Trust and the organisation-stakeholder relationship

Trust is a fundamental aspect of the moral treatment of stakeholders within the organisation-stakeholder relationship. Stakeholders trust the organisation to return benefit or protections from harm commensurate with their contribution or stake. However, in many situations, the firm holds greater power than the stakeholder and therefore cannot necessarily be trusted to return the aforementioned benefit to the stakeholder. Stakeholders must therefore rely on the trustworthiness of the organisation to fulfil their obligation in accordance to Phillip's principle of fairness. The notion that low power stakeholders may not be fully consenting in the organisation-stakeholder relationship serves to reinforce this necessity. Four distinctive propositions arise from the consideration of trust in the organisation-stakeholder relationship: that trust implies a fiduciary duty to stakeholders; that trust co-exists with dependency and power; that trust should not be unconditional; and that formal mechanisms may enhance trust or substitute for trust.