Chapter 1 - Review co-worker trust

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Master Thesis

The antecedents and consequences of peer trust in franchise networks

Reinder Hamming S3125335

MSc Business Administration – Small Business & Entrepreneurship

University of Groningen Faculty of Economics and Business

Supervised by Evelien Croonen Co-assessor: Arjan Frederiks

September 2018 Word count: 19.644

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Abstract

This study contributes to research on franchise networks by explaining the impact of franchisees’ trust in their fellow franchisees inside the franchise network (peer trust). Peer trust is defined as franchisee’s trust in its fellow franchisees (‘peers’) within the franchise network. The study builds on a systematic review of the antecedents and consequences of co-worker trust within organizations and a systematic review of the antecedents and consequences of trust in network members in inter- organizational contexts. Based on those two systematic reviews and the franchise literature I propose an integrative framework of the antecedents and consequences of peer trust in franchise networks. The integrative framework shows that the antecedents of peer trust can be divided in four major clusters of factors: franchisees’ (i.e. trustor) characteristics, peer (i.e. trustee) characteristics, franchisor’s characteristics and franchise network characteristics. These antecedents identify what franchisees and franchisors should or should not do to create higher levels of peer trust. The consequences of peer trust can be divided in four major factors: citizenship behaviour, commitment, counterproductive behaviour and performance. These factors may influence the franchisees, the franchisor and the franchise network. The framework combines prior studies and contributes to a less researched literature area that focuses on peer trust in franchise networks. The research and practitioner implications of the review, limitations and a research agenda for further research are discussed.

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Introduction

Franchise networks have a high impact on employment and economic output and are therefore an important form of entrepreneurial activity in many countries (Dant et al., 2011). In franchising a company (i.e. the franchisor) owns a business format and the franchisee, typically an independent business owner will pay royalties for the use of the business format while using the standards of the franchisor (Davies et al., 2011; Grünhagen and Dorsch, 2003). The franchise network comprises all the different units of the franchisees combined with the units that are managed and owned by the franchisor itself (i.e. company-owned units). This means that all these units operate under the same umbrella trademark (Elango and Fried, 1997; Gassenheimer et al., 1996).

Trust between franchisor and franchisee is very important in the franchise network, because the franchisor and franchisee have long-term contractual relationships with each other but they have different economic motives (Solis-Rodriguez and Gonzales-Diaz, 2012; Winsor et al., 2012).

Franchisees are focused on the profitability of their own unit, while franchisors want to maximize the profitability of the system or growth in sales (Dant and Nasr, 1998; Combs and Ketchen, 2003). To give an example, franchisors will focus on revenue maximization by adding new franchisees. This will lead to an increase in the total revenues and profit for the franchisors, as a result of the growth in amount of royalties paid by the franchisees (Caves and Murphy, 1976). However, adding new franchisees may lead to intra-chain competition between franchisees, because they are located too close to each other (Kalnins and Lafontaine, 2004). Franchisees may adapt to their local contexts to increase their profits, but they may adapt that much that they deviate from the franchise concept (El Akremi et al., 2011; Gassenheimer et al., 1996). These and other goal conflicts like opportunistic behavior of franchisees could lead to tensions in the franchise network (Barthélemy, 2008). Tensions and opportunistic behavior in the network could lead to agency problems and may lead to negative consequences, such as franchisees that leave the franchise network or conflicts (Croonen, 2017; Frazer and Winzar, 2005; Kidwell et al., 2007; Winsor et al., 2012).

Trust is an important topic in intra-organizational and inter-organizational contexts. If trust is present in a relationship individuals can work together without or at least a reduced need for monitoring or without engaging in self-protective behavior (Mayer and Gavin, 2005). One of the most widely accepted trust definitions is the definition of Rousseau et al. (1998, p. 395) “trust is a psychological state comprising the intention to accept vulnerability based upon positive expectations or behavior of another”. Another often used definition in the trust literature is the definition of Mayer et al., (1995, p. 712) who define trust as “the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that another party”. These two definitions have been used by different authors, who all focused on two important aspects of trust, namely willingness to be vulnerable and the positive expectation of others. The first one, the willingness to be vulnerable,

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means the acceptance of risk in a relationship (Rousseau et al., 1998; Zaheer et al., 1998). The second aspect of trust is a trustors’ positive expectation of the behavior of the trustees (Mayer et al., 1995;

Lewicki and Bunker, 1996).

A lot of research has been done into the antecedents and consequences of trust in different organizational contexts, for example in intra-organizational contexts, like trust among co-workers and the trust of the company leader in his/her workers (Fulmer and Gelfand, 2012; Burke et al., 2007;

McCauley and Kuhnert, 1992; Searle et al., 2011). Also the inter-organizational contexts achieved a lot of attention, focusing for example on trust in buyer-supplier relationships (Fang et al., 2008) and trust between the franchisee and franchisor (Croonen and Brand, 2013; Davies et al., 2011). Most studies in the franchise literature studied the antecedents and consequences of trust of franchisees in their franchisor (Croonen and Broekhuizen, 2017; Davies et al., 2011). Fulmer and Gelfand (2012) distinguished three types of referents, who a trustor can trust: individuals, teams and organizations.

Most organizational studies are focusing on the individual level of trust and trust with a multi referent perspective is needed (Fulmer and Gelfand, 2012). Most research in the franchise context is focusing on trust in the individual and the multi-referent approach is not often used (Croonen, 2017). Research adopting a multi referent perspective can help in identifying if the antecedents and consequences studied at the individual level are relevant across different levels (Fulmer and Gelfand, 2012).

