Post by Duke University - The Fuqua School of Business

Why do people lose trust in institutions—and what can leaders do to rebuild it? New research from Prof Sim Sitkin and Christopher Long, PhD '02 shows that trust breaks down when organizations struggle to explain the contradictions in how they operate. Key insights: • Institutions are expected to balance competing demands—like innovation vs. stability or transparency vs. confidentiality • When these tensions aren’t clearly explained, stakeholders may see inconsistency or even hypocrisy • Over time, these perceived contradictions can erode legitimacy and trust • Rebuilding trust requires making trade-offs explicit—not hiding them • Consistency across decisions, policies, and actions signals credibility At its core, institutional trust is about how people interpret what organizations do and why they do it. “When stakeholders see contradictions as unmanaged or unexplained, they begin to question whether an institution can be trusted at all,” Sitkin said. #Leadership #Trust #OrganizationalBehavior #BusinessStrategy #InstitutionalTrust