HALO EFFECT IN TRUST

PRESENTED BY-
JAIPRAKASH RAUT
JATAN ANANAD
JOSEPH ABRAHAM
LIBIN BABU
MANISHA CHOURASIA
MINI SUBRAMANIAN
WHAT IS HALO EFFECT?
 Halo Effect Is Basically An Effect Which Talks About
The Good Or Bad Impression Of A Person.
 It Is More Likely To Focus On An Extension Of An
Overall Impression Of A Person (Or One Particular
Outstanding Trait) To Influence The Total Judgment
Of That Person.
 The effect is to evaluate an individual high on many
traits because of a belief that the individual is high
on one trait.
HALO EFFECT IN TRUST
 “PRIDE OF WORK AND ORGANISATIONAL
LOYALTY ARE WIDESPREAD PHENOMENON IN
ORGANISATIONS… PEOPLE WILL BE STRONGLY
MOTIVATED BY ORGANISATIONAL LOYALTY
,EVEN WHEN THEY CAN EXPECT NO SELFISH
REWARDS FROM IT”
-HERBERT SIMON
INTRODUCTION
 Anywhere Under The Sun Principal Agent
Relationship Has Attracted The Attention Of
Scholars From Different Fields For Over Three
Decades.

 Trust Literature Considers Goodwill Trust And

Competence Trust As Two Distinct Type Of Trust .

 The Paper Suggests An Experiment To Find Out

Whether There Is Relationship Between Two Types
Of Trust.
 “Trust” Is An Belief ,Which Otherwise Can Be Said As Being
Counted On To Do Right Things When No Body Is Watching.

 It’s A Willingness To Rely Or Expectancy Of Positive (Or Non

Negative ) Outcomes That One Can Receive Based On
Expected Action Of Another Party In An Interaction
Characterized By Uncertainty.

 It Was An Earlier Perception That Better Control An

Monitoring Can Be Done When There Is A Trust But The
Issue Was To Consider Whether The Two Types Of Trust
Are Interlinked And Positively Related Or Not

 To Find Out This The Research Has Been Taken

OVERVIEW OF THE REASEARCH
 In This Research Two Types Of Trust Are Identified
◦ Goodwill Trust
◦ Competence Trust
 These Are Also Then Classified As
◦ Cognitive
◦ Affective
 After Classification These Are Measured On With
Different Number Of Items Likert Scale,. All Items Were
Respondeed On A 7 Point Likert Scale From Strongly
Disagree(1) To Strongly Agree(7)
METHODOLOGY
• The Research Requires A Context Or Scenario Where
The Same Perception Of Trust Can Be Build .

• Thus ,After Consulting Various Executives And Scholars

,It Was Decided That A Simulated Setting Would Be
Most Appropriate For Testing The Hypothesis.

• The Research Setting Was Build Up On One Case And

Two Case lets.
 THE CASE WAS ABOUT RADHESHYAM
AGENCIES A FIRM ENGAGED IN DISTRIBUTION
OF PACKAGED AND BRANDED FOOD
OPERATING IN ANDHRA PRADESH
,HYDERABAD .
 THE QUESTION WAS TO ASSESS THE

DISTRIBUTOR’S PERFORMANCE IN THE

AGENCY THEORY FRAMEWORK..
 CASELETS WERE ABOUT

 A DISTRIBUTOR WHO HAS RECORD OF MANY

INCIDENTS OF ENGAGING IN OPPORTUNISTIC
BEHAVIOUR TO THE DETRIMENT OF THE
COMPANY

 A DISTRIBUTOR WHO HAS SHOWN,OVER THE

YEARS ,EXCELLENT TRAITS OF HIGH
PROFESSIONALISM AND EXCELLENT
PERFORMANCE.
SAMPLING SCHEME AND SIZE
 THE SCALE PERTAINING TO COMPETENCE
TRUST WAS COMPOSED BY PUTTING
TOGETHER VARIOUS SCALE S IN LITERATURE .
 THEN EXPERT OPINION IS TAKEN OF 14

FACULTY MEMBERS AND 7 TOP RANKING

STUDENTS OF TOP B-SCHOOLS.
HYPOTHESIS
 IT WAS THE PERCEPTION THAT COMPETENCE
TRUST AND GOODWILL TRUST ALONG WITH
THEIR SUB CATEGORIES ,ARE DISTINCT AND
THEY DON’T HAVE ANY RELATION .
 THUS THE REALATIONSHIP i.e. COEFFICIENT

OF TRUST BETWEEN THESE TYPES IS

CONSIDERED TO BE ZERO.
STATISTICAL TOOL AND TESTS
THE TOOL USED IS CORRELATION
COEFFICIENT
 THE RELATIONSHIP BETWEEN BOTH THE

TRUSTS WAS ESTABLISHED USING THREE

DIFFERENT TYPES
◦ COGNITION
◦ AFFECT
◦ OVERALL
CORRELATION BETWEEN CT AND GWT ACROSS
THREE RANGES

CATEGORY COMPETENCE TRUST GOODWILL TRUST

HIGH TRUST 0.57 0.537

NEUTRAL 0.171 0.276

LOW TRUST 0.441 0.332

INFERENCE
 THUS ,AFTER THE RESEARCH IS BEEN
COMPLETED ,IT WAS FOUND THAT THERE IS
VERY HIGH DEGREE OF POSITIVE CORRELATION
BETWEEN THE TWO TRUSTS
 AND RELATING IT WITH HALO EFFECT THE
CONCEPT OF ‘IMPLICIT PERSONALITY THEORY
IS ALSO FIT .THUS IT CAN BE SAID AND PROVED
THAT THERE IS HALO EFFECT IN TRUST.
THANKYOU !