Croonen (2017, p. 4) mentioned that there are four different types of referents for franchisee trust:

trust in top management, trust in the boundary spanners, trust in the franchisee’s peers¹ and trust in the franchisor’s organization. This study focuses on franchisee trust in their peers, which I call peer trust in this study. Peer trust is defined as “a franchisee’s trust in its fellow franchisees (‘peers’) within the franchise system” (Croonen, 2017, p. 197). Important to note is that, peer trust is the franchisee’s overall perceived level of trust in its peers, within the same network. This means that my study is not focusing on a dyadic relationship between two specific peers (peer specific trust).

The antecedents and consequences of trust in the franchisee’s peers are currently unstudied and the topic is mentioned in the literature gap for future research (Croonen, 2017). The lack of research on the antecedents and consequences of peer trust leads to a lack of understanding about the importance of this topic for franchisors, franchisees and franchise systems. I expect that peer trust could lead to positive consequences, such as higher information sharing between franchisees (El Akremi et al., 2011). Besides, I expect that peer trust leads to less negative consequences, like counterproductive behavior and free riding (El Akremi et al., 2011; Croonen, 2010). Knowledge about this topic is therefore important for franchisors. For example, franchisors could introduce systems that help to share knowledge in the network, which could increase the performance of the entire network (Okoroafor, 2014).

This paper contributes to the literature, by developing an integrative framework of the antecedents and consequences of peer trust, which could be tested empirically in the future. Peer trust

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in franchise networks is a new concept. Therefore, I chose to build on literature from studies of co- worker trust for two different reasons. First, relationships within the franchise network can be seen as intra-organizational relationships. Franchisees have to agree with contractual requirements from the franchisor and the franchisor is monitoring franchisees compliance, which can be seen as a hierarchical intra-organizational relationship (Croonen and Broekhuizen, 2017; Kidwell et al., 2007).

Second, franchisees are dependent on each other because the behavior and performance of franchisees influences the performance of their peers (Kidwell et al., 2007; Solis-Rodriguez and Gonzalez-Diaz, 2012). This means that the performance of the whole franchise network is dependent on the behavior of the franchisees (Jambulingam and Nevin, 1999). This is also the fact in intra-organizational contexts, because the behavior of employees affects the performance of an organization (Hansen and Wernerfelt, 1989). Taken together, franchisees in a franchise system can be seen as co-workers, because the relationships between peers can be characterised as non-hierarchical relationships, but there is interdependence.

Franchisees are operating under the same format, which asks for a uniform presentation (Dant et al., 2013). However, franchisees are different legally independent business owners. Therefore, only building on co-worker literature provides an incomplete account of trust in peers. In order to have a more ambiguous view on the topic of peer trust, I chose to build also on the literature of trust in network members in an inter-organizational network¹, which I will call trust in network members in this study. Studies in the inter-organizational context showed that the share of resources between partners leads to relationships characterised by vulnerabilities and interdependencies (Schilke and Cook, 2015). These relationships are also visible in the franchise network, which means that franchisees have inter-organizational relationships with their franchisor (Croonen and Broekhuizen, 2017). This means that franchisees are embedded in intra-organizational and inter-organizational relationships in the network. They are multiple legally independent business owners, each with their own interests, but at the same time they have to work together to be a successful network (Fang et al., 2008). Therefore, combining both literature streams gives a complete overview of peer trust in the franchise network.

This article is organized as follows. First, I present a systematic literature review of the antecedents and consequences of co-worker trust within organizations and build an integrative framework. The same method will be used for a literature review of trust in network members. The aim of this method is to collect all empirical evidence and bring this together in an integrative framework. Second, I propose an integrative framework of the antecedents and consequences of peer trust, which is based on the literature reviews, and the franchise literature. Finally, I discuss the theoretical and practical implications of this study, and discuss implications for future research. Figure 1 presents an overview of the structure of this study.

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Systematic literature review on co-worker trust (chapter 1)

Systematic literature review on trust in network members (chapter 2)

Integrative framework on the antecedents and consequences of co-worker trust

Integrative framework on the antecedents and consequences of trust in network members

Integrative framework on the antecedents and consequences of peer trust in franchise networks

(chapter 3)

Conclusion and Discussion (chapter 4) Integration with franchise

literature

Figure 1. Overview of the structure of this article

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Chapter 1 - Review co-worker trust

1.1 Methodology

This study conducts a systematic literature review (Dada, 2018; Nijmeijer et al., 2014; Tranfield et al., 2003) that focuses on the antecedents and consequences of co-worker trust. A systematic literature review can help identifying a scientific contribution and helps in the selection of reliable knowledge from earlier research in a transparent and scientific way (Hakala, 2011; Tranfield et al., 2003). The literature review includes the data collection and data analysis. Finally, I present the results, which results in an integrative framework of the antecedents and consequences of co-worker trust.

Data collection

The studies included in this research investigated the antecedents and consequences of co-worker trust in organizations. Some of the studies are totally focused on this subject, while others are partially focused on the antecedents and consequences. The studies that are included in this review are based on three categories of search criteria, mentioned by Wang and Chugh (2014). These are the search boundaries, search terms and the coverage period. The search boundary is an electronic database, namely Web of Science InCites^TM. I searched in four separate categories of journals: Business, Management, Industrial Relations and Labor, and Applied Psychology. Each of the four different categories resulted in a list of journals ranked according to their five-year impact scores (Eigenfactor, n.d.). The first 15 journals in each specific category were included in this research, which means that this research is based on the most influential journals (Appendix 1).

