Importance of Trust in todays industry

Abstract

Over the last decade ‘trust' has become a word in common use in project industries. Trust is a central element in UK government reports. The industry has a reputation for poor quality and service, a bad safety record, and a history of broken promises. A higher level of trust is needed to enhance project performance. Several studies have shown that partnering projects on the average are more successful than traditional.

The concept of trust is discussed, the report explores the role of trust in the construction industry, and proposes an integrated trust management programme which is based on ethical partnering. Trust can be measured by using key performance indicators. Quantitative indicators with quantitative ranges will be used to measure the performance level of the projects on a scale of one is to five (Poor, Average, Good, Very Good and Excellent), by using questionnaires and interviews amongst the team members. From the results obtained, trust can be measured and tracked. Results from the study can be used to improve performance levels of future projects or measure, evaluate and upgrade the existing performance level of the organization.

Introduction

Trust has been highlighted in both the Latham (1994) and Egan (1998) reports as a major factor leading to the success or failure of construction projects. Trust is important where work is delivered to contract and uncertainties are high, providing conditions in which mistrust and opportunism can prevail.

Considerable literature has emerged on the impact of trust on successful project management in recent years. Trust is used as one of the metrics that defines the nature of inter-organizational relationships found frequently within project settings. Thus, it has a strong positive influence on project success. A successful project begins and ends with trust and should be built on the foundation of trust. It is necessary to know what trust is to provide a basis for the development and management of trust.

Trust is derived from the word ‘trost', which comes from German language, it means comfort. It also carries the sense such as to assess character. Trust is the cement that binds together all relationships and provides the foundation in which the society operates, leadership flourishes, and changes occur ( Glazer,1997)

It has been noted by Kadefors(2004) and others that trust is a complex concept and as a result, can have a variety of meanings, depending upon the situation and the actors in relationship.

Rosseau et al. formulated the following definition, ‘Trust is a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behaviour of another.' Trust first emerges as a psychological state that then impels or encourages like behaviours to follow. Finally, trust points to a positive initial state between individuals or organizations. From this positive state cooperation or other interorganizational relationships are encouraged.

Mayer et al., (1985) considered trust as one party's wish to be a vulnerable to actions of other party; but this willingness is developed from an expectation that the other will perform important activities without monitoring or control. Trust is a psychological construct and is the outcome of interactions with other's values of attitudes along with emotional moods (Jones and George, 1998). Trust can be thought of as a realized psychological state reached through experience of positive behaviours, expectations or intentions of another. This state involves acceptance of risks and vulnerability of the other.

According to Shaw (1997), trust is defined as beliefs that those on whom we depend will meet our expectations of them. He further mentions that that there are four elements needed to measure trust. They are

  • Exhibiting trust ; i.e. currently existing trust
  • Achieving trust ; i.e. following through on business commitments
  • Acting with integrity , i.e. behaving in a consistent manner
  • Demonstrating concern; i.e. respecting the well-being of others.

Trust is a complex issue and many factors influence trust in relationships. Trust is thought to be a psychological phenomenon that is risky but based on faith, reliance, understanding, cooperation, positive expectations, and past experiences, honest communication, reliance and delivery of outcomes. As such trust has a number of aspects, components, factors, attributes, characteristics and features.

Trust can operate on a number of different levels (both intra- and inter-organizationally) as they relate to projects. That is, trust relationships emerge both within an organization (among functional groups) and across organizational boundaries (between organizations working together on joint activities of concern).

Firstly, trust is critical to maintaining a strong, positive project team atmosphere. Secondly, trust is important both across hierarchical levels and between departments within the organization; for example, trust between the project manager, team, and top management is critical for project success. Thirdly, trust is critical in inter-organizational setting, as different organizations are required to work together in partnership as they develop a project of mutual benefit

The nature and forms of trust.

Several alternative models of enacted trust have been proposed. Three notable models of trust are Hartman's model, Rousseau et al.'s framework, and Lewicki and Bunker's conceptualization. These conceptualizations assume different reasons why trust should emerge and the forms it will then take.

A good team relation is important in the success of a project. It is suggested by Munn (1995) that the initial opinions of the individuals entering the project are important in shaping its final outcome. The initial options can force the project into a spiral of increasing or decreasing trust. When a project moves in an unfavourable direction with an initial attitude of mistrust, a model based on the GRIT proposal can be used; this relies on the reciprocal nature of a relationship, and will not succeed if the tool is used incorrectly. For the proposal to work there needs to be a conscious decision by one of the team members to become vulnerable and break the downward spiral, by making statements of intents clearly expressing their desire to trust other parties. The GRIT model can be used to reverse the downward spiral of trust.

Research has been conducted over the years to study the critical factors for developing trust in client contractor relationships that fit all phases in the construction industry. The evolution of ideas can be seen in Appendix 1 and 2.

Trust in Construction: Achieving Cultural Change

The interim report defines the issues of trust between construction project teams. It identifies the different perceptions of trust and the role it plays within construction.

