2007).

The communication type correction matrix shows that BIM has medium correlations with

project website (r = 3.14) and video conferencing (3.19) at the 0.05 significance level (Tabel 4-

1). These correlations are also the largest correlations in the matrix. This implies that there is a

moderate positive relationship between the perceived preference of using BIM to communicate

on construction projects and the perceived preference of using project websites and video

conferencing to communicate on construction projects. The more an individual relies on BIM to

communicate on construction projects, it is plausible that the more the individual will use other

advanced technologies and be technology savvy. Negative medium correlations exist between

the preference for paper documents and the preference for electronic documents, BIM, project

website, electronic schedule and estimates. The strongest negative correlation is between the

preference for paper documents and the preference for BIM (r=-0.325). The results suggest that

individuals who prefer paper versions of documents will not have a preference for electronic

documents or using technologies on construction projects.









The document type correlation matrix displays the nonparametric correlations for the

document type trust factors. Table 4-2 shows a number of medium and large correlations

between the factors indicating the existence of medium and strong relationships. More

specifically, there are medium and strong positive relationships between electronic forms of

communication. The preference for electronic documents has a medium or large correlation to

BIM (r= .446), project website (r=.441), electronic schedule and estimate (r=.601) and digital

picture and videos (r=.342) This indicates a high likelihood that individuals that trust electronic

documents might also trust electronic documents generated by other technologies.

A number of large correlations exist in the trustworthiness correlation matrix (Table 4-3).

Being paid on time and being competent are perfectly correlated (r=1.0), signaling that as

individuals on construction projects pay on time their perceived competency increases. Being

reliable and collaborating effectively have the highest number of correlations with the other

trustworthiness factors. Both being reliable and effective collaboration are correlated to six other

factors. This indicates that reliable and effective collaboration could act as dominant antecedent

of trustworthiness on construction projects.

In the stakeholder correlation matrix the sub-contractor factor has the highest number of

correlations with other variables. The strongest correlation (r=0.348) is between sub-contractor

and supplier/vendor. This implies that there is a medium linear positive relationship between

trust for a sub-contractor and the trust for a supplier/vendor. As the perceived trust for one

increases, the perceive trust for the other increases as well, albeit at a different rate.

Every factor in the KPI category is a large correlation and a strong relationship with

every other factor (Table 4-4). Each r value displayed in the matrix is significant at the 0.01

level. Moreover, four factors, cost, quality, profit, and schedule are perfectly correlated (r value =









1.00). The results in the KPI correlation matrix indicate that there is a strong positive relationship

between the KPIs trust levels on construction projects. This suggests that there is a strong

likelihood the improvement one of the KPIs listed in Table 4-5 would positively influence trust

between contracting parties on construction projects.

The factors in the contract type correlation matrix (lump sum, unit price, cost-plus fixed)

are highly correlated (Table 4-6). This suggests that trust is most likely important on all contracts

types.

The pre-construction and design phase correlation matrix (Table 4-7) shows that value

engineering has a large correlation with constructability review at the 0.001 significance level.

The perception of how these factors impact trust has a linear and positive relationship. The

required trust levels for both value engineering and constructability reviews were perceived to be

similar.

The correlations matrix in Table 4-8 shows the existence of small correlations between

the factors in the construction phase category and are not considered noteworthy.

A number of strong relationships exist between the factors in the management skills

correlation matrix (Table 4-9). Team building and information sharing have the largest

correlation ofr = 0.734 significant at the 0.001 level. This refers to the positive linear

relationship in the perceived requirement of trust in both team building and information sharing

found in the perception of the survey respondents.

4.4 Chi-Squared Goodness of Fit Test

The chi-squared goodness of fit test was used to identify significant differences in perceptions of

each factor's impact on trust. P-values at the 0.05 level or less indicate a significant difference in

perception regarding a particular trust factor. For each significant p-value its impact on trust









(challenges trust, supports trust, requires trust or no impact on trust) was determined using the

goodness of fit test value.

In the communication method category, more factors challenge trust on construction

projects than support trust (Table 4-10). Face-to-face communication supports trust while

communicating by the use of a project website, BIM, video conferencing and e-mail challenges

trust. The use of a telephone neither challenges nor supports trust. This suggests that any use of

advance technology on construction projects could challenge existing trust between contracting

parties. Also, face-to-face communication should support other forms of communication.

In regard to the document type factors, none of the factors challenged trust (Table 4-11).

Documentation from a project website, BIM or in paper form had no perceived impact on trust

on construction projects. Using electronic documents, digital pictures and videos, electronic

schedules and estimates, complete contract documents and a signed contract was perceived to

support trust. These findings infer that the use of electronic documents not generated from

advance technology such as BIM can help support trust on construction projects. Additionally,

having signed contracts along with complete project drawings and specifications would also

support trust.

The majority of the trustworthiness factors were perceived to support trust between

contracting parties on construction projects (Table 4-12). Socializing outside of work and having

similar level of experience were perceived to challenge trust. Having a similar skill set was

perceived to have no impact on trust. The following factors were all perceived to support trust:

familiarity, caring, similar values, minimize risk, not litigious, collaborate effectively,

competent, reliable and paying on time.









Table 4-13 shows the p-values of the goodness of fit tests for each factor in the

stakeholder category. The only factor in this category that was perceived to challenge trust was

construction managers. Since a number of the survey respondents were general contractors they

might perceive construction managers on construction projects as an unnecessary control

measure. Working with a designer or a supplier/vendor had no perceived impact on trust while

working with a sub-contractor or owner/owner's representative was perceived to support trust.

Each key performance indicator was perceived similarly by survey respondents (Table 4-

14). Productivity, cost, profit, safety, schedule and quality were all perceived to support trust

between contracting parties on construction projects.

The results based on the type of construction project contract are illustrated in Table 4-

15. The Table shows that lump sum contracts and unit price contracts have no positive or

negative impact on trust between contracting parties on construction projects. However, the cost-

plus fixed fee contract type was perceived to support trust.

The factors in the pre-construction and design phase category were not perceived to

challenge or support trust (Table 4-16). Value engineering, constructability reviews and the pre-

construction phase, due to the wording of the question were perceived to require trust, while the

use of BIM for visualization of the project in the design phase was perceived to have no impact

on trust. These findings suggest trust is important in the pre-construction and design phase of

construction projects and that a higher level of trust is required when executing constructability

reviews or value engineering.

The chi-squared goodness of fit test results for the construction phase are displayed in

Table 4-17. The Table shows that effective negotiation requires trust and a request for

information (RFI) that is completed in a timely and adequate manner supports trust. Moreover,









the inspection of a corrective change order by a neutral third party and the use of change orders

in the magnitude of greater than 10% of the initial project cost challenge trust.

Table 4-18 shows the results of the chi-square goodness of fit test results for the

management section. Each management factor (using information technology, minimizing

claims, improve information sharing, improving leadership, team building and communication)

was perceived to require trust. This suggests that construction professionals working on

construction projects could be more effective in communicating, team building and using

information technology if they develop trust between individuals and with work processes.

4.5 Chi-Squared Test for Independence

The chi-squared test for independence explores associations between two categorical variables.

Each trust factor was tested with each survey respondent characteristic. In order to increase the

validity of the chi-squared test for independence, categories for each factor were combined to

form new categories. For example, each trust factor was reduced from five categories to two

categories. Rankings from one to three were placed in the "weakens trust" category and rankings

from four to five were placed in the "strengthens trust" category. Categories related to the survey

respondent characteristics were also combined. Table 4-19 shows the new categories associated

with survey respondent characteristics. The gender survey characteristic was eliminated from the

chi-squared analysis due the unbalanced proportions of men and women survey respondents.

In total, 432 chi-squared tests were completed and Table 4-20 shows the significance

level of each test. The chi-squared analysis identified eight significant relationships between the

survey respondent characteristics and the 54 trust factors. Table 4-21 provides the detail of the

significant relationships. The years of work experience of the survey respondent was

significantly associated with communicating using BIM, documentation through a project

website, working with construction managers and using a constructability review in the design









phase of a construction project. More specifically, it is likely that individuals having 20 or more

years of experience in the construction industry are less trusting of communicating through BIM,

receiving documentation from a project website, working with construction managers and

participating in constructability reviews.

4.6 Logistic Regression

A logistic regression model was developed for each trust factor. Each logistic model utilized the

new categories constructed for each trust factor and survey characteristic described in the chi-

squared test of independence analysis section. The dependent variable of each model was the

categorical ranking of each trust factor (54 factors). The independent variables of each logistic

regression model were the survey respondent characteristics, which included company type,

construction type, company volume, role in company, age, education, gender and years of

experience. In total 54 different logistic regression models were developed with 8 categorical

independent variables (survey participant characteristics) generating 54 r-squared values and

over 1,100 p-values. The predictive power of the r-squared from logistic regression model did

not show significant results at the 0.05 level. The p-values associated with the independent

variables in the model also did not show significant results at the 0.05 level. The results indicate

that the survey respondent characteristics have little predictive power associated with the trust

factors asked in the survey.

4.7 Trust Model

A trust model was developed incorporating the findings discussed in the descriptive statistics,

correlation analysis, chi-squared goodness of fit test, chi-squared test of independence and

logistic regression sections. Figure 4-18 shows the trust factors that were statistically tested for

inclusion in the trust model. Figure 4-19 lists the trust factors categorized by strengthening trust

factors, weakening trust factors, associative trust factors and factors that require higher levels of









trust. Figure 20 shows the preliminary trust model for contracting parties on construction

projects. The model begins with acknowledging the importance of having trust throughout all the

phases of construction projects. The second stage of the model identifies areas that require higher

levels of trust. The third stage of the model utilized the factors that strengthen trust. The

following model stage is to scan the related factors and identify how they can be used to

strengthen trust. The last model stage is to address the factors that weaken trust.


4.8 Validating Case Studies

The validating cases studies were designed and completed based on the parameters set by Yin

2003. A case study is an empirical inquiry that enables a researcher to cover contextual

conditions that are important in their area of study (Yin 2003). The case studies were used to

validate the preliminary trust model developed in the previous section. The case studies

considered each section of the trust factors: communication method, document type,

trustworthiness, stakeholder, KPIs, contract type, pre-construction & design phase, construction

phase, management. Additionally, emphasis was also given to the correlation and chi-squared

test of independence findings, such as the influence of an individual's years of work experience

in the construction industry and relationships between trustworthiness factors and advanced

technology. The case studies were executed through a guidedconversation over the telephone

using the the survey questions as starting point but also honing in on the results of the statistical

analysis.

Case Study 1 provides construction management, design/build and program management

services. The company is family owned and operated and has been in business for over 50 years

of experience. It has offices throughout Florida. It has an annual volume of around $100 million

and focuses on commercial, government, healthcare and education construction projects. The









case study participant worked as a project manager, held a master's degree, was under the age of

40 and had less than 10 years of experience. Table 22 describes the results of the case study. The

results indicate that face-to-face communication is the most preferred method of communication

on construction projects. It is difficult to get buy from sub-contractors to use advanced

information and communication technologies such as BIM due to the lack of perceived benefits

associated with the technologies. Trust is most important in the pre-construction phase of

construction projects. It was also believed that the more work experience a construction

professional had the more cautious they became in adopting new technologies on construction

projects. The most important trustworthiness factor honoring informal and formal agreements.

Case Study 2 is one of the world's ten largest construction companies. With offices all

over the globe, Case Study 2 has expertise in construction, development of commercial and

residential projects and public-private partnerships. The company's annual volume is over $1

billion. The case study participant worked in a director's role, held a bachelor's degree, had more

than 20 years experience and was over the age of 50. Table 23 describes the results of the case

study. The results stressed the negative impacts associated with over-using e-mail as a

communication method and the lack of usefulness of project websites for project staff. However,

there was a preference for electronic documents. In terms of using advanced information and

communication technologies, the benefits must apparent and forcing individuals to technology

typically created inefficiencies on the project. Trust on construction projects positively impacts

the project bottom line. Honoring informal and formal agreements is the best way to create trust

between contracting parties on construction projects.

In 2007 Case Study 3 was named by Fortune as the most admired engineering and

construction company. Engineering News Record consistently ranks Case Study 3 among the top









10 contractors in the United States. Case Study 3's annual revenues are consistently over $1

billion dollars and the company has been in operation since 1884. The company has the capacity

to compete for billion-dollar mega-projects, however the average project size is under $15

million. Case Study 3 is also one of the largest employee owned firms in the United States. The

case study participant worked in a role of a project manager, held a master's degree, was under

the age of 40 and had 15 years of work experience in construction. Table 24 describes the results

of the case study. The results indicate that face-to-face communication is the most preferred

communication method. Doing what you said you would do is the most important

trustworthiness factor. Maintaining high levels of trust on construction projects has a number of

benefits including improved project management skills. Maintaining high levels of trust

throughout the entire construction process positively impacted the project bottom line.

Case Study 4 is a nationwide facility solutions company specializing in construction

management services. The company has been in operation since 1938 and employs almost 400

people. Case Study 5 is a 100% negotiated planning and construction firm that puts fees at risk to

achieve an average added value of approximately 20%. The case study participant was over the

age of 50, had over 20 years of construction work experience, held a bachelor's degree and

worked in the role of a vice-president. Table 25 describes the results of the case study. The

results indicate that face-to-face communication is the most preferred communication method

and the over-use of e-mail weakens trust. Honoring informal and formal agreements is the most

important trustworthiness factor. Working directly with the owner creates the highest levels of

trust with the uncertain factors found on construction projects. Time is the most important KPI

and maintaining high levels of trust saves time which in turn creates a number of other









efficiencies. Work experience is negatively associated with optimism for new information and

communication technologies due to past disappointments with technology.

Case Study 5 has been in operation for over 40 years and specializes in commercial and

mixed retail construction projects. The company works as a general contractor, construction

manager and design/build contractor. The case study participant was under the age of 40, held a

bachelor's degree and worked in the role of a senior project manager. Table 26 describes the

results of the case study. The results indicated that the trustworthiness of an individual on a

construction projects is dependent on his/her ability on consistently following through on

informal and formal agreements. E-mail is being used a formal communication device and in

turn putts a burden on the trust between contracting parties. Trust is important on all contract

types and phases of the construction process. Currently there is a lack of trust in advanced

information and communication technologies for the Construction industry. Low bid

construction projects create an environment where it is difficult to build trust. Trust between

contracting parties creates a number of positive benefits including time saving, lowered costs and

improved profit.

Case Study 6 has been operating in the United States for over 100 years. The company

enjoys a 5a-1 Dun & Bradstreet rating and is the only top 15 Engineering News Record's

domestic building constructor with this highest rating. It also has a bond rating capacity of $4

billion. The firm is financially independent and without debt. Case Study 7 provides a number of

construction related services that are applicable throughout the entire construction process. The

case study participant was under the age of 30, had less than five years of construction

experience, and was finishing a master's degree. Table 27 describes the results of the case study.

The results indicated that face-to-face communication was most preferred. Time, cost and quality









was the most important KPIs. If trust does not exist in the pre-construction phase it is difficult

build in the later stages. Major complaint with advanced technologies is that they require too

much up-front time investment without the payoff.

Case Study 7 has received many high rankings over its 150 years of operation. In 2008, the

Engineering News Record ranked Case Study 8 as the top sewer and waste construction

company, the 2nd water facility construction company, the 9th power plant construction company,

the 12th civil and structural construction company, and the 26th global design firm. The company

has operations across the globe, employs thousands of individuals and generates billions of

dollars in revenue annually. The case study participant worked in a director's role, had over 20

years of work experience, was over the age of 50 and had a master's degree. Table 28 describes

the results of the case study. The results indicated that there is hesitancy communicating or

working with advanced information and communication technologies. The relative importance of

KPIs could change according to the preference of each project owner. Little support exists for

using a neutral 3rd party for a corrective change because of the lack of a vested interest in

completing the project. Trust improves communication, information sharing, leadership and team

building on construction projects. The use of advanced technology depends on the realization of

achievable benefits directly related to the technology.

Case Study 8 is a supplier of high value consultancy, engineering and project management

services to the world's energy, power and process industries. The company has major operations

in the UK and Americas, employs over 22,000 people and has annual revenues of over $4

billion. The case study participant worked as a project manager, had more than 20 years of

experience and held a master's degree. Table 29 describes the results of the case study. The case

study results indicate that a timely and adequate response to a change order helps build trust.









Receiving a corrective change order from a neutral 3rd party does little to foster trust. Trust is

important on all contract types especially low bid contract types. Trust is also important

throughout all the phases of the construction projects. Management skills such as

communication, team building, leadership and information sharing are further enhanced when

high levels of trust exist between contracting parties on construction projects.

Case Study 9 is a group of independent construction companies focusing on civil

engineering, heavy industrial and building markets. Case Study 9 has annual revenue of more

than $4 billion making them the largest contracting organization in Canada and one of the largest

in the United States. Case Study 9is employee owned and employs over 8,000 individuals. The

case study participant was a project manager with over 20 years of experience and held a

bachelor's degree. Table 30 describes the results of the case study. The case study results

indicate that the use of a construction manager could decrease trust between contracting parties

on construction projects because of the extra layer of control. Currently, using BIM to visualize

the project does not build trust because of the lack of confidence in the advanced information and

communication technologies such as BIM. Trust improves negotiations and the procurement

phase of construction projects. Generally, as the work experience of an individual increases the

more skeptical they are about the benefits of using new technologies.

Summary. Nine validating case studies were completed covering the entire spectrum of

company size, construction type, company volume and participant age, role and years of

experience. In the communication method section, it was clear that face-to-face communication

was most preferred and had the highest potential to strengthen trust. E-mailing back and forth has

become an obstacle to trust and a method of avoiding work related issues. The use of project

websites and/or BIM for communicating generally creates discomfort with the parties involved.









In the document type section, electronic forms of documents were clearly preferred. This

included estimated, schedules, report and so on. Completed drawings, specifications and signed

contracts were very important. Relying on e-mail for formal documentation was discouraged due

to potential liabilities associated with this practice. The most important and perhaps the key

antecedent of trustworthiness was consistently following through on formal and informal

agreements. In the opinions of the case study participants this fostered the highest levels of trust

over time. In regard to the stakeholder factors there was a clear preference for working directly

with the owner and some apprehension about working with construction managers.

All the KPIs discussed were thought to be important but there was special emphasis on

time and budget. Lump sum or low bid contracts were thought to generate conditions that would

make it more difficult to foster trust. Trust between contracting parties was said to be important

on all contracting types. Consistently, trust was said to be important in all phases of the

construction process. However, there was special emphasis on the pre-construction and design

phases. Using a neutral 3rd party to execute a corrective change was not supported because a

neutral 3rd party generally does not have a vested interest in the project and could complicate the

situation further. A timely and adequate response to any request for information further develops

trust between contracting parties. Trust was viewed as extremely important to factors listed in the

management section. Trust further enhanced leadership, communication, team building,

information sharing and the use of advanced technology. More specifically, when adopting

advanced technologies such as BIM on construction projects team buy-in must be achieved. The

actual benefits of the technology must outweigh the amount of time invested in setting up the

technology and the amount of risk associated with using the technology. Lastly, the case study

results showed a positive indication of a positive relationship between years of construction work









experience and the requirement of trust for new technologies and work processes. As the number

of years of work experience increased the level a trust required to adopt the new technologies

and work processes also increased.

Each case study supported the notion that many concrete benefits were associated with

high levels of trust between contracting parties on construction projects. The overarching benefit

of high levels of trust was the reduced time and effort required from management and processes.

When high levels of trust existed on construction projects, less oversight was required. This in

turn saved time, lowered costs and improved the bottom line. Additionally, when high levels of

trust were present on construction projects, the quality of work improved, productivity levels

increased and construction accidents decreased.

4.9 Revised Trust Model

The validating case study results pointed to the need of revising the preliminary trust model.

Figure 4-21 shows the revised trust model and Figure 4-22 shows the revised trust model in

detailed form. First, the model's components were re-organized to better reflect the results of the

validating case studies. Second, trust being important on all contact types was added. Third,

lump sum contract were added to the factors that required higher levels of trust. Fourth, overuse

of e-mail and unclear benefits to using new technologies and/or new work processes was

included with the factors that weakened trust. Fifth, honoring informal and formal agreements

and focusing on improving project schedule and lowering project costs was added to the factors

strengthening trust. Sixth, the importance of aligning the contextual factors such as unique

project conditions, the interests of the owner was also added to the model. Lastly, a notice of

improved trust and improved bottom line projects was included.

The revised trust model started with the understanding that trust is important during all

phases of the construction process (pre-construction, design, procurement, construction, close









out) and all contract types (lump sum, unit price, cost plus fee, negotiated, etc). The next phase

of the model identified the factors requiring higher levels of trust, the factors weakening trust and

the factors unique to the project. The factors that required higher levels of trust included

constructability review, value engineering, negotiation, leadership, team building, avoiding

claims, adopting IT, sharing information effective communication and lump sum contracts. The

factors that weakened trust consisted of using advanced technologies such as BIM, overusing e-

mail, not respecting informal agreements, existence of construction managers on the project,

excessive change orders, using a neutral 3rd party to review corrective change orders, and unclear

benefits of using new technologies and/or using new work processes. Contextual factors included

the owner/client's interests and the unique project conditions such as material, weather,

complexity, equipment, location, etc. The third phase of the model utilized trust strengthening

factors, related trust factors and aligned these factors to the specific context of the construction

project. The factors strengthening trust consisted communicating face-to-face; sharing electronic

forms of information; working with sign contracts, complete drawings and complete

specifications; consistently honoring informal and formal agreements; working with owners;

improving project schedules and lowering project costs; and responding to RFIs in a timely and

adequate fashion. Related trust factors included years of work experience and required trust;

different advanced technologies; different factors of trustworthiness; different KPIs; and

information sharing and effective teams. The last phase of the trust model indicated a level of

improved trust between contracting parties and an improved project bottom line.

The revised trust model could be applied any number of different scenarios as illustrated in

section 3.2. The model is flexible depending on the different factors that are identified and the

outcomes desired. For instance, it is important to identify if higher levels of trust is required









resulting from a need to improve leadership, communication, team building or information

sharing. Next, the individual using the model is required to identify the existence of any factors

that could weaken trust. The factors could include the use of BIM, the overuse of e-mail or the

use of a neutral 3rd party administering a corrective change order. Following this is to identify

important context factors that could impact trust. These factors could include the owner's

preferences, past experiences, and unique project conditions. Identifying factors that require

higher levels of trust, factors that weaken trust and important contextual factors happen

simultaneously. The next stage of the model is focused on strengthening trust. Options in this

stage include participating in face-to-face meetings, following through on informal agreements,

and improving the time dimension of construction work. In this stage it is important to utilize or

anticipate the different associations discussed in the model, for instance the relationship between

work experience and the lack of optimism for using advanced technology or improving one KPI

is perceived to be improving other KPIs. The last component of this stage is to ensure the

contextual factors are aligned to the factors that strengthen trust. As detailed throughout the

research study there are many factors there were analyzed, categorized and included in the

revised trust model. This also means that there are many different applications for the revised

trust model and many different trust strengthening strategies that could be generated by the

revised trust model.