Second, the search criteria were coworker trust and co-worker trust, since both terms are used to measure trust in peers in the literature. The search took place on May 28, 2018 and searched is on topic. Lastly the search period was chosen. The search period includes articles published up to June 2018, without other limitations with reference to the publishing date. The search process was limited to articles published in English and those in peer-reviewed academic journals. Only journal articles were included in the searching procedure (i.e. no books or chapters), according to Keupp et al. (2012, p. 369) “journal articles can be considered validated knowledge and are likely to have the highest impact on the field”. The overall search strategy generated a sample of 32 articles (Appendix 1). Of the initial sample of 32 articles the title and abstracts were reviewed, because the title and abstracts of articles contain often the keywords of the article (Dada, 2018). Seven articles were excluded because they did not meet the inclusion criteria. The inclusion criteria include articles that focus on antecedents and consequences of co-worker trust. Excluded articles mentioned one of the searching terms in the text, but were not focusing on the antecedents or consequences of co-worker trust in detail. The new sample was further evaluated and four articles that did not meet the inclusion criteria were removed.

Some antecedents or consequences were related to co-worker trust influenced through a moderator or mediator and these articles are included in the final sample. This full text reading reduced the selection

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to 21 articles. Finally, one article was added because it was mentioned in several articles. Ultimately 22 articles were included in the analysis. Figure 2 provides an overview of the selection process.

Data analysis

The selected articles are based on a heterogeneous nature of literature, with too many different variables and conceptualizations. Therefore it was not possible to conduct a meta-analysis (Nijmeijer et al., 2014). The relationships with co-worker trust in the different articles used different theories and methodologies. Therefore I used content analysis to analyse the data, as content analysis is often used for systematic literature reviews (Dada, 2018; Davey et al., 2009; Germain and Cummings, 2010).

Content analysis can help in the reduction of data based on categories, after reviewing all the articles the formulated categories and factors can be counted (Prasad, 2008; Silverman, 2013). Content analysis helps in finding the most important factors and generalizations (Mays et al., 2005). As mentioned earlier, the content analysis in this review is based on direct antecedents and consequences of co-worker trust and mediated or moderated relationships of antecedents and consequences of co- worker trust. During the process, different categories were developed, based on common characteristics of the antecedents and consequences. Tranfield et al. (2003) used the same approach in their systematic literature review. The number of antecedents and consequences in each category were counted and explained (Prasad, 2008). Finally an integrative framework of co-worker trust is build.

1.2 Results: the state of the empirical literature

Table 1 presents a summary of the articles that were included in the final sample. In total 22 articles published between 2002 and 2018 found a relationship between the antecedents and consequences of co-worker trust. The antecedents and consequences of co-worker trust received almost equal attention

Figure 2. Selection process systematic review (figure based on Nijmeijer et al., 2014)

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in the included articles. Of the final sample, 10 articles paid attention to both the antecedents and consequences of co-worker trust. Six of the studies paid only attention to the antecedents of co-worker trust and five of the studies only to the consequences of co-worker trust. A surprising outcome of the literature review is that the articles in the period 2002 till 2006 were only focusing on the antecedents of co-worker trust.

The majority of the studies in Table 1 used a quantitative research design (n = 21). Only one article used a qualitative research design. Most of the studies on co-worker trust in the review used the finance industry as empirical setting (n = 6). Followed by articles that used the manufacturing industry (n = 5) and the education (n = 5), or it is not specified (n = 6). The studies were conducted in more than 12 different countries, most of them in North America (50%) followed by countries in Europe (18%). Table 1 shows that various theoretical perspectives were used in the different articles. The majority of studies were building on the social-exchange theory (n = 6)¹ or building on the trust literature (n = 5). These findings are in line with the arguments that trust has an important role in the emergence and maintenance of a social exchange relationship (Blau, 1964). Furthermore, the social exchange theory is one of the most influential theories for understanding workplace behavior (Cropanzano and Mitchell, 2005).

Based on the literature review, I distinguished four different groups of antecedents that influence co-worker trust². These are employee (i.e. trustor) characteristics, co-worker (i.e. trustee) characteristics, leadership characteristics and organizational characteristics. The employee characteristics emphasize the characteristics of the trustor, such as the propensity to trust of the individual. The co-worker characteristics encompass the trustor’s perception of the characteristics and behaviors of their co-workers. The leadership characteristics include the trustor’s perceptions regarding the characteristics the leader, such as the behavior of the leader in the organization. The last category, organisational characteristics explain trustor’s perceptions of the organizational characteristics.

Based on the literature review, I distinguished four different categories of consequences of co- worker trust, which can be categorized in behavioral outcomes and performance outcomes. The behavioral outcomes are citizenship behavior, organizational commitment, group cohesion and counterproductive behavior. The distinguished consequences of my review are almost consistent with the findings of the meta-analysis of Colquitt et al. (2007). Their meta-analysis included studies of the antecedents and consequences of trust in a task-focused environment. Identified in their meta-analysis are the following consequences: risk taking, task performance, citizenship behaviour and less counterproductive behavior. Risk taking was not found in this literature review and organizational commitment was not part of the consequences of their analysis. They excluded commitment as

1 Social exchange theory is a broad theory and includes: socialization theory, fairness heuristic literature, social cognitive theory, network theory and reciprocity theory. These different theories are included in the social exchange theory, because these theories are focusing on the

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consequence in their analysis, because not enough trust studies used commitment to include in their meta-analysis (Colquitt et al., 2007). Group cohesion was not found in the meta-analysis of Colquitt et al., 2007). Group cohesion could be part of commitment (the excluded consequence), because commitment is the feeling of being a member of a group, because of an emotional attachment and willing to commitment (Meyer and Allen, 1997).

