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Abstract Trust is an essential element of all social exchange relations (Barber 1983, Barnard 1938, Blau 1968, Deutsch 1960, Garfinkel 1963) and collective action (Luhmann 1979, Parsons 1951). Organizational scholars have noted that coordination (Cyert and March 1963, Macaulay 1963, Williamson 1975) and control (Arrow 1974, Ouchi 1980) rest upon a foundation of trust. However, in many organizations, the level of interpersonal trust is low—particularly between management and employees (e.g., Golembiewski and McConkie 1975)—leading organizations to adopt control mechanisms (e.g., contracts, bureaucratic procedures, or legal requirements) as substitutes for trust when interpersonal relations are lacking (Fox 1974, Williams 1975). Such ‘legalistic’ mechanisms are typically adopted not only to facilitate administrative coordination (Weber 1947) but also to obtain the symbolic legitimacy that accompanies the use of institutionalized procedures (Edelman 1990, Meyer 1983, Sitkin and Bies 1993, Sitkin and Roth 1993, Yudof 1981) and to restore sufficient levels of trust necessary for activity to continue (Shapiro 1987, Zucker 1986).
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