LEADERS`S UNTRUSTWORTHY BEHAVIOUR DECREASES
INNOVATIVENESS OF FOLLOWERS: WHAT KIND OF
LEADERSHIP ORGANIZATIONS NEED TO ASSURE THEIR
INNOVATIVE DEVELOPMENT?
M.Sc., Doctoral student, Sari Häkkinen, University of Eastern Finland, Department
of Business, Joensuu, Finland
sari.hakkinen@uef.fi
ABSTRACT
This paper examines trustworthiness in leadership behavior as an inspirer of
innovativeness. In managerial leadership, ensuring functioning new innovations is one of
the major challenges in more and more complex organizations and competitive
environment. While new innovations for all different kind of business fields from industry
specific few to the education and consulting companies are found to be obligatory for
organizations to catch on, is intra-organizational trust and leader`s trustworthy behavior
as obligatory for succeed management, more specially managerial leadership. This
research has been made by using qualitative methods.
Keywords: Trust, trustworthiness, managerial leadership, effects of trust, distrust,
innovativeness, qualitative method, triangulation
INTRODUCTION
Trust forms a foundation for co-operation and is part of a social moral order in
organizations and society (Rousseau et. al., 1998). Trustworthiness seems to be ‘earned by
daily deeds’ and ways of actions of leaders (Häkkinen et.al.,2010). Trust has been shown
to have influences on processes such as communication, cooperation, and information
sharing (Burke et.al., 2007). Innovativeness is usually mentioned as an organizational
behaviour. In this paper, innovativeness is discussed at individual level, which might be
destroyed or harmfulled by leader`s distrustfully behaviour in leader-follower relationship
in organizations. Distrust as a construct have been theorized as unidimensional or different
construct from trust, and defined as low trusting or negative expectations of the other party
and with a lack of confidence in the other, and belief that the other may not care about the
other’s welfare and may act harmfully (Lewicki et.al.,1998). Although trust has been
widely studied in inter-organizational relationships recently (Ebert, 2009), the intraorganizational trust perspective is more scarcely studied despite the fact that it affects also
the functioning and dynamics of inter-organizational relationships (Savolainen, 2010).
How are these two perspectives interrelated? Recent research has called for research on
trust at both the macro and micro levels (Schoorman et al. 2007). In this paper, at macro
level trust is represent between organizations and at micro level trust (which is main topic
in this paper) is represent between leader and follower. More specifically micro level trust
is shown as a trustworthy behavior. Trust is a complex, multifaceted phenomenon, and
different conceptualizations of the nature of trust exist in interpersonal relations (Möllering
et.al.,2004).
Leaders show trustworthiness by building and sustaining or violating trust (Häkkinen
et.al., 2010). The effects of leader trustworthiness are presented and discussed based on
two real life cases from small industrial companies. Both companies represented different
kind of leadership styles; other might be describes democratic and the other authoritarian.
In conclusion, the findings confirm the results in prior trust research that leader’s
competence (ability) is one of the key dimensions of trustworthiness (Peterson,1998) as
well as leadership style. Findings show that the process of trust development is complex
appearing as more meandering in nature. Tillmar (2007) conceptualizes trust and distrust
as the endpoints of a continuum. Research results indicate, that when distrust exists
between leader and follower, the follower has no interest to create new or develop itself or
its work neither than feel innovative. Trust might also imagine as a “house with many
doors”, when it is possible to open a new door and going forward ignoring the
disappointments; moving on. I might hesitate how far human might go without breaking
down and giving up to even try to trust anymore? Every door you open, that heavier it will
be to open the second one.
The study also shows that leadership style makes difference to innovative atmosphere at
the organization. The style of management-by-fear broke the opportunities for developing
and keeping quality and innovative workforce (Savolainen & Häkkinen,2011). Distrusting
employees do not work effectively and share their knowledge, and tacit knowledge in
specific (Savolainen,2008), which is extremely harmful for innovativeness atmosphere in
organizations.
Methodologically this qualitative research is implemented by using triangulation.
Narrative analysis, interviews and observation methods are combined in the study.
Qualitative research methods have challenged to trustworthy development and leadership
influences for subordinates and organizations (Cho & Ringquist,2007).
THEORETICAL DISCUSSION
Trust, Distrust and Trustworthiness
Trust has been classified in business research as an intra-organizational trust and an extraorganizational trust. Trust in different organizational and business relationships has been
examined widely and multidisciplinary over the last few years (Ebert, 2009). Inter- and
intra-organizational trust has been seen as a basis for all relationships and business
interactions. Rotter (1967) defines interpersonal trust as an expectancy by an individual or
a group that the word or promise (verbal or written) of another individual or group can be
relied upon.
