Trust is an important ingredient to the overall functioning of a company. Executives and managers should trust each other to ensure that there is proper communication. Workers throughout the organization should show trust to their leaders. They should be able to trust their immediate manager or they will not be able to give the best performance on a daily basis. Additionally, customers should be able to trust the company or they will stop purchasing services and products from the organization (Langhorne, 2018). By putting decision-making and trust together, managers and executives can begin to understand how trust can affect decision-making. Trust improves decision making in an organization by building stronger communication and relationships within the organizations.
Definition of trust and decision making
Trust can be defined as the level of confidence established between two parties. Trust enables the corporation of human endeavors in different areas of life and is important to create meaningful organizational relationships. People trust other people and not technology (Mackenzie, 2010). Trust can also be described as an expression of confidence people have in an organization. It leads to cooperative behavior among individuals and creates correct links within the organization. Trust is not built in a day but takes a long time to build. It can also be destroyed in a day and it would take a long time to regain it (Serrat, 2017). Breaking trust gives rise to distrust. Trust can be critical for the success of an organization and requires a keen attention from the management. Effective managers today have to develop trusting relationships so that they have a strong influence on employees and the running of the organization.
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Every organization is composed of two major components when it involves the manager interacting with employees. The two major components are communication and decision-making. Decision-making can be defined as an example of communication. Decision-making can be described as the process which managers move towards arriving at new solutions and inventing changing within the organization. It can involve significant changes within the organization which can result in the success or failure of an organization. There is nothing that will communicate more emotionally and quickly than a negative decision because it will affect a large population within the organization.
Factors influencing trust
Trust among different people in an organization depends on several factors such as organizational effectiveness and leadership relationships. Trust that is based on correct relationships with the leaders can have several advantages to an organization. Relationships in the workplace that are characterized by trust can foster a healthy workplace environment. It can work to strengthen corporation within the organization, increase organizational commitment, and interpersonal conflicts (Song, 2009).
Trust in an organization can also be enhanced when management power is shared among different individuals in the workplace. Giving subordinates the chance to take part in certain decisions can influence the trust of the overall leader. Trust and decision-making are inter-related because giving subordinates a chance to make decisions provides trust on the managers and leaders in the organization. Managers can ensure power sharing in the organization by inviting subordinates to be involved in the decision-making process. This will serve to improve their commitment and competence of the entire organization (Hansen, 2011).
Trust in the entire organization is also highly dependent on employees. Managers are likely to show a great trust in the work and commitment of employees in case they know that the employees are dependable. This shows that employers have to be careful in selecting employees that are dependable and are committed to the success of the organization. Before any power-sharing is done in an organization, managers have to show that they understand employee loyalty and have good faith in the working of employees. This will ensure that managers can fully rely and trust employees when they decide to delegate some important managerial activities.
Apart from employees being dependable, trust should also be built by the managers. This form of trust has been described as trust in the management. Management that shows proper leadership will be associated with positive outcomes for the organization. Some of the benefits that the organization can have as a result of trust are job satisfaction, improvement in overall performance, positive organizational outcomes, and the building of healthy inter-organizational relationships (Hanse, 2011).
Decision-making in an organization
The success rate of an organization is highly dependent on having a faster decision-making process. A study by Neyer (2004) has shown that the effectiveness in the decision making of an organization can improve the performance of an organization by up to 95%. Decision-making can additionally impact employee engagement by improving it by 50%. A company’s decision-making process has a significant impact on how employees perform.
Decisions in an organization are usually made for two different reasons. The first reason is to make change to take place and the second reason is to react to changes that could take place. When a change occurs, the decision-making process should keep pace with the changes. Companies that can quickly make decisions through change become highly advantaged and move on to become business leaders. On the other hand, companies that are slow in the process of making decisions can fall farther from change and could get easily knocked out of the market.
Managers and subordinates developing trust and decision-making
Decision-making can be defined as the degree which managers could allow the participation of subordinates throughout the process of decision-making process. In every organization, the process of decision making will involve whether the decision is made solely by the manager or whether the decision is made by involving the subordinates. The degree which subordinates can influence the decisions made in the organization and how their interests are usually reflected in the overall outcome of the decision can be used to describe the process of decision-making.
The participation of subordinates has been shown to increase trust in the organization and leads to other organizational advantages. Shagholi (2010) studied on the relationship between trust and decision-making process and found that trust can be enhanced in the organization when employees participate in decision-making. Employee participation builds trust in the organization which acts as a means of improving organizational effectiveness. It also plays a big role in improving the productivity of the organization and the ability of employees to be committed and motivated in their work.
The building of trust in the organization is highly dependent on the willingness by the managers in an organization to make use of employee participation throughout the decision-making process. The willingness and degree which managers show the readiness to let subordinates participate in critical decisions in the organization can lead to an improvement of trust in the organization. Shagholi (2010) found that most of the highly satisfied managers in an organization are those that can build confidence and trust from their superiors and have a high participation by their subordinates throughout the decision-making process. The participation of employees in decision-making builds commitment and loyalty and it encourages managers to develop trust in their employees.
