Proximity, trust and morality in networks

Abstract

Network interaction is embedded in social settings, which allows for the development of trust. Trust is supposed to be an efficient functional equivalent of contracts, guarantees, insurances, safeguards, etc. Trust between actors reduces transaction costs. However, trust cannot be introduced and enforced within interaction relationships. It is argued that trust is more likely to occur and to be prevalent when actors have the spatial capability for personal, direct interaction. Thus, proximity and trust are supposed to be positively related to each other. Proximity is strongly interrelated with embeddedness. In the discussion about morality in organisations, there is an assumption we referred to as the 'moral spill-over effect': it is impossible, it is said, to restrict moral competencies and moral behaviour to one particular situation, environment, or topic. However, we argue that, even though trust is a term that is described in moral theory, trust and morality are not necessarily positively correlated. This means that even if embeddedness and proximity in a network lead to an increase of trust between network partners, it does not necessarily produce moral spill-over effects. Thus, proximity and morality do not necessarily have to be positively correlated with each other. The influence of proximity on morality can be positive or negative, depending on the social surrounding in which network collaboration is embedded.