The importance of trust in leadership within organizational contexts has been recognized
in the literature. Trust has been shown to have influences on processes such as
communication, cooperation, and information sharing (Burke et.al, 2007, cf. Shamir&
Lapidot, 2003). Distrust as a construct have been theorized as unidimensional or different
construct from trust, and defined as low trusting or negative expectations of the other party
and with a lack of confidence in the other, and belief that the other may not care about the
other’s welfare and may act harmfully (Lewicki et.al, 2006, 1998). Trust has been seen as
a one of the main element of productivity in organizations (Bijlsma & Koopman 2003). In
continuous change occurring in organizations, trust plays an important role in improving
work welfare and business success (Seretin 2005, Mishra 1996). Innovativeness and good
work welfare are walking hand-by-hand. Commitment to work and organization, and
mental well-being are related affecting the success of the organization. In this trust plays
also a role (Coyle-Shapiro et. al., 2002). Commitment of employees is shown in
acceptance of company values, pursuing goal achievement, and pride of working in the
organization and willingness to stay (Coyle-Shapiro et. al., 2002). Trust appears at many
levels, organizational or managerial, and is manifested in interaction between employees
and/or organization (Joseph & Winston 2005, Serva, Fuller & Mayer 2005). At the
organizational level trust is described as faith in the engagements of the employer.
Employees believe that the actions of organizations are performed for public interests
eventually (Lee 2004, Gilbert & Tang 1998). The more engaged followers are their work,
that better they share their knowledge and innovative ideas to company`s credit.
Mental insecurity may be often a reason for atmosphere- related problems in workplaces
such as teasing, conflicts, disputes and arguing. All of them affect the level of trust. Mental
well-being is largely sustained by emotional support (appreciation, respect, openness,
feedback, etc). Correlation of commitment for work and organization is reflected in
employees work motivation and satisfaction, i.e., work welfare (Häkkinen, 2007). Leaders
support is expected and their actions are seen as the most influential. In co-creation, trust is
a basic element of functioning relationships in organizations (Savolainen, 2008).
Employees in organizations create trustworthiness by their actions and behavior. Trust
building has been listed as one of the most essential tasks in managerial leadership (Graen
& Uhl-Bien 1995, Yukl 2010). Trust building and maintaining is complex, however
(Ikonen & Savolainen 2010, Nurmio & Turkki 2010). Leader traits and behavior including
styles and skills matter in trust building. By implication leaders mundane behavior seems
to play the main role, i.e., trust is built and maintained by leaders ‘daily deeds’ (Häkkinen
& Savolainen, 2010, Savolainen, 2009). Theoretically, various leader traits and leadership
styles are related to trustworthiness shown in practice by the leader’s behavior in dyadic
subordinate-leader relationship. In conclusion, trustworthiness matters in emergent
leadership (cf. Yukl,2010).
Managerial leadership and innovativeness
Theoretically, various leader traits and leadership styles are related to trustworthiness
shown in practice by the leader’s behavior in dyadic subordinate-leader relationship. In
conclusion, trustworthiness matters in emergent leadership (cf. Yukl,2010). Leadership,
management and managerial leadership, couching leadership etc., are often mixed
metaphors. Northouse (2004) descriptive leadership as to explain how leaders help
organizations to reach their purposes through concern for production (which is generally
named as a management) and concern for people (leadership). Additional confusion for
the term leadership is caused by the use of other imprecise terms as power, authority,
management, administration, control and supervision to describe similar phenomena (cf.
Yukl, 2010). Leadership includes following concepts: other term is management, reference
to the past and future, dealing with change and managing stability, symbol of responsible
and power, and also process of influence. Managerial leadership retains both terms:
management and leadership, which means that processes and people will be lead at the
same time. (Avery, 2004)
Innovative leadership or leading innovativeness retains those dimensions of leadership and
for that reason, could be understood as a managerial leadership point of view. In the
development of trust and distrust in the organization, organizational culture is depicted as
‘the other side of the coin of leadership’ and is largely influenced by leaders’ actions
(Schein, 2004). In the case of very authoritarian management style, for example,
employees become socialized into and adopt the way of actions of their leaders. As an
indication of trustworthiness, trustful atmosphere, spontaneous sociality emerges between
organization members (Fairholm & Fairholm, 1999). In the opposite case, distrustful
atmosphere prevails which hinders communication and interaction (Savolainen &
Häkkinen, 2010). Poor leadership underestimates employees’ competences, which destroys
innovativeness.