4.10 Comparison to Other Leadership and Trust Models

The literature review section analyzed a number of models related to leadership and trust in other

fields of research. This section discusses the similarities and differences between the analyzed

leadership and trust models in the literature review section and the revised trust model discussed

in the previous section. The main difference between the reviewed leadership models and the

revised construction trust model generated in this study is that the revised trust model is project









based where the leadership models are individual based. General leadership models found in the

literature are concerned with transforming individuals where in the construction industry the

transformational goal is focused on the project. Additionally, the distinction between the leader

and follower in the construction industry is not as clear as in other industries. This is related to

the number of specialist/experts that work on construction projects and the health and safety risk

associated with the work. Similarities between the models include the importance of context and

the finding that effective leadership depends on trust between contracting parties.

A number of similarities exist between the revised trust model discussed in the previous

section and the trust models analyzed in the literature review section. These similarities include

the cyclical nature of trust where trust can be weakened or strengthen depending on outcomes

over time. There are also a number of differences between the trust models. The literature states

that the antecedents of trustworthiness are competency, benevolent and integrity. However, these

antecedents do not necessarily apply to the construction industry. The main antecedent of

trustworthiness proposed in the revised trust model is honoring informal and formal agreements.

This was described as "doing what you said you would do" by case study participants. This

factor was also perceived as distinct from competency, integrity and benevolence and unique to

construction projects. Due to the overwhelming number of constantly changing tasks that are

required on a given project, it is very difficult to monitor every action. This creates a unique need

for trust and creates a unique antecedent of trustworthiness to the construction industry. An

additional difference pertaining to the trust models is the more cautious nature of construction

professionals in building trust on construction projects. This was explained as the greater risks

associated with construction projects. These risks are not only business related but also health

and safety related.









4.11 Comparison to Construction Specific Trust Models

The construction literature review identified three main trust models. Figures 4-23, 4-24, and 4-

25 show the models. This section explains the similarities and differences between the proposed

trust model developed in this research discussed in Section 4.9 and the three trust models found

in the construction literature discussed in Section 2.3.10.

A number of similarities and differences exist between the trust model developed in this

research and the trust models found in the construction literature. Table 4-31 describes the

differences and similarities between the literature review models the proposed model.

Considerable differences exist in the sample populations of each model. Pinto et al. (2008) used

face-to-face interviews with owners and contractors working in large construction projects in

Northwest Canada. Wong et al. (2008) used a mail questionnaire to survey project managers,

owners, architects, engineers and consultants throughout Hong Kong. Jin et al. 2005 also used

mail questionnaires to survey property developers, professional consultants and contractors. The

model proposed in this research used a telephone survey supported by fax and e-mail to survey

construction professionals working for the largest contractors in the U.S.

A number of similarities exist between the three construction literature trust models and

the model developed in this research. Pinto et al. (2008) analyzed competency as an antecedent

to trustworthiness on construction projects similar to the proposed model discussed in this

research. Wong et al. (2008) found that communication methods, contracts, and agreements

impact trust between contracting parties on construction projects similar to the proposed trust

model developed in this research. Jin et al. (2005) found trust to be important in each

construction phase similar to the proposed trust model discussed in this research.

A number of differences exist between the three construction literature trust models and

the model developed in this research. Pinto et al. (2008) analyzed factors related to intuitive-









based trust where the proposed trust model did not analyze intuitive-based trust. Wong et al.

(2008) analyzed factors related to organizational policies, knowledge management,

thoughtfulness and emotional investment where the proposed trust model did not analyze these

factors. Jin et al. (2005) analyzed the changes in the relationship dependency for each phase of

the construction process where the proposed model did not complete this analysis.

The trust model developed in this research was more comprehensive and more specific

than the three models found in the construction literature. The trust model proposed by this

research analyzed a number of factors related to communication methods, document types,

trustworthiness factors, contract types, stakeholders, KPIs, management skills and the different

construction phases that were not analyzed by the other trust models.

In summary, the main difference between the proposed trust model and the trust models

found in the construction literature is that the proposed trust model has a greater level of detail

and is solely focused on large contractors in the U.S. The proposed trust model adds a number of

different dimensions to the existing trust models found in the construction literature. A

description of the new dimensions can be found in Table 4-32.



















E Commercial


50% E Heavy Civil


I Industrial

17%
E Commercial

6%

Figure 4-1. Survey Respondent Characteristics: Type of Construction






6%


E General Contractor
20%


E Design/Build


57%
E Construction
Management

17% E Other




Figure 4-2. Survey Respondent Characteristics: Company Type
















36%


M $100 to $499 million




* $500 million or more


i 64%






Figure 4-3. Survey Respondent Characteristics: Company Volume


* Owner or CEO

* Vice President or Director

* Project Manager

M Other


Figure 4-4. Survey Respondent Characteristics: Role in Company
















N Less than 5 years

N 5 to 10 years

14% 11 to 15 years


N 16 to 20 years
70%
N More than 20 years





Figure 4-5. Survey Respondent Characteristics: Years of Experience






3%
6%

2%
2 High School
30% Graduate/GED
N Some college


E Associate's Degree


N Bachelor's Degree


E Master's Degree


59%



Figure 4-6. Survey Respondent Characteristics: Education Distribution
















* 30 or younger

* 31 to 40

I 41 to 50

E 51 to 60

* Over age 60


36%


Figure 4-7. Survey Respondent Characteristics: Age Distribution


* Male

* Female


Figure 4-8. Survey Respondent Characteristics: Gender Distribution












face-to-face


- I I I-1


4.41


telephone 3.52

e-mail 3.05

video conferencing .87

BIM 2 78

project website 2.50

0.00 1.00 2.00 3.00 4.00 5.00
Likert Scale

Figure 4-9. Rankings of Communication Method












signed contract 4.78

complete contract documents 4.67

electronic schedule and estimate 4.32

digital pictures & videos 4.15

electronic 4.08

pa per 3.35

BIM 3.33

project website 3.29

0.00 1.00 2.00 3.00 4.00 5.00
Likert Scale

Figure 4-10. Rankings of Document Types












pay on time
reliable
competent
col I a borate effectively
not litigious
minimize risk
similar values
caring
familiar
similar skills
si milar experience
socializing

0.0


---- -
---- -
---- -
---- -
---- -
---- -
---- -
---- -
---- -


-
-~- -
~I~ I -


1.00


2.00


3.35

S23.94
2.35


3.00


4
-4.
S4.4
4.27
4.27


4.00


S4.83
S4.82
4.79

.61
45
51







5.00


Likert Scale


Figure 4-11. Rankings of Trustworthiness


owner/owner's
rep.

sub-contractor


designer


supplier/vendor

construction
manager

0.00


- I I I I -


-I-I-I-I'


-I-I-I-


-I-I-I-


-I--I'


1.00


2.00


4.08


3.68


3.50


3.08


3.00


4.00


Likert Scale


Figure 4-12. Rankings of Stakeholders


4.50


5.00











quality

schedule

safe

profit

cost

productivity

0.00 1.00 2.00 3.00
Likert Scale

Figure 4-13. Rankings of Key Performance Indicators


cost-plus fixed fee



unit price



lump sum


0.00


1.00 2.00 3.00
Likert Scale


- -
- -

- -

- -

- -

- -


Figure 4-14. Rankings of Contract Types


4.00


5.00


3.74


3.66


4.00


5.00











pre-construction
phase

va I ue engineering

Sconstructability
review

BIM


-I-I-I-I-


-I-I-I.


3.26


4.05


4.00


0.00 1.00 2.00 3.00
Likert Scale

Figure 4-15. Rankings of Pre-Construction and Design Phase


negotiation


timely RFI


change orders

inspection by
neutral party

0.00


-I-I-I-I'


-I-I-I-I'


-I-I-


-I-I-


1.00


2.97


2.00 3.00
Likert Scale


Figure 4-16. Rankings of Construction Phase


4.62


4.00


5.00


4.20


4.14


4.00


5.00


mmmm


2. 3











communication


tea ms

leadership p

information sharing

claims U

information technology

0.00


- I I I I -


- -

- -

- -

- -


-I-I-


1.00


2.00


3.00


3.00


4.30

S4.26

4.12

4.02


4.00


Likert Scale


Figure 4-17. Rankings of Management Skills


Table 4-1. Communication Type Correlation Matrix
Factors 1 2 3 4 5 6
1. Face to face 1.000 -.014 .099 .045 .096 .214
2. Telephone -1.000 .103 .221 .090 -.064
3. Email -.103 1.000 .194 .024 .184
4. Project website 1.000 .255* .314*
5. Video conferencing -- -- 1.000 .319*
6. BIM- 1.000
* Correlation is significant at the 0.05 level (2-tailed)
** Correlation is significant at the 0.01 level (2-tailed)



Table 4-2. Document Type Correlation Matrix
Factors 1 2 3 4 5 6 7 8
1. Electronic 1.000 -.318" .105 -.056 .446 .441" .601" .342
2. Paper 1.000 -.008 .086 -.325 -.299 -.231 -.068
3. Signed contract 1.000 .251 -.011 -.017 .157 .134
4. Complete contract documents 1.000 .268 .179 .000 .108
5. BIM 1.000 .382 .325 .297
6. Project website 1.000 .405** .268
7. Electronic schedule and estimate 1.000 .187
8. Digital pictures & videos 1.000
* Correlation is significant at the 0.05 level (2-tailed)
** Correlation is significant at the 0.01 level (2-tailed)


4.5$


5.00










Table 4-3. Trustworthiness Correlation Matrix
Factors 1 2 3 4 5 6 7 8 9 10 11 12
1. Pay on 1.000 .172 .559** 1.000** .484** .124 .158 .057 .484** .513** .161 .092
time
2. Familiar 1.000 .160 .172 .171 -.013 .151 .136 .418** -.008 .216 .116
3. 1.000 .559** .251* .094 .283* .102 .252* .233 .183 .164
Minimize
risk
4. 1.000 .484** .124 .158 .057 .484** .513** .161 .092
Competent
5. Reliable 1.000 .134 .395** -.250* .484** .225 .165 -.123
6. Caring 1.000 .066 .167 .124 -.058 .176 .269*
7. Similar 1.000 .002 .395** .110 .245* .133
values
8. 1.000 .057 .111 .141 .239
Socializing
9. 1.000 .226 .161 .092
Collaborate
effectively
10. Not 1.000 -.081 -.062
litigious
11. Similar 1.000 .494**
skills
12. Similar 1.000
experience
* Correlation is significant at the 0.05 level (2-tailed)
** Correlation is significant at the 0.01 level (2-tailed)



Table 4-4. Stakeholder Correlation Matrix
Factors 1 2 3 4 5
1. Owner/owner's rep. 1.000 .014 .070 -.054 .022
2. Designer 1.000 .143 .144 .285*
3. Supplier/vendor 1.000 .191 .348*
4. Construction manager 1.000 .074
5. Sub-contractor .074 1.000
* Correlation is significant at the 0.05 level (2-tailed)
** Correlation is significant at the 0.01 level (2-tailed)



Table 4-5. KPI Correlation Matrix
Factors 1 2 3 4 5 6
1. Productivity 1.000 .484" .702 .702 .702 .702"
2. Safe 1.000 .702** .702** .702** .702**
3. Cost 1.000 1.000"* 1.000"* 1.000**
4. Quality 1.000 1.000* 1.000"
5. Profit -- 1.000 1.000**
6. Schedule 1.000
* Correlation is significant at the 0.05 level (2-tailed)
** Correlation is significant at the 0.01 level (2-tailed)










Table 4-6. Contract Type Correlation Matrix
Factors 1 2 3
1. Lump sum 1.000 .737** .457**
2. Unit price 1.000 .628**
3. Cost-plus fixed fee 1.000
* Correlation is significant at the 0.05 level (2-tailed)
** Correlation is significant at the 0.01 level (2-tailed)



Table 4-7. Pre-construction and Design Phase Correlation Matrix
Factors 1 2 3 4
1. Pre-construction phase 1.000 .204 .201 .045
2. Constructability review -1.000 .074 .585**
3. BIM 1.000 .322*
4. Value engineering 1.000
* Correlation is significant at the 0.05 level (2-tailed)
** Correlation is significant at the 0.01 level (2-tailed)



Table 4-8. Construction Phase Correlation Matrix
Factors 1 2 3 4
1. Change orders 1.000 .264 .089 .301
2. Inspection by neutral party 1.000 .082 .127
3. Timely RFI 1.000 .107
4. Negotiation --1.000
* Correlation is significant at the 0.05 level (2-tailed)
** Correlation is significant at the 0.01 level (2-tailed)



Table 4-9. Management Correlation Matrix
Factors 1 2 3 4 5 6
1. Leadership 1.000 .365 .206 .605 .601 .374
2. Claims 1.000 .100 .401* .312 -.058
3. Information technology 1.000 .279* .373** .120
4. Team building 1.000 .747** .403**
5. Information sharing -- 1.000 .494**
6. Communication -- 1.000
* Correlation is significant at the 0.05 level (2-tailed)
** Correlation is significant at the 0.01 level (2-tailed)









Table 4-10. Chi-Squared Goodness of Fit Test Results: Communication Method
Factors P-Value Impact on Trust
Project web site 0.000 Challenges trust
BIM 0.005 Challenges trust
Video conferencing 0.008 Challenges trust
E-mail 0.002 Challenges trust
Telephone 0.622 No impact on trust
Face-to-face 0.000 Supports trust


Table 4-11. Chi-Squared Goodness of Fit Test Results: Document Type
Factors P-Value Direction
Project website 0.375 No impact on trust
BIM 0.789 No impact on trust
Paper documents 0.622 No impact on trust
Electronic 0.000 Supports trust
Digital pictures and videos 0.000 Supports trust
Electronic schedule and Supports trust
estimate 0.000
Complete contract documents 0.000 Supports trust
Signed contract 0.000 Supports trust




Table 4-12. Chi-Squared Goodness of Fit Test Results: Trustworthiness
Variables P-Value Direction
Socializing 0.000 Challenges trust
Similar experience 0.000 Challenges trust
Similar skills 0.460 No impact on trust
Familiar 0.000 Supports trust
Caring 0.000 Supports trust
Similar values 0.000 Supports trust
Minimize risk 0.000 Supports trust
Not litigious 0.000 Supports trust
Collaborate effectively 0.000 Supports trust
Competent 0.000 Supports trust
Reliable 0.000 Supports trust
Pay on time 0.000 Supports trust









Table 4-13. Chi-Squared Goodness of Fit Test Results: Stakeholder
Variables P-Value Direction
Construction manager 0.018 Challenges trust
Supplier/vendor 0.622 No impact on trust
Designer 0.140 No impact on trust
Sub-contractor 0.000 Supports trust
Owner/owner's rep. 0.000 Supports trust


Table 4-14. Chi-Squared Goodness of Fit Test Results: KPIs
Variables P-Value Direction
Productivity 0.000 Supports trust
Cost 0.000 Supports trust
Profit 0.000 Supports trust
Safe 0.000 Supports trust
Schedule 0.000 Supports trust
Quality 0.000 Supports trust


Table 4-15. Chi-Squared Goodness of Fit Test Results: Contract Type
Variables P-Value Direction
Lump sum 0.385 No impact on trust
Unit price 0.128 No impact on trust
Cost-plus fixed fee 0.016 Supports trust



Table 4-16. Chi-Squared Goodness of Fit Test Results: Pre-construction & Design Phase
Variables P-Value Direction
BIM 0.233 No impact on trust
Constructability review 0.000 Requires trust
Value engineering 0.000 Requires trust
Pre-construction phase 0.000 Requires trust



Table 4-17. Chi-Squared Goodness of Fit Test Results: Construction Phase
Variables P-Value Direction
Inspection by neutral party 0.000 Challenges trust
Change orders 0.002 Challenges trust
Timely RFI 0.000 Supports trust
Negotiation 0.000 Requires trust









Table 4-18. Chi-Squared Goodness of Fit Test Results: Management
Variables P-Value Direction
Information technology 0.001 Requires trust
Minimizes claims 0.000 Requires trust
Information sharing 0.000 Requires trust
Leadership 0.000 Requires trust
Team building 0.000 Requires trust
Communication 0.000 Requires trust


Table 4-19. New Categories
Survey Respondent Characteristic
Company Type

Construction Type

Annual Volume
Company Role

Years of Experience

Education
Age
Trust Factors


New Categories
General contractor and other, construction manager and
design/build
Only Commercial, commercial and other types, industrial
or heavy civil
$500 million or less and over $500 million
Owner or CEO, VP or director and project manager or
other
Less than 20 year of experience and 20 or more years of
experience
Master's degree, Bachelor's degree and Other
40 and under, 41 to 50 and 50 and over
Weaken trust and strengthened trust












Table 4-20. Results of Chi-Squared Test for Independence
Construction Company Company
Variables Type Type Volume R
Face-to-face 0.095 0.214 0.140
Telephone 0.652 0.621 0.523


e-mail
Project website
Video conferencing
BIM


0.587
0.892
0.900
0.132


0.743
0.780
0.223
0.271


0.145
0.371
1.000
0.412


ole
0.333
0.314
0.112
0.550
0.818
0.412


Years
Experience
0.107
0.562
0.106
0.074
0.261
0.003**


Age
0.483
0.919
0.168
0.699
0.045**
0.193


Education
0.531
0.355
0.429
0.533
0.749
0.291


Electronic 0.281 0.162 0.530 0.642 0.288 0.523 0.499
Paper 0.652 0.578 0.706 0.929 0.674 0.615 0.356
Signed contract 0.032* 0.547 0.256 0.550 0.350 0.707 0.082
Complete documents 0.781 0.079 0.810 0.731 0.098 0.325 0.633
BIM 0.246 0.678 0.446 0.613 0.299 0.375 0.392
Project website 0.728 0.455 0.937 0.539 0.016** 0.658 0.087
Electronic schedule and
estimate 0.038* 0.390 0.140 0.705 0.876 0.863 0.531
Digital pictures and
videos 0.736 0.896 0.961 0.526 0.585 0.236 0.310


Pay on time
Familiar
Minimize risk
Competent
Reliable
Caring
Similar values
Socializing
Collaborate
Not litigious
Similar skills
Similar experience
Owner
Designer
Supplier/vender
Construction manage.
Sub-contractor
Productive
Safe
Lower costs
Improves quality
Profitable
Improve schedule
Lump sum
Unit price
Cost plus fee
Pre-construction
Constructability rvw.
BIM
Value Engineering
Change orders
Neutral parties
Timely rfi
Negotiation
Leadership
Avoid claims
Information technology
Effective teams
Information sharing
Communication


0.555
0.279
0.152
0.555
0.297
0.117
0.850
0.571
0.555
0.190
0.888
0.232
0.005*
0.214
0.310
0.653
0.340
0.03*
0.311
0.178
0.178
0.178
0.178
0.112
0.017*
0.359
0.108
0.520
0.565
0.716
0.312
0.969
0.123
0.855
0.850
0.837
0.941
0.279
0.614
0.284


0.555
0.264
0.447
0.555
0.568
0.481
0.214
0.363
0.555
0.375
0.918
0.325
0.375
0.313
0.239
0.865
0.706
0.555
0.555
0.748
0.748
0.748
0.748
0.243
0.330
0.588
0.407
0.077
0.541
0.523
0.072
0.989
0.450
0.549
0.103
0.881
0.316
0.145
0.217
0.375


0.720
0.577
0.521
0.720
0.697
0.419
0.570
0.486
0.720
0.774
0.228
0.851
0.774
0.250
0.376
0.251
0.404
0.262
0.262
0.431
0.431
0.431
0.431
0.664
0.311
0.229
0.868
0.745
0.044**
0.212
0.470
0.126
0.056
0.910
0.212
0.665
0.751
0.577
0.530
0.266


0.536
0.472
0.941
0.536
0.694
0.366
0.247
0.381
0.679
0.064
0.245
0.773
0.717
0.208
0.723
0.311
0.974
0.679
0.666
0.411
0.411
0.411
0.411
0.498
0.281
0.085
0.436
0.783
0.873
0.264
0.649
0.728
0.050
0.301
0.705
0.337
0.618
0.199
0.573
0.619


* violates chi square assumption of 5 values in each cell making result unreliable
** significant at the .05 level


0.512
0.954
0.817
0.512
0.512
0.220
0.876
0.253
0.356
0.968
0.674
0.206
0.968
0.148
0.095
0.000**
0.548
0.356
0.356
0.517
0.517
0.517
0.517
0.863
0.788
0.231
0.873
0.014**
0.738
0.269
0.830
0.334
0.924
0.876
0.377
0.206
0.386
0.954
0.288
0.357


0.355
0.586
0.192
0.355
0.707
0.987
0.906
0.650
0.740
0.858
0.968
0.543
0.611
0.015**
0.636
0.203
0.199
0.355
0.704
0.311
0.311
0.311
0.311
0.709
0.260
0.320
0.829
0.610
0.979
0.950
0.516
0.213
0.618
0.886
0.616
0.543
0.679
0.444
0.598
0.728


0.765
0.786
0.374
0.765
0.771
0.215
0.398
0.918
0.765
0.544
0.553
0.481
0.544
0.855
0.110
0.261
0.040**
0.765
0.765
0.311
0.311
0.311
0.311
0.404
0.369
0.925
0.871
0.648
0.648
0.966
0.653
0.532
0.245
0.488
0.794
0.765
0.413
0.094
0.616
0.359


I












Table 4-21. Significant Relationships
Respondent Trust Factor Sig. Relationship
Characteristic Value
Years of Communicating 0.003 More years of experience less trusting of BIM
experience using BIM
Years of Documentation form 0.016 More years of experience less trusting of
experience project website project websites
Years of Construction 0.000 more years of experience less trusting of
experience management Construction managers
Years of Constructability 0.014 More years experience less trusting of
experience review constructability reviews
Age Video conferencing 0.045 The age group 41-50 was most trusting of
video conferencing
Age Designer 0.015 The youngest age group was most trusting of
designers
Company BIM 0.044 Lower annual volume more trusting of using
volume BIM to visualize the project in the design
phase
Education Sub-contractor 0.040 The higher the education the more trusting of
sub- contractors


Stakeholders
1. Owner
2. Designer
3. Suppliers & Vend(
4. Construction Man,
5. Sub-Contractors.


