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Leadership Determinants of Trust

Leadership Determinants of Trust. Sim Sitkin Fuqua School of Business Duke University. In collaboration with Allan Lind, Morela Hernandez, and Chris Long. What Influences Trust?. Various influences have been identified

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Leadership Determinants of Trust

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  1. Leadership Determinants of Trust Sim Sitkin Fuqua School of Business Duke University In collaboration with Allan Lind, Morela Hernandez, and Chris Long

  2. What Influences Trust? • Various influences have been identified • Competence, benevolence, reliability, honesty, etc (e.g., Dirks & Ferrin, Avoilio and colleagues) • Influences are generally consistent with the kinds of things leaders “should” do • But the links between specific leadership behaviors and trust has remained largely unexamined • Often asserted, rarely tested • Conceptualization is often vague and atheoretical, or very broad • Goal is to clarify the potentially important insights for both literatures • Present newly developed leadership approach • Make the leadership-to-trust links explicit and specific • Present preliminary results of an early test • Discuss some implications

  3. The “Leadership Challenge” • There is a substantial body of work on leadership, but there is not really a clear picture of what leadership is and how one can teach people to be better leaders. • Some scholars (e.g., Meindl, Ehrlich, & Dukerich) have even contended that leadership is not an important factor in organizational performance, that it is simply a “romanticized explanation” of more complex management and environmental factors.

  4. How to Address the Challenge • Consider whether there is indeed something in the concept of leadership to theorize about, study, and teach • Organize our understanding of leadership and related phenomena so that we can systematically examine how leadership evolves as organizations change

  5. Contemporary research and theory on leadership • Huge quantity and variety • Variable in focus and quality • Empirically rigorous, but more usually managerial than leadership-focused • Atheoretical and/or vague • Practitioner-oriented, but not very systematic or testable • Narrow, focusing on only one or two aspects of leadership • Theoretical, but are not very generative for rigorous scholarship or practical enough for managerial application • Some examples • Transformational leadership, Charismatic leadership, Symbolic leadership, Attribution theories of leadership, Relational leadership

  6. A preview of approach • Working with my colleagues Allan Lind and Chris Long (and additional colleagues, and including recent PhD students Jim Emery, Morela Hernandez, and Drew Carton), we have worked to organize and integrate this topic with an eye to empirical testing and implementation. • We have found ourselves incorporating & extending many elements used by other theories, but we have been most influenced by relational views of leadership and trust. Thus, today’s focus . . . • Before I begin presenting our theory and early results on the impact of leadership on trust, let me define it and give you a brief picture of our leadership framework.

  7. Definition of Leadership • A leader is: • A person who influences others • A person who exhibits specific leadership behaviors • A person who accepts a leadership role and identity • Leadership is: • A set of behaviors and their effects • A social role • A perspective or identity • Leadership is not: • Formal authority or position • Only positive (effective leaders can pursue evil) • A set of traits that cannot be developed or modified or learned (“you can’t teach height” but you can teach leadership)

  8. Leadership versus Management • Not about leaders vs. managers, not different people • Most individual roles involve elements of both leadership and management • But both good leadership and good management are necessary for optimal organization performance • Leadership is not just about top organizational heroes • Includes leading up, down and laterally • Applies to a variety of life roles – leading peers, family members, community, leading oneself

  9. How is the Approach Distinctive? • Focus on Behavior: • Leadership is what you do, not just who you are. Change what you do and you can change your leadership style. Thus, the approach is testable and actionable. • Focus on Effects: • Each dimension is keyed to theorized effects of leadership behaviors. • Focus on Breadth and Integration: • Most leadership approaches focus on just a few aspects of leadership – ours tries to integrate the range of leadership dimensions – and effects.

  10. Leadership domains ETHICAL SUPPORTIVE INSPIRATIONAL RELATIONAL CONTEXTUAL PERSONAL

  11. Core focus of the domains Accepting responsibility Raising optimism & enthusiasm Providing resources, feedback, and protection Clarifying who we are and how we work together Showing concern and understanding Preparing and projecting who you are

  12. Consequences of effective leadership TRUST STEWARDSHIP HIGH ASPIRATION INITIATIVE CREDIBILITY COMMUNITY

  13. ETHICAL SUPPORTIVE INSPIRATIONAL RELATIONAL CONTEXTUAL PERSONAL Leadership domains and effects STEWARDSHIP HIGH ASPIRATION INITIATIVE CREDIBILITY COMMUNITY TRUST

  14. Our Focus Today TRUST

  15. Definition of Trust • Trust is a psychological state comprising the intention to accept vulnerability based on positive expectations of the intentions or behavior of another (Rousseau et al., 1998)

  16. Foundation of the Model • Personal: Leadership emerges from the projection of your personal values, concerns, passions and world view. • Relational: Leadership is rooted in projecting concern for and understanding of others in interpersonal and inter-organizational relationships. • Contextual: Leadership simplifies and focuses by clarifying contexts.