Number of studies*

Number of studies*

Number of studies*

Total sample^* 22 United States

Theoretical/perspective Authentic leadership theory Conservation of resources theory

Organizational behavior and social psychology

Social exchange theory Social information processing theory Theory of psychological engagement

Transformational leadership literature

Trust literature

Antecedents

Employee characteristics Co-worker characteristics Leadership characteristics Organizational

characteristics

Consequences Behavioral outcomes:

Citizenship behavior

9

1

1 11

1

1 5

7 6 2

4

9

Organizational commitment Group cohesion

Counterproductive behavior Performance outcomes:

Performance

Trust definition Cook and Wall (1980) Mayer and Davis (1999) Mayer et al. (1995) McAllister (1995) Other definitions

Forms of trust Affect-based trust Cognitive-based trust Affect- and cognitive-based trust

Calculation and relational based trust

Not specified

Measurement of trust Matching/dyadic approach Overall

Not relevant

4 2 1

5

2 4 5 3 8

4 0

1

1 24

6 15 1 Methodology

Quantitative Qualitative

21 1

Industries Agricultural Education Engineering Finance Fire fighters Healthcare Manufacturing Retail Not specified

Countries Australia Canada China Europe Ireland Korea Nigeria Philippines Sweden United Kingdom

1 5 2 6 1 2 5 1 6

2 2 1 1 1 1 1 1 1 1

* Some of the studies were focusing on more than one antecedent, consequence, industry country etc.

Table 1. Summary of empirical research on the antecedents and consequences of co-worker trust.

1.3 Results: a framework of co-worker trust

As described in the section above, the description show that four major antecedents and four major consequences with multiple sub-factors are related to co-worker trust. The factors are mapped in an integrative framework with the major factors as building blocks and the sub-factors as content of the block. Figure 2 presents the systematic overview and the different factors and the sub-factors, which will be shortly explained in the following section. Structured information about all the individual papers in the final sample can be found in Appendix 2. Before presenting the antecedents and consequences of co-worker trust I will describe the used definitions of co-worker trust.

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A striking fact found in the literature review is that none of the studies had a clear definition for co-worker trust. Two studies on co-worker trust used the definition of Cook and Wall (1980) for their measurements, five studies the definition of Mayer et al. (1995), four on the definition of McAllister (1995) an three on the definition of Mayer and Davis (1999). Furthermore, eight studies are building on definitions of trust of other authors.

According to McAllister (1995) trust can be divided in two forms: cognition-based trust and affect-based trust. Four studies in the review focused on affect-based trust, this is the emotional bond between individuals that are grounded and reciprocal care (McAllister, 1995). One of the studies was using cognition-based trust and affect-based trust (Ladebo, 2006). Cognitive-based trust is the instrumental evaluation of the characteristics of the other party (e.g. integrity, competence, honesty and reliability) (Dirks and Ferrin, 2002; McAllister, 1995). One qualitative study in the review used calculation and relational based trust (Lau and Cobb, 2010). According to Williamson (1993) can calculative trust been labelled as cognitive trust, because individuals can decrease uncertainty by using contracts. Relational based trust is comparable to affective trust, because emotions become part of the relationship, which leads to reciprocal personal care and concern (McAllister, 1995). The other 24 studies of the review were not focusing on a specific form of trust.

Important to note is that co-worker trust, the antecedents and consequences are measured in different ways. Several studies used a matched/dyadic approach (n = 6). This means that co-worker trust, the antecedents and consequences are measured between two employees who regularly interact on a work-related basis (Scott et al., 2013). Other quantitative studies in the literature review used a more general approach of co-worker trust, the antecedents and the consequences (n = 14). For example, studies were focusing on co-worker trust within the organization in general, based on the perception of the trustor.

1.4 Antecedents of co-worker trust

The review identifies four core antecedents of co-worker trust: A: Employee (i.e. trustor) characteristics, B: Co-worker (i.e. trustee) characteristics, C: Leadership characteristics D:

Organizational characteristics. These different factors are in line with the different levels of trust found by Fulmer and Gelfand (2012); they made a distinction between trust at the individual level, team level and organizational level. On individual level the franchisee can trust the leader, on team level te co-workers and on organizational level the franchisor’s organization and franchise network (Croonen, 2017). The defined core factors are presented in Figure 2 and the findings are discussed in more detail below.