Demographics
1. Company Type
2. Construction Type
3. Volume
4. Role
5. Years Experience
6. Age
7. Gender


Communication
Method
1. Face to Face
2. Telephone
3. E-mail
4. Project Website
5. Video Conferencing
6. BIM


Document Type
1. Electronic
2. Paper
3. Signed Contract
4. Complete Drawings
5. Building Information
Model
6. Project Website
7. Electronic Schedule
and Estimate
8. Electronic Pictures
and Videos /


KPI
1. Productivity
2. Safety
3. Cost
4. Quality
5. Profitability
6. Time


10. Able to Collaborate
11. Not litigious
12. Similar skills
13. Similar level of


1. Change Orders


Engineering


Figure 4-18. Trust Factors Tested for Trust Model











Strengthening Trust
Factors

Communication Method
Face to Face
Document Type
Electronic
Signed Contract
Complete Drawings &
Specifications
Electronic Schedule and
Estimate
Electronic Pictures and
Videos
Trustworthiness
Pay on Time
Familiar
Minimize Risk
Reputation
Competent
Reliable
Caring
Similar Values
Able to Collaborate
Not Litigious
Similar Skills
Stakeholders
Owner
Sub-Contractors
KPI
Productivity
Safety
Cost
Quality
Profitability
Time
Contract Type
Cost-plus-fee
Construction Phase
Timely Response to RFI


Weakening Trust
Factors


Communication
Method
E-mail
Project Website
Video Conferencing
BIM
Trustworthiness
Socializing
Similar level of
experience
Stakeholders
Construction Manager
Construction Phase
Change Orders
Corrective Change
order from a neutral 3rd
party


Correlations
Advanced technology
perceived similarly:
Collaboration,
reliability, competent
and paying; Time,
cost, profitability and
quality;
Information sharing
and effective teams
Chi-square Test of
Independence
Years of experience
related to advanced
BIM, project websites,
construction
managers, and
constructability
reviews


Factors Requiring
Higher Levels of
Trust

Pre-construction &
Design Phase
Constructability
Review
Value Engineering
Construction Phase
Negotiation
Management
Leadership
Building Teams
Avoiding Claims
Adopting IT
Information Sharing
Information
Good communication


Figure 4-19. Categories of Trust Factors











Trust in all Identify Factors that Use Trust Use Related Trust Address Trust
Construction Require Higher Strengthening Factors Weakening Factors
Phases Levels of Trust Factors

Reconstruction Phase Communication Correlations & Chi- Communication
Design Phase Preconstruction & Method square relationships Method
Procurement Phase Design Phase Face to Face Years of experience Advance Technology
Construction Phase Constructability Review Document Type Communication (e.g. BIM, project
Closeout Phase Value Engineering Share electronic Method & Document websites)
Construction Phase forms of information, Type: advanced Trustworthiness
Negotiation hove sign contracts technology; Relying of on socializing
Management and complete Trustworthiness: or past experience
Leadership drawing and collaboration, Stakeholders
Building Teams specifications reliability, pay on Working with
Avoiding Claims Trustworthiness time, competency; construction managers
Adopting IT ,,ii. i.t.... Vl,,i, ,: KPIs: time, quality, Construction Phase
Sharing Information be reliable, pay on profit, cost Excessive change orders
Good communication time, minimize risk and Design Phase: and using a neutral 3d
be competent advanced technology party to review
Stakeholders Management: corrective change orders
Get information from information sharing
Owners and Sub- and effective teams
Contractors
KPI
Improve KPIs',
especially cost, quality,
profitability, time
Construction Phase
Timely Response to
RFI

Figure 4-20. Preliminary Trust Model





Table 4-22. Case Study 1
Categories of Trust Factors
Communication Method


Document Type




Trustworthiness


Stakeholder
KPIs


Contract Type
Pre-construction & Design
phase


Construction phase

Management


Comments on Proposed Trust Model
* Prefers face-to face contact
* Sees the advantages of using advanced technology but
difficult to get buy in from sub-contractors
* Prefers to use electronic forms of documents
* Official documents and when money changing hands
prefers sign copies of documents
* Paper copies of complex drawings are important
* All the trustworthiness factors are important but it comes
down to consistently following through on formal and
informal agreement, which builds trust over time
* Prefers working with owners or owners reps directly
* All key performance indicators are important and their
relative importance could change with the project or the
owner
* Does not impact trust
* Trust is important through the pre-construction and the
design phases of the construction process
* Trust helps make constructability reviews and value
engineering more effective
* Trust is important through the construction phase as well
as the procurement and close out phase
* Management skill such as communication, information
sharing and using advanced information and
communication technologies on construction projects
improve with trust
* The more work experience an individual has the more
skeptical they about new technologies and new work
processes
* For individuals to use more advanced technologies, the
benefits of these technologies must be apparent


v '





Table 4-23. Case Study 2
Categories of Trust Factors
Communication Method







Document Type


Trustworthiness







Stakeholder
KPIs


Contract Type
Pre-construction & Design
phase
Construction phase

Management


Comments
* Preferred face-to-face communication
* People on construction projects overused e-mail
* E-mail was used as a tactic to avoid addressing work
related items
* Not supportive of the use of a project website for job
function.
* Project website's are only good to update external parties
* Preferred electronic documents
* Preferred paper versions of drawings, specification, and
signed contracts
* All the trustworthy characteristics are important but the
most important is to consistently following through on
formal and informal agreements
* When a contracting party can be counted on in this
fashion a number of efficiencies are created due to less
management effort and this positively impacts the
project's bottom line
* Prefers to work directly with the owners
* All the KPIs are important
* There needs to be caution putting to much focus on
profitability
* Trust is important for all contract types
* Trust is important in both the pre-construction and the
design phase
* Trust is important in the construction, procurement and
closeout phase
* Management skills such as leadership, communication,
using technology are enhanced if there is trust with the
process and trust between team members
* Currently there is little buy-in for subcontractors to use
BIM
* Forcing sub-contractors or other parties to use advanced
technologies does not work and only creates
inefficiencies
* Construction professionals with many years of work
experience prefer to see the benefits associated with new
technologies and work processes before they agree to
invest time and energy in using them





Table 4-24. Case Study 3
Categories of Trust Factors
Communication Method





Document Type


Trustworthiness


Stakeholder


KPIs
Contract Type
Pre-construction & Design
phase
Construction phase

Management


Comments
* Preferred face-to-face communication
* Stated that the construction industry was not ready for
the use of advanced technology.
* Advanced technology need to improve before it would be
fully adopted
* Preferred electronic documents
* Preferred hard copies of signed documents and other
important information
* All trustworthiness factors were important, but trust
comes down to delivering on what was agreed on in the
prescribed timeframe and budget
* Prefer to work the owner or owner's rep
* Construction manager provides unnecessary layer of
control
* All key performance indicators are important
* The contract type does not impact the importance of trust
* Trust is important in the pre-construction and the design
phase
* Trust is important in throughout the construction,
procurement and close out phase
* Trust building between team members further enhances
important management skills such as communication,
information and team building
* To further enhance the use on information technology on
construction projects, the comfort level construction
professionals must be improved
* The experience an individual has in the construction
industry more skeptical the individual is about new
technologies and work processes due to the risk
associated with them





Table 4-25. Case Study 4
Categories of Trust Factors
Communication Method





Document Type


Trustworthiness





Stakeholder
KPIs

Contract Type

Pre-construction & Design
phase








Construction phase

Management


Comments
* Prefers face-to-face communication
* E-mail is overly relied upon as a formal communication
method
* In cases when messages are important, such as formal
notices, documents must be signed
* In the participants role as overseeing disputes, the most
preferred document type are singed documents and
complete contract documents.
* A number of the trustworthiness factors are important
* Trustworthiness of an individual depends upon the
individual's ability to delivery what was agreed upon
* This includes informal agreements that are not in detailed
on signed documents
* Prefers to work with the owners
* Delivering projects on time and on budget are the most
important KPIs
* Easier to build trust on negotiated projects
* Low bid projects are very difficult to build trust
* Trust is especially important in the pre-construction
phase
* A contractor needs to be involved early to provide the
necessary information and build the necessary foundation
for trusting relationships
* Construction manager or general contractor must have
the ability to provide quick and accurate information in
the early project stages
* This helps build trust between team members
* Trust is important through the construction, procurement
and closeout phases
* Good management skills supported by trust improves
management results
* When using advanced technology on construction
projects, it is important that the technology can achieve
the expected results
* Work experience is negatively related to the optimism
associated with new technologies and work processes


Y





Table 4-26. Case Study 5
Categories of Trust Factors
Communication Method

Document Type



Trustworthiness


Stakeholder


KPIs

Contract Type

Pre-construction & Design
Phase
Construction Phase
Management


Comments
* Prefers face-to-face communication
* Not supportive of using e-mail for communication
* Prefers electronic documents
* Advanced technology needs to further develop
* GC are willing to adopt to new technologies but the
benefits are uncertain
* The trustworthiness of an individual is determined by
their ability to consistently deliver the items they
indicated they would deliver
* Prefer to work with the owner and subcontractors
* Construction managers could add an unnecessary layer
of control
* All the KPIs are important but the importance could
change with the owner
* Trust is important with all contract types, but low bid
contract could prove more difficult to build trust
* Trust is important throughout the pre-construction phase
and the design phase
* Trust is important in all aspects of the construction phase
* The effective management process would be improved
where trust existed between contracting parties
* Currently there is lack of trust in the benefits generated
by advanced technology
* The more work experience an individual has the more
trust is needed before new technologies and work
processes are used. Trust in this case is directly related to
realized benefits





Table 4-27. Case Study 6
Categories of Trust Factors
Communication Method


Document Type

Trustworthiness

Stakeholder
KPIs
Contract Type

Pre-construction & Design
phase
Construction phase

Management


Comments
* Preferred face-to-face communication
* Open to using advance technology but other people on
the project did not see the value
* Preferred electronic versions of documents
* Paper versions of drawings and specifications helpful
* Reliability is the most important trustworthiness
characteristic
* Prefer working with the sub-contractors
* Cost, schedule and quality are the most important KPI
* Unaware if there would any difference in relating to
contract type
* Trust was very important in the pre-construction and
design phase of construction project projects
* Trust is important in the construction phase but more
important in the pre-construction phase
* Difficult to get individuals to consider using advanced
information technology
* Common complaint is too much up front time investment
without the required benefits
* More trust with the technology would improve this
situation









Table 4-28. Case Study 7
Categories of Trust Factors
Communication Method




Document Type


Trustworthiness
Stakeholder

KPIs

Contract Type
Pre-construction & Design
phase
Construction phase


Management


Comments
* Preferred to communicate face-to-face
* Video conferencing could also be useful
* Hesitant communicating through BIM and project
website
* Preferred electronic versions of documents
* Preferred signed documents with important information
* Was uncomfortable with BIM generated documentation
* Most important factor is delivering on agreed tasks
* Preference of stakeholder depends on the nature of the
project
* All KPIs are important, the importance could change
according to the owner or project
* Trust is important on all contract types
* Trust is important in all facets of the pre-construction
and design phase
* Not in favor of using a neutral 3rd party for a corrective
change because neutral parties are generally not vested in
the project
* Trust improves communication, information sharing,
leadership and team building
* The use of advanced technology is dependent on gaining
improved benefits from the technology


YI





Table 4-29. Case Study 8
Categories of Trust Factors
Communication Method


Document Type





Trustworthiness


Stakeholder

KPIs
Contract Type
Pre-construction & Design
phase
Construction phase




Management


Comments
* Most preferred communication method was face-to-face
or telephone
* Least preferred communication method was BIM
* Electronic documents were most preferred
* This included schedules, estimate, digital pictures
* Paper documents were the least preferred
* Sign contracts and complete set of project drawings and
specification were important
* All trustworthiness factors were important
* Following through on agreements determines the
trustworthiness of an individual
* Did not prefer working with construction managers due
to the extra layer of controls
* All KPIs are important
* Trust is important on all contract types
* Trust is important in all facets of the pre-construction
and design phase of the construction projects
* Receiving a corrective change from a neutral 3rd party
does not foster trust
* The timely and adequate response to a change order
fosters trust
* Negotiation based on trust is more effective
* Management skills such as communication, leadership,
team building and information sharing is further
enhanced by trust between contracting parties
* The use of information technology requires better results
* The more experience a construction professional has the
more cautious they tend to be with new technologies and
work processes





Table 4-30. Case Study 9
Categories of Trust Factors
Communication Method



Document Type



Trustworthiness



Stakeholder

KPIs

Contract Type
Pre-construction & Design
phase

Construction phase



Management


Comments
* Preferred communicating face-to-face and video
conferencing the most
* Had a relatively high preference for using BIM
* Did not have a preference for e-mailing
* Did not prefer project websites
* Preferred electronic version of document
* High preference for signed contracts and complete
project drawings and specifications
* Socializing outside of work had little impact on
trustworthiness of individuals on construction projects
* Living up to formal and informal agreements on
construction projects fosters high levels of trust
* Least preferred stakeholder is the construction manager
due the extra layer of control
* All KPIs are important
* Quality is most subjective
* Trust is important for all contract types
* Trust is very important in the pre-construction phase
* Using BIM to visualize the project does not necessarily
create trust between contracting parties
* A corrective change from a neutral 3rd party does not
create trust
* Trust is important in the construction, procurement and
closeout phase
* Trust is most important to high performing teams
* Trust between contracting parties can limit claims
* For trust to improve with the use of advanced
information technology the better results are necessary
* Generally as an individual's work experience increases
the more cautious they are about new technologies




















Figure 4-21. Trust Model for Contracting Parties on Construction Projects


























Trust Between
Contracting
Parties on
Construction
Projects


All Project
Phases
Preconstruction
Design
Procurement
Construction
Close out


All Contract
Types
Lump sum
Unit price
Cost plus fee
Negotiated


04


Identify Factors that
Require Higher Levels
of Trust
Constructability review
Value engineering
Negotiation
Leadership
Building teams
Avoiding claims
Adopting IT
Sharing information
Good communication
Lump sum contracts

Identify Factors the
Weaken Trust
Advance technology (e.g.
BIM, project websites)
Overuse of e-mail
Not respecting informal
agreements
Construction management
company
Excessive change orders
Using a neutral 3`d party to
review corrective change
orders
Unclear benefits of using
new technologies and/or
work processes


Identify Contextual
Factors
Owner/client's interest
Stakeholder backgrounds
Unique project
circumstances


Utilize Trust
Strengthening Factors
Communicating face-to-
face
Sharing electronic forms of
information
Working with sign
contracts and complete
drawing and specifications
Consistently honoring
informal and formal
agreements
Working with owners
Improving project schedules
Lowering project costs
Timely and adequately
responding to RFIs



Utilize Related Trust
Factors
Years of work experience
and required trust
Different advanced
technologies
Different Trustworthiness
factors
Different KPIs
Information sharing and
effective teams

Align to Contextual
Factors
Strategies should be
customizes specific or
unique project factors


Figure 4-22. Detailed Trust Model for Contracting Parties on Construction Projects










Owner Trust
Competence Trust
Integrity Trust
Intuitive Trust

Satisfaction with working P
Project Success
Relationships
Contractor Trust
Competence Trust
Integrity Trust
Intuitive Trust
Figure 4-23. Pinto et al. 2008 Trust Model. Source: Pinto et al. 2008, page 5


System-based Trust
Organizational policy
Communication system
Contracts and agreements

Cognitive-based Trust
Interaction
knowledge


TRUST


Affect-based Trust
Being thoughtful
Emotional investments
Figure 4-24. Wong et al. 2008 Trust Model. Source: Wong et al. 2008, page 824





























Figure 4-25. Jin et al. 2005 Trust Model. Source: Jin et al. 2005, page 691










Table 4-31. Comparison of the Different Trust Models


Model
Pinto
et al.
2008,
page
5














Wong
et al.
2008,
page
824


Sample
* Northwest
Canada
* Face-to-face
interviews
* Owners and
contractors
involved in
large
construction
projects








* Hong Kong
* Mail survey
* Project
managers,
owners,
architects,
engineers
and
consultants
* 70% had 10
years or
more of
experience


Similarities
* Analyzed factors
related to competency-
based trust and
integrity-based trust t
* Findings: competency
is an important
antecedent of
trustworthiness
* The nature of trust
could change with the
context






* Analyzed
communication
systems, contracts and
agreements
* Findings:
Communication
methods, contracts,
and agreements
influence trust


Differences
* Analyzes factors
related to
intuitive-based
trust
* Less
comprehensive,
analyzes a fewer
number of factors
* Less specific
* Findings
contractors and
project owners
prefer different
forms of trust



* Analyzed factors
related to
organizational
policies,
knowledge
management,
thoughtfulness
and emotional
investment
* Findings:
emotional and
knowledge factors
impact trust
* System-based,
cognitive-based
and affect-based
trust is mutual
dependent


Additions
* Communication
method
* Document type
* Trustworthiness
* KPI
* Stakeholders
* Contract types
* Pre-
construction
and design
phase
* Procurement
and
construction
phase
* Management
* Trustworthiness
* KPI
* Stakeholders
* Contract types
* Pre-
construction
and design
phase
* Procurement
and
construction
phase
* Management










Table 4-31 Continued.
Model Sample
Jin et China
al. Mail survey
2005, Property
page developer,
691 professional
consultant,
contractor
75% more
than 5 years
experience


Similarities
Analyzed construction
trust in different
construction phases
Asked survey
participants about the
relationship between
risk and trust
* Findings: trust is
important in each
construction phase;
there are different
tools to foster trust;
trust and risk are
inadvertently related


Differences
* Analyzed the
changes in the
dependency for
each phase of the
construction
process
* Each construction
phase a different
inherent risk, tool
for fostering trust,
dominant and
dependent
relationship


Additions
* Communication
method
* Document type
* Trustworthiness
* KPI
* Stakeholders
* Contract types
* Pre-
construction
and design
phase
* Procurement
and
construction
phase
Management









Table 4-32. Uniqueness of the Revised Trust Model to the Trust Models in the Construction
Literature


Comparison Categories
Sample Population


Communication Method


Document Type


Factors of Trustworthiness



KPIs

Stakeholders


Contract Type


Other construction related
factors


Construction Change Factors


Management Skills


Information and
Communication Technology


Comments Focused on the Proposed Trust Model
The proposed trust model solely focuses on large contractors in
the U.S. The survey respondents had more years of construction
related experience
The proposed trust model analyzed specific communication
methods such as face-to-face, e-mail and BIM where the other
trust models did not
The proposed trust model analyzed more factors than contracts,
it included different forms of electronic documents (estimates,
schedules, pictures)
The proposed model completed an extensive analysis of factors
related to trustworthiness; the other models also completed an
extensive analysis and put a special emphasis on emotional
factors where the proposed model did not
The proposed trust model analyzed important KPIs (e.g. time,
cost, quality) where the other trust models did not do the same
The proposed trust model analyzed five different stakeholders
where the analysis of the other trust models were not as
extensive
The proposed trust model analyzed three contract types; the
construction literature trust models did not consider contract
types
Jin et al. (2005) considered different construction phases. But
the model did not consider the different elements of the pre-
construction and design phase such as constructability reviews
and value engineering as did the proposed trust model
Jin and Ling (2005) discussed a number of similar elements as
the proposed trust model. However, they did not analysis the
impact of corrective changes from a neutral 3rd parties
The proposed trust model was more comprehensive in analyzing
management skills such as leadership, team building,
communication and information sharing
The proposed trust model was the only model that considered
the impact of information and communication technology on
trust between contracting parties on construction projects


u'










CHAPTER 5
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 Summary

Effectively managing construction projects presents some of the most pressing challenges

facing any industry. Stakeholders in the construction industry routinely face low productivity

rates, low use of advanced technologies, low profit margins, high number of claims and high

business, health and safety risks. The U.S. construction industry accounts for approximately $1

trillion of the U.S. gross domestic product and employs close to 8 million individuals (U.S.

Census Bureau 2008). Achieving the desired improvements in productivity, schedule, cost and

safety on construction projects has been difficult and has cost the U.S. significantly as a result of

the inefficiencies. The goal of this research was to develop a model that would help increase the

effectiveness of contracting parties working on construction projects and in turn help improve

the bottom line of construction projects. More specifically, the research focus was to identify the

factors found on construction projects that improved trust between project stakeholders.

The literature review was organized in three sections: leadership approaches, trust models

and leadership and trust in construction management. The leadership approaches section

reviewed the trait, behavior, needs, situational, transformational and team approaches. The

review identified different personality traits, behaviors and respect for different situations for

improving leadership. However, all leadership approaches were required to rest on a foundation

of trust between contracting parties. Without trust the positive effects of leadership were limited.

The analysis of the trust literature supported the findings in the leadership literature and

identified the different components of building trust between contracting parties in work

environments. The analysis showed that trust had four main phases: orientation, evaluation,

action and outcome. In the orientation phase the contracting parties oriented themselves to the









situation at hand. They reviewed the existing protective measures, the reputations of the other

parties, the inherent risks and the trust evaluation criteria. The evaluation phase followed the

orientation phase in the trust building process and determined whether trust based action would

take place. Factors involved in the evaluation phase focused on the initial trust propensity of the

parties involved, the determinants or antecedents of perceived trustworthiness and the factors

that comprised trust alignment and intention. The action phase only occurred if the risk involved

was acceptable. In the outcome phase, the results of the trusting action were analyzed and if the

expectations defined in the orientation phase were met, trust would be strengthened. If the

expectations and criteria were not met, trust would be weakened and distrust could manifest

itself.

The analysis of the construction management literature further substantiated the findings

of the non-construction leadership and trust literature and also provided the necessary context to

the research. Trust was found to be an important component of project leadership in the

construction industry as well as team building, information sharing and communication. The

literature showed possible different antecedents to trustworthiness on construction projects

compared to other industries resulting from the unpredictable nature of construction projects.

Additionally, the inherent business, health and safety risks associated with construction work

seemed to have an impact on trust between contracting parties. The construction literature

illustrated a number of instances where trust between contracting parties could improve work

processes such as value engineering, adopting new technologies and negotiating.

The methodology applied to this research had several components. The first component

developed a comprehensive framework containing over 150 construction specific factors that

could positively or negatively impact trust. The applicability of the framework was tested in a









construction project scenario format. The 150 factors were prioritized and reduced to 65 factors

with input from industry professionals. The research questions were based on the main categories

within the trust framework and focused on communication methods, document types,

antecedents of trustworthiness, type of stakeholder, KPIs, contract type, elements of the different

construction phases and determinants of effective project management.

The survey was targeted at construction professionals in positions of influence working

for companies ranked in the Engineering News Record's Top 400 U.S. Contractors. The total

sample size was 66. Ninety-two percent (92%) of the survey respondents were male, 80% were

over the age of 40, 70% have 20 or more years of construction work experience, 89% had a

master's or bachelor's degree, 69% help a position of director, V.P., CEO or Owner, 57%

worked for general contractors, 77% of were engaged in commercial construction and 100% of

the survey respondents worked for companies generated over $100 million in annual revenue.