  17. Personal Leadership • Demonstrate that you have the • insight and knowledge to lead to • success. • Be real; let your values and • personality show in your actions. • Make your dedication to the team-- • and your courage in pursuing its • goals--evident to all.

  18. Effective personal leadership yields CREDIBILITY

  19. Relational Leadership • Attend to your leader-follower • relationship with each • person you seek to lead: • Show concern, understanding, and respect for others. • Be seen as fair.

  20. Effective relational leadership yields TRUST

  21. Contextual Leadership • Create a sense of identity (pride and belonging). • Focus and simplify to build a sense of coherence. • Enhance clarity of roles and functions.

  22. Effective contextual leadership yields a sense of COMMUNITY

  23. But our focus today is on leadership determinants of trust TRUST What is the prediction from the literature about what influences trust?

  24. So how might these three dimensions relate to trust?

  25. Arguments Extrapolated from Trust Literature • Personal Leadership Affects Trust • Competence, shared values, personal interests are predictive of trust (Sitkin & Roth; Mayer et al) • Attribution of leadership – passion, insight (Calder) • Relational Leadership Affects Trust • Leadership as forms of relationship (Weber; Lewin; Kouzes & Posner) • Benevolence, caring, respect, fairness & understanding of the other (Bies; Lind & Tyler; Sitkin & Roth) • Contextual Leadership Affects Trust • Increased contextual control undermines trust in other party (Shapiro, Zucker) • Symbolic leadership and the importance of congruent symbols (Pfeffer; Sitkin & Stickel) • Without formal protection, risk of opportunistic exploitation is too high (Sitkin; Lewicki & Bunker; Bijlmsma-Frankema & Costa; Long & Sitkin)

  26. Implicit Theoretical Model Personal Relational Contextual Trust

  27. ETHICAL SUPPORTIVE INSPIRATIONAL CONTEXTUAL RELATIONAL PERSONAL

  28. Key theoretical assumption: interdependence of leadership domains Third-Order ETHICAL Second-Order SUPPORTIVE INSPIRATIONAL Foundation RELATIONAL CONTEXTUAL PERSONAL More personal More structural

  29. Leadership Framework Extends Argument to Make It More Directly Testable • Dimensions of Leadership are Mutually Facilitative • Personal & Contextual Leadership Affects Trust, but only through their link to Relational Leadership • Direct Links of Personal and Relational to Trust implied in the literature may be spurious, as indirect routes of influence never tested

  30. Theoretical Model Personal Relational Contextual Trust

  31. Hypotheses • Higher levels of Relational Leadership are associated with greater Trust in the leader (H1). • Personal (H2A) and Contextual (H2B) Leadership will be significantly associated with Trust. • Personal (H3A) and Contextual (H3B) Leadership will be significantly associated with Relational Leadership. • The effects of Personal (H4A) and Contextual (H4B) Leadership on Trust will be mediated by Relational Leadership.

  32. Sample and Procedure • Participants completed the 360-degree survey online as part of executive leadership courses (n=129) • Weekend EMBA (n=55) • Cross Continent EMBA (n=52) • Open Enrollment (n=22) • Ratings supplied by supervisors, peers and direct reports (n= 700+) • Permission to use data for research requested, nearly all consented • Survey distributed & completed online (approx. 20 minutes to complete survey) • Participants received feedback as part of a course • Raters assured anonymity; ratings aggregated to preserve confidentiality of individual raters

  33. Web-based Leadership Instrument

  34. MDLI Feedback

  35. MDLI results (graphics)

  36. 6 domains, multiple rater groups

  37. MDLI results (Personal Leadership table)

  38. Some Preliminary Findings • Today’s analysis based on data collected in July, August, September of 2003. • Able to clean data and create appropriate scales • Analyzed using structural equation models (AMOS) • Still consider findings to be tentative - newly redesigned variables & results in but not yet analyzed. • But results seem quite robust, so optimistic