A: Employee (i.e. trustor) characteristics: Several studies show that the level of co-worker trust are determined by the propensity to trust, time of the employee in the organization, skills development,

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ANTECEDENTS

A: Employee (trustor) characteristics Soft characteristics (trustor perceptions) Employees’ propensity to trust¹(+) Self-estrangement of employee (-) Employees’ abusive supervision² (-) Hard characteristics (trustor characteristics) Type of employment (external (-) vs. internal (+) )^a

Skills development of employee (+) Time of employee in the organization (+) B: Co-workers (trustee) characteristics Perception of co-worker characteristics Trustworthiness^c (ability, benevolence and integrity) of co-workers (+)

Behavior of co-worker

Resource investment of co-worker^b(+) Uncivil behavior of co-workers³(-) Relationship conflict with co-workers (-) C: Leadership characteristics Authentic leadership of leader (+) Trust of leader in co-workers⁴ (+) D: Organizational characteristics Cultural characteristics

Psychological safety of employee³(+) Shared norms between co-workers (+) Procedural characteristics

Organizational socialization tactics in he organization (+)

Procedural justice in the organization (+)

CONSEQUENCES Behavioral outcomes

E: Citizenship behavior of co-workers Towards co-worker

Interpersonal citizenship behavior (+) Conferring support between co-workers (+) Task support between co-workers (+)

Social support/Accessibility of social exchanges between co-workers (+)

i: Pro-active work behavior between co-workers (+)

ii: Person-focused interpersonal citizenship behavior (+)

Towards organization

Organizational citizenship behavior (+) i: Pro-active work behavior towards organization (+)

Perceived organizational support (+)

F: Organizational commitment of co-workers Affective commitment with organization (+) Turnover of co-workers (-)

G: Group cohesion of co-workers (+) Group cohesion between co-workers (+) Psychological safety of co-workers (+) H: Counterproductive behavior of co-workers Exclusion of co-workers (-)

Performance outcomes

I: Performance of co-workers and organization iii/iv: Individual performance

Task/job performance of co-workers and organization (+)

CO-WORKER TRUST MEDIATOR

Cultural characteristics a. Perception of shared norms between co-workers (+) b. Co-worker social support (+)

Employee characteristics c. Propensity to trust (+)

MEDIATOR

Flexible role orientationⁱ(+) Empathic concernⁱⁱ(+) Sharing resourcesⁱⁱⁱ(+) Exchanges^iv(+)

MODERATOR

Communication characteristics 1. Virtual dyads (-)

3. Contribution to exchange relationship (+)

5. Organizational identification (+) Group characteristics

2. Negative peer abusive supervision (+)

4. Low group performance (+)

Figure 2. A model of the antecedents and consequences of co-worker trust. Numbers in the antecedents are referring to the moderators; letters in the antecedents are referring to the mediators and the letters in the mediator to the consequences. The symbol (-) indicates that the antecedents or

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type of employment, the level of self-estrangement, the level of abusive supervision. These characteristics can be divided in soft and hard characteristics. Soft characteristics are based on the feelings and attitudes of the trustor and the hard characteristics are measurable characteristics of the trustor.

Soft characteristics

Employees’ propensity to trust (+): Propensity to trust is an individual’s perception of the general trustworthiness of others (Mayer et al., 1995). Three of the 22 studies of the final sample found that propensity to trust is positively related to co-worker trust (Roussin and Weber, 2012; Van der Werff and Buckley, 2007; Yakovleva et al., 2010), regardless of the country, industry or theoretical perspective that was used in the empirical setting.

Self-estrangement of employee (-): Golden and Veiga (2018) found that higher levels of self- estrangement of a worker are negatively related to co-worker trust. Self-estrangement can be defined as a psychological separation from the self (Fromm, 1955), which means that there is a difference between a person’s self image in the workplace and a person’s ideal self-image (Seeman, 1959).

According to Golden and Veiga, higher levels of self-estrangement lead to separation of workers, which leads to passive and indifferent behavior of workers to their co-workers. As result of this do self-estrangement workers invest less time in their relations with co-workers and are less willing to share resources (Kahn, 1992; Greenberg and Grunberg, 1995). The study of Golden and Veiga (2018) is building on the social exchange theory, self-estrangement of an employee will lead to less social exchanges with co-workers. Social exchanges are essential in building trust between co-workers. A decrease in social exchanges as result of self-estrangement behavior of the trustor will lead to a decrease in the trustworthiness of the trustor in the eyes of the co-workers (Levin et al., 2006). Taken together, self-estrangement behavior of the trustor will lower co-worker trust in the organization.

Employees’ abusive supervision (-): One study found that trustors’ abusive supervision is negatively related to co-worker trust (Peng et al., 2014). They found in their quantitative analysis among 411 employees in 23 different companies in China that trustors’ abusive supervision is negatively related to affect-based trust between co-workers. Trustors’ abusive supervision is the workers’ own experience of being abused by the leader (Peng et al., 2014, p. 1385). Workers who are treated unfairly do not have the feeling that they are part of the group (Tyler and Blader, 2000). Building on the social exchange theory, trustors’ abusive supervision will lead to less social exchanges among co-workers.

This will lead to lower levels of co-worker trust.

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Hard characteristics

Type of employment (external (-) vs internal (+)): Svensson (2015) made a distinction between internal and external workers: internal workers are directly hired by an organization and external workers are working for an organization but their formal employer is another organization. Social integration in an organization is more difficult for external workers, since they are often working for a short time for the organization. This is negatively related to a sense of belonging, which has a negative influence on co-worker trust (George and Chattopadhyay, 2005: Liden et al., 2003). The perception of shared norms between co-workers mediates the relationship between type of employment and co- worker trust. Shared norms between co-workers have a positive influence on the level of co-worker trust (Svensson, 2015). Taken together internal employment is positively related to co-worker trust, mediated by the perception of shared norms.