Managers that trust their subordinations indicates that the organizational climate is healthy and that the organization is geared towards success. In case of any emergencies in the organization, the subordinates will be able to make a decision quickly that handle the situation effectively. Additionally, trust between managers and subordinates will ensure that the process of change will be an easy and smooth process. The subordinates will adjust to the changes willingly as a result of the trust and relationship built with the managers (Gao et al., 2011).
Yuan Wang (2007) analyzed the relationship between trust the participation in the process of decision making. The study was conducted to analyze the cultural similarities and differences that existed between Australian and Chinese managers. The study revealed that the level of trust which managers have in their subordinates has a direct impact on the attitudes of employee participation towards the management process. The study revealed that managers that have a level of trust in their subordinates will find their management work easy. This is because employees will be ready and willing to assist the manager in the difficult process of decision-making. Employees that deal directly with customers will be able to make decisions that can help advance the organization for success. The study by Wang revealed that there was a significant maturing among managers in both Chinese and Australia. The level of trust can be used to explain the success of some of organizations in the places and their adoption of change.
Trust improves the speed of decision making
The speed of decision-making is an important part of an organization because it has a direct impact on business growth. Shepherd (2015) analyzed the how entrepreneurial decision can affect the performance of an organization. The study found that slow decision-making can have a negative impact on an organization. The study was conducted on executives in different companies and found that 72% of companies which had experienced strategic failures in its recent past was partly due to the slow process of decision making. This is because a company with a slow decision making process lacks a competitive advantage since a slow decision making process makes the growth of the company slow compared to agile competitors. The study found that one of the biggest factors that hindered the speed of decision making process are bureaucracies which exist in an organization that cause problems in coordination.
The problems in coordination and bureaucracies in the organization can be easily combated by creating an environment in the organization that builds and enhances trust. An organization that is built upon trust may have bureaucracies just like any other organization. However, trust will ensure that there is proper coordination among both managers and employees. Building trust between managers and employees is a way to ensure that the decision-making process is fast (Murray, 2016).
Building trust in the organization is also important in ensuring that the outcome arrived at is the best. This will ensure that the decision made is effective and will advance the organization for further growth. In order to come up with the best decision, the organization should synthesize the knowledge and experience from almost every employee in the organization. The gathering, synthesis, and analysis of data presented by the employees will only be possible in an organization that has been built by trust. Additionally, employees will be able to share their ideas and opinions freely in case the organization has an environment that is built on trust. Diverse perspectives will be warmly welcomed. Good ideas will be discussed, some ideas will be left out, and the best ideas will rise to the top and chosen as the best course of action.
Trust has also been found to have a positive impact in decision making by improving job satisfaction, affective commitment and group commitment. Kumar and Saha (2017) studied the effects of trust and decision making on attitudinal outcomes of employees. The results from their study showed that participation in decision making can be used to predict affective commitment and job satisfaction among the employees. However, maintain a high level of trust fostered group commitment towards the organizational goals. The study shows the indirect relationship between trust and decision making in an organization. Trust can improve group commitment which improves decision making abilities of the employees. The effect of this is that employees can realize other benefits such as job satisfaction.
Trust can improve the judgment of business leaders throughout the decision making
Trust in the organization is also important in an organization because it can improve the judgment of business leaders throughout the process of business making. Managers that trust their employees can be used to mean that they trust the initiatives that make and that they can trust their judgment in making decisions. Additionally, employees that trust their managers trust the judgments made by the leaders throughout the process of decision making (Wu et al., 2016).
The process of decision making is a difficult task. Both business leaders and employees have to make use of their judgement to arrive at the best decision. However, the use of one’s judgement comes with a great deal of doubt about the final decision. Decision makers find the entire process difficult because they may not be able to put into words the entire decision or they do not know what to expect from the outcome of the decision. Not showing trust in one’s judgement or in the judgement of others can cause fear and doubtfulness throughout the process of decision making. Developing trust among both employees and managers removes the doubts and fears that come about throughout the process of making decisions.
According to Gillian Stamp (2007) leaders can send signals about trust through the use of a shared purpose and value in the organization. Having a basis of values in the organization ensures that employees can make the proper decision when faced with any challenge or decision-making process. Employees can respond by using proper judgment in light of any situation at hand. Depletion of values in the organization leads to poor judgment among employees which causes a decrease in trust.
Negative influences of distrust in decision making
Just in the same way that trust can improve the process of decision, distrust can have a negative influence in decision making by causing uncertainty. Schul and Peri (2015) carried out several experiments where they studied the behavior of decision-makers when uncertainty was uncertainty occurred in the situation. The results of the study showed that the participants were less willing to take part in the decision-making process after having an encounter with a distrustful person. They would also discount the advice of another person in case they perceived that the other party was someone that was distrustful.
How to build trust to improve the process of decision making
According to Randy Conley (2013), trust can be enhanced in an organization by understanding the relationship it plays towards the process of decision making. Randy notes that trusting one’s decision-making abilities can improve the overall success decision-making process. There are other strategies that managers in an organization can use to improve trust which includes not overestimating their decision-making abilities, being clear on the decision that should be made, gathering the facts accurately, and making a follow-up after the decision has been made (Helliwell and Huang, 2011).
Trust can also be built in an organization by maintaining authenticity in the entire organization. The organization should not focus