  39. Scale Reliabilities “The locus of leadership . . . involvesbehaviors . . . produced by leadersas these elements areinterpreted by followers.”(Lord & Maher, 1993; p.11) • IV Scales created from “follower” perceptions of leader behaviors • DV Scales created from “follower” ratings of leader effects across three rater groups • Intraclass Correlation Coefficient (ICC) • ICC useful for determining the extent to which variance of individual responses are attributed to group membership • ICC assesses reliable differentiation between groups (Bliese et al., 2002; Castro, 2002) • ICC especially useful if between group variability is potentially theoretically important and requires detailed examination • Supervisors + Peers + Direct Reports: ICC = .862 • Peers + Direct Reports: ICC = .723

  40. Independent Variables • Personal Leadership Behavior (α = .80) • Authenticity - Creativity • Vision - Passion & Courage • Expertise • Relational Leadership Behavior (α = .81) • Concern • Respect • Reliability • Contextual Leadership Behavior (α = .77) • Coherence • Coordination • Identity

  41. Personal LeadershipBehavior(α = .80) • Authenticity • Lets you know what he/she is really like. • Lives his/her values. • They are who they appear to be. • Vision • Provides a clear vision for the organization or unit. • Formulates clear goals. • Articulates where the organization/unit is going. • Expertise • Really understands our work. • Is smart about what we do. • Has deep expertise. • Creativity • Finds innovative solutions to business problems. • Is open to exploring new ideas. • Thinks outside the box. • Passion and Courage • Is passionate about the work we do. • Displays courage in the face of uncertainty. • Is not afraid to show his/her feelings. • Is not afraid of being wrong. • Is committed to doing what he/she thinks is right.

  42. Relational Leadership Behavior (α = .81) • Concern • Displays concern for me. • Is sensitive to my needs. • Cares about my priorities and interests. • Is interested in understanding me. • Shows compassion. • Respect • Shows respect for people regardless of their level in the organization. • Makes an effort to seek out others' opinions on important issues. • Takes the time to explain decisions. • Is a good listener.

  43. Contextual LeadershipBehavior(α = .77) • Coherence • Makes sure his/her employees understand business issues. • Promotes a shared understanding about complex issues. • Cuts through complex or ambiguous problems to make them easier to understand. • Explains why things are being done a particular way. • Coordination • Helps coordinate actions of unit or organization. • Resolves conflicts constructively. • Creates processes that facilitate the work. • Ensures that we take the needs of others into account as we do our work. • Makes clear how responsibilities are being divided.

  44. Dependent Variables: Leadership Effects • Personal Leadership: LOYALTY (α = .86 ) • I feel loyal to ____. • ____ can depend on me. • I would go out of my way to help ____ if he/she asked me to. • Relational Leadership: TRUST (α = .80 ) • I trust ____ to be fair. • ____ deals fairly with me. • ____ is unbiased in his/her decisions. • Contextual Leadership: COMMUNITY (α = .87 ) • We are like family. • People here are concerned with the success of the whole organization. • I feel like I’m really part of the team around here. • In this organization, we know we can depend on each other. • Being a good organizational citizen is part of our organization culture.

  45. Hypotheses • Higher levels of Relational Leadership are associated with greater Trust in the leader (H1). • Personal (H2A) and Contextual (H2B) Leadership will be significantly associated with Trust. • Personal (H3A) and Contextual (H3B) Leadership will be significantly associated with Relational leadership. • The effects of Personal (H4A) and Contextual (H4B) Leadership on Trust will be mediated by Relational leadership.

  46. Theoretical Model Personal Relational Contextual Trust

  47. Statistical Methods • Structural Equation Model Analyses (AMOS 5.0 in conjunction with SPSS 11.5) • 4 models are presented • Standardized Regression Weights are shown • Details (error terms etc) are not shown on models to simplify display for readability • Model Fit Indices TLI and CFI were considered • This is still very much a work in progress

  48. Model e1 e2 e3 e4 e5 e6 e7 e8 e9 Vision Creativity Expertise Passion Authenticity Respect Concern Coordination Coherence e10 e11 e12 Relational Ldrshp Contextual Ldrshp Personal Ldrshp e13 TRUST

  49. Direct Effects Test of Trust Literature Relational Ldrshp Contextual Ldrshp Personal Ldrshp .34** .45*** .26* TRUST Model Fit: TLI = .54; CFI = .66

  50. Direct Effects Test of Trust Literature Relational Ldrshp Contextual Ldrshp Personal Ldrshp .45*** .34** .26* TRUST Model Fit: TLI = .54; CFI = .66 • Significance consistent with trust literature (H1, H2A & H2B) • Fit of model based on literature is quite low.

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