Effects of Trust in Management

10 Pages 2609 Words

cy theory and social exchange theory. Agency theory involves a principal-agent relationship where the principal assigns some task for completion to an agent in exchange for compensation. Social exchange theory states that “In a social exchange one individual voluntarily provides a benefit to another, invoking an obligation of the other party to reciprocate by providing some benefit in return.” (Whitener p. 515) Here, trust is generated by the exchange of these obligations, and by the gradual expansion of exchanges. In scholarly readings on trust, the issue of opportunism in subordinates is often addressed. In social exchange theory, opportunism is minimized because of the relationship that is formed over time, and perceived trust is usually greater in such relationships.
However, there is more to gaining trust than simple task assignments. Managers must consider five factors that influence subordinate’s perceived trust. First, behavioral consistency is important because consistency leads to predictability in behavior. Knowing that a manager will respond well to a new idea is important to an employee’s sense of importance and security. Next, behavioral integrity should be displayed through telling the truth and keeping one’s promises. Thirdly, the sharing and delegation of control is a direct demonstration of a manager’s trust in an employee, and may compel the employee to reciprocate that trust. This also affirms the employees importance in an organization. Next, the factor of communication involves three stipulations, that managers communicate accurate information, include their explanations for decisions, and express openness. Lastly, to establish perceived trust, a manager must demonstrate concern for employees. This is accomplished in three ways, firstly by showing sensitivity for employee needs, secondly by acting in a way that protects employees, and thirdly by refraining from exploiting others for one...