The results of the average means scores showed that face-to face communication was most

preferred communication method with advanced technology the least preferred. Electronic forms

of documents along with signed contracts and complete drawings and specifications were the

most preferred document types. Paying on time and reliability were the most preferred

determinants of trustworthiness. Regarding KPIs, each factor had a similar high mean score.

With regard to preference in stakeholders, working with the owner or owner's representative had

a strong preference over the other stakeholders. Each contract type was ranked similarly.

Pertaining to construction phases, it was found that trust was important in all phases. Again, in

the management category, trust was perceived to assist a number of project management

functions such as leadership, team building, communication and information sharing.









Correlation analysis was used to describe the strength and direction of the linear

relationship between two variables. The results of the analysis illustrated a number of small,

medium and large positive correlations between the trust factors. The most noteworthy

correlations included a medium correlation between BIM, project websites and video

conferencing; a strong correlation between all forms of electronic documents and images; a

perfect correlation between competency and paying on time; perfect correlations between

improving cost, quality, profit and schedule; large correlations between contract types; large

correlations between constructability review and value engineering; and large correlations

between leaders, team building and information sharing.

The chi-squared goodness of fit test was used to determine the perceived impact each

factor would have on trust between contracting parties on construction projects. The results were

categorized into four categories: factors strengthening trust, factors weakening trust, factors

requiring higher levels of trust and factors having no impact of trust. Communicating via any

form of technology was perceived to weaken trust where face-to-face communication

strengthened trust. Electronic forms of documents, signed contracts and complete drawings and

specifications were perceived to strengthen trust. Every trustworthiness factor strengthened trust

except socializing, similar skills, and similar levels of experience. Socializing and similar levels

of experience challenged trust where similar skills had no impact on trust. Each type of KPI

strengthened trust. The presence of construction managers on construction project was perceived

to weaken trust while working with owners and subcontractors was perceived to strengthen trust.

Cost-plus fixed fee contracts were also found to strengthened trust. Corrective changes orders

from neutral third parties and excessive changes orders weakened trust while timely and

adequate responses to RFI in the construction phase strengthened trust. Constructability review,









value engineering, using information technology, minimizing claims, information sharing,

leadership, team building and effective communication required higher levels of trust.

The chi-squared test for independence explored relationships between two categorical

variables. In total, 432 chi-squared tests were completed. The most noteworthy relationship at a

significance level of 0.05 was between the survey respondent's years of work experience and

communicating using BIM, documentation through a project website, working with construction

managers and using a constructability review in the design phase of a construction project. These

relationships inferred that having many years of experience in the construction industry have

made them more cautious in adopting new technologies and seeking added work processes.

A preliminary trust model for contracting parties on construction projects was developed

using the results of statistical analysis. The preliminary model identified factors in categories

related to the different construction phases, higher levels of trust, strengthening trust, weakening

trust and factors that were related to one another.

Validating case studies were used to test the preliminary trust model. In total nine case

studies were completed covering the entire spectrum of company size, construction type,

company volume and participant age, role and years of experience. The results of the validating

case studies pointed to the need of consistently honoring informal and formal agreements made

throughout the construction process. This factor more than any other factor, fostered trust

between contracting parties.

The major components of the trust model indicated that trust was important during all

phases of the construction process and all contract types. It was important to identify factors that

required higher levels of trust, factors that weakened trust and factors unique to the construction

project. Additionally, it was important to utilize the factors that strengthened trust, the factors









that were related to one another and align these factors with specific factors related to

construction project. The combination of these parameters had a high likelihood to improve trust

and lead to an improved bottom line for construction projects and their stakeholders. The

research was limited to construction professionals working for large construction contractors in

the U.S.

5.2 Conclusions

The research clearly showed the importance of trust between contracting parties

throughout the entire construction process. Work in the pre-construction, design, procurement,

construction and close out phases was perceived to be improved by the existence of trust

between stakeholders. The presence of trust lessened the time and effort required to manage the

details of the project. This in return improved the bottom line of the construction projects and the

stakeholders involved in the project.

As the U.S. construction industry attempts to modernize itself with the use of advanced

technologies such as BIM, it must respect the high preference for face-to-face communication.

The research found that using advanced technologies such as BIM weakens trust on construction

projects. This is due to the perceived lack of benefits associated with new information and

communication technologies. However, correlation analysis did find relationships between

technologies inferring that individuals that prefer to use a particular technology will likely prefer

to use other technologies as well.

The use of e-mail on construction projects needs to be reclassified as casual

communication. The over-use of e-mail is currently causing a number of communication

challenges on construction projects. These challenges if not resolved by face-to-face

communication weaken trust, create adversarial relationships and could lead to legal disputes.









Good communication on construction projects is supported by the use of electronic

documents (schedules, estimates, pictures and videos), signed contracts and complete drawings

and specifications. Sharing information in an adequate and timely manner is also an important

method of strengthening trust between contracting parties over time.

The survey results indicated that there could be a number of antecedents of

trustworthiness for individuals working on construction projects. Theses included paying on

time, competency, reliability and effectively collaborating. However, the results of the case

studies indicated that there was one overarching antecedent which focused on consistently

honoring informal or formal agreements, "doing what you said you would do." To improve trust

on construction projects it is imperative to follow through on informal and formal agreements.

In terms of adopting new technologies and/or new work processes on construction, the

benefits associated with them must be clearly evident. Construction professionals respond well to

the improvements in KPIs (productivity, schedule, safety, quality, profitability, cost), and in

particular reduction in project duration and project costs. This infers that the adoption of new

technologies and work processes must consistently result in a reduction of project times and

project costs. This will assist with achieving the required buy-in from project participants.

An added dimension to the challenge of adopting new technologies and work processes is the

experience level of the individuals involved in the project. Generally, as the experience level of

the individual increases the required "proof' of benefits also increase. Individuals with

considerable work experience are generally more cautious in supporting new technologies and

work processes due to the inherent business, health and safety risks involved. However, once

these individuals experience the benefits first hand, they tend to be strong supporters. In addition,









the preference for using electronic document could be viewed as a sign that the construction

industry is making advances.

High levels of trust between contracting parties is necessary for improved project

management results. Leadership, team building, communication and information skills are

viewed as essential project management skills. The effectiveness of these skills is further

enhanced by the ability to foster trust with the individuals and work process involved on the

construction project.

Building trust on construction projects is different than other industries due to the nature

of construction projects. Construction projects are temporary, complex and uncertain. The non-

construction literature on trust and leadership proved to be useful in understanding the

parameters and theories associated trust and leadership. However, the results are not always

applicable to the construction industry.

5.3 Recommendations

The trust model enables construction professionals to be proactive in building strong

relationships and anticipating potential problems that lead to poor project performance. Trust is

the foundation of a number of positive initiatives in the construction industry. It fosters effective

value engineering, learning organizations, partnering, relational contracting, etc. The results of

the research could assist any number of these initiatives achieve better results.

Construction practitioners at all levels are continually searching for new ways of

improving work related performance. This applies at the executive level, the entry level and to

all stakeholders on construction projects. Advancing the knowledge and understanding of trust in

the field of construction could have a number of implications. First, the corporate culture of

construction firms could be reinvented into a trust based culture that is supported by incentives.

Second, hiring polices, strategies and assessment tools could be reformulated to reflect the









importance of trust building skills. The new policies would seek individuals with dispositional

characteristics closely associated with the required skill set. Third, training programs at all staff

levels could be updated to incorporate the trust and leadership findings. This will support the

transformation of the company culture. Fourth, staffing projects could originate from a different

perspective in attempting to match specific project factors with appropriate project managers.

This will also improve team effectiveness. Fifth, stakeholder management (e.g., owners,

architects, engineers, construction manager, contractors, subcontractors, vendors/suppliers and

consultants) could be trust based. This includes building long standing relationships with

stakeholders and improved management skills to maintain and strengthen trust over time. Sixth,

the research results could be used in each phase of the construction process. Last, the findings

could be transferred to different construction sectors (heavy civil, commercial, industrial, etc.)

and contract types.

The empirical exploration of the issues pertaining to trust in construction has created new

opportunities for additional research. Further research could focus on expanding the trust factor

framework. A detailed analysis of the communication methods on construction projects could be

completed by identifying the specific circumstances that encourage the use of advanced

information and communication technologies. The statistical analysis used in this research could

be repeated on different sample sizes and sample populations to see if the same statistically

significant results occur. The sample population of the study could be expanded to include other

stakeholders on construction projects and individuals working for smaller construction

companies. Additional research from the human perspective could further enhance the

understanding of construction projects and begin to close the gap with other academic

disciplines. Academic programs in building construction could consider revamping their









curriculum to ascertain whether their materials provide students the required knowledge in the

areas of trust. The results of this applied research could be shared with other construction project

stakeholders with the goal of building better relationships and achieve bettering business results.

Moreover, the survey used in this research could be administered to owners, designers, sub-

contractors and suppliers to accomplish a 360 analysis.









APPENDIX A
TRUST FRAMEWORK SCENARIO TEST

Bill Jones works for ABC Construction (ABC). He is a VP in the company and works out

of the New Jersey office. Bill has just celebrated his 56 birthday with his wife and five children

at the local church (Baptist) that he has attended all his life. He enjoys playing golf and fishing in

his spare time. Both the golf course and the lake where he fishes, is located five minutes away

from his home. As an adult, Joe has had only one job, working for ABC construction and he has

just completed 30 years of service. Joe obtained a B.A. in Civil Engineering and an MBA part-

time while working. In his 30 years at ABC, Joe has managed several projects helping him gain

important experience and an annual salary of $200,000. Bill's years in construction has made

him very skeptical about anyone he has not worked with before or heard about from a reliable

source.

ABC has been in business for over 50 years specializing in the construction of retail

shopping centers across the United Sates and is known for building the Mall of America (the

biggest mall in the U.S.). The company prides itself on using the latest technology including

BIM, tablet computers and project websites. The company believes in promoting from within but

discourages hiring family members.

ABC construction was contacted by XYZ Shopping Malls (XYZ) a South American

company looking to break into the American market. XYZ's plan was to build one of the largest

and elaborate shopping malls in the U.S.. The proposed site in Texas was large enough to have a

shopping mall of about 1.5 million square feet of gross leaseable area. XYZ wanted the mall to

be LEED certified (at the gold level) and stay within a budget of about $700 million. XYZ

intended to negotiate a cost-plus contract with ABC. The two companies had never done

business before. ABC was referred to XYZ by one of their American contacts. The only









information they had about each other's company was what they gleaned from their respective

company's websites.

Bill Jones from ABC and Jose Garcia from XYZ were given the leads for the project.

Jose Garcia was from Santiago, Chile and was temporarily living in Texas because of the project.

Jose was 33, single, enjoyed night life and preferred to talk in Spanish. His construction

experience was limited to South America. Jose he did not have any college education and was

not familiar with the American way of life.

During Bill and Jose's initial phone conversation, they both realized they a number of

similar business interests related to the proposed project. After the call, Bill e-mailed Jose to set

up a follow up meeting. Jose replied to Bill with a phone call without responding to Bill's e-mail.

After a few exchanges it was clear that Bill preferred to work through e-mail and Jose preferred

work through the phone. Bill decided to setup up a website for the project and posted a number

of discussion points for a working agenda and encouraged Jose to make changes accordingly to

the document on the website. The discussion points were as follows:

* Project scope
* Environmental impact
* Site review
* Existing survey Hazardous substances
* Geotechnical investigation
* Permits
* Preliminary estimate
* Preliminary schedule
* site logistics planning
* Value engineering
* LEED compliance
* BIM
* Funding

Bill suggested that they conduct the first couple of meetings via video conferencing. Bill

felt that business travel was a waste of time and money. Jose suggested that they meet in person









to get to know each other and tour of the site. Bill suggested that Jose post pictures or a video of

the site on project website for Bill to see. These discussions made Jose uncomfortable because he

preferred doing business face-to-faceand with people he could socialize with. Reluctantly, Bill

agreed to fly out to Texas to meet with Jose. Jose expressed his disinterest in using the project

website set up by Bill. He also stated he was unfamiliar with BIM and did not want to use it for

this project. It was clear that Bill preferred new technology when possible and Jose did not.

Before the meeting, Bill used some of his contacts in the construction industry to obtain

more information regarding XYZ and Jose Garcia. Bill found out that XYZ had a long history of

developing quality shopping malls throughout South America that showcased complex and

innovative designs. However, the complexity of XYZ's projects typically resulted in incomplete

contract documents causing a high number of owner directed change orders and delays. On the

positive side, XYZ was also known for paying on-time and with good margins. The only thing

known about Jose was that his uncle owned the company.

Explanation. Trust is the basis for all human action and without trust humans are

paralyzed by inaction (Luhman 1979). The construction industry faces a number of challenges

including low profitability, low productivity, high number of claims, low use of technology and

human action based on trust is the key to improvement. My research is intended to build a model

that could anticipate or predict the trust levels between contracting parties on construction

projects and in turn assist in formulating strategies that would foster a higher degree of trust

between them. More specifically, using the above scenario one would be able to predict which

similarities and which differences would influence the trust level between Bill and Jose and

impact success of their future relationship. The differences between Bill and Jose include:

* Bill is family oriented, attends church regularly and enjoys fishing and playing golf









* Jose is single with no children and enjoys nightlife

* Jose prefers to speak in Spanish, Bill prefers to speak in English

* Jose prefers to meet in person while Bill prefers to conduct meetings through video
conferencing

* Bills prefers to use new technology when possible Jose prefers not to

* Bill's company discourages family relations in their company, Jose's company promotes
family members first

The similarities between Bill and Jose:

* both companies have been in business for a long time
* both companies have good repetitions
* both companies have considerable experience in their fields
* both companies have an want to building cutting edge shopping malls
* both individuals have leadership positions in their companies

This research assists in understanding the trust level between Bill and Jose and their

respective companies and the reasons why. Depending on the results, different strategies can be

used accordingly to improve trust between them or a decision to terminate the relationship can be

made avoiding potential problems in the future.










APPENDIX B
CAREER FAIR SURVEY

Trust Questionnaire
This survey is conducted in cooperation with the ME. Rinker, Sr. School ofBuilding Construction.

Please circle the appropriate answer.
1. Gender: M F
2. Company Type: GC CM Design/Build Other
3. Construction Type: Commercial Industrial Heavy Civil Other
4. Company Volume (yr.): <$50m $50 to $99m $100m to $499m $500m & Over
5. Company Role: Owner VP /Director Project Manager Other
6. Experience: <5 years 5 to 10 years 11 to 20 years Over 20 years

Please indicate your level of agreement that on construction projects TRUST IS AFFECTED by the
following factors.
Using a 5-point scale with 1= strongly disagree, 2=disagree, 3=neutral, 4=agree, 5=strongly agree,
please circle the number that best reflects your opinion.

1. Personal Characteristics (i.e. gender, age, education) 1 2 3 4 5
2. Type of Stakeholder (i.e. owners, architects, engineers, suppliers) 1 2 3 4 5
3. Work Experience (i.e. number of years, skill level) 1 2 3 4 5
4. Communication Method (i.e. face-to-face, telephone, e-mail, 1 2 3 4 5
BIM)
5. Document Types (i.e. paper documents, electronic documents, 1 2 3 4 5
estimates, schedule)
6. Number Change Orders 1 2 3 4 5
7. Performance Indicators (i.e. cost, schedule, profit, quality) 1 2 3 4 5
8. Claims History 1 2 3 4 5
9. Contract Type (i.e. lump sum, unit-plus, etc.) 1 2 3 4 5
10. Project Characteristics (i.e. scale, complexity, space constraints) 1 2 3 4 5
11. Project Type (i.e. government or private) 1 2 3 4 5
12. Perceived Trustworthiness (i.e. reliability, competence, 1 2 3 4 5
cooperation)

Please indicate if your level of agreement that TRUST IS IMPORTANT in each of the following phases
of construction.

Using a 5-point scale with 1= strongly disagree, 2=disagree, 3=neutral, 4=agree, 5=strongly agree,
please circle the number that best reflects your opinion.

1. Pre-construction Phase (partnering, preliminary estimates and 1 2 3 4 5
schedule)
2. Design Phase (value engineering, constructability reviews, 1 2 3 4 5
BIM)
3. Procurement Phase (negotiations) 1 2 3 4 5
4. Construction Phase (inspections, RFIs, CPM scheduling) 1 2 3 4 5
5. Close-out Phase (as built drawings, claims, final payments) 1 2 3 4 5
THANK YOU!!










APPENDIX C
FINAL SURVEY INSTRUMENT

The Florida Survey Research Center at the University of Florida is working with UF researchers
in the M.E. Rinker, Sr. School of Building Construction to conduct a survey of construction
industry professionals to further understand the role of trust between contracting parties on
construction projects.
Your answers will remain anonymous. You do not have to answer any questions that you do not
wish to answer. The survey should only take about 10 minutes to complete.
Please indicate your response by marking the appropriate box. When you have completed the
survey, please return it to us at dzuppa@dcp.ulf.edu. Thank you for your participation.


First, we have afew general questions about your company and the work that you do.
1. Which of the following types of construction does your company do? [Please mark all that apply.]
Commercial Industrial


Heavy Civil Residential
Other: Other:
Don't know Refuse

And, which of the following best describes your company type? [Please mark one answer.]
General Contractor Construction Management
Design/Build Other:
Don't know Refuse

Would you say your company's annual volume is:
Less than $50 million $50 million to $99 million
$100 million to $499 million $500 million to $999 million
$1 billion or more Don't know
Refuse

How many years have you been working in the construction industry?
Less than 5 years 5 to 10 years
11to 15 years 16 to 20 years
More than 20 years Don't know
Refuse

And, which of the following best describes your role in the company? [Please mark one answer.]
Owner Vice President or Director
Project Manager Project Engineer


Other: Don't know
Refuse


Next, we have afew questions about your communications preferences.


~^


I


'










Below, you will find a list of statements about your communication preferences when working
on construction projects. Using a scale from 1 to 5, where 1 is "Strongly Disagree" and 5 is
"Strongly Agree," please indicate how much you agree or disagree with each statement.
Don't
1 2 3 4 5 know Refuse
6. I prefer to communicate face-to-face
7. I prefer to communicate on the telephone
8. I prefer to communicate by mailing back and forth
9. I prefer to communicate by using a project-specific website
10. I prefer to communicate by using video conferencing
11. I prefer to communicate by sharing information through a
Building Information Model (BIM)

The next group of statements focuses more specifically on documents related to construction
projects.
Don't
1 2 3 4 5 know Refuse
12. I prefer having electronic versions of documents
13. I prefer having paper versions of documents
14. I prefer having signed contracts
15. I prefer having a complete set of project drawings and
specifications
16. I prefer having a Building Information Model (BIM)
17. I prefer having a project website
18. I prefer having electronic schedules and estimates
19. I prefer having digital pictures and videos

Now, we'd like to know about your preferences for ii ,,i king n ith various types ofpeople when
completing construction projects.
Below, you will find a list of statements about various types of people you may work with on
construction projects. Using a scale from 1 to 5, where 1 is "Strongly Disagree" and 5 is
"Strongly Agree," please indicate how much you agree or disagree with each statement.
Don't
1 2 3 4 5 know Refuse
20. I prefer working with individuals who pay me on time
21. I prefer working with individuals who I am familiar with
22. I prefer working with individuals who keep my risk to a
minimum
23. I prefer working with individuals who are competent at their
jobs
Don't
1 2 3 4 5 know Refuse
24. I prefer working with individuals who are reliable
25. I prefer working with individuals who are caring
26. I prefer working with individuals that have similar values










27. I prefer working with individuals that I socialize with outside
of work hours
28. I prefer working with individuals who collaborate effectively
29. I prefer working with individuals who are not litigious

The next group of statements focuses more specifically on various stakeholders in construction
projects.
Don't
1 2 3 4 5 know Refuse
30. I prefer working with Owners or Owners' representatives
31. I prefer working with Designers
32. I prefer working with Suppliers / Vendors
33. I prefer working with Construction Managers
34. I prefer working with Subcontractors

The next group of statements focuses more specifically on worker characteristics.
Don't
1 2 3 4 5 know Refuse
35. I prefer relying on individuals who have a similar skill set as I
do
36. I prefer relying on individuals who have similar years of
experience as I do
37. I depend on individuals who are productive
38. I depend on individuals who work safely
39. I depend on individuals who control costs
40. I depend on individuals who complete quality work
41. I depend on individuals who make projects profitable
42. I depend on individuals who meet project deadlines

Next, we have some questions about your preferences related to various phases of construction
projects and contracts.
Below, you will find a list of statements about various aspects of construction projects. Using a
scale from 1 to 5, where 1 is "Strongly Disagree" and 5 is "Strongly Agree," please indicate how
much you agree or disagree with each statement.











Don't
1 2 3 4 5 know Refuse
43. Trust is important in the pre-construction phase of
construction projects
44. When the change orders on construction projects amount to
more than 10% of the total cost, I lose confidence in the
members of the project team
45. An effective constructability review depends on trust
between the parties involved
46. Using BIM to visualize construction projects creates trust
47. I prefer to receive a corrective change from a neutral 3rd party
48. Receiving an adequate and timely answer to an RFI (request
for information) improves trust
49. Good leadership on construction projects is based on trust
building
50. I trust the members of a project team on a Lump Sum
Contract
51. I trust the members of a project team on a Unit-Price
Contract
52. I trust the members of a project team on a Cost-Plus-Fee
Contract
53. I negotiate contracts based on trusting relationships
54. Claims can be avoided if trust exists between stakeholders
55. Use of information technology on construction projects is
dependent on trust
56. High-performing teams on construction projects are
dependent on trust between team members
57. Trust between contracting parties improves communication
58. Trust between contracting parties improves information
sharing
59. Value engineering requires trust between all stakeholders to
be successful


Finally, we just have a few demographic questions for statistical purposes.
60. Are you: I Male Female

61. Which of the following categories contains your age?
30 or younger 31 to 40 41 to 50
51 to 60 Over age 60 Refuse

62. What is the highest level of education you have completed?
High school graduate / GED Some college
Associate's degree Bachelor's degree
Master's degree PhD
Other: Refuse









APPENDIX D
LETTER TO PERSPECTIVE SURVEY PARTICIPANTS

Dear Survey Participant,

You were recently contacted by the Florida Survey Research Center at the University of
Florida requesting your participation in an important survey related to the construction
industry. The survey focuses on the factors that influence trust between contracting parties on
construction projects. The results of the survey will be used for innovative research and teaching
at the M.E. Rinker, Sr. School of Building Construction at the University of Florida.

