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BUILDING TRUST IN THE SMALL BUSINESS: THE MANAGER'S ROLE Jeanne Daboval, NOVA Southeastern University Ray Cornish, McNeese State University Lonnie Phelps, McNeese State University Charles Rader, McNeese State University ABSTRACT Trust is a significant issue in small business management. It is possible to assess the trust climate of the small business and, if desirable, initiate change. Change assessment and initiation is both a challenge and an opportunity for small business managers. Building trust and benefits stemming from trust development are the focus of this paper. INTRODUCTION Competent small business managers recognize the importance of human resources. Small firms compete more successfully when effective management of human resources is a primary goal of the owner or manager (Hatton and Raymond, 1994). A key aspect of effective human resource management is the presence of a trust climate in the small business culture. Trust and a trusting workplace climate have been widely discussed in the literature. The benefits of trust are well established. But the view normally taken reflects the development of trust among workforces. The focus centers on workers' trust of managers. A related aspect of trust merits attention: how much does the manager extend trust in interaction with workers? Trust between the managers and employees of a small business is crucial to a positive functioning culture. A trust climate increases the intensity and stability of employee dedication to the company, helps alleviate stress among employees, and positively affects employee work-related behavior (Butler, 1991; Shore and Wayne, 1993; and Mishra and Morrissey, 1990). Research has shown that businesses having a competitive edge in an industry will often attribute their efficiency more to company culture than to some technology or specific process (Hatton & Raymond, 1994; Schein, 1990). Also, research has demonstrated that trust is more important than participation to work satisfaction (Mishra & Morrissey, 1990; Butler 1991). Managers can focus on practices and behaviors to assess the culture of a small business (Clement, 1994). Research has provided a clear concept of what culture is, how it can be measured, and how it can be changed (Schein, 1990; Butler, 1991). In the case of building trust into a culture, management leadership and attitude are critical. A primary contention of this paper is that small business managers can and should initiate trust building. POTENTIAL TRUST CLIMATES Trust must be cultivated. It is reciprocal in nature, and may exist in several combinations. The total trust climate in a firm can be assessed by observing behaviors within the firm such as

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communication flow and decision making processes. In studying the culture, it may prove beneficial to assess the trust climate as a product of the trust extended by managers and the trust extended by workers. In this compendium of trust, managers may be the dominant factor because they are more able to be proactive in the trust building process while workers are more likely to be trust responsive. The diagram illustrates some possible trust climates that may be found in the small business. FIGURE 1 POSSIBLE TRUST CLIMATES High Manager Trust Low Worker Trust 2 Manager Trust 1 Low Manager Trust Low Worker Trust Employee Trust Position 1: Managers do not extend trust to workers; workers do not extend trust to managers. Everybody in this picture views everybody else in this picture as "out to get the next fella." Hidden agendas are suspected and little if any open communication takes place between manager and workers. It is a conflict environment with low level commitment and loyalty. Labor/management battles are the rule. Position 2: Managers extend trust to workers; workers do not extend trust to managers. Perhaps a well-intentioned manager attempts to develop trust, but workers perceive the manager as only marginally competent or honest and withhold trust. Workers suspect the manager's motives. Position 3: Managers extend trust to workers; workers extend trust to managers. Everybody is committed to organization goals and the successful achievement of those goals is internalized. Good communication flows freely, workers participate in decisions, honesty and integrity are valued among workers. Managers delegate responsibility and allow worker autonomy. Optimal synergy and teamwork are achieved. The "Three Musketeers Scenario" (One for All, All for One). Where everybody would like to be. Position 4: Managers do not extend trust to workers; workers extend trust to managers. This may be a form of pseudo trust that can be present in the civil service or tenure situation where the workers have built in job protection. The manager may be supervising the willing but incompetent worker who cannot fend for himself/herself and therefore leaves it to the boss and/or the system to take care of him. In the small business the classic case of the "owner's son," or "married the boss's daughter." The positions shown in the diagram represent extremes and there are other possible combinations. 4 Low Manager Trust High Worker Trust 3 High Manager Trust High Worker Trust

