Explaining the Limited Effectiveness of Legalistic “Remedies” for Trust/Distrust

TLDR

Organizations often adopt formal rules, contracts, or other legalistic mechanisms when interpersonal trust is lacking. This paper seeks to explain why such legalistic remedies fail by proposing a theory that separates task‑specific reliability from value congruence, showing that these mechanisms address only reliability concerns while ignoring value‑related ones. The authors illustrate their theory with a case study of organizational responses to employees with HIV/AIDS, demonstrating how legalistic mechanisms fail to address value congruence. Recent research confirms that legalistic remedies are ineffective at restoring trust, and the paper ends by outlining an agenda for future research.

Abstract

Organizations frequently adopt formal rules, contracts, or other legalistic mechanisms when interpersonal trust is lacking. But recent research has shown such legalistic “remedies” for trust-related problems to be ineffective in restoring trust. To explain this apparent ineffectiveness, this paper outlines a theory that distinguishes two dimensions of trust—task-specific reliability and value congruence—and shows how legalistic mechanisms respond only to reliability concerns, while ignoring value-related concerns. Organizational responses to employees with HIV/AIDS are used as a case illustration that supports the theory's major propositions. The paper concludes with an agenda for future research.