Please find a copy of the survey attached. I would like to thank you in advance for taking a brief
moment to complete the survey. Once the survey is completed, please e-mail the survey to
dzuppa@dcp.ufl.edu or fax it to 352.392.4364. If you have any question please contact Dino
Zuppa, a Ph.D. Student in the Rinker School of Building Construction, at 352-273-1188.
Thank you again for your time. Your contribution is greatly appreciated.

Sincerely,



Dr. Raymond Issa
Professor and Director of Graduate and Distance Education Programs









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BIOGRAPHICAL SKETCH

Dino Zuppa was born and raised in Canada. He completed his Bachelor of Arts at

McMaster University and his Master of Arts of Urban and Regional Planning at the University of

Florida. Dino has held several business and government related positions in the Toronto area.

While completing his Ph.D. he was the Assistant Director of the Shimberg Center for Housing

Studies.





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1 MODEL FOR DEVELOPING TRUST IN CONSTRUCTION MANAGEMENT By DIODORO ZUPPA A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLOR IDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY UNIVERSITY OF FLORIDA 2009

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2 2009 Diodoro Zuppa

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3 To Julia

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4 ACKNOWLEDGMENTS I would like to acknowledge a num ber of individuals for their assistance in the completion of my dissertation. Firs t, I would like to thank Dr. Case lla for his assistance with the statistical analysis in my re search. Second, I would like to ack nowledge Dr. Scicchitano and his team at the Florida Research Center for their assistance in ad ministering the telephone survey. Third, I would like to acknowledge the individuals at the Shimberg Center for their support. Fourth, I would like to express my gratitude to my dissertation committee: Dr. Issa, Dr. Williamson, Dr. Lucas, Dr. Olbina, and Dr. C how. More specifically, I would like to acknowledge Dr. Issa, the chair of my committee, for being a valued academic mentor, setting high standards, creating a rewarding Ph.D. expe rience and exposing me to a number of academic opportunities; Dr. Williamson for her continua l guidance, encouragement and funding the telephone survey and SPSS training required to co mplete my dissertation; Dr. Lucas for the insightful discussions regarding the human impacts on construction projects; Dr. Olbina for her support and feedback; and Dr. Chow for his participation and enc ouragement. Fifth, I would like to thank my parents and my sisters for their enco uragement. Sixth, I would like to give a special thanks to Dr. Williamson for providing me th e many forms of support and encouragement throughout the process. Her commitment to my academic, professional, and family success was greatly appreciated. Last, I woul d like to express my deepest gr atitude to my wife and my daughter. I would like to thank Patricia for her unwavering encouragement and creating the opportunity to pursue my goals, and Julia for ma king the journey more enjoyable than I thought possible.

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5 TABLE OF CONTENTS Page ACKNOWLEDGMENTS .............................................................................................................. 4LIST OF TABLES .......................................................................................................................... 8LIST OF FIGURES ...................................................................................................................... 12ABSTRACT ...................................................................................................................... ............ 15 CHAP TER 1INTRODUCTION ................................................................................................................. 171.1Need for Research ........................................................................................................ 171.2Challenges Specific to U.S. Construction Industry ...................................................... 191.3Main Research Focus ................................................................................................... 202LITERATURE REVIEW ...................................................................................................... 242.1Leadership .................................................................................................................... 242.1.1Defining Leadership ......................................................................................... 242.1.2The Difference between Lead ership and Management .................................... 252.1.3Trait Approach ................................................................................................. 272.1.4Behavior Approach .......................................................................................... 312.1.5The Needs Approach ........................................................................................ 352.1.6Situational Approach ........................................................................................ 392.1.7Transformational Approach ............................................................................. 432.1.8Team Approach ................................................................................................ 472.1.9Leadership Summary ....................................................................................... 482.2Trust ......................................................................................................................... .... 492.2.1Definition of Trust ........................................................................................... 492.2.2Trust Focused Compendiums of Papers ........................................................... 492.2.3Trust Focused Dedicated Journal Editions ....................................................... 582.2.3.1Trust in the Business Environment .................................................... 582.2.3.2Trust within organizations ................................................................. 652.2.3.3Trust in human resource management ............................................... 672.2.3.4Trust in organizations ........................................................................ 712.2.3.5Trust among personnel ...................................................................... 742.2.3.6Trust in marketing .............................................................................. 772.2.4Key Trust Research .......................................................................................... 832.2.5Trust in Virtual Environments ......................................................................... 972.2.6Breach of Psychological Contract and Trust .................................................. 1012.2.7Summary: Integrated Mode l of the Trust Process.......................................... 1032.2.7.1Orientation phase ............................................................................. 1032.2.7.2Evaluation phase .............................................................................. 106

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6 2.2.7.3Action phase .................................................................................... 1092.2.7.4Outcome phase ................................................................................. 1102.3Trust in Construction Management ............................................................................ 1112.3.1Key Performance Indicators ........................................................................... 1112.3.2Leadership Skills ............................................................................................ 1122.3.3Core Competencies ........................................................................................ 1132.3.4Productivity .................................................................................................... 1142.3.5Benefits of Trust ............................................................................................. 1152.3.6Antecedents of Trust ...................................................................................... 1152.3.7Trust and Partnering ....................................................................................... 1152.3.8Trust and Teams ............................................................................................. 1162.3.9Trust and Information and Communication Technology ............................... 1162.3.10Trust Frameworks and Models From the Construction Literature ................ 1182.3.11Summary ........................................................................................................ 1203METHODOLOGY .............................................................................................................. 1803.1Framework of Trust Factors ....................................................................................... 1823.2Scenario Test .............................................................................................................. 1823.3Prioritizing the Factors ............................................................................................... 1823.4Research Questions .................................................................................................... 1843.5Survey Instrument ...................................................................................................... 1843.6Statistical Analysis and Preliminary Trust Model ..................................................... 1853.7Validating Case Studies a nd Revised Trust Model .................................................... 1864RESULTS 1954.1Survey Respondent Characteristics ............................................................................ 1954.2Survey Results ............................................................................................................ 1964.3Correlation Analysis .................................................................................................. 1984.4Chi-Squared Goodness of Fit Test ............................................................................. 2004.5Chi-Squared Test for Independence ........................................................................... 2034.6Logistic Regression .................................................................................................... 2044.7Trust Model ................................................................................................................ 2044.8Validating Case Studies ............................................................................................. 2054.9Revised Trust Model .................................................................................................. 2124.10Comparison to Other Leadership and Trust Models .................................................. 2144.11Comparison to Construction Specific Trust Models .................................................. 2165SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ....................................... 2525.1Summary .................................................................................................................... 2525.2Conclusions ................................................................................................................ 2575.3Recommendations ...................................................................................................... 259APPENDIX ATRUST FRAMEWORK SCENARIO TEST ...................................................................... 262

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7 BCAREER FAIR SURVEY .................................................................................................. 266CFINAL SURVEY INSTRUMENT ...................................................................................... 267DLETTER TO PERSPECTIVE SU RVEY PARTICIPANTS ............................................... 271LIST OF REFERENCES ............................................................................................................ 272BIOGRAPHICAL SKETCH ...................................................................................................... 288

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8 LIST OF TABLES Table page 1-1 Ranking of Computer use by industry in 2006 ................................................................. 22 1-2 Ranking of Private Sector Industries According to the Lowest Median Years of Em ployee Tenure ........................................................................................................................ ....... 22 1-3 Employed Workers by Alternative Work Arrangements in 2005 .................................... 23 2-1 Comparing Leadership and Management ....................................................................... 121 2-2 Comparing Leaders and Managers ................................................................................. 121 2-3 Summary of the Trait Approach ..................................................................................... 122 2-4 Summary of the Behavior Approach .............................................................................. 123 2-5 Overview of Corresponding Theory of Needs ................................................................ 124 2-6 Description of Di fferent Power Bases ............................................................................ 126 2-7 Summary of the Needs Approach ................................................................................... 127 2-8 Major Findings in Cognitive Resource Theory .............................................................. 128 2-9 Summary of the Situational Approach ........................................................................... 131 2-10 Factors of Transformational and Transactional Leadership ........................................... 132 2-11 Summary of the Transformational Approach ................................................................. 134 2-12 Comparison of Team Effectiveness Criteria ................................................................... 135 2-13 Summary of Leadership Approaches .............................................................................. 136 2-14 Definitions of Trust ..................................................................................................... .... 137 2-15 Forms and Facades of Trust ............................................................................................ 139 2-16 Phases of Alliance Development and Evolution of Trust ............................................... 139 2-17 Sources of Intentional Reliability ................................................................................... 140 2-18 Sources of Reliance......................................................................................................... 140 2-19 Summary of Compe ndium of Papers .............................................................................. 140

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9 2-20 Form of Dependence, Risks, Qualities of Trustworthiness and Mechanism of Trust .... 141 2-21 Trust Building Processes, Base Disciplin es, and Underlying Beha vioral Assum ptions 144 2-22 Summary of Academy of Management .......................................................................... 146 2-23 Risk Reduction in Di fferent Alliance Types ................................................................... 147 2-24 Summary of Organizational Studies ............................................................................... 148 2-25 Summary of International Journa l of Hum an Resource Management ............................ 149 2-26 Summary of Orga nizational Science .............................................................................. 150 2-27 Summary of Personnel Review ....................................................................................... 150 2-28 Summary of European Journal of Marketing .................................................................. 152 2-29 Comparison of the Behavior al Definitions of Trust ....................................................... 153 2-30 Trust Antecedents ........................................................................................................ ... 155 2-31 Managing Trust: Sample Insight From the Literature .................................................... 157 2-32 Theoretical Approaches to Trust Developm ent .............................................................. 159 2-33 Comparison of Types of Trust ........................................................................................ 160 2-34 Summary of Key Journal Articles ................................................................................... 163 2-35 Summary of Trust in Virtual Environments ................................................................... 166 2-36 Summary of Trust a nd P sychological Trust .................................................................... 167 2-37 Examples of Cyclical Development of Trust .................................................................. 170 2-38 Key Performance Indicators in the Construction Industry ............................................. 170 2-39 Use of Leadership Approaches in Construction ............................................................. 171 2-40 Leadership Skills for Project Managers in Construction ................................................ 172 2-41 Core Competencies of Proj ect Managers in Construction .............................................. 173 2-42 Benefits of Building and Main taining Trust in Construction ......................................... 174 2-43 The Antecedents of Trustworthiness in Construction ..................................................... 175 2-44 Partnering Success Factors in Construction .................................................................... 175

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10 2-45 Success Factors of Teams in Construction ..................................................................... 176 2-46 Benefits of Using Technology in Construction .............................................................. 176 2-47 Factors of Success for Using Technology a nd Virtual Collaboration in Construction ... 177 2-48 Relationship-Based Trust Framework ............................................................................ 177 2-49 Processes in Constructi on That Require Trust ................................................................ 179 3-1 Framework of Trust Factors............................................................................................ 188 3-2 Categories of Trust .......................................................................................................... 192 3-3 Research Questions ........................................................................................................ 194 4-1 Communication Type Correlation Matrix ...................................................................... 226 4-2 Document Type Correlation Matrix ................................................................................ 226 4-3 Trustworthiness Correlation Matrix ................................................................................ 227 4-4 Stakeholder Correlation Matrix ...................................................................................... 227 4-5 KPI Correlation Matrix ................................................................................................... 227 4-6 Contract Type Correlation Matrix .................................................................................. 228 4-7 Pre-construction and Design Phase Correlation Matrix .................................................. 228 4-8 Construction Phase Correlation Matrix .......................................................................... 228 4-9 Management Correlation Matrix ..................................................................................... 228 4-10 Chi-Squared Goodness of Fit Test Results: Communication Method ............................ 229 4-11 Chi-Squared Goodness of Fit Test Results: Document Type ......................................... 229 4-12 Chi-Squared Goodness of Fit Te st Results: Trustworthiness ......................................... 229 4-13 Chi-Squared Goodness of Fit Test Results: Stakeholder ................................................ 230 4-14 Chi-Squared Goodness of Fit Test Results: KPIs ........................................................... 230 4-15 Chi-Squared Goodness of Fit Test Results: Contract Type ............................................ 230 4-16 Chi-Squared Goodness of Fit Test Results: Pre-constructi on & Design Phase .............. 230 4-17 Chi-Squared Goodness of Fit Te st Results: Construction Phase .................................... 230

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11 4-18 Chi-Squared Goodness of Fit Test Results: Management .............................................. 231 4-19 New Categories ........................................................................................................... .... 231 4-20 Results of Chi-Squared Test for Independence .............................................................. 232 4-21 Significant Relationships ................................................................................................ 233 4-22 Case Study 1 ................................................................................................................... 236 4-23 Case Study 2 ................................................................................................................... 237 4-24 Case Study 3 ................................................................................................................... 238 4-25 Case Study 4 ................................................................................................................... 239 4-26 Case Study 5 ................................................................................................................... 240 4-27 Case Study 6 ................................................................................................................... 241 4-28 Case Study 7 ................................................................................................................... 242 4-29 Case Study 8 ................................................................................................................... 243 4-30 Case Study 9 ................................................................................................................... 244 4-31 Comparison of the Different Trust Models ..................................................................... 249 4-32 Uniqueness of the Revised Trust Model to the Trust Models in the Construction Literature .................................................................................................................... ..... 251

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12 LIST OF FIGURES Figure Page 2-1 Follower Behavior Based on Strongest Need ................................................................. 124 2-2 Sequence of Actions for a Leader to Id entify the S trongest Needs of a Follower .......... 125 2-3 Leader Roles in the Path-Goal Model ............................................................................. 129 2-4 Situational Leadership .................................................................................................... 130 2-5 Transformational Leadership and Transactional L eadership .......................................... 133 2-6 Team Leadership Model ................................................................................................. 135 2-7 Detailed Model of In itial Trust Formation...................................................................... 141 2-8 Integrating Trust and Distrus t: Alternative Social Realities ........................................... 142 2-9 A Process Model of Opportunistic Betrayal ................................................................... 143 2-10 Exchange Framework of Initiating Managerial Trustworthy B ehavior .......................... 143 2-11 Trust and Control in Strategic Alliances ......................................................................... 144 2-12 Proposed Model of National Culture and the Developm ent of Trust ............................. 145 2-13 Integrated Framework of Trust, Cont rol, and Ris k in Strategic Alliances ..................... 147 2-14 Dispositional and Situati onal Determinants of Trust in Two Types of Managers ......... 148 2-15 The Relational Exchanges in Relationship Marketing .................................................... 151 2-16 The KMV Model of Relationship Marketing ................................................................. 151 2-17 Trust and Reliance in Business Relationships ................................................................ 152 2-18 Derived Path Coefficients Based on Structural E quation Analysis of the Theoretical Model ......................................................................................................................... ..... 154 2-19 Proposed Model of Trust ................................................................................................ 156 2-20 The Cyclical Trust-Building Loop for Collaboration ..................................................... 156 2-21 Managing Trust: Summary Implications for Practice ..................................................... 158 2-22 Stages of Trust Development .......................................................................................... 161

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13 2-23 The Continuum of Degrees of Intra-Organizational Trust ............................................. 161 2-24 A Depiction of the Trust Process .................................................................................... 162 2-25 Antecedents of Virtual Collaboration ............................................................................. 164 2-26 Taxonomy of Trust Information ..................................................................................... 164 2-27 Components of the Conceptual Framework in the Context of E-commerce .................. 165 2-28 Developed Research Model for Investigating O nline Trust ........................................... 166 2-29 Integrated Model of the Trust Process. ........................................................................... 168 2-30 Different Forms of Trustor and Trustee Relationships ................................................... 169 2-31 The Continuum of Degrees of Trusting Action .............................................................. 169 2-32 Pinto et al. 2008 Trust Model ......................................................................................... 178 2-33 Wong et al. 2008 Trust Model ........................................................................................ 178 2-34 Jin et al. 2005 Trust Model ............................................................................................. 179 3-1 Overview of Methodology .............................................................................................. 187 3-2 The Gender, Position and Years of Experience of Survey Respondents ........................ 192 3-3 The Survey Respondents Company Type Construction Type and Annual Volum e .... 192 3-4 Ranking of Trust Factor Categories ................................................................................ 193 3-5 Ranking of the Need of Trust in Different Phases of Construction ................................ 193 4-1 Survey Respondent Characteris tics: Type of Construction ............................................ 218 4-2 Survey Respondent Charact eristics: Com pany Type ...................................................... 218 4-3 Survey Respondent Charact eristics: Com pany Volume ................................................. 219 4-4 Survey Respondent Character istics: Role in Company .................................................. 219 4-5 Survey Respondent Characteris tics: Years of Experience .............................................. 220 4-6 Survey Respondent Characteris tics: Education D istribution .......................................... 220 4-7 Survey Respondent Charact eristics: Age Distribution ................................................... 221 4-8 Survey Respondent Character istics: Gender Distribution .............................................. 221

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14 4-9 Rankings of Communication Method ............................................................................. 222 4-10 Rankings of Document Types ......................................................................................... 222 4-11 Rankings of Trustworthiness .......................................................................................... 223 4-12 Rankings of Stakeholders ............................................................................................... 223 4-13 Rankings of Key Performance Indicators ....................................................................... 224 4-14 Rankings of Contract Types............................................................................................ 224 4-15 Rankings of Pre-Constr uction and Design Phase ........................................................... 225 4-16 Rankings of Construction Phase ..................................................................................... 225 4-17 Rankings of Management Skills ..................................................................................... 226 4-18 Trust Factors Tested for Trust Model ............................................................................. 233 4-19 Categories of Trust Factors ............................................................................................. 234 4-20 Preliminary Trust Model ................................................................................................. 235 4-21 Trust Model for Contracting Pa rties on Construction Projects ....................................... 245 4-22 Detailed Trust Model for Contractin g Parties on Construction Projects ........................ 246 4-23 Pinto et al. 2008 Trust Model ......................................................................................... 247 4-24 Wong et al. 2008 Trust Model ........................................................................................ 247 4-25 Jin et al. 2005 Trust Model ............................................................................................. 248

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15 Abstract of Dissertation Pres ented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy FACTORS IMPACTING TRUST BETWEEN CONTRACTING PARTIES ON CONSTRUCTION PROJECTS By Diodoro Zuppa August 2009 Chair: R. Raymond Issa Major: Design, Construction, and Planning The construction industry is f acing a number of challenges related to low productivity rates, uncertain profits and lo w adaptation rates of new technol ogies. Trust between contracting parties on construction projects is viewed as an important stra tegy to address these and other problems. This research focused on identifying the factors found on construction projects that weakened or strengthened trust between stakeholders. A thorough literature review of leadership approaches, trust models and leadership and trust in construction was completed. The leadership literature found that effective leadership was dependent on trust. The review of the trust models confirmed this finding and provided insights regarding the nature of developi ng trust. The construction literatur e provided additional insights and the necessary context of tr ust on construction projects. The methodology applied in the research fi rst developed a comprehensive framework containing a number of f actors that could impact trust on cons truction projects. The applicability of the framework was tested. The factors in the framework were prioritized and reduced with the use of a preliminary survey. The revised prio ritized framework provided the basis for the research questions and survey questions. The su rvey was administered by phone with fax and email support. The survey results were analy zed using advanced st atistical methods. The

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16 statistical results were developed in a prel iminary trust model. The model was tested by validating cases studies. The results of the case studies were incorporated to develop a revised and final trust model for contracti ng parties on construction projects. The survey respondents were characterized as highly educated males with over 20 years of construction experience holding senior positions. Thorough the us e of descriptive statistics, correlation analysis, Chi-Square Goodness of Fit Test, Chi-Square Test of Independence, and validating case studies each trust factor was iden tified as weakening trust, strengthening trust or requiring trust. The major findings indicated that face-to-face communi cations strengthened trust; the over use of e-mail w eakened trust; honoring informal and formal agreements was the key antecedent of trust; time was the key perf ormance indicator; construction management was enhanced by high levels of trust and trust could increase the bottom line of construction projects.

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17 CHAPTER 1 INTRODUCTION The construction industry, which is characteri zed by uncertainty, com plexity and urgency, currently faces a number of obstacles (Telem et al. 2006; Dainty et al. 2005; Turner and Muller 2003). Construction projects in par ticular present some of the most challenging arenas within which to apply advanced information and communication technologies and project management techniques (Dainty et al. 2005) The circumstances surroundi ng construction projects have resulted in a number of negativ e impacts including lo w productivity rates, low adaptation of new technologies, low profit margins, high number of claims, high number of delays and high number of safety infractions. The consequences of not creating more efficient construction projects and construction teams are significant considering the U.S. construction industry employs close to 8 million people and accounts for over $1 trillion(8%) towards the gross domestic product (2008 U.S St atistical Abstract). 1.1 Need for Research Trust and leadership can signifi can tly contribute to the success or failure of construction projects. Hyvari (2006) found that a project managers leadership ability accounted for approximately 76% of a projects success and 67% of a projects failur e. Other studies have showed that a project manager without leadersh ip skills can increase the unexpected transaction costs by 25% if he/she was unable to effectiv ely clarify misundersta ndings (Levitt 2007). However, effective leadership is dependent on trust between contracting parties. Leadership without mutual trust is a contra diction (Bennis 2003, page 131). Trust is imperative in building successful teams, adopting new technologies, reducing costs and improving the bottom line of construction projects (Lui et al. 2006; O Connor and Yang 2004; Fong and Lung 2007). Trust also has a direct link to reduc ing costs and saving time (Constr uction Industry Institute 1993).

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18 Trust is the lubrication that makes it possibl e for organizations to work. Its hard to imagine an organization without some semblan ce of trust operating somehow, somewhere. Trust is the glue that maintains organization integrity. Like leadersh ip, trust is hard to describe, let alone define. We know when it is operating and when it is not. We cannot say much more about it expect for its esse ntiality (Bennis and Nanus 1985, page 43). Scholars in construction tend to frame research questions fro m technical dimensions. They focus on new technologies, processes, techniques, and materials while failing allocate the same levels of research to understanding the human dimensions involved in the construction process (Turner and Muller 2005). Construc tion research lags behind other fields of research in how leadership and trust building (human dimension) skills impact the success (profit, costs, schedule, quality, safety) of constructi on projects. A a special issue for its 50th Anniversary, the Journal of Construction Engineering and Manage ment outlined a number of pressing research areas. Developing new construction specific mana gement models that assist construction professionals in bridging the gap in values, be liefs, norms and work practices of individuals on construction projects across the globe were amon g the top priorities (Levitt 2007). The special issue also stressed the importa nce of improving leadership, co mmunication, and trust building skills to compliment and support t echnical skills (Russell et al. 2007). Other research has stressed the importance of using the combination of adva nced technology and trus t based relationships (Ho 2009; Kim et al. 2009, Yeung et al. 2009). However, scholars have found that the impacts of the factors leading to good leadership and strong trust specific to constr uction projects have not been researched to the same degree as in other industries (i.e. financial, business, government, educational) (Turner and Muller 200 5). There is a need to evaluate leadership and trust theories in the context of the construction industry and to develop construction specific leadership and trust models. Recent trust research in the c onstruction literature has focused on the Asian construction industry (Jin and Li ng 2005; Jin and Ling 2006). The focus of this research is to help mitigate the lack of leadership and trus t research in the U.S. construction industry.

