Trust in Business and Business Education: How Have Economic Relations in Ukraine Changed Over the Years of Independence? An Analysis of the Study

What phenomenon would you consider essential for any business? Financial indicators? Range of services? Market position? Customer relationships? Undoubtedly, each of these aspects is important. However, there is one more factor, one that literally shapes the economy. Without it, all other elements become unattainable. That factor is Trust.

Trust and its perception within the Ukrainian business community became the focus of a new study conducted by Paul Clyde (University of Michigan), Serhii Hvozdov (Kyiv School of Economics), and Sophia Opatska – founding dean of the UCU Business School and Vice-Rector for Strategic Development at the Ukrainian Catholic University.

As the authors state, their research focused not only on trust itself but also on its defining components: from value orientations instilled in specialized educational institutions to the development of unique relationships with clients and partners. What insights did the researchers uncover? What conclusions did they reach? We present an overview of their findings below.

Research Methodology

Analyzing such a complex topic as trust in the business environment requires a special methodological approach. Therefore, data collection was conducted using qualitative methods, specifically semi-structured in-depth interviews.

The selection of respondents was also notable. The study surveyed 10 men and 8 women, not just as business owners or top managers but as representatives of three different “generations” of Ukrainian entrepreneurs. Nearly a third of participants started their professional activities between 1991-1996, over a third between 2000-2008, and the rest between 2011-2017. Having developed as professionals under distinct economic and social conditions, they accumulated unique experiences. Additionally, their extensive network connections across different regions and even countries provided a practical foundation for their conclusions.

Trust in Business: How Does It Manifest?

The surveyed entrepreneurs identified several types of trust crucial to their activities:

• Trust within the team;
• Trust between the company and its partners (including suppliers);
• Customer trust in the brand;
• Trust in the state and its institutions.

Trust itself was strongly associated with the following concepts:

• Quality;
• Actions and results;
• Honesty;
• Delegation;
• Recognition of expertise and professionalism;
• Confidence;
• Direct and open communication.

“This is a long way, it starts with the family, it startswith school, it starts with the formation of the overall culture of society, with the formation of the values that should be in society and should be transformed into public administration and business”,

stated one respondent from the food production sector.

How Is Trust Built?

Through conversations with entrepreneurs, the researchers concluded that educational background and business experience had little impact on their perception of trust. For almost every respondent, trust was about shared values and fulfilling commitments.

“Businesses simply cannot do otherwise. It’s implied. If you are in business and you are doing something, you have to trust the counterparty, you have to take risks”,

shared one respondent, the head of a security company.

At the same time, the respondents distinguished trust based on the parties involved.

For customers, the key factors influencing trust in a brand include:

• Corporate social responsibility;
• Quality of products and services;
• Transparency and openness in communication;
• Company stability and longevity.

For business partners, the criteria for trust-based relationships differ:

• Keeping promises;
• Responsibility;
• Honesty in case of changes in agreements;
• Adherence to pre-agreed terms of cooperation.

Entrepreneurs also outlined their approaches to fostering trust within a company:

• Shared understanding of strategy among team members;
• Support in critical situations;
• Honest communication.

“It starts with the interview, when you speak truthfully and honestly about all the pros and cons of the job. And you don’t promise something that you can later say, “I’m sorry, but it didn’t work out that way”. This is about the proper quality and fulfillment of the employer’s obligations”,

explains another respondent, who is a manufacturing business owner.

Trust in Government Institutions

The most sensitive topic for respondents was trust in government institutions in Ukraine. The determining factors in this area were:

• Legislative transparency;
• Institutional stability;
• Policy predictability.

Given the internal and geopolitical realities of recent decades, the biggest challenges in building trust in the state included:

• Consequences of the Russia-Ukraine war (energy crises, mobilization policies, and overall uncertainty);
• Corruption;
• Legislative shortcomings.

“Trust between the company and the state means transparent, understandable laws that are not designed to benefit one person, but rather to be born out of a desire to make this a win-win strategy, so that everyone wins: both business and the state”,

summarized a respondent, a top manager in the oil and gas industry.

