Trust vs Trustworthiness: Which is More Relevant to Online Business?

Trust and trustworthiness are two terms whose role in the growth and success of relationships cannot be ignored. It becomes even more critical when one makes reference to the relationship that exists between an online business and its customers. Particularly, at a time when relationship marketing has been thought to establish, develop, and maintain successful and mutually beneficial long term relational exchanges with customers, they cannot be overemphasised.(Morgan and Hunt 1994) In this article, the concept of trust and trustworthiness are highlighted and explained in detail. However, one of the two is considered more crucial to online businesses.

Trust, according to Mayer et al (1995), ‘is the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party’. In this definition, the term, ‘trustor’ refers to the party who is exposed to the actions of another party (trustee). The trustor (customer) recognises and analyses the risks involved when exposed to the actions (products and services) of the trustee(online business) but chooses to be vulnerable all the same whether there is a control system that ensures that his expectations are met or not. People’s ability to trust varies due to the differences in their personality and experiences when a risk is perceived.

Risk is the ‘culprit’ here because without it, the need to build trust in customer - online business relationship would not be necessary. Khan et al (2009), identifies types of risk to include functional risk, physical risk, financial risk, social risk, and time risk. Functional risk involves the uncertainty in a product’s ability to satisfy the need or want for which it is bought. Physical risk is about the safety of the customer using a product. Here, the customer is also at risk of being hurt if the personal information given out goes into the wrong hands. Financial risk has to do with high involvement products where a customer would have to pay a high price for a product. This includes the fact that customers are paying online and can be duped or have their credit card information accessed by fraudsters. Social risk is the risk of being ridiculed or coming to some disrepute by using a particular product or brand. While time risk looks at when a customer is at risk of being forced to keep a product bought because of wrong choice.


Due to these risks perceived and involved in online transaction, online businesses must be able exhibit attributes that make them worthy of their customers trust. This will not only ensure repeat purchases but will also make them loyal to the brand. Kharouf and Sekhon (2008) assert that this loyalty can be attitudinal or behavioural. Attitudinal loyalty can be described as a type of loyalty where a customer develops a strong emotional attachment to a brand and buys the brand no matter what the competition has to offer. While behavioural loyalty is about repeated purchases that does not depict any form of attachment. Rather, it may mean that it is more convenient to buy the brand or because an incentive has been offered.

Trustworthiness has been defined by Ben-Ner et al (2009), to mean ‘the willingness of a person B (on-line business) to act favorably towards a person A (consumer), when A has placed an implicit or explicit demand or expectation for action on B’. Consumers have expectations they want met. Where this is absent, trust is undermined. Hardin (2002:1) says that ‘to ask any question about trust is implicitly to ask about the reasons for thinking the relevant party to be trustworthy'. Mayer et al (1995) argues that the attributes that a trustee exhibits will determine how great or small the level of trust will be. They are of the view that the factors that lead to trust can be summarised in three attributes: ability, benevolence, and integrity, which they referred to as the ‘factors of trustworthiness’. These three characteristics determine how much an online shop is perceived as being trustworthy.

Ability: This refers to the competence of the online business to deliver its promises. The consistency and the competence with which they satisfy and exceed their customers’ expectations in the kind of service and product they deliver will cause their customers to perceive them as being trustworthy. This will in turn engender trust in the mind of their customers.

Benevolence: Online communities must never be seen as being exploitative and only interested in making profits. But should be seen as aware and sensitive to their customers needs, and interested in their welfare. They must be perceived as caring and customer-oriented.

Integrity: This has to do with the online businesses being consistent in following a set of principles and values that are in alignment with those of their customers. They should be seen as reliable, open in communication and honest such that customers do not see them as deceptive. A survey of 1,600 customers on their changing attitudes to financial services reveals that more than 71% do not trust the industry, while one out of every ten totally distrust marketing information given by banks.(Fund Strategy,2009). This stresses the need to build a relationship based on organisational trustworthiness.

In addition, because customers may have questions about products and services online, exhaustive information must be provided to address these concerns.

In conclusion, it is important to note that the risks involved in online transactions make it necessary that online businesses should have trustworthiness attributed to them, if they are perceived to be worthy of trust. This will go a long way to encourage the intention to buy and actual financial risk taking (purchase) by consumers, as well as attitudinal loyalty in the long run.

