Impact of organizational structure and in-organization resource allocation on trust and trustworthiness

Abstract

We experimentally investigated how different organizational structures (horizontal, vertical) and in-organization resource allocation methods (equal, unequal) impact individuals’ trust-related behavior using a two-stage, three-player trust game. As factors influencing trust or trustworthiness, we focused on influential and resource-based power shaped by organizational structures and resource allocation methods, respectively. We expanded the inequity aversion model with power inequities and demonstrated that power inequities can impact individuals’ inequity aversion and therefore their trust-related behavior. In the equal resource allocation treatment, the trustees exhibited a greater probability of being trustworthy, and the trustors were more trusting in the horizontal structure treatment. Those trustees holding both power types significantly encouraged trust and trustworthiness, while influential power was more effective in increasing trustworthiness. This study makes a novel theoretical contribution by exploring the motivation factors of power inequity aversion and explaining how organizational structures and resource allocation methods impact individuals’ trust-related behavior via inequity aversion.