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19 1.2 Challenges Specific to U. S. Construction Industry Many leadership and trust m odels discussed in the literature have been developed without considering the unique context of the U.S. c onstruction industry. Using information from the U.S. Bureau of Labor Statistics an overview of the U.S. construction industry is provided. Safety The construction industry has the worst safe ty record for all industries analyzed by the Bureau of Labor Statistics. For instance, in 2005, the construction industry experienced 1,186 or 21% of fatal work injuries ou t of 5,702 total fatal work injuries in the U.S. This was the most of any industry (about one out of every five fatal work injuries recorded). The construction industry also had the highest nonfatal injuries and illnesses incident rate for all private industries. It had 414,900 nonfatal injuries and illnesses. Th is translated into an incidence rate of 6.3 (injuries or illnesses) per 100 full-time worker s while the average incident rate for private industries was 4.6 per 100 full-time workers (Depar tment of Labor, Bureau of Labor Statistics, 2007). Computer use. According to the Bureau of Labor St atistics, the construction industry has the lowest use of computers and the second lowe st use of the Internet of private industries studied. Twenty-eight per cent (28%) of employees in the construction indu stry use computers at work and 21% use the Internet at work (Table 1-1) (Department of Labor, Bureau of Labor Statistics, 2007) Employee tenure. The construction industry is saddled with one of the lo west levels of employee tenure rates of all private sector industr ies. Table 1-2 shows that in terms of median number of years, employees in the construction industry remain with an employer for 3 years. This can be considered short compared with th e manufacturing (5.4 years) and transportation and utilities industries (4.9 years). The low level of employee tenure is coupled with the highest

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20 average weekly hours worked (38.6 hours per week ) compared to other industries (Department of Labor, Bureau of Labor Statistics, 2007). Alternative and contingent employment arrangements. The number of alternative workers identifies the portion of workers in an industry that have non-typical employment arrangements (Department of Labor, Bureau of Labor Statistics, 2007). Table 1-3 ranks the percent of independent contractors, on-call workers and workers provid ed by contract firms according to industry. Construction ranks the highest or the second highest in use of each type of temporary employee (Department of Labor Bureau of Labor Statistics, 2007). Regulatory complexity. The construction industry is burdened by numerous regulatory requirements. For instance, as construction projec t managers in the United States attempt to delivery successful projects they are faced with over ,000 jurisd ictions at the state and local government levels that regulate building design, construction, and renovation through a confusing, diverse, and, at times, conflicting array of codes, sta ndards, rules, regulations, and procedures (Russell et al. 2007, page 662). Summary of Characteristics of Construction Industry. The analysis in this section compared the construction industry to other privat e sector industries. Using data from the U.S. Census Bureau and the Bureau of Labor Statisti cs, it was evident that the construction industry faces high regulatory complexity, high turnover, a large number of temporary employees, poor safety record and low use of computers. 1.3 Main Research Focus The m ain focus of this research centered on developing a construction specific trust model. The model is aimed at improving trust between cont racting stakeholders on construction projects. The model incorporates a set of prioritized factors found on cons truction projects that were linked to weakening or strengthening trust. Th e range of construction specific factors were

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21 associated with communication methods, document types, types of stakeholders, expectations, key performance indicators, contract types, ma nagement skills and the processes found in each phase of the construction process. These also acted as supplementa ry research questions. The end result of the trust model was intended to assi st in addressing the challenges facing the U.S construction industry while enhancing the bottom line of construction projects and their stakeholders.

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22 Table 1-1. Ranking of Com puter use by industry in 2006 Rank Industry % of Computer Use Rank Industry % of Internet Use 1 Financial activities 82.4 1 Financial activities 68.9 2 Information 77.5 2 Information 67.5 3 Business & professional services 68.4 3 Business & professionalservices 57.1 4 Education and health services 62.2 4 Education and health services 42.8 5 Manufacturing 51.9 5 Manufacturing 39.1 6 Wholesale trade 51.1 6 Transportation and utilities 33.7 7 Transportation and utilities 47.6 7 Wholesale trade 32 .7 8 Mining 42.5 8 Mining 31.8 9 Leisure and hospitality 30.4 9 Construction 21.0 10 Construction 28.1 10 Leisure and hospitality 17.6 Source: Department of Labor, Bureau of Labor Statistics, 2007 Table 1-2. Ranking of Private Sector Industrie s According to the Lowest Median Years of Employee Tenure Rank Occupational Category Median Years 1 Leisure and hospitality 1.9 2 Construction 3.0 3 Wholesale retail 3.1 4 Professional and business services 3.2 5 Mining 3.8 6 Financial activities 4.0 7 Education and health services 4.0 8 Transportation and utilities 4.9 9 Nondurable Goods Manufacturing 5.4 10 Manufacturing 5.5 Source: United States Department of La bor, Bureau of Labor Statistics, 2007

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23 Table 1-3. Employed Workers by Alte rnative Work Arrangements in 2005 Rank Industry Independent Contractors Rank Industry On-call Workers Rank Industry Workers Provided by Contract Firms 1 Construction 22.0 1 Education and health services 33.8 1 Public administration 16.6 2 Professional and business services 21.3 2 Construction 12.2 2 Construction 16.5 3 Financial activities 10.4 3 Leisure and hospitality 10.4 3 Education and health services 15.7 4 Other services 9.9 4 Transportation and utilities 8.4 4 Manufacturing 14.1 5 Retail trade 8.9 5 Professional and business services 7.7 5 Professional and business services 10.4 6 Education and health services 8.7 6 Retail trade 5.6 6 Financial activities 6.8 7 Leisure and hospitality 4.5 7 Manufacturing 4.8 7 Leisure and hospitality 4.5 8 Transportation and utilities 3.9 8 Public administration 4.4 8 Transportation and utilities 4.0 9 Manufacturing 3.2 9 Other services 3.8 9 Information 4.0 10 Agriculture & related industries 2.6 10 Financial activities 3.4 10 Wholesale trade 3.4 11 Wholesale trade 2.1 11 Wholesale trade 2.1 11 Retail trade 3.1 12 Information 2.0 12 Information 1.8 12 Other services 0.3 13 Public administration 0.3 13 Mining 1.0 13 Agriculture & related industries 0.2 Source: Department of Labor, Bureau of Labor Statistics, 2007

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24 CHAPTER 2 LITERATURE REVIEW The literature review is organized in three se ction s. The first section reviews leadership theory in the field of business management. The second section focuses on trust literature from the disciplines of psychology and business manageme nt. The third section analyzes the topics of leadership and trust specific to constructi on management, which include key performance indicators, teams and information technology. 2.1 Leadership The leade rship section of the literature review begins with an attempt to define leadership. It continues with a discussi on on the differences between l eadership and management. The section concludes with a review of the main leadership approaches, which include trait, behavioral, needs, contingency, tr ansformational and team. In descri bing the different leadership approaches the terms leader and the followe r are used. This connotation does not imply a hierarchical relationship. It simply provides a distinction betw een the entities in the leadership process. 2.1.1 Defining Leadership Leadership is a universal phenom enon in hum ans and examining it is one of the worlds oldest pursuits (Bass 1990). Leadership resear ch has revealed over 130 different definitions (Burns 1978), making it one of the most obs erved and least understood phenomena on earth (Burns 1978, page 2). Bass states that there are almost as many different definitions of leadership as there are persons who have atte mpted to define it (Bass 1990, page 11). Burns (1978) also points out that it is im portant to have differe nt definitions of lead ership to address the contextual difference in which leadership is used For instance, the meaning of leadership might

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25 be different in the financial services industry compared to the meaning of leadership in the construction industry. Although scholars have failed to agree on a definition of leadership, some common ground exists. First, leadership is an intende d interaction between a leader and a follower (individual, group or orga nization) with the relationship be tween the leader and follower not necessarily hierarchical in natu re. Second, the interaction between the leader and the follower is a process that is context specific where the leader influences or inspires the follower to achieve mutually beneficial goals. Thir d, the leader has the ability to effectively adapt to changing situational variables. Fourth, the process of influence is based on the most important needs of the follower creating an enthusiastic, commitment by bot h parties. Last, the l eader and follower are both transformed, changed or have experienced growth by the process of leadership (Hackman and Johnson 1991; Hersey et al. 2001; Nort hhouse 2001; Yukl 2002; Burns 1978; Bass 1990). 2.1.2 The Difference between Leadership and Management Although a m anager (or a project manager in the construction industry) is sometimes called a leader, the act of leading (leadership) is different than the act of managing (management) (Covey 1989; Kotter 1990; Bass 1990; Zal eznik 1992; Bennis 2003). Leadership and management are complementary yet distinct maki ng it difficult to define leadership (Caldwell 2003). Leadership could include management, but management does not necessarily include leadership (Bass 1990). This pe rmits the potential c onflict between these two functions where managing may hamper leadership development and leadership may disrupt the effectiveness of managers (Covey 1989; Zaleznik 1992). Stron g management alone can create bureaucracy without a purpose, but strong lead ership alone can create change that is impractical. Effective managers must also be leaders and leaders mu st manage (Yukl and Lepsinger 2004, p. 10). The necessity for leadership and management mu st find a balance that enables construction

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26 companies to thrive in a constantly evolving and highly unpredictable industry (Cheng et al. 2007; Dainty et al. 2005; Odusami, 2002). Leadership is more of an art (Covey 1989) th at focuses on inspiring and aligning people to a companys vision while management focuses on more traditional measures linked to the companys bottom line (Kotter 1991) Leadership is a social process within a network of complex relationships which forms a constan tly evolving community. As people in this community interact conflicts between personal values, beliefs and needs arise. A leader sees past the conflicts and aligns the individuals into an effectively functioning community focused on the same goal. Leadership creates new beliefs, patterns a nd actions while management is used to adapt to this change by establishing stability and predictability (Barker 1997). Leadership creates the vision for change and management tr anslates the vision into actions (Caldwell 2003). Other researchers go so far to argue that mangers and leaders are different types of people, managers being more reactive and less emotionally involve d, and leaders being more proactive and more emotions invol ved. The overlap between leadership and management is centered on how they both invol ve influencing a group of individuals in goal attainment. (Northouse 2001, page 12) As indicated in Tables 2-1 and 2-2, mana gement includes the functions of planning, budgeting, organizing, staffing, controlling, problem solving, and focusing on the short term bottom line. Leadership includes the functions of establishing dire ction, aligning people, motivating, producing change, and inspiring trust for the long term (Kotter 199; Bennis 2003). In the construction industry the function of management would be defined by budgeting, scheduling, and performance measuring (Menches and Hanna 2006; Cox et al, 2003; Chua et al. 1999) where leadership would be defined by constantly improving (Spatz 1999) team building (Skipper and Bell 2006) a nd trust building (Bulte r and Chinowsky 2006).

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27 In contrast, other scholars ch allenge the distinction between leadership and management. They argue that the main focus of any organizati on is the achievement of goals and whether they are accomplished by management or leadership makes no difference. Even managers that are insensitive and lower employee morale can sti ll achieve good results (Andersen 2006). In the construction industry these goals are referred to key performance indicators (Cox et al. 2003) or measures of project success (Hughes et al. 2004). However, scholars and researchers argue because of the unique conditions of the constr uction industry sound management (Cox et al, 2003) and leadership (Skipper and Bell 2006; Dainty et al. 2005) are e ssential to success of construction companies. 2.1.3 Trait Approach The leaders hip trait approach section discu sses the great man theory, leadership traits between 1904 and 1947, leadership traits between 1948, and 1970 and the five factor model. Great Man Theory. The pursuit of identifying personality traits of great leaders has been a goal of scholars since the beginning of time. Confuciu s in 500B.C. and Aristotle in 300B.C. proposed ideal traits for leaders (Muller 2007). At the beginning of the 20th Century the great man theory emerged and focused on the specia l traits of great leaders that aided them in achieving extraordinary accomplishments regardless of the situation (Chemers 1997). The great man (or leader) theory suggests that certain individuals are born with superior traits that allow them to achieve great things or change the course of hi story. These traits could be in the form of a deep passion for power, a sense of mission, an unbounded reserve of energy, or an iron will. The word leadership is derived from the verb act which is believed to have two distinct components, the functi on of giving commands (leader or beginner) and the function of executing (follower or finisher). The leader depe nds on the followers to complete the commands and the followers depend on the leader to initate the commands. Historically, the strength of the

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28 leader was in the original ini tiative and risk, not in the execu tion. The lager in magnitude the accomplishment the larger the mythological image of the leader became (Jennings 1960). Great leaders separate themselves from av erage leaders by their ability to excel in situations where high degrees of personal risk and personal initiatives are required (Jennings 1960). The greatest leaders have th is ability to turn s ituational incompatibili ties into assets. The situation can be shaped by the force of the great leader to the same extent that the weak leader can be shaped by the force of situation, (Jennings 1960, page15). Leadership traits. The trait approach to leadership emerged from the great man theory. The term trait refers to a va riety of individual attributes, including aspects of personality temperament, needs, motives and values (Yukl 2002, page 176). A leaders traits, which are inherited and learned, are transferable from situat ion to situation (Hersey et al. 2001). The needs and motives of a leader guide, energize and sustain their behavior These needs can be physiological (hunger) or emotional (achievement). Values influence the leaders preference, perceptions and choice of beha vior. They are internalized and determine right from wrong, ethical from unethical. Skills, which can be consid ered traits, refer to the ability to accomplish something in an effective manner. Skill can also be classified as technical, interpersonal and conceptual in nature (Yukl 2002). Leadership traits 1904-1947. Stogdill (1948) completed a th rough review of leadership studies (throughout variou s groups, business, educational, gang s etc.) in the time period of 1904 to 1947. The review found the following organizati on of common successful leadership traits: capacity (intelligence, alertness, verbal f acility, originality, and judgment), achievement (scholarship, knowledge and athletic accomplishmen ts), responsibility (dependability, initiative, persistence, aggressiveness, self -confidence, and the desire to excel), participation (activity,

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29 sociability, cooperation, adaptability and humo r), status (socioeconomic position and popularity) and situation (mental level, status, skills, needs and interests of followers, objective to be achieve and so on). Moreover, Stogdill (1948) found that th e situation determined which traits and skills would be required by the leader. Leadership traits 1948. Following up his previous research, Stogdill completed an additional review of lead ership traits and skills from leadersh ip literature in the time period of 1948 to 1970. Stodgill found that determination, persis tence, self confidence and ego strength to be important leadership traits and interper sonal competence became more important as the necessary technical skills had been master ed. Stogdill concluded that every leader had distinguishable natural traits that separated th em from followers, every situation had different demands, and the result of the inte raction between the tr aits and situations, which was the most pressing challenge in proactive leadership, was unknown. The driv ing force between traits and the situation was fulfillment of i ndividual needs in the situation. This process continues whether the needs can be fulfilled or there is just a hope of fulfilling the needs (Bass 1990). The five factor model of personality variables. The five factor model of personality or the Big Five personality variab les was an attempt to create a common group of traits that predicted successful job performance for leaders. Research on the Big Five predominantly focused on the business sector. An additionally go al for the Big Five was to create a common language for leadership trait theory and provi de a basic level for analysis (Digman 1990). Goldstein (1999) defined the Big Five variables as: emotional st ability (calm, secure, and nonanxious) or conversely not neuroticism; extroversi on (socialable, talkative, assertive, ambitious, and active); openness to experience (imaginative, artistically sensible and intellectual); agreeableness (good natured, cooperative, and trusting); conscientiousness (responsible,

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30 dependable organized, persistent, and achievement oriented). Add itional scholars such as Hughes (1992) added other variables to the Big Five including values, achievement and rugged individualism. Although there is some general agreement in the literature about the value of the Big Five personality variables, conflicting results exist regarding the importance of each particular variable. Robertson et al.s (2000) findings indicate that conscien tiousness is the best predictor while others found achievement (Hough 1992) agr eeableness and emotional control (Smith and Canger 2004) as the most important variables. Barlow et al. (2003) found that the required leadership skills and traits change according to the level of the organization and the experience of the leader. Anderson (2006) st ated that traits of leaders could not explain organizational performance and that leadership and manageme nt is not about possessing special traits but instead it is about action. Clusters of traits and skills forming other competencies. Recently, other competencies have evolved from the interconnection and clustering of a number of leadersh ip traits and skills. These competencies include emotional intelligen ce (emotional maturity, self-confidence), social intelligence (perceptiveness and behavioral flexibili ty), ability to learn, adapting to the changing internal and external environments. These compet encies require a number of traits and skills to be present at the same time (Yukl 2002). The majo r strength of the leadership trait approach is that it can be applied to all types of individuals, at all levels and in different situations. The major weakness of the leadership trait approach is that there is no definitive list of leadership traits and identification of traits is viewed as highly subjective (Northouse 2001). Summary of trait approach. Traits of great leaders have been studied since the beginning of time (Muller 2007). There is some agreement am ongst scholars that leader ship traits could be

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31 predictors of job performance and project success. Yukl (2002) proposes th at leaders wanting to be effective should know thei r traits by understanding their strengths and weaknesses, developing relevant skills, and selecting subordinates that addr ess their weaknesses. It is important that leaders know the influence their inherent and learned pers onality traits have on their followers in work situations. Table 2-3 provid es a detailed summary of the trait approach to leadership. 2.1.4 Behavior Approach The behavior leadership appro ach d iffers from the leadership trait theory by focusing on how leaders behave rather than whom leader s are (Northhouse 2001). Beha vior in leadership refers to how individuals act or responds to their environment. Although behaviors are seen to be unconscious they are thought to be learned and unlearned. This section reviews the Ohio State leadership studies, the University of Michigan leadership studies and the managerial grid leadership model. The Ohio State leadership studies. The Ohio State leadership studies were an extensive undertaking involving several discip lines and focusing on the situati onal determination of leader behavior on the group as opposed to the individu al (Stogdill and Coons 1957). The instrument used in the studies was the Leader Behavior De scription Questionnaire. The questionnaire began with 1,800 items which were further broken down to 150 items and then classified into 9 dimensions of leadership behavior. The 9 dimens ions included: integration (acts which tend to increase cooperation among group members or decrease cooperation among them); communication (acts which increas e the understanding and knowledge about what is going on in the group); production (acts which are orient ed toward volume of work accomplished); representation (acts which speak for the group interaction with out side agencies); fraternization (acts which tend to make the leader a part of the group); organization (acts which lead to

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32 differentiation of duties and which prescribe ways of doing things); evaluati on (act which have to do with distribution of rewards or punishments; initiation (acts which lead to changes in group activities; domination (acts whic h disregard the ideas or pers ons of members of the group) (Fleishman 1953). Research results showed that the previous ni ne dimensions of rese arch could be further simplified into two dimensions, employee focused and work focused. The authors concluded that leadership behavior either focused on building relationships (consideration) or completing work (initiating structure) (Stogdill and Coons 1957). University of Michigan leadership studies. At approximately the same time as the Ohio State leadership studies (early 1950s) the Institute of Social Re search at the University of Michigan conducted a number of long range studies focusing on human relations in group organization. One segment of the study centered on the relationships between clerical workers and their supervisors in the home office of the Prudential Insurance Company (Katz et al. 1950). A second segment of the study focused on railroad gangs and their foreman. The purpose of the studies were to discover the relationships between supervisor y attitudes and behaviors, group productivity, worker moral and compare the fi ndings between the clerical workers and the railroad gangs (Katz et al. 1951). The study of clerical workers and their superv isors compared high performing sections to low performing sections. High performing sections were found to receive general rather than close supervision, they had a greate r sense of pride in their work and their supervisors were more employee oriented than production oriented (Katz et al. 1950). The study of railroad gangs and their superv isors found similar resu lts to the study of clerical workers. Foremen of high performing gangs were to found to be sensitive to the work

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33 and personal needs of gang members. They showed interest is the workers off the job problems and were constructive rather than punitive in th eir attitude towards the workers mistakes. High performing foremen also spent more time on l eading than on working (Katz et al. 1951). In a followed up research paper to the Univ ersity of Michigan Studies Katz and Kun (1952) further described that i ndividuals are a part of many interlocking social systems. The systems are work related and non-work related an d each system has its own pattern of rewards and punishments set up by different individuals or groups of indivi duals with different goals and intentions. The authors stated that it is a mistak e to think that workers are only part of a work social system and it is important to understand that as the individual s involvement in these social systems change, the individuals values attitudes, perceptions, and motives will also change. (Katz and Kun 1952) Likert (1961), Director of the Institute for Social Research, University Michigan, concluded that successful supervisors were effective communicators primarily focused on the human aspects work related challenges. Likert defined communication as a complex process involving many dimensions, transmitting, receiving and interpreting information. Leadership is a relative process where leaders must adapt th eir behavior to exp ectations, values, and interpersonal skills of other in dividuals. This applies to with in the organization, outside the organization and at all levels. As a result no specific style, behavior or communication strategy will work in all situations (Likert 1961). In summ ary, the University of Michigan research found that task oriented behavior, rela tions oriented behavior and participative leadership differentiated effective from non-effective leaders (Yukl 2002). Managerial grid. Blake and Moutons Managerial Gr id (1985) further expanded the two dimensions put forth in the Ohio State leadership studies (task focused a nd relationship focused)

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34 and created a Managerial Gird. The Managerial Grid has the le vels of concern for production on one axis and levels of concern for employees on the other axis. Levels of concern refer to the character and strength of the a ssumptions behind the leaders lead ership style. Blake and Mouton outlined five leadership styles: county club management (focus on relationship), impoverished management (no focus on relationship or task), authority-obedience (focus on task), organization management (focus on relationship and task) and team management (commitment to relationship and task from both leader and follower). The aut hors concluded that the t eam leadership style, which gained a commitment from both leader and follower on the importance of the relationship and the task, was most effective. The Managerial Grid model also stated that leaders make subjective appraisal of situ ations which include assump tions based on experiences, organizational policies and personal values, which guide behavior and constitute a personal leadership theory or style (Blake and Mouton 1985). The foundation for understanding managerial leadership is in r ecognizing that a bosss actions are directed by assumptions regarding how to use authority to achieve organization purpose with and through people (Blake and Mouton 1985, page 9). Strengths and weaknesses of th e behavior leadership approach. The strength of the behavioral approach is that it adds to the trait approach and is supported by many empirical studies. However, not having a uni versal list for effective lead ership behaviors is a weakness (Northouse 2001). Summary of behavioral approach. The leadership behavior theory focuses on how a leader behaves instead of what traits the lead er possesses. Effective l eaders are both people and task focused and they have the ability to gain commitment from their followers (Blake and Mouton 1985). Table 2-4 provides a detailed summary of the behavi oral approach to leadership.

