Trust after the Global Financial Meltdown
Version of Record online: 1 DEC 2011
© 2011 Center for Business Ethics at Bentley University
Business and Society Review
Volume 116, Issue 4, pages 403–433, Winter 2011
How to Cite
WERHANE, P., HARTMAN, L., ARCHER, C., BEVAN, D. and CLARK, K. (2011), Trust after the Global Financial Meltdown. Business and Society Review, 116: 403–433. doi: 10.1111/j.1467-8594.2011.00391.x
- Issue online: 1 DEC 2011
- Version of Record online: 1 DEC 2011
Over the last decade, and culminating in the 2008 global financial meltdown, there has been an erosion of trust and a concomitant rise of distrust in domestic companies, multinational enterprises, and political economies.
In response to this attrition, this article presents three arguments. First, we suggest that trust is the “glue” of any viable political economy, and we propose that the stakes of violating public trust are particularly high in light of the asymmetry between trust and distrust. Second, we identify a constellation of key barriers to overcoming distrust that companies face in the current environment: (1) corporate mind-sets that promote a preoccupation with quantification, hierarchical leadership models, and “blind trust” in authority; (2) the anonymity of core stakeholders; (3) the agency of the media as a driver of the political economy; and (4) firm-centric models of stakeholder relationships.
Third, we argue that, notwithstanding these challenges, these phenomena are not fatal and can be addressed through a holistic transformation in corporate culture. Such a transformation might include a shift to collaborative leadership models and replacing authority models with responsibility, a “names and faces” approach to stakeholders through cases and stories, more egalitarian communication exchanges with external stakeholders, and a reprioritization of the firm as a vital element among others within a system rather than the central core of a network.
We conclude that the value of trust at the individual, institutional, national, and global levels cannot be overstated. Without a reinvigoration of trust in our political economies, at all levels, the future of an economically vibrant planet is indeed bleak.