Skills development of employee (+): One study found a relationship between skills development and co-worker trust. Svensson (2015) found in his quantitative analysis with a sample size of 711 employees in the public sector in Sweden that an employee’s skills development is positively related to co-worker trust. According to Svensson (2015), higher levels of skills and competencies lead to employment security. External employees in an organization can negatively influence co-worker trust, because they can be seen as threat for internal workers their job position (Allan, 2000; Kraimer et al., 2005). At the same time are external workers dependent on the internal workers to perform their jobs (Barley and Kunda, 2004). Therefore, it is important for employees to develop their skills, which generates more employment security (Svensson, 2015). Employment security decreases the vulnerability of an employee in his or her position. Employees with more skills development are less afraid of losing their position. Therefore skills development is positively related to co-worker trust.

Time of employee in organization (+): The effect of trustor’s time in the organization on co-worker trust was reported in one study (Van der Werff and Buckley, 2007). In their empirical setting among 193 employees of an international accountancy and consultancy firm was found that the time of an individual in the organization was positively related to co-worker trust. The level of co-worker trust will increase over time as result of the socialization process (Wilson et al., 2006). Positive experiences of the trustor and trustee will lead to more interactions and the building of social resources, which will lead to an increase in the level of co-worker trust (Frederickson, 2001).

B: Co-worker (i.e. trustee) characteristics: Co-worker characteristics and behavior is the second antecedent that influences co-worker trust. Six studies showed that the characteristics of the co-worker have an influence on co-worker trust. These factors can be divided in two sub-groups, namely perceptions of the trustor about the co-worker and the behavior of co-workers. The perception of the trustor includes studies that focus on the trustworthiness of co-workers (n = 3). The behavior of the co-

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worker includes studies that focus on the resource investment of co-workers (n = 1), uncivil behavior of co-workers (n =1) and relationship conflicts with co-workers (n = 1).

Perception of co-worker characteristics

Trustworthiness (ability, integrity and benevolence) of co-worker (+): Two studies considered the influence of trustworthiness of the co-worker on co-worker trust. Mayer et al. (1995) separated trust from trustworthiness; trustworthiness has three characteristics of the trustee (ability, benevolence and and integrity), which are antecedents of trust (Colquitt et al., 2007). Each of the characteristics is explained in more detail in Appendix 3.

Dirks and Skarlicki (2009) and Colquitt et al. (2011) found that ability, benevolence and integrity of co-workers are positively related to co-worker trust. Yakovleva et al. (2010) found these results only for benevolence and integrity. All of the studies are conducted in the United States, but different industries are used for these quantitative analysis. The studies are building on the social exchange theory and trust literature, which provides support that social exchanges are necessary to built co-worker trust.

According to Blau (1964), one of the goals of relationships between partners is that they can derive future benefits from it. An important aspect of workers’ willingness to participate in social exchanges is the belief in the co-worker’s perceived trustworthiness (Dirks and Skarlicki, 2009).

Being perceived as trustworthy, will lead to higher levels of co-worker trust. For example, a worker is more willing to engage in social exchanges with a co-worker with a lot of competencies and useful skills in the eyes of the trustor. This leads to a higher level of perceived ability, which has a positive influence on the level of co-worker trust.

Behavior of co-worker

Resource investment of co-workers (+): Halbesleben and Wheeler (2015) considered the influence of resource investments (in terms of organizational citizenship behavior) of co-workers on co-worker trust. They showed that higher resource investment of co-workers lead to an increase in co-worker support. The study of Halbesleben and Wheeler (2015) builds on the conservation of resource theory.

This theory focuses on objects, personal characteristics, conditions or energies that are valued by individuals (Hobfoll, 1989, p. 516). Understanding these processes when determining the values of resources can help in understanding the behavior of employees in social exchanges. Workers who receive support from co-workers have a belief that this co-worker will help them in the future (Hobfoll, 2001). This belief in co-worker support will lead to higher levels of co-worker trust (Halbesleben and Wheeler, 2015).

Uncivil behavior of co-workers (-): The study of Scott et al., (2013) showed that uncivil behavior of a

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individuals in different industries in the Philippines. Uncivil behavior of co-workers will make the trustor doubt about the benefits of the relationship (Darley, 2004; Fitness, 2001: Robinson et al., 2004). This has a negative influence on the social exchanges and the trustworthiness of that co-worker and will decrease the level of co-worker trust.

Relationship conflict (-): The only qualitative study in this systematic review is from Lau and Cobb (2010). They developed a conceptual model building on the social exchange theory that explores the impact of relationship conflict on co-worker trust. A relationship conflict between co-workers will lead to negative affects in the relationship, which leads to differences in values, perspectives and attitudes (Simons and Peterson, 2000; Williams, 2001). Therefore Lau and Cobb (2010) propose that relationship conflict has a negative effect on co-worker trust

C: Leadership characteristics: Two studies showed that co-worker trust is a result of leadership characteristics and behavior, the studies focused on authentic leadership and trust of the leader in co- workers. The studies were conducted in Australia (n = 1) and the United States (n = 1) and used several industries for their empirical setting. Each of the antecedents is explained below.

Authentic leadership (+): Gill and Caza (2018) found in their quantitative research a relation between authentic leadership and social exchanges between co-workers, which generates higher levels of co- worker trust. Authentic leadership is the combination of interrelated behaviors, which emphasises the behavior of leaders in acting to their workers; making ethical decisions and the use of information (Avolio et al., 2004; Gardner et al., 2011). An authentic leader will have workers who are more likely to follow, trust and identify themselves with their leader (Gill and Caza, 2018). This will influence the behavior that the workers have in the group and it will lead to a more positive group climate, which increases the level of co-worker trust (Hogg and van Knippenberg, 2003).