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35 2.1.5 The Needs Approach This approach describes the im portance of follower needs, leader communication and leader power. Understanding the followers needs. A followers behavior is dependent on two factors, their needs in a particular situ ation and the changing strength of these needs. Every individual has a unique set of needs that may or may not be evident to the followe r or the leader. These needs could be conscious and/or subconscious making them difficult to identify. Generally, needs are categorized by maintena nce needs or a growth needs. Maintenance needs are essential for all individuals and are building blocks fo r growth needs. Table 2-5 illustrates that maintenance needs includes items related to physi ology (food) safety (shelter) and social contact (friendship). Growth needs t ypically emerge once the maintenance needs are sufficiently satisfied and these could include the need for achievement and self-est eem. Maintenance and growth needs are interconnected and change accordi ng to the situation, stage of life, career, etc. (Hersey et al. 2001; Maslow 1970). The behavior of a follower is based on his or her strongest need in a particular situation. The strength of needs are in continual fluc tuations and are base d on past experiences (Expectancy Theory), future expectations/probabi lity of success (Availability Theory) ( Hersey et al 2001), present situa tion (Lewin 1945) and the pos ition of the need on the satisfied/unsatisfied continuum (Maslow 1970). These four factors continually interact to create the strongest need at a particular time. Past experiences, positive and negative are based on Vrooms Expectancy Theory and states that past experiences (positive an d negative) strengthen or weaken a need based on its probability of being accomplished. Future expectations is based Availability Theory and implies that perceived limitations in the environment will also support and hinder the strength of a nee d. Maslow showed that as need becomes satisfied it looses its

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36 strength and other needs emerge, whereas an unmet need influences behavior to a greater degree. However, Expectancy Theory and Availability Theory qualifies this statement according to the perceived probability of success. As the probability of success approaches 100% or 0% the motivation for this need d ecreases because the high like lihood and high unlikelihood of achieving the need is less motivating (Heresy et al. 2001). As a follower acts, the need gets closer or further away to fulfillment. If the follower continually faces blocks to satisfying the need, frustration arises and the strength of the need either increases or decreases. Continually frustra tion leads to a change in the strength of the need according to the perceived probability of succe ss. As the need approaches fulfillment or satisfaction other needs strengthen and emerge influencing or re-p rioritizing behavior (Heresy et al. 2001). This process is explained in Figure 2-1. By understanding the driving factors of the fo llowers behavior, leaders can become more conscious of their leadership approach. Figure 2-2 describes the leadership approach for a leader when the goal is to align actions with followers need s. The first step for a leader is to identify the followers strongest needs and select the leadership approach accordingly (Bennis 2003; Potter 1990). Once the leadership approach (or combination of approaches) is determined, a leadership attempt can be made. If the leadership attempt is successful, the leader will achieve the desire outcome. If the leadership attempt is not succes sful, the leader will not achieve the desired outcome. In the case of failure, the leader must fo cus again on identifying and aligning actions to the needs of the follower in order to influence or spark action in the follower (Maslow 1970; Hersey 2001). Leader communication. Communication is based on the tran sfer of verbal and nonverbal symbols. Depending on the unique make up of indi viduals (past experien ces, culture, religion,

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37 etc) the interpretation of symbols and the value as signed to them is arbitr arily generated. This is what makes humans unique and communication complex. The goal of communication is to create a shared reality between the sender and receiver of symbols (Hackman and Johnson 1991). Dean Barnlund, a noted communication scholar, identified five basic principles of the human communication process. Th e first principle suggests that communication is a dynamic ever-changing process that begins with the experien ces, skills, feelings and characteristics of the people involved. The second principle states that communication is circular in nature. This implies the individuals involve d the communication process are simultaneously senders and receivers of symbols. The noti on that communication is complex and involves the understanding and negotiation of shared interpretations is the th ird principle. The forth principle states that communication is irreversible, once a message is se nt and interpreted, it can not be taken back. The fifth principle is that communication encomp asses the total personal ity of the individuals involved in the communicati on. (Hackman and Johnson 1991) Hackman and Johnson (1991) listed seven communi cations skills for leaders to effectively influence followers. The skills included: devel oping perceptions of credibility (competence, trustworthiness dynamism), developing and using power bases effectively, making effective use of verbal and nonverbal influence, developing po sitive expectations for others, managing change, gaining compliance, and negotiating productive solutions. From a communication stand point, leaders are made not born, and are required to be aware of how their communication style is perceived by the follower (Hackman and Johnson 1991). Use of power. A leaders effectiveness in motivating and influencing followers, in a large part, is determined by the followers of leader s use of power (Yukl 2002). French and Raven (1959) define power in terms of influence which causes changes in a persons behavior,

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38 opinions, attitudes, goals, needs, values and othe r aspects of the their ps ychological field. Before influencing or motivating can be attempted, a lead er uses one of seven power bases. These power bases are reward, coercive, legitimate, refere nt, expert (French and Raven 1959), information (Pettigrew 1972), connection (Hersey et. al 1979) and ecological (Y ukl 2002) (Table 2-6). Some authors further categorize the pow er bases into position power and personal power (Yukl 2002). The power of leaders is determined by their ability to produce a result aligned with the needs of the followers (Petigrew 1972). Every indi vidual, consciously or subconsciously, defines the range of power they will allow the leader. If the leader proceeds beyond this range, the leaders power with the individual decreases. Every time a leader attempts influence or exercises power two forces are put in motion, a directi ng and an opposing force. The follower will be influenced by the force that is perceive d more powerful (French and Raven 1959). The stronger the needs or values of a followe r in a particular situation, the more power the leader can exert and the more power the follo wer will tolerate. The relationship of power is determined by the followers strongest need in a particular situation and the followers perception of the extent of the leaders pow er. Therefore the lead er needs to know the motivational bases of followers (strongest) which will define the domain of influence (Cartwright 1965). The strength and form of power a leader has in a particular situa tion is dependent on the strongest need of the follower. The range of pow er varies from case to case and situation to situation. Using power outside the range decrease s the power. Some bases of power have more potential for follower resistance, frustration (coercive power ) a nd some have more potential for increased follower satisfaction (referent a nd expert power) (French and Raven 1959).

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39 Yukl (2002) argues that power and influence ar e separate constructs. The power base and the extent of power effects influe nce tactics. Yukl defi nes nine influence tactics: rational appeal, appraising, inspirational appeals, consultati on, exchange, collaboration, personal appeals, ingratiation, legitimating tactics, pressure and coalition tactics. Yukl and Tracey (1992) in a study on influencing followers found rational pers uasion, inspirational ap peal, and consultation as the most effective influence tactics. Pressure tactics, similar to coer cive power were usually ineffective, resented and a socially undesi rable (Yukl and Tracey 1992). Charbonneau (2004) found that rational persuasion and inspirational a ppeals may increase the perception of transformation leadership style. Even with thes e findings, it is important to note that influence attempts can use any sequence of influence ta ctics and can be effective dependant on the situation. Summary the needs approach. This approach highlighted the importance of leaders ability to identify and align with the strongest needs of the follo wer in a particular situation. Additionally, this section illustrated that how a leader communicates and how a leader uses power or influence tactics will also have imp act the leaders effectiveness (Table 2-7). 2.1.6 Situational Approach The contingency and situational approach to leadership d iscusses the LPC contingency model, the cognitive resource theory, the path goal theory and the situational model of leadership. LPC contingency model. The LPC contingency model matches leader traits and situations. Using the least preferre d coworker (LPC) score the leader is first categorized as being relationship focused or task focused. Second, usi ng three situational variables, leader-member relations, task structure and position power (in orde r of importance), the situation is determined to be highly favorable, moderately favorable or least favorable. Highly favorable situations

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40 comprise good member-relations, structured task s and strong position power. This increases the leaders control and influence of the situation. Fielder, the originator of the LPC contingency model found that relationship oriented leaders are more effective in moderately favorable situations, where task oriented leaders are more effective in highly and least favorable situations (Fiedler 1964; Fielder 1967). Tas k motivated leaders perform best in situations in which their control is either very high or relatively low, while relationship-motivated leaders perform best when their influence and control are moderate (Fiedler 1995, page 455). Fiedler (1967) found that stre ss and intelligence could be factors that prevented the appropriate fitting of leadership style and task situ ation. For instance, if th e leaders style did not match the context the leader would experience stress causing an immature intelligence. More specifically, in high-stress situations effective leaders were more task oriented and in moderate stress situations effective leaders were more re lationship oriented. In low-stress situation the leaders intelligence contributed more to group effectiveness, while group intelligence contributed more in high stress si tuations. The major challenge with this theory is that it does not explain extremes and exceptions (Fielder 1967). The contingency model has a number of conceptu al weaknesses. First, it is uncertain how the LPC score affects the group or if it remains constant over time. Second, the model provides traits and not behaviors, which creates an obstacle for training. Lastly, it is unclear how the model proposes to improve leadership, since tr aits are assumed unchangeable; changing the situational variables (employee-relations, task structure and position power) is problematic; and the LPC is inappropriate for fitting th e leader to the situation (Yukl 2002). Cognitive resources theory. Cognitive resources theory of leadership explores the relationship between group effectiveness and the use of cognitive resources such as experience

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41 and intellectual abilities. The theory states that the group s performance is determined by the interaction of the leaders intelligence and e xperience (traits), leader behavior, interpersonal stress, and group tasks (situation) (Fiedler and Garcia 1987). Inte rpersonal stress moderates the relationship between leader inte lligence and the subordinate. Ca uses of stress could include conflicts with subordinates, demands without ade quate resources and support, role conflict with superiors and frequent work crises (Yukl 2002). The cognitive resource theory found that that under stress-free conditions intelligence was the main factor of group influence and eff ectives. Under high stress conditions, experience was the main factor of group influence and effect iveness (Fiedler and Garcia 1987). The theory postulates that there is interference between the in tellectual process and expe rience that is we cannot at the same time apply logical, analytic, or creative thinking to a problem while reacting to it automatically on the basis of over-learned skills, knowledge and behavior (Fiedler 1995, page 456). Table 2-8 shows the major findings in cognitive resource theory (Fiedler and Garcia, 1987). Path goal theory. The path goal theory of leadership attempts to explain how a leaders behavior affects the satisfaction, motivation, and performance of a fo llower. The path goal theory focuses on the formal relationship of s uperiors and subordinates (House 1971). According to this theory, leaders are effec tive because of their impact on [followers] motivation, ability, to perform effectively and satisfactions. The theory is called Path Goal because its major concern is how the lead er influences the [followers] perceptions of their work goals, personal goals and paths to goal attainment, the th eory suggests that a leaders behavior is motivating or satisfyi ng to the degree that the behavior increase [followers] goal attainment and clarifies the paths to these goals (H ersey et al 2001, page 111). Followers are motivated with a leaders behavior if the behavior satisfies an immediate or future need, complements the followers environmen t or it leads to effective performance. Path goal differs from other leadership contingency theories by emphasi zes the fit between leadership

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42 style and the followers characteristics and work environment. Other leadership contingency theories emphasize the match between leadership st yle and a particular situation or leadership style and the development level of subordina tes (House and Mitchell 1974) (Figure 2-3). Situational leadership theory. Situational leadership is the interplay of the three continuums, leader task behavior leader relationship behavior a nd the follower readiness. These factors determine which leadership style will be most effective in a particular situation. Figure 24 describes continuums of leader behaviors, styles and decisi on styles along with follower readiness. According to the range of follower readiness (high, moderate or low willingness and ability) and the demands of the situation (relations hip or task) the leader can diagnosis and match which leadership style, behavior and decision style will be most effective (Hersey et al. 2001). Although aspects of the situationa l model are useful (Hersey et al 1979; Vecchio 1987), other aspects are problematic (Blank et al. 1990; Graeff 1997;Fernandez and Vecchio 1997). Summary of situational approach. The situational leadership approach aims to match leader behaviors with situational variables (Table 2-9). Generally the lead ers behavior rests on a continuum of high or low relations hip oriented behavior or task oriented behavior. Depending on the situational variables the leader will choose th eir behavior (relationship or task) accordingly. Situational variables are also on continuum ranging from high to low. The major situational variables were leader intelligen ce, follower readiness (willingness and ability), task clarity, and follower reward. The strength of the situational a pproach is that it is practical, easy to use and understand. However, is lacks a strong body of re search and does not explain how different situational factors change over time.

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43 2.1.7 Transformational Approach The transf ormational leadership approach section will review transactional and transformational leadership, leader-member exchange theory, emotional intelligence and servant leadership. Transactional and transformational leadership. Burn (1978) describes the difference between transactional and transformational leadersh ip. He indicates that transactional leadership is when Leaders approach followers with an eye to exchanging one thing for another. such transactions comprise the bulk of the relationshi ps among leaders and followers, especially in groups, legislatures and partie s (Burns 1985, page 4). Burns states that transformational leadership transpires when: The transforming leader recognizes and explai ns the existing or demand of a potential follower. But beyond that the transforming leader looks for potential motives in followers, seeks to satisfy higher needs and engages the full person of the follower. The result of the transforming is a relationship of mutual stimulation and elevation that coverts followers into leaders and may cove rt leaders into moral agents (Burns 1985, page 4) Bass (1985) argues that transfor mation leadership motivates followers to do more than the expected in three different ways. First, leaders raise the consciousness of followers in accordance with the importance and value of spec ific goals. Second, leaders influence followers to transcend self interest for the interest of the team or or ganization. Third, leaders assist followers to fulfill their higher needs (Bass 1985). Transformational leadership builds on the previous leadership approaches in an integrative and constructive manner (Burns 1985). Transformational leadership attempts to explain behavior that moves followers beyond the expected outcomes (tra nsactional leadership). Transactional leadership is not focused on cateri ng to the individual needs of followers or the

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44 personal development of the follower. Its main c oncern is on the exchanging things of value to advance the leaders inte rest (Northouse 2002). Bass and Avilio (1993) describe the majo r components of transformational and transactional leadership. They state that idealized influence, inspirationa l motivation, intellectual stimulation, and individualized c onsideration comprise the factors of transformational leadership. Contingent reward and management by exception comprise transactional leadership (Table 210). Tichy and DeVanna (1986) explained transfor mational leadership as the process that inspires followers to accomplish great things. This approach stresses that leaders are required to understand and address the needs of followers. Th e authors outlined the need for revitalization, creation of vision, and institutionalizing change s as the major steps in the approach. The elements of transformational and transactional le adership work together to create performance beyond the expectations of the pa rties involved in the relationship (Figure 2-5). This happens when the self interests of both the leader and the follower are transcended for the interests of the organization (Bass 1985). The transformational leadership approach ha s strong intuitive appeal and has received considerable attention form re searchers. It goes beyond the tran sactional leadership model by promoting growth in followers. However, it can lack conceptual clarity and it is similar to the trait approach, which might be seen as elitist in nature (Northouse 2001). Leader Member Exchange Theory. The Leader Member Exchange Theory (LMX) states that exchanges between leaders and followers ar e both material and psychological (emotional). This suggests that exchanges are both transa ctional and transforma tional or evolve from transactional to transformational. The theory sets out to explain th e relationship or the

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45 interactions between the leader and the follower. This removes the focus from the leader (traits and skills), the follower (behavior) and context (situational) (Garen and Uhl-Bien 1995). The development of the LMX theory took place in four stages. The first stage found that contrary to prevailing assumptions of the Oh io State and Michigan studies of effective supervision (average leadership style) many mana gerial processes in organizations were found to occur in a dyadic basis, with managers devel oping differentiated relationships with professional direct reports (Garen and Uhl-Bien 1995, pa ge 226). LMX showed no support for the average leadership style previously postulated. The Research also showed that different followers formed different perceptions of the same leader. For in stance, the leader was both trustworthy and not trustworthy depending on the follower. Scholar s explained the reason for this as resource constraints put on managers, which forced them invest time with a select group of followers instead of the entire group of follo wers (Garen and Uhl-Bien 1995). The second stage of LMX theory showed that th e higher the quality of the leader follower exchange, the more positive the benefits for the leader, follower and organization that were realized. As a result, effective leadership pr ocesses were dependent on high quality social exchange relationships. The third stage of the LMX theory focused on the attempt of creating high quality exchanges between all followers. Th e authors stressed the importance of making an offer to all followers to engage into a high quality relationship, which evolved from stranger partnership (no influence) to acq uaintance partnership (limited influence) to maturity influence (almost unlimited influence). As the partnership matures, the influence is reciprocal and the mutual trust and respect is extremely hi gh. The fourth stage moves beyond the dyadic relationships and focuses on the groups (Garen and Uhl-Bien 1995).

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46 Brower et al. (2000) studied relational leadership based on LMX and interpersonal trust. They found that there was a constant feedback loop between the leader and the follower in which they subjectively evaluated each other based on tr ust criteria (ability, be nevolence and integrity). They found that trust was context and situation specific (Brower et al. 2000). Dunegan in his research found that the percepti on of the leader (image management) influenced the LMX and trust between the leader and follower. If the leader was perceived to have the ability to satisfy the followers needs the possibility of trust improved (Dunegan 2003). In summary, the LMX theory focuses on the sp ecial, unique relations hips leaders creates with others. If these relationships are characterized by mutual trus t and respect, the goals of the leader, the follower, and the organization are all advanced. This demonstrates the importance for leaders to strive for high-quality relationships with followers. Emotional intelligence. Daniel Goleman (1998) argued that emotional intelligence is the third part of effective leadership. The other two parts are intellectu al intelligence and expertise. He proposed that organizations now compete with people instead of products and this is what makes emotional intelligence important. Golema n defines emotional intelligence using the following five elements self-awareness, motivation, self-regulation, empathy and adeptness in relationships and asserts that a ny leadership approach must include these elements (Goleman 1998). Servant leadership approach. Greenleaf (2002) defines servan t leadership as the leader who serves the highest priority needs of the follo wer first. He states that the person who is a servant leader is a servant firs t and a leader second. Servant l eadership emphasizes listening to learn and communicating w ith the intention of connecting with the followers own experience. A person who is a leader first, is predominately c oncern with their own needs. However, a servant

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47 leader first listens and learns about the followers highest pr iorities. With an accurate understanding, the servant leader then communicates the vision with the intention of linking the followers own experience and imagination with th e vision. Greenleaf believ es this can not be done without trust in the leader Additionally, the more challe nging and complex the goal, the more trust in the leader is required (Greenleaf 2002). Summary of transformational leadership approach. A summary of the transformational leadership approach is presented in Table 2-11. 2.1.8 Team Approach Team leadership. The team leadership approach is fairly new and does not benefit from amounts of empirical research the other leadership approach es have received. Teams are organizational groups composed of members w ho are interdependent, who share common goals, and who must coordinate their activities to accomplish these goals (Northouse 2002, page 169). The major obstacle in team effectiveness is lead er effectiveness. Northhouse (2002) defines four types of leadership functions fo r groups within internal and exte rnal dimensions. These functions include: diagnosing group deficiencies (monitoring /internal), taking remedi al action to correct deficiencies (executive action/internal), forecasting impeding environmental changes (monitoring/external), and taking preventative action in response to environmental changes (executive action/external). By analyzing these f our functions it is clear that team leaders are required to monitor the internal and external situati on, implement the appropriate strategies and apply behavioral flexibility to match the complexity of the situation to ensure team effectiveness (Northhouse 2002; Lafosto and Larson 2001). Tabl e 2-12 compares the team effectiveness criteria suggested by Hackman a nd Walton (1986) with those de termined by Larson and LaFasto (1989).

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48 Team leadership is an ongoing process that requires leaders to receive information, understand it, and communicate it a manner that is meaningful for the team (Hackman and Johnson 1991). If trust is absent, it is highly li kely that team will loose it effectives. The required trust must also evolve with the team over time (Dyer 1995). Other essential elements of teams are having a common purpose, interdependence, mutual influence and face-to-face communication (Hackman and Johnson 1991). Costa et al. (2001) conducted research with 112 teams that tested the relationship between tr ust and perceived task performance, team satisfaction, relationship commitment and stress. The results showed that trust was positively linked to relationship commitment, team satisfac tion and task performanc e. The study also found that stress and trust were nega tively related. Janssens and Brett (1997) in their study of transnational teams also showed that trust wa s important in teams and Herzog (2001) identified trust as a success factor in effective teams and collaborations. Figure 2-6 presents a team leadership model suggested by House et al. (200 1). The model explains the mediating decisions and the internal (task and relational) and external (environmental) functions of the team leader. 2.1.9 Leadership Summary Leadership is a com plex process that is difficult to define. It involves the ongoing interaction of inherent personality traits, preferred behavioral styles, unsatisfied needs, unpredictable situational vari ables and transformational goa ls and outcomes. Although a common definition of leadership does not exist, many of the definitions describe the intended interaction between the leader a nd follower, the importance of mutu al goals, the ability to adapt to situational variables, the skill of basing influence strate gies on the strongest needs of followers, and the being transformed by the proc ess. Table 2-13 further summarizes the findings in the leadership section. In c onclusion, despite the number of diffe rent approaches to leadership, effective leadership is dependent on trus t between the leader and the follower.