References

Ben-Ner, A. and Frey, H. (2010) ‘Trusting and Trustworthiness: What are they, How to Measure them, and What Affects them’. Journal of Economic Psychology 31 (1), 64-79

Fund Strategy (2009) ‘SCAM- Second Coming Asset Management’. Fund Strategy 19 October, 39

Hardin, R. (2004) Trust and Trustworthiness. New York: Russell Sage Foundation

Khan, B. M., Shahid, S. A., and Akhtar, A. (2009) ‘Role of Trust: Brand Equity’. SCMS Journal of Indian Management, 12-22

Kharouf, H., Sekhon, H. (2008), Trustworthiness within the Hotel Sector: A structural Model, IIMA conference proceedings: India

Mayer, R. C., Davis, J. H., and Schoorman, F. D. (1995) ‘An Integrative Model of Organizational Trust’. The Academy Review 20 (3), 709-734

Morgan, R. M., and Hunt, S. D. (1994) ‘The Commitment-Trust Theory of Relationship Marketing.’ Journal of Marketing 58, 20-38

The Internet and Who We Have Become: A Look at Homointerneticus

On Thursday the 18th of February, 2010, BBC posted a documentary on their website tagged “The Virtual Revolution 4: Homointerneticus”. Homointerneticus is a term coined to describe a current shift in human behaviour of learning and growing from natural experience, to a state of learning that is very much dependent on the Internet. Dr. Aleks Krotoski, the presenter takes the viewer into an exploratory journey on the internet’s true role and purpose in human society.

Over the past few years, there has been a growing fear that the internet is fast taking over the minds of people. People are spending hours doing more on the web than they would any other activity in their daily lives. They surf the net constantly, watching movies, reading gossip, chatting with friends, doing shopping, sending e-mails, you name it; their dependency on it growing more with time.

According to Dr. Aleks Krotoski, the web’s revolutionary effects on humans can be found in South Korea, considered to be the world’s most wired nation on earth. Children over there as young as three years of age can be found using the internet. Reports of internet addiction are prevalent amongst South Korea’s youth. Dr. Krotoski reveals that according to research, 62% of the population’s 3-5 years olds are on the internet roughly 8 hours every week, twice the exposure by British five year olds. The South Korean government figures on the other hand show that close to 210,000 children are affected by the internet’s pull, many of which spend 18 hours online each day. 80% of those afflicted in this group need medication to treat their addiction while 20% need to be hospitalized.

Internet addicts can be described as people who spend an unhealthy time on the internet, either for productive or unproductive purposes. In the documentary, Dr. Krotoski highlights the effects of the internet on South Korea’s young, but these kids are not the only ones affected in general. According to The Center for Internet Addiction (2010), surveys reveal that some employees have lost their jobs because they spend too much time on the internet for non-job related issues. 1 in 5 of these employees view online pornography at work and 70% of adult web sites are hit between the hours of 9-5. Not only do employees surf sex sites but they also visit sport sites, bid on eBay, trade stocks, shop online, and send jokes to co-workers. This type of misuse not only hurts employee job performance but increases threats to information security and drains valuable network resources.

From the net’s addictive nature, Krotoski explores the manner in which the internet affects the way people think in the long run. According to a Neuroscientist Susan Greenfield of Oxford University, the internet may be distorting children’s sense of reality, discouraging them from learning between action and consequence. Kids may stay in a “fantasized” state where there are no rights or wrongs, just actions. On the internet, one can do anything, say anything and get away with it, but that is not true in real life situations. However, because of the illusion provided by the internet, most young people think they can do the same in real life situations and go scot-free. This in the long run will contribute to the rise in the number of delinquents.

In the same vain, Dr. Krotoski examines the internet’s negative ability to make people become lazy thinkers. The web's design which is based on the foundation of “associative thinking”, in this case use of hyperlinks, encourage internet users to move through web pages barely skimping through or internalizing the information they are exposed to. Nowadays people hardly read books because this “hyperlinked-network” provides an easy way to access information even when this information is not provided to the fullest as would in a book. This is overall damaging to the development of the human brain which is designed for more rigorous activity.

In conclusion, the internet can be referred to as man’s leading invention in the 21st century. It is a powerful tool in advancing human knowledge and capacity. However, if used wrongly, it could be the very thing that damages the very essence that created it in the first place, the human mind.

References:

The Center for Internet Addiction Recovery
http://www.netaddiction.com/index.php?option=com_content&view=article&id=91&Itemid=105 [ 28 February 2010]

BBC (2010) “The Virtual Revolution 4: Homointerneticus” [online]’available from’ http://bbc.co.uk/virtualrevolution [28 February 2010]