RESEARCH METHODOLOGY AND DATA
Methods of analysis
This paper adopts an explorative, qualitative approach to the study of trustworthiness
within leadership. In the study, interviews, observation and narrative methods are used.
The data were collected by means of thematic face-to-face interviews, open-ended
interviews and observations. A few team leader-follower dyads in two organizations have
been interviewed and observed. Methodologically, and from the philosophy of science
perspective, this qualitative study is based on the constructionist paradigm and multisource data. Narrative analysis, method of narrative accounts as well as interviews and
observations will be combined in the study. Qualitative research methods have challenged
the studying of trustworthy development and leadership influence on subordinates and
organizations (Cho & Ringquist 2007). This paper answers the challenge by qualitative
and longitudinal type of study using several data gathering methods.
Description of case company
Both companies are SMS companies and well recognized on their own business field and
economically bandwagon. New innovations and product development were obligatory to
the lean manufacturer.
-
Company A, the first case (thesis) company, manufacturing and sale of valves and
pumps, operating in worldwide.
-
Company B, the second company, vegetable food supplier which main customers
include mostly professionals in food, restaurant and catering companies in Finland.
Company A- The leadership style was pretty authentic and organization composition very
hierarchy. Middle managers had responsibility, but it was somewhat apparent; GM made
all decisions after all and his behavior was not steady handed nor neutral or equitable
toward employees. Open dialogue between managers and subordinates was not potential.
Also fear and qualm for GM`s attitude existed among the people. Co-creation between
employees through the organization was insignificant.
Company B- The leadership style was democratic and participative management.
Atmosphere in the organization was communicative and open to debate. Flexible job
descriptions provided for diverse work and limitation of liability as well as authority. Cocreation between employees and managers was trivial and matter of course.
Main findings
The study shows that the factors most influential to the trust between leader and follower
are: First leader: 1) equal behavior toward all employees and avoid divide or separate them
for groups. Also avoid create too close relationship between any subordinates. 2) Showing
and being trustworthiness when behaving stabile all the time, standing behind the values
and leading democratic. 3) encourage followers to share their knowledge by asking their
opinions and respecting their points of view. Second follower: 1) Avoid group together
modeling cliques or clans inside the work community. 2) Distinguish work from leisure
when adopting attitude for co-workers and leaders; understand the relevant behavior at
work. 3) Share their knowledge to all co-workers and let information flow for tacit
knowledge.
Furthermore, the study suggests that the most important phases influencing the
strengthening of trust are reciprocity between an employer and an employee, competence
of both parties and increasing of responsibility. On the contrary, at the organizational level,
trust is not necessarily mutual and reciprocal (Schoorman et al. 2007). In other words,
leader trustworthy behavior and untrustworthy behavior has effects on the organizational
level trust. (Savolainen & Häkkinen, 2010)
CONCLUSIONS
In conclusion, the trustworthy behavior by subordinates might implement work related
behavior and high commitment for company and work. Conclusively it can be stated that
perceptions of the dyadic leader-subordinate trust about each other’s ability, integrity and
benevolence has effect on the extent to which an organization can be trusted (Schoorman
et al. 2007). Thus, it seems that organizational and inter-personal trust are inter-related.
Based on the research results, it seems evident that trust cannot be build without
continuous interaction with leaders and followers, which has reciprocal effect on the
interpersonal and organizational level trust, which is obligatory for people`s commitment
and free will to create new and share their knowledge for benefiting organization. Overall,
the study increases understanding of trustworthiness in leader behavior, leadership style
and the consequences of trustworthy and untrustworthy behavior at both interpersonal and
organizational levels.
The two leaders make an illustrative case for untrustworthy and trustworthy leadership
reflected in different kinds of leadership features and behaviors. Most importantly, the
differences in the cases show the favorable and unfavorable effects of trust in showing
trustworthiness; in the first case trustful climate with enthusiasm, high commitment and
effective communication and knowledge sharing prevail. In the second case, distrustful
atmosphere, fear, low commitment, and lack of collaboration activity, and knowledge
sharing appear respectively. As to leader behavior, in the case of authoritarian
management style, employees become socialized into and adopt the very way of actions of
their leader. Culture develops with unwritten daily manners by the influence of the leader.
Lack of respect and appreciation stimulates development of distrust (Fairholm & Fairholm,
1999). The study implies that managers should learn more of trust and develop behavioral
skills for showing trustworthiness. This way they may become more conscious of the role
and consequences of trust and distrust in their actions of leadership. The style of
management-by-fear broke the opportunities for developing and keeping quality workforce
(Peterson, 1998). Distrusting employees do not work effectively and share their
knowledge, and tacit knowledge in specific (Savolainen, 2008; Juuti, 1999).
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