Trust of leader in a specific co-worker (+): Lau and Liden (2008) found in their matching survey among 146 individuals in different organizations (university, manufacturing and construction) that the level of trust of leaders in a specific co-worker is positively related to co-worker trust. Leaders of an organization have more influence than co-workers in an organization, because they have a higher formal status. Therefore, they have a bigger role in the creation of an attitude, which helps in creating trust between co-workers. (Liden et al., 2004). Trusted employees by leaders have often more responsibilities, confidential information and get more advice from the leader (Lau et al., 2007). This leads to higher performance and co-workers see the worker as more capable. As a result of this, trust of the leader in a co-worker lead to higher co-worker trust between co-workers in an organization (Lau and Liden, 2008).

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D: Organizational characteristics: Organizational characteristics includes the perception of the trustor of the organisational characteristics. Four studies showed that organizational characteristics influences co-worker trust in organizations. These studies can be divided in cultural characteristics and procedural characteristics.

Cultural characteristics

Psychological safety (+): Only one study found a relationship between psychological safety and co- worker trust. The quantitative study of Roussin and Weber (2012) among managers working in the technology and manufacturing industry found that psychological safety is positively related to co- worker trust. Psychological safety is according to Kahn: (1990, p. 708) “a feeling able to show and employ one’s self without fear of negative consequences to self-image, status or career”. According to Edmondson (2004), psychological safety leads to more trust between employees. Employees who perceive a higher level of psychological safety are more willing to take risks and are less afraid of being locked out or being embarrassed, which positively influence co-worker trust (Roussin and Weber, 2012). Therefore, psychological safety positively influences co-worker trust.

Shared norms (+): Svensson (2015) found in his quantitative analyses building on the trust literature that shared norms have a positive relationship with co-worker trust. The feeling of familiarity with shared norms facilitates predictability in a relationship, which increases the level of trust between co- workers (Misztal, 2013). This coherence among peers makes co-workers known with their way of thinking and acting, which has a positive outcome on the level of trust (Svensson, 2015).

Procedural characteristics

Organizational socialization tactics (+): The quantitative analysis of Lapointe et al. (2014) among 224 participants in different organizations in Canada found that organizational socialization tactics lead to higher co-worker trust. Organizational socialization tactics are part of a process in which new employees are introduced to their new environment, by learning the behaviors, attitudes, and skills that are necessary for their function in the organization (Fisher, 1986). Building on the social exchange theory, higher levels of organizational socialization tactics give newcomers more ways to build social exchanges with their co-workers. An increase in social exchanges among employees will lead to more affect-based trust in peers (Lapointe et al., 2014).

Procedural justice (+): The quantitative analysis of Shin et al. (2014) among employees of 107 different teams of an electronic company in Korea found that procedural justice is positively related to co-worker trust. A procedural justice climate is the fairness level of the decision-making processes in an organization (Naumann and Bennet, 2000). Workers who have the feeling that an organization is

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principles (Frazier et al., 2010). Higher levels of procedural justice will lead to more cohesion among co-workers, which leads to a higher level of co-worker trust (Simons and Roberson, 2003).

1.5 Consequences of co-worker trust

The review identifies four core consequences related to co-worker trust, these can be divided in behavioural outcomes (E: Citizenship behavior, F: Commitment, G: Group cohesion, H:

Counterproductive behavior) and performance outcomes (I: Performance). The factors citizenship behavior and commitment can be divided in citizenship behavior and commitment towards co-workers and citizenship behavior and commitment towards the organization. The factors and sub-factors are presented in Figure 2 and the findings are discussed in more detail below.

Behavioral outcomes

E: Citizenship behavior: A consequence of co-worker trust is an increase in citizenship behavior.

This relationship is reported in nine studies, most of them are building on the social exchange theory (Dirks and Skarlicki, 2009; Golden and Veiga, 2018; Halbesleben and Wheeler, 2015; McGuire and Bielby; 2016; Parker et al., 2006; Peng et al., 2014; Settoon and Mossholder, 2002; Shin et al, 2014;

Yakovleva et al., 2010). Irrespective of the industry and country all studies showed that workers citizenship behavior increases as result of higher levels of co-worker trust. Organizational citizenship behavior (OCB) is behavior that is not directly related to the main task activity, it supports the organizational, social and psychological context of work (Borman, 2004, p. 238). The literature review showed different sub-factors of citizenship behavior between co-workers, which are all related to helping behavior and pro-active working behavior towards co-workers and towards the organization.

This is also showed by Williams and Anderson (1991) who distinguished OCB in two different types, these are proactive cooperation and assistance between co-workers and proactive work behavior for the organization (Williams and Anderson, 1991). Therefore they distinguished OCB in individual OCB and organizational OCB.

According to Organ (1988; 1990), OCB can be classified in five different dimensions. Table 2 presents an overview of the dimensions and the consequences that I found in the review. Most studies in the review focused on helping behavior between co-workers (n = 8), followed by behavior as following the organizational rules (n = 4) as result of higher co-worker trust. Building on the social exchange theory, it is possible to conclude that co-worker trust leads to cohesion and comfort in social exchanges. Trust and comfort in social exchanges makes individuals more comfortable in relationships, which leads to less perceived risk (Settoon and Mossholder, 2002). The literature review shows that trust leads to individuals who are more willing to help each other. Besides that, these individuals show more proactive behavior in favour of their co-workers and the organization. Taken together, co-worker trust has a positive influence on individual and organizational citizenship behaviour.

