Formation of Stakeholder Trust in Business and the Role of Personal Values

47 Pages Posted: 5 May 2013 Last revised: 19 Oct 2014

See all articles by Michael Pirson

Michael Pirson

Fordham University - Graduate School of Business Administration; Harvard University; Humanistic Management Network

Kirsten E. Martin

George Washington University - Department of Strategic Management & Public Policy

Bidhan L. Parmar

University of Virginia - Darden School of Business

Date Written: May 3, 2013

Abstract

Declining levels of stakeholder trust in business are of concern to business executives and scholars for legitimacy and performance related effects. Research in the area of stakeholder trust in business is nascent therefore the trust formation process has been rarely examined at the stakeholder level. Furthermore, the role of personal values as one significant influence in trust formation has been under-researched. In this paper, we develop a contingency model for stakeholder trust formation based on the effects of stakeholder specific vulnerability and personal values of the trustor. Using a factorial vignette methodology, we find that Schwartz’s (1994) value set interacts with stakeholder roles so that trustworthiness signals of competence and character play differing roles during trust formation. These results inform stakeholder trust research, organizational trust research and research in personal values. The research also informs managers tasked with rebuilding stakeholder trust in business.

Keywords: Stakeholder Trust, Personal Values, Trust Formation, Public Trust

Suggested Citation

Pirson, Michael and Martin, Kirsten E. M. and Parmar, Bidhan L., Formation of Stakeholder Trust in Business and the Role of Personal Values (May 3, 2013). Darden Business School Working Paper No. 2260527; Fordham University Schools of Business Research Paper No. 2260527. Available at SSRN: https://ssrn.com/abstract=2260527 or http://dx.doi.org/10.2139/ssrn.2260527

Michael Pirson (Contact Author)

Fordham University - Graduate School of Business Administration ( email )

1790 Broadway 1147
New York, NY New York 10019
United States

Harvard University

1875 Cambridge Street
Cambridge, MA 02138
United States

Humanistic Management Network ( email )

St. Gallen
Switzerland

Kirsten E. M. Martin

George Washington University - Department of Strategic Management & Public Policy ( email )

Washington, DC 20052
United States

Bidhan L. Parmar

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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