Trust in Times of Uncertainty

According to the surveyed entrepreneurs, full-scale war has fundamentally altered the mechanisms of trust-building. In the face of mass destruction, economic challenges, and the country’s struggle for survival, change was inevitable. Today, entirely new aspects of trust have become crucial:

• The reputation of counterparties in both the market and society;
• Flexible payment and credit terms to support mutual cooperation;
• The importance of personal connections in large-scale deals.

Researchers reached an unexpected conclusion: despite the horrors of war, business has become more “human”. The role of honesty and openness in initiating cooperation has become even more critical.

“Reputation now consists not only of the projects implemented, but also of how you communicate, how you exchange documents, how the local managers work, even how they communicate, what words they use. This is also becoming important. This is also a component of reputation”,

shares a top manager of a mining and construction company.

Business Education: An Investment in Trust

One of the study’s key findings was the role of business education in shaping trust. Respondents had diverse educational backgrounds, from degree programs (11 participants) to short-term courses. Against this backdrop, it was particularly interesting to assess their perception of the importance of business education in shaping an entrepreneur’s value system.

Entrepreneurs with business school experience more often emphasized:

• The standardization of business processes.
• The value of professional networks and shared values.
• The formation of leadership culture through open communication and long-term responsibility.

“The essence of [business] programs is reflection, networking, and the ability to focus on the path you plan for yourself in the future”,

summarizes the owner of an architecture and consulting company.

However, such recognition does not imply a “caste” mindset among respondents. On the contrary, most of them, while acknowledging the role of business education in shaping graduates’ worldviews and the level of basic trust in them, emphasized that it is merely a desirable addition to a specialist’s “profile”. The key factor in trusting an individual’s expertise remains practical experience.

Conclusions and Recommendations for Business

So, what conclusions did the authors of the study reach?

1. Reputation is a key asset. Participants emphasized the critical role of trust in entrepreneurial activity. Transparency, social responsibility, and commitment to agreements were defining factors both for business owners themselves and for their clients or partners. The widespread practice of verbal agreements or deferred payments is just one example of the significance of such social “capital”.

2. Development of institutional trust. One of the most pressing issues for Ukrainian businesses is their relationship with government authorities. The clarity of the “rules of the game”, legislative transparency, and simplification of regulatory mechanisms are the main points entrepreneurs lack in building trusting relationships with the state.

3. Strengthening business education. Despite varying experiences with business education, respondents unanimously supported its importance. For them, it is primarily about the values that institutions cultivate. However, perceptions of graduates’ level of expertise varied significantly compared to the practical experience of their colleagues. This aspect requires further analysis. At the same time, it prompts a discussion about the potential transformation of business education in Ukraine in accordance with new realities.

4. Business and the military sector: new horizons of opportunity. Among the study participants, six individuals had direct involvement with Ukraine’s Defense Forces. Their perspective on the “intersections” of these spheres deserves special attention:

• Process organization, resource management, communication, prioritization, and a focus on value creation – this is far from an exhaustive list of improvements in the military achieved through interaction with business.

• In both entrepreneurship and the military, experience is valued significantly more than status, while teamwork and shared goals play a decisive role.

• Ultimately, the study’s central theme – trust – takes on particular significance for those with combat experience. The reason for this is the cost of mistakes, which is incomparable to that in a peaceful environment.

Considering all of the above, for Ukrainian business, trust is not just a word. It is a real asset that has gained special importance in times of turbulence and a war for survival. The nature of relationships within teams, with partners, clients, the state, and even the Defense Forces has turned into a unique experience for its participants. Thus, in the long-term perspective, trust may become a competitive advantage, fostering sustainable partnerships and ensuring stable development even in times of change.If this topic resonates with you and you would like to learn more about all the findings of the authors, we invite you to read the research report or attend its presentation. Initiatives like these allow us to see familiar things from a truly new perspective!