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Type of OCB Dimension Explanation Source in systematic literature review Individual OCB Altruism Chiang and Hsieh (2012, p. 181): “taking the

initiative to help members of an organization resolve problems”

Dirks and Skarlicki, 2009; Halbesleben and Wheeler, 2015; McGuire and Bielby, 2006;

Peng et al., 2014; Settoon and Mossholder, 2002; Shin et al., 2014;

Courtesy Chiang and Hsieh (2012, p. 181): “to avoid work problems, remind and inform other co-workers in advance”

McGuire and Bielby, 2006; Settoon and Mossholder, 2002

Organizational OCB

Conscientiousness Chiang and Hsieh (2012, p. 181): “in addition to complying with organization rules, going beyond minimum requirements through hard work”

Golden and Veiga, 2008;; Parker et al., 2006; Settoon and Mossholder, 2002;

Yakovleva et al., 2010 Sportsmanship Chiang and Hsieh (2012, p. 181): “obeying

organizational regulations, tolerating imperfect situations without compliant”

Shin et al., 2014; Yakovleva et al., 2010

Civic virtue Chiang and Hsieh (2012, p. 181): “remaining attentive and proactive when participating in organizational activities”

Yakovleva et al., 2010;

Table 2. Dimensions of organizational citizenship behavior (Organ, 1988; 1997; Chiang and Hsisch, 2012; Williams and Anderson, 1991)

F: Organizational commitment: Organizational commitment is the second consequence of co- worker trust. Organizational commitment includes the feeling of an employee in which they identify with the realization of the goals and values of the organization in return for a range of benefits and rewards (Ladebo, 2006). Four studies of the literature review showed a relationship between co- worker trust and commitment.

Affective commitment (+)/Turnover intention (-): Four studies showed that co-worker trust has positive outcomes on the affective commitment of workers with the organization (Ferres et al., 2004;

Ladebo, 2006; Lapointe et al., 2014; Parker et al., 2006). Affective commitment is the emotional attachment of an employee towards the organization (Ladebo, 2006). The studies were conducted in many different industries, including: manufacturing, finance, education, healthcare and public services and in several countries. Nigeria, Canada, Australia and the United Kingdom are mentioned countries in the studies. Most of the studies were building on the social exchange theory (n = 2). All of the studies found a positive relationship between co-worker trust and affective commitment.

According to Meyer and Allen (1991, p. 67) affective commitment is “the employees’

emotional attachment to, identification with, and involvement in the organization”. Affective commitment is also related to the turnover intention of employees. Employees with less affective commitment are more willing to leave the organization (Mathieu and Zajac, 1990; Meyer and Allen 1991). Trust leads to higher levels of commitment (Mathai, 1991) and leads to more trust and mutual respect among members of an organization (Nyhan, 1999). More trust and mutual respect lead to more

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social exchanges, which strengthens the relationships and commitment with the organization and co- workers (Ferres et al., 2004).

G: Group cohesion: Group cohesion is the third consequence of co-worker trust. Group cohesion is the feeling of an individual in being part of a group and the willingness to stay in the group. (Ladebo, 2006). Group cohesion is therefore related to commitment, which is the extent an employee feels an emotional attachment to the organisation (Ladebo, 2006). Group cohesion can therefore be seen as commitment towards co-workers. Two different sub-factors of group cohesion resulted from the review. These are group cohesion and psychological safety.

Group cohesion (+): The quantitative study of Ladebo (2006) among participants of an agricultural development program in Nigeria found that co-worker trust is positively related to group cohesion.

Group cohesion is the feeling of an individual in belonging to a work group. Individuals who have this feeling are willing to make sacrifices towards the achievement of goals and are motivated to stay in the work group (Ladebo, 2006, p. 413). Higher levels of trust leads to more cohesion among individuals in a group (Webber, 2002), because workers have positive expectations about the behavior of their co-workers and leaders. Eventually, this leads to a climate of trust (Hansen et al., 2002).

Psychological safety (+): Psychological safety is found in my review as both an antecedent and consequence of co-worker trust. One study showed that co-worker trust has a positive influence on a feeling of safety by the trustor (May et al., 2004). This result was found in a quantitative survey of 213 employees in a large insurance company in the United States. As mentioned before psychological safety is “ feeling able to show and employ one’s self without fear of negative consequences to self- image, status or career” (Kahn 1990, p. 708). An increase in co-worker trust leads to the feelings of safety at work and leads to co-workers who are more willing to take risk without the fear of negative consequences (Colquitt et al., 2011; May et al., 2004).

H: Counterproductive behavior: The effect of co-worker trust on counterproductive behavior was reported in one study. They found that a decrease in co-worker trust leads to exclusion of co-workers (Scott et al., 2013). Other examples of counterproductive work behavior are aggression, interpersonal conflict, sabotage and theft (Fox et al., 2001). Violated trust relationships leads to workers who are less willing to work together and are afraid of a vulnerable position (Mayer et al., 1995). Lower levels of trust will lead to less social exchanges between co-workers and co-workers who are more focused on their own survival in an organization (Scott et al., 2013). This results in behavior as the exclusion of co-workers and counterproductive behavior in the organization.

Chapter 1 - Review co-worker trust

Abstract

Contents

Introduction

Chapter 1 - Review co-worker trust