The main ways of building trust in the construction industry are:

  • Experience: People tend to build relationships by working together.
  • Repeated fulfilment of communications through action and outcome creates trust.
  • Good communications arises out of trust and, as evidence of trust, may then be used to develop further trust. If people consistently prove themselves to be reliable they will be trusted.
  • Problem solving: sharing and solving problems as a team helps communication.
  • Reciprocity: Team members supporting and rewarding each other's trusting behaviour helps to build the relationship.
  • Reasonable behaviour: Working fairly and professionally with the people in the project team.
  • Shared goals: A joint understanding of the roles and aims of project work. This is allows for the creation of shared goals with mutual understanding; everyone can be seen to fulfilling a joint task, rather than viewing their own role as separate from the rest of the project team. Communication is improved which builds trust.

Proposal for an integrated trust management programme using partnering.

Successful projects require extensive communication and effective coordination that aid in organizing and integrating teams (client and supply team) to become committed to successful delivery. If such a team is integrated in concert they heavily reduce waste, improve quality, and innovate to complete projects. If team members can produce clear and accurate information that other members can rely on, then uncertainty is reduced. Lack of cooperation has been identified as one of the major causes of inefficiency in the construction industry. Industry-wide studies have suggested the use of partnering as a way to promote co-operative contracting.

Latham raised the issue of partnering and defined it as being ‘...a contractual agreement between the parties for either a specific length of time or for a definite period. The parties agree to work together in a relationship of trust, to achieve specific primary objectives by maximizing the effectiveness of each participant's resources and expertise...'

Latham mentioned that partnering arrangements should include mutually agreed and measurable targets for the productivity improvement. Successful partnering depends on attitudes, teamwork and an ability to innovate and to offer efficient solutions. There should be incentives for cost savings, and the introduction of performance measurement to encourage competition against clear targets for improvement in terms of quality, time and costs.

Partnering is a management process whereby the partners work together in a spirit of mutual trust, co-operation and openness, in achieving mutually agreed objectives measured against performance indicators.

Fig 4: Source: The Reading Construction Forum-‘Trusting the Team'

An integrated trust management programme can be achieved by engaging in trust-based partnering, this encourages parties to adopt higher ethical standards, and achieve improved ethical performance in all their business dealings. Trust- based partnering has the potential to produce an improvement in the ethical climate of the construction industry. Trust is an ethical construct. Ethical partnering places trust at the centre.

Ethical partnering in the industry results in;

  • Trust and fairness
  • Good relationships leading to repeat business.
  • Completion on time
  • Sharing of cost savings
  • Joint problem solving
  • Early warning of problems
  • Improved efficiency and cost effectiveness
  • Encouragement of ideas and innovation.

Construction activities require concerted effort of all participants and teamwork is the key. This teamwork can either be intra- or inter-organizational or both.

Partnering advocates co-operation, open communication and joint problem solving. Its success depends on the attitude of those involved. Partnering has no prospect without the commitment and trust among the participants. The common goal of the participants includes successful completion of the projects. To bring out genuine co-operation, proactive moves of the parties are necessary in order to break through the inherent mistrust.

Partnering measures typically include workshops for structured team building, joint goal formulation, and formalised systems for conflict resolution and evaluation of goal achievement

Trust can be measured by establishing Key Performance Indicators, also known as KPI's or Key Success Indicators (KSI), these define and measure progress toward organizational goals. Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organization.

Fig.5: Presents the five sources of mistrust, the partnering tools and the purposes of these tools in relation to trust building.

The Author shall be proposing a model to measure trust which shall consider the following seven important KPI's : time, cost, top management commitment, quality, trust and respect, effective communication, innovation and improvement which are linked to trust within the organization.

Quantitative indicators with quantitative ranges can be used to measure the performance level of partnering projects on a scale of one is to five (Poor, Average, Good, Very Good and Excellent), by using questionnaires and interviews amongst the team members. Trust can be measured from the performance levels obtained. (Appendix 3)

Trust usually emerges where information is reliable, also when the team members' promises and their outcomes match or exceed the expectations. When expectations are not met, suspicion rather than trust emerges.

Conclusions and Recommendations

The most prevalent values among the team members in the construction industry are the requirements of trustworthiness in developing harmonious business relationships, the need for integrity and trust in collaborating. Engaging in trust-based partnering encourages parties to adopt higher ethical standards, and achieve improved ethical performance in all their dealing. Ethical partnering is characterised by reliability, delivery of promises, open and honest communications, respect and reciprocity, and a willingness to act reasonably towards each other, and is the most effective model for parties seeking to build sustainable relationships. Trust-based partnering has the potential to produce an improvement in the ethical climate of the construction industry.

ISO-9000 certification serves as a means for producing trust. It signifies a particular construction / design entity's adherence to developing ethical - based partnerships, and the organization's conscious intent on conducting themselves in the utmost ethical manner possible in serving their clients and in partnership with their fellow subcontractors, suppliers, and associates. Owner organization desirous of ethical collaborating on the design and construction of their facility now require ISO-9000 certification as a qualification requirement.

References & Bibliography

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