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49 2.2 Trust The literature on trust is exte nsive and challenging to orga nize around them es and topics. Dietz and Hartog (2006) identifi ed a number of compendiums of papers, dedicated journal editions and key journal articles. This section is organized by th e compendiums, journal editions and articles identified by Dietz and Hartog with th e addition of trust in virtual environments and trust in breach of ps ychological contracts. 2.2.1 Definition of Trust In approxim ately 50 years of research, scholar s have not agreed on a definition of trust. Table 2-14 lists a selection of cross-discipline trust definitions The common elements of these definitions are positive expectations, vulnera bility, risk, interdependence, subjective psychological state of mind and the changing na ture of the definiti on according to context (situation) and/or discipline (Lewicki et al. 2006). 2.2.2 Trust Focused Compendiums of Papers This section reviewed on e foundational pie ce of trust research and three additional compendiums of papers on trust research. Th e foundational work is by Lunmann (Trust and Power, 1979) and is often cite d as the foundation for trust th eory (Schoorman et al 2007; McAllister 1995; Vangen and Huxham 2003). The compendiums of papers are by Gambetta (1988), Lane and Bachmann (1998), and Nooteboo m and Six (2003) and are cited by Dietz and Hartog (2006) as important to field of trust research. Compendium on trust a nd power (Luhmann 1979). Luhmann (1979) in Trust and Power, postulates that trust enables action by mini mizing fear of loss or fear of making the wrong decision. Trust reduces the complexity asso ciated with the free dom of behavior and choice individuals experience in society. Without some form of trust in some mechanism,

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50 individuals would be burdened by societys complexity and paralyzed by fear and inaction (Luhmann 1979). Trust reduces social complexity by going be yond available informa tion and generalizing expectation of behavior in that it replaces missing information with an internally guaranteed security. It thus remains dependent on other reduction mechanisms developed in parallel with it for example those of la w, of organization and, of course, those of language, but cannot, however, be reduced to them. Trust is not the sole foundation of the world; but a highly complex but nevertheless structured c onception of the world could not be established without a fairly comp lex society, which in turn could not be established without trust (Luhmann 1979, page 94). Trust is developed by gaining familiarity with the past, present and future. The action of trust takes place in the present while contemplating past e xperiences and expecting or gambling on the certainty of future outcomes. The decision to trust is the subjective blending of knowledge and ignorance and anyone who abuses trust will be burdened with more complexity (Luhmann 1979). In every case [trust] rests on the structur e of the system which confers trustthe readiness to trust is an impor tant instance of the absorp tion of complexity through structures that can relieve the bur den of action. (Luhmann 1979, page 83) As society evolves and new uncertainty and complexity arises, familiarity and trust are required to evolve as well. Subsequently, the form s and structures that a llow trust to develop are constantly evolving, changing and adapting to a subjective (individual, group, organizational, societal) view of the world. Individuals can tr ust and distrust simulta neously, in a number of things, at different levels and fo r different purposes (Luhmann 1979). Distrust generally functions at the same time of trust. Distrust is also a strategy that reduces complexity. Individuals who are distrustful distill the complexity of the world and limitless amount of information by negation until these items are manageable. However, using distrust to reduce complexity can be more burdensome due to the increased reliance of information and the challenge of narrowing the in formation down to a manageable level. Distrust

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51 is manifested by distributing behaviors. Distrust is also controlled by a subjective process similar to trust. Luhman states that distrust can not be totally eliminated but it must not be allowed to overcome trust. When distrust occurs, it must be seen an anomaly, an accidental or an insignificant occurrence and not be permitted to gain momentum and be destructive. In summary, Luhmann argues that the many forms of trust reduce the complexity of the world. Without trust, even though su bjective, in some form of so cietal structur e, individuals would be overly burdened by fear an d paralyzed to act (Luhmann 1979). Compendium on trust (Gambetta 1988). Scholars in Gambettas compendium of articles, Trust offered a number of different perspectives on trust. Desgupta (1988) asserted that trust was central to all transactions and outlined seven key points for understanding the development of trust. First, trust can only deve lop when appropriate consequences for breaching contracts and agreements have been established. The second point stated that the enforcement agency must also be trustworthy. Third, trust be tween persons and agencies were interconnected. Fourth, the promise made by the trustee must be credible (avoid blind trust). The fifth point described the importance of observing the world from the other persons perspective. Even though trust did not have a unit of measure, its value can be measured was the sixth point. The point was that trust emerged out of the inability to monitor the actions of others (Desgupta 1988). Williams (1988) discussed the importance of knowing the motivations of individuals for the purpose developing cooperation and trust. W illiams defined four different types of cooperative motivations, two macro-motivations (egoistic and non-egoi stic) and two micro motivations (egoistic and non-egoist ic). Egoistic macro-motivations implied that the individuals cooperated due to fear of sanctions from a hi gher level of authority (i.e. Government). Nonegotistic macro-motivations were found in the moral or ethical dispositions of individuals where

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52 there was a sense of duty to a higher level entity (i.e Country) to cooperate. An egoistic micromotivation to cooperate was based on the self-interest of that individual to cooperate in specific circumstances. A non-egoistic micro-motivation to cooperate implied cooperation in certain occasions based on an individuals predispositi on. Williams concluded that most individuals were motivated by a combination of macro and mi cro motivations and it was the responsibility of the trustor to identify the trus tees motivations (Williams 1988). Luhmann contemplated the relationship between familiarity, confidence and trust. He stated that all individuals created familiarity in their environments. Even when individuals encounter unfamiliar circumstances, they explained it with familiar symbols and experiences (Luhmann1988). Trust is a solution for specific pr oblems of risk. But trust has to be achieved within a familiar world (Luhmann 1988, p. 95). Luhmann continued with a comparison of the subtle differences between confidence and trust. In a state of confidence, individuals refrain from considering alternatives and react to a disappointment with an exte rnal attribution. In a state of trust, an individual chooses a course of action despite possibl e consequences and attributes failures internally. Trust and conf idence can affect one another and can act as antecedents for one another. Trust is an internal calculation of external conditions which creates risk. Trust is based in a circular relation between risk and action, both being complementary requirements. (Luhmann 1988, p. 100). The assessment of risk in any situation is highly subjective and dependent on the trustors perception (Luhmann 1988). Gambetta suggested that trust was the basi s for a number of important functions, but warned that an over abundance of trust can de detrimental. This notion was supported by Baesons work in the compendium Even though organizations requi red basic forms of trust to exist, increasing trust and c ooperation would not necessarily improve effectiveness of

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53 organizations. His research showed that in creasing trust could al so promote undesirable circumstances. (i.e., promoting trust and coope ration among criminals or terrorists) not to mention the potential costs to competition. Ga mbetta and Baeson explained how competition benefited organizations and how an over abundance of trust might have negative consequences. The answer was to balance trust, cooperation and competition (Gambetta 1988, Baeson 1988). Even to compete, in a mutually non-destructive way, one needs at some level to trust ones competitors to comply with certain rules.(Ga mbetta 1998, p. 214). Understanding this principle, organizations instituted a number of different constraints in an attempt to maintain the optimal balance of trust, cooperation and competition. Gambetta explained that the problem of trust was essentially one of communication. Individuals need to know about eac h other motives in order to tr ust them. Indivi duals generally do not believe that everyone will cooperate a nd therefore fear bei ng taken advantage of. Gambetta supports this notion by quoting Hume: When each individual perceives the same sense of interest [motive] in all his fellows, he immediately performs his part of any contac t, as being assured that they will not be wanting in theirs. All of them, by concert en ter into a scheme of action, calculated for common benefit, and agree to be true to their words interest is the first obligation to the performance of promises. (Gambetta 1988, p. 227) Gambetta concluded his compendium by statin g that trust, in di fferent degrees, was existent in most human experiences. Trusting a person means believing that when offe red the chance he or sh e is not likely to behave in a way that is damaging to us, and tr ust will typically be relevant when at least one party is free to disappoi nt the other, free enough to avoid a risky relationship and constrained enough to consider that relations hip as an attractive option. (Gambetta 1988, p. 218) Trust entailed an entire continuum of degrees rang ing from blind trust to distrust between agents. At the core of trust is uncertainty or ignoran ce. Trustors do not have full knowledge regarding

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54 the behaviors, motives or future responses of trustees. Trust is a tentative and intrinsically fragile response to our ignorance a way of c oping with the limits of our foresight[and] a device for coping with the freedoms of others (Gambetta 1988, p. 218). Compendium on trust with and between organizations (Lane and Bachmann 1998). Lane and Bachmans (1998) compendium, Trust Within and Between Organizations, focused on trust within and between organi zations in a global business en vironment. In the introductory chapter, Lane set the context by discussing the preconditions of trust, type s of trust and the level of trust analysis. The preconditions of trust were described as the existence of uncertainty and risk; interdependence between the trustor and trustee; and vulnerabi lity to opportunistic behavior. The different types of trust included calculative trust (expectations based on self interest of cost and benefits), value or norm based trust (sha red common values and norms), and cognition based trust (common understanding of soci al rules, which included proce ss based trust, character based trust, and institutional based trust). Lastly, trust research transpired in four different levels, micro-level (between individuals and between organizations), institutional level (institution as the source of trust), system level (legal, educatio n, political), and societal level (collective values and norms) (Lane 1998). Sydow (1998) described the factors surrounding inter-organizational tr ust (trust between organizations) in a global market place. He cond ucted his analysis usi ng the concept of interorganizational networks defined as long-term institutional arrangements among distinct but related organizations based on trus t. It was found that several econom ic benefits were believed to be associated with using trust as the control system in these networks. These benefits included reducing transaction costs, adapting collective strategies, coordinating economic activities, and openly exchanging information and learning. Sydow also outlined six factors that supported trust

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55 as the control mechanism between organizations in a network. These factors were: frequency and openness of communication; interacting and exchanging in many different ways; openness of relationships; balanced autonomy and dependence; small number of simi lar (values and norms) firms in the network; and sim ilar firm structures (Sydow 1998). The decision to use power disguised as tr ust can be tempting for organizations. Power can reduce the risk of trust by mandating coop eration, compliance and predictability. Although the power approach reduces risk, it also re duces creativity, innovation and collaboration, items that trust promotes. At times it is difficult to accu rately decipher trust from illusionary trust. Consequently, it is important to incorporate the power relations of the situation when assessing trust in the relationship. Table 2-15 shows the different relations hips between trust and power. Understanding interests, aligning interests, sharing meanings, open communications, and identifying when power instead of trust are used are the most important f actors of distinguishing trust from power (H ardy et al 1998). Sako (1998) focused his research on how tr ust improved business performance. He argued that trust reduced transa ction costs, aligned governance structures, increased returns on investments (i.e. new systems, higher sta ndards), and improved learning, innovation and continuous improvement. Specifically, it was go odwill trust (concerned for the well-being of other parties) that had largest impact on pe rformance. Sakos findi ngs also recommended focusing on trust enhancers, such as providing important informa tion, rather than safe guarding against potential opportunistic behavior (Sako 1998). Liebeskind and Oliver (1998) reported how co mmercial interests have transformed the nature of trust relationships between academic researchers in molecular biology. The researchers found that trust was not neutral to the interest of individuals or institu tions. Existing trust

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56 relationships were impacted by the interests of new parties, which changed the previous alignment of interests and values. As new intere sts entered existing trusting relationships, a new formulation occurred which had the potential to cause conflict or even the severance of relationships (Liebeskind and Oliver 1998). Thus trust is not best viewed as a fixed or given commodity that exists within a specific social community or network of relationships but rather should be understood to be the output of dynamic exchange relationships that are fuelled by individual interests, as well as being the lubricant for the formation of ne w exchange relationships. Thus, exchange is both embedded in trust, and engenders its formation (Liebeskind and Oliver 1998, page 140). Deakin and Wilkinson (1998) discussed the relationship between the legal system and inter-organizational trust. The legal system in many instances provided the environment that enabled trust to develop. At times it acted as th e catalyst that triggered intermediate institutions (trade associations and standard setting organizations) to transl ate the metavalues of the legal system into standards for the business commun ity. Additionally, the lega l system established sanctions that protected agains t opportunistic or uncooperative be havior and provided regulatory reform that encouraged economic productive (Deakin and Wilkinson 1998). Marsden (1998) focused on the constraints (or rules) that enhanced trust in employment relations. These constraints included rules on work (job description and tasks), tools (skills required to execute the tasks), competence (f unction of completing work) and qualification (functional qualifications). The challenge in defi ning rules is always finding a balance between flexibility and control. Trust can develop around any set of the rules, but where there is less opportunity to monitor and protec tion against opportunistic behavi or more trust is required. Marsdens research also showed the importance of defining the obligations and roles of both the employee and the employer as well as the scope of the authority associated with each rule and

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57 role. These definitions provided the conditions th at enabled trust to transform into high trust (Marsden 1998). Childs (1998) research focused on the phases of international strategic alliance development and the evolution of trust in each phase. Table 2-16 shows that as strategic alliances develop, the form of trust transformed from self interest-based to common interest-based. Bachmann (1998) concluded by stating, The fore most problems relating to the analysis of trust seem to be connected to the understanding th e role of the institutional environment in which business relations are embedded (Bachmann 1998, page 298). Consequently, economic activity and trust are highly dependant on the nature of the institutional environment in which they interact. The authors in this compendium have us ed an array of different terms to conceptualize trust and illustrated the difficulty of finding suit able words or concepts that describe the multidimensional aspects of trust. When researching tr ust it is important to consider the impact that power has on the relationship in question. Bach mann also reasserted the importance of a strong socio-legal framework in creating a stable institutional environm ent that encourages good faith business activities as opposed to adve rsarial business activ ities (Bachmann 1998). Compendium by Nooteboom and Six (2003). The research presented by Noteboom and Six (2003) in Trust Process in Organizations involved a multi-disciplinary approach to examine the causes and foundations of trust in organizations. Anything can be trusted (person, team, organization, law etc). Individuals can at the same time extend trust and distrust to the same object in different contexts and for different re asons. The trustworthiness of objects change in different situations and conseque ntly the trust extended to these objects change as well. The mediating factors associated with the changing nature of trust are the inte rests (values, norms, etc.) of the parties involved in the relationshi p (exchange) and trust process that enabled the

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58 effectively learning interests (values, norms, cal culations) of each party in the relationship. Environmental (situational) m echanisms promoting and supporti ng the learning of interests by providing security enhances the trust building proce ss (Nooteboom and Six 2003). Nooteboom and Six (2003) indi cated that reliability and reliance were also important factors of organizational trust (Table 2-17 and Table 2-18). In dividuals must be both reliable to each other and reliant on each other. The Tables discuss the tensions that were found in trust relationships (egotistical vs. altrui stic; control vs. trust), the leve l of trust analysis (Macro and Micro), and the general behaviors in each situation. Trustors or tr ustees that feel betrayed or taken advantage of will show their discontent in a number of obvious ways. It is important that other members of the relationship pick up on th ese cues. Nooteboom and Six concluded their work on trust by stating that, Trust is a four-pl ace predicate: someone (t rustor) trusts some-thing or someone (trustee) with respect to something (competence, intentions) depending on conditions (Nooteboom and Six 2003, page 225). Summary. Table 2-19 shows the summary of the co mpendiums discussed in this section. 2.2.3 Trust Focused Dedicated Journal Editions This section reviews six differe nt dedicated journal editions with ar ticles published in the Academy of Management Review; Organizational Studies, Organizational Sc ience, International Journal of Human Resource Management, Pe rsonnel Review and European Journal of Marketing. 2.2.3.1 Trust in the Business Environment Rousseau et al. (1998) ex amined the definition of trust; the nature (static or dynamic) of trust; the status of trust (cause effect or mediator); and the le vels of trust analysis. An acrossdiscipline review of the literature showed that there was no common definition of trust. However, there was common ground in that trus t was a psychological state of mind, involved

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59 risk, and required the interdepe ndence of the trustor and trustee. Trust was also considered a dynamic phenomenon that was either buildi ng, stabilizing, and di ssolving while being considered either a cause (independent, choice), an effect (dependent, institutional arrangements) or an interaction (moderating role) (Rousseau et al. 1998). Rousseau et al. (1998) defined four different forms of trust (deterrence, calculative, relational and institutional). Deterrence-based trus t was considered a low level of distrust and a substitute of for control. The trustee was judge d as trustworthy owing to sanctions or other mechanisms instituted to minimi ze the cost of a violation. Calculus-based trust manifested where risk was continually monitored and a rational choice based on credible information and the belief of positive gains could be made by the trustor. This type of trust was limited to specific exchanges. Relational trust or affective trust wa s established on repeated interactions between the trustor and the trustee. Th e trusting decision incorporated information from within the relationship and concern of the trustor and tr ustee were reciprocated. The repeated positive interactions fulfilled expectations and strengthened the willingness to take risks. The last form of trust described by Rousseau was institutional ba sed trust. This form of trust created the environment (of structures, rules, standards, etc. ) for calculative and rela tional trust to develop on the individual, team, organizational, or societ al level. The forms of trust changed as the interests of the individuals involved change and as the structures of the institutions change (Rousseau et al. 1998). McKnight et al. (1998) investig ated the paradox of high initial trust in some relationships. They described the paradox as how do two indi viduals without any prior knowledge of each other build trust in their initial meeting. Figure 2-7 presents a deta iled model of initial trust and illustrates the interaction between disposition to tr ust, the cognitive process, institutional-based

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60 trust, trusting belief (trustworthi ness) and trusting intention. As two individuals approach a new trusting relationship, they encounter each others disposition to trust. This comprises their trusting stance (developed in childhood) and faith in humanity (general outlook). The individuals dispositions filter into the institutional based trus t consisting of structural assurances (rules and procedures) and situational normality (stable environmental conditions). Next, the institutional based trust joins with the cognitive processes of categorization (making unfamiliar circumstances familiar) and illusions of control (perceiving more power than actual). Together they feed into the trusting belief. The trusting be lief is a judgment of trustwor thiness based on the criteria of benevolence, competence, honesty and predictabilit y. Together these four factors, influenced by the previous variables, form the trusting intention of initial trust between unfamiliar individuals. Through the process, individuals se arch and interpret information that matches their beliefs and views with the intention of crea ting the desired or expected resu lts. Individuals tend to consider misjudgments as isolated cases and assess the ne xt relationship in a similar manner (McKnight 1998). Sheppard and Sherman (1998) conceptualized tr ust with four distinct and ordered forms. These forms included shallow dependence, shallo w interdependence, deep dependence and deep interdependence. Table 2-20 shows the four form s of trust according to the associated risk, qualities of trustworthiness, mechanisms for tr ust, relational mechanisms and institutional mechanisms. Sheppard and Sherman (1998) argued th at relationships vary in terms of depth and forms and were categorized as having shallow or a deep interdependence or dependence. In turn, each category determined the type of risks, trustworthy criteria and trust mechanisms appropriate for the specific relationship (Sheppard and Sherman 1998).

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61 Lewicki et al. (1998) found that individuals had simultaneous re asons to trust and distrust in relationships. This illustrate d that trust and distrust were separate constructs and not the opposite ends of the same continuum. Both trust and distrust could exist simultaneously in relationships. Figure 2-8 shows the c onstructs of trust and distrust. The opposite of trust is not distrust their an tecedents and consequences are separate and distinct, they can occur at the same time[the ] increase in distrust can serve the purpose of enabling emergence of greater trust in social systems. Trust depends on the inclinations toward risk bei ng kept under control and on th e quota of disappointments not becoming to largeif this is correct than a system of higher complexity which needs more trust, also needs at the same time mo re distrust (Lewicki et al. 1998, page 451). Lewicki et al. also indicated th at the keys to remedying distru st in work organizations was to match skills with requirements, provide appropriate information for work requirements, design jobs that consider human limitations in pr ocessing information, and align personal and organizational values. Elangovan and Shapiro (1998) presented a mode l of the process of betrayal or more specifically opportunistic behavior in trusting relationships. Betrayal was defined as a voluntary violation of mutually known pivot al expectations of the trustor by the trus ted party (trustee) which has the potential to threaten the well-be ing of the trustor (Elangovan and Shapiro 1998, page 548). The scholars stated that th e intent of the betrayer was the most critical factor in the act of betraying or opportunistic behavior. Additionall y, they outlined several key considerations in discussing betrayal. They described the requirements of betrayal as deliberately violating important expectations that were accepted by both parties, and the betrayal transpired through action and not just thought. Again, it was important to decipher the intent of the violation. A trustee genuinely willing to meet the trustors expectations but unable to was not considered betrayal. A trustee not wanting or choosing not to meet the trustors expectations for their own personal interests was considered a betrayal. Figure 2-9 shows a process model of opportunistic

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62 behavior that leads to betrayal It begins with triggers whic h advance into the assessment of benefits, relationships, and principles. These filter through judgments of benevolence and integrity and form the motivation to betray. At th is point, the penalties re lated to betraying are assessed and the coalescence of the variables in the model determined the perceived degree of opportunistic behavior or betray al (Elangovan and Shapiro 1998). Whitener et al. (1998) examined trust in an attempt to identify the antecedents of managerial trustworthiness in an economic exch ange process. Managerial behavior is an important influence on the development of trust in relationships between mangers and employees. We define managerial trustworthy be havior as volitional ac tion that are necessary though not sufficient to engender employees trus t in them (Whitener at al. 1998, page 516). Figure 2-10 shows the exchange framework in in itiating managerial trustworthy behavior. The process begins with three sets of factors, organi zational, relational, and individual. These factors feed into the managerial trus tworthy behavior, which consists of behavioral consistency, behavior integrity, sharing and delegation of control, commun ication and demonstration of concern. Lastly, four boundary conditions (receiv ed similarity, perceived competence, employee propensity to trust and task interdependence) are brought into the exchange to develop the employee perceptions of trust. The Figure 2-10 al so shows the cognitive process of the employee in assessing the managers trustwor thiness (Whitener et al. 1998). Das and Tengs (1998) examined trust and co ntrol in developing partner cooperation in alliances (for a more detailed review of this topic see Das and Teng in the Organizational Science section of this document). Das and Te ng (1998) indicated that trust and control came together and affected one anot her in trusting relationships. Fi gure 2-11 shows the relationship between trust and control as it re lated to confidence in partner cooperation. The figure shows that

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63 control mechanisms affect the trust level and the control level. The trust building activities affect the trust level, which in turn affect the control level. The control level and trust level determine the confidence in cooperation among partners (Das and Teng 1998). Donely et al.(1998) defined five trust bu ilding processes along with their underlying behavioral assumptions and primary base descri ption with originating discipline (Table 221).The trust building processes and the underlyi ng behavioral assumptions described by Donely et al. (1998) are more detailed th at the processes presented by R ousseau et al. (1998) or Lewicki et al. (1998). Additionally, Figure 2-12 shows a model of developing trust base d on national culture. The model incorporates a number of findings from the other papers in the Academy of Management Journal including the importance of cognitive and non-cognitive processes, values and norms and trust bases on institutions, organizations and individuals (Donely et al. 1998). Bigley and Pearce (1998) developed a problem-centered organizing framework of trust. The scholars organized their findings in three ma in groupings of trust re search: interactions among unfamiliar actors, interactions among fam iliar actors within ongoing relationships, and organization of economic transactions. Three perspectives assisted in understanding the trust process in interactions among unfamiliar actors. These perspective were disposi tional, behavioral decision and institutional. Each individual has their own disposition to trust or distrust. As these individuals become more familiar with one other, the information they ob tained trough their interaction becomes the major driver in the trust process. The second perspe ctive focused on the behaviors of unfamiliar actors in trusting relationships. This pe rspective stressed the importance of situational factors, influence

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64 behaviors and trust levels The third perspective drew attentio n to the role of the institutional framework that shaped the trust relationship between the actors. Interactions among familiar actors were defi ned by the gathering of knowledge or the forming of bonds between each actor. Organizatio n of economic transactions and its governance interacted with trust and imp acted the perception of risk fo r individuals involved in the relatio