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But clearly, the ultimate goal is to come as close as possible to Position 3. To move the firm's culture in this direction, managers must be proactive in the creation of a trust climate. What is suggested: 1. The manager can elect to accept responsibility for extending trust. 2. The manager can assess behavior patterns to evaluate how much trust he/she extends. 3. The manager can make a conscious decision to increase the amount of trust extended by committing to behave in a trusting manner. 4. The manager can then practice those behaviors that extend positive trust and avoid those behaviors that destroy trust. Small businesses, by their very nature offer a unique opportunity for trust creation. The generally closer contact between the various management levels and workers gives rise to a familiarity in the workplace that can be a solid foundation for trust. KEYS TO EXTENDING TRUST Components of trust are definable and can be measured (Mishra and Morrissey, 1990; Butler, 1991; Clement, 1994). Trust can be viewed as a belief in the integrity, character, and ability or competence of the manager. Positive perceptions about these qualities lead to an extension of trust (Butler, 1991). Some conditions necessary to build trust are open communication, workers sharing in decision making, respect for privacy, and sincerity of sharing perceptions and feelings (Mishra and Morrissey, 1990). Trust is an exchange between people. Its initiation by one party creates a responsibility for reciprocation by the other. Because of situational determinants and some organizational cultural constraints the manager must be the driving factor in organizational trust building. Some specific conditions that activate and sustain trust are shown in Table 1. TABLE I TRUST BUILDING BEHAVIORS Competence Keeps abreast of technology, information, skills; possesses human relations/interpersonal skills; Openness Encourages input from workers, discusses work related problems; is open to accepting and giving ideas; freely shares ideas and information Promise Fulfillment Follows through on what has been said; keeps word; acts and makes decisions

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consistently Availability/Reliability Is physically present when needed; takes times to discuss and consider employee needs/problems/concerns Discreetness Integrity Loyalty Keeps confidences Is honest and truthful Can be depended upon; supports employees and demonstrates sincere concern/interest; has motives for protecting and making the worker look good Fairness Behaves in a predictable way; uses good judgement and common sense in decision making/problem solving Benefits Of Extending Trust It is likely that a number of benefits will accrue to the firm, the manager, and workers if managers can develop the capacity to increase the trust they extend. 1. A major concern in today's workplace is stress. Stress is documented as a significant source of debilitation for workers and firms. Trust has been suggested as an antidote for stress. It is likely that extending trust will have a palliative effect on manager's stress levels as well as stress levels for employees. Managers who can trust their employees will operate more cooperatively and less confrontationally. 2. Related to stress reduction is better relations with workers. As workers experience being trusted they are likely to respond with a greater degree of openness and trust in return. The general climate in the workplace is likely to show improvement in loyalty. 3. Output and performance will improve. Employees will more strongly support the efforts and objectives of management and will more closely identify with the work of the company. Being trusted will lead to greater commitment and a stronger sense of responsibility by workers. 4. Worker participation and involvement increases as workers identify more readily with their job outcomes. Worker participation provides a source of job satisfaction. 5. Greater team spirit prevails as a result of closer commitment and cooperation.

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6. Extending trust may be very helpful in the management of diversity. As workforces become ever more diverse, even in small businesses, managing problems stemming from diversity become an important aspect to the culture. Trust may facilitate solutions to problems arising from diversity. Extending trust offers significant benefits both directly and indirectly to the manager, to the workers, and to the company. The human resource is perhaps the most important asset of the small business. Effort spent to cultivate the culture conducive to better employee satisfaction and productivity pays off in the long run success of the business. The small business that uses personnel resources to more effectively compete in today's market will survive. Managers should examine the extent to which they extend trust compared to the capacity of extending trust in their situation. If it is possible to increase the levels of trust extended, the manager should attempt to do so. Trust - How Much? A related question in the extension of trust is how much to extend. In making this judgment, several factors are important. 1 . Situational Constraints. Situational constraints may dictate the extension of trust. In particular, where the situation is critical or urgent, less trust may be practical. 2. Experience/competence of worker. Clearly, the experience and competence of the worker will play an important part in determining how much he/she should be trusted. 3. Personal characteristics of the manager. Personal characteristics of the manager will influence ability and willingness to extend trust. 4. Interpersonal dynamics. The nature of the relationship between the manager and the worker, how they interact on a personal level, will be an influencing factor on trust extended at the professional level. The manager may extend trust without immediately getting trust in return. If the manager is sincere in practicing trusting behavior a trust response will be the result in the long-term. And ultimately, trust from both sides becomes mutually reinforcing. REFERENCES Butler, J. K., Jr. (1991). Toward understanding and measuring conditions of trust: Evolution of a conditions of trust inventory. Journal of Management, 17 (3), 643-663. Clement, R.W. (1994). Culture, leadership, and power: The keys to organizational change. Business Horizons, 30 (1), 33-39. Dale, D.M. (1991). Management practices and the uninvolved manager: The effect of supervisory attitudes on perceptions of organizational trust and change orientation. Public Personnel Management, 20 (1), 101-113.

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Hatton, L. & Raymond, B. (1994). Developing small business effectiveness in the contest of congruence. Journal of Small Business Management, 32 (3), 76-89. Mishra, J. &Morrissey, M.A. (1990). Trust in employee/employer relationships: A survey of west Michigan managers. Public Personnel Management, 19 (4), 443-461. Schein, E.H. (1990). Organizational culture. American Psychologist, 45 (2), 109-119. Shore, L.M. & Wayne, S.J. (1993). Commitment and employee behavior: Comparison of affective commitment and continuance commitment with perceived organizational support. Journal of Applied Psychology, 78 (5), 774-780.

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