A proposed trust management model for organisations: the case of the Ethiopian banking sector

Abstract

Ethiopia, a developing country on the African continent, has experienced double digit growth during the last decade. To sustain this growth, the country needs a sound and healthy banking sector. Consensus exists that trust is a valuable resource that can make a difference. It influences the quality of relationships between an organisation and its employees and management. It enables organisations such as banks, to retain their most valuable employees and customers, and improve organisational functioning. Most leaders agree that high levels of trust are critical to the success of their organisations. In this study, the existing theoretical principles and models relating to trust, were analysed in depth, and followed up by an empirical study to determine to what extent trust management practices were being applied. A quantitative survey was conducted on a probability sample of 405 participants from the eight largest banks in Ethiopia. From the measured items, 54 usable factors were identified by using exploratory factor analysis. The calculated Cronbach alpha values indicated a satisfactory internal consistency. While the Pearson product-moment correlation applied to the factors, indicated a dominance of statistically significant positive correlations. Various informative results emerged from the empirical survey, amongst which were, the relative weak application of trust management practices such as trust drivers and trust builders. Some barriers were also identified such as the trustworthiness of coworkers/ team members, the immediate supervisor and top management. Thus, it was evident that proper trust management practices had not been fully established within the banking sector in Ethiopia. There was thus a need for some guidelines in this regard. An integrated trust management model was therefore developed, and tested, through Structural Equation Modelling, and validated to satisfy this need.