A paper manufacturer with over 300 employees once announced that it was planning to move to more spacious and attractive premises thirty miles down the road.

When staff members heard the news, they were very apprehensive.

Would transport be provided, so that they would be able to commute easily to the new factory?

What would workplace facilities be like in the new place - even if the plant itself would be bigger and brighter, maybe working conditions would be inferior?

And what about work schedules? Would some jobs become redundant? Or, maybe the opposite would happen, and they would land up with extra, unwanted, responsibilities?

At any rate, the company promised to move in six months. And that's about all the information that was forthcoming from the corporate big brass. Anxiety turned into passive resignation - for the time being. All the workers could do was wait and see.

When facts are slow, rumors rush in

The six months passed. But the only thing emanating from the executive office was a an uncanny silence. And of course, when facts are slow in coming, rumors rush in to take their place. Stories began to circulate that the company was in a difficult spot financially, and was looking for a buyer to bail it out of trouble.

Whereupon, the company president came out of hiding for once, but only to say that the rumors were false, and that purely technical problems were delaying the move a bit, but it would take place within a year.

For another year, management continued to insist that the move was imminent, while employees' moods alternated between nail-biting anxiety, denial of reality and mounting anger.

Finally, the charade ended. An official announcement confirmed that the company would be staying put, and hinted that a sale had fallen through.

Now, we can come to management's defense by pointing out that, quite likely, its motives were honorable.

Perhaps, the big wigs had reasoned that staff members just wouldn't be able to cope with bad news. They might all descend into a wild panic, which surely wouldn't do anyone any good.

The executives may have sincerely believed that they could turn the critical situation around in a relatively short time (although to attempt this without enlisting the cooperation of the work force, would have been a major error of judgment in itself). Why terrify our people with alarm bells, they may have nobly thought, if the crisis will, in any event, blow over soon?

If these explanations are correct, what was the company's reward for such "unselfishness"?

With any remaining remnants of credibility and trust between the company and its employees quickly evaporating, these employees started to vote with their feet. Within a year, the company had lost 35 percent of its labor force, and, given its two-faced reputation, found it no easy thing to recruit replacements.

Business psychologist Robert Rosen, who tells over this story in his book, The Healthy Company points out that trust either feeds on itself and grows, or fades faster and faster until it disappears.

As a rather perceptive company CEO once said: "Trust isn't handed over to you as a gift; you receive it on loan."

At the beginning of a relationship, both company and employees trust each other and have certain expectations. But as politicians know (or should know), if only from bitter experience: the higher the expectations, the harder could be the fall.

Obviously, as Rosen writes, if employees see blatant signs of distrust - such as hidden microphones in an office, video spy cameras, or capricious searches through desks and lockers - they know their trust is misplaced. But even where there is low-level behind-the-scenes distrust, as in our story of the paper company, people will become frustrated and disappointed, then grow angry and feel deceived and betrayed.

And then what happens next?

Productivity out the window

The author quotes philosopher Peter Koestenbaum: "One responds to betrayal with bitterness and cynicism, and with willing and stoic isolation. One builds a fortress and lives in it. One creates a moat and remains contained inside. One becomes armored like a turtle, protected like a cactus, and defended like a porcupine."

There's no middle path , it seems. Nature abhors a vacuum. We saw in our story that in the absence of reliable information, rumors quickly take over. Similarly, there's no stable condition in any organization called "absence of trust."

Either a positive quality of trust continually gathers momentum and grows like a giant snowball hurtling downhill, or its negative counterpart, distrust, spreads throughout the organism like a cancer.

And as hardened, unemotional, businesspeople, let's go straight to the bottom line:

What happens to productivity in a distrust-infected work environment? Most likely, it will go out through the window.

The disease also hits hard at a company's balance sheet in a number of other ways: elaborate employee manuals may become necessary, as well as employee polygraph tests; there may be legal fees to enforce employee contracts, and million-dollar golden parachutes may need to be constructed.

Yes, the price of distrust can be very high indeed.

Far too many executives and managers don't yet seem to grasp that trust is a business asset that has enormous clout. The problem is that it's as fragile as it's powerful. It needs to be carefully nurtured through conscious effort and well-planned strategies.

For homework, you might like to think about the following:

We've been talking about trust, or the lack of it, specifically in the context of the business corporation and the workplace. But has all this any relevance to our everyday lives and personal relationships?

Does the story of the paper company - and I'm talking to myself now - have any significance for me in my role as a husband and as a parent? Is there a lesson or two I can learn from it?

I can only speak for myself, but I think there is.

Azriel Winnett is creator of Hodu.com - Your Communication Skills Portal. This popular free website helps you improve your communication and relationship skills in your business or professional life, in the family unit and on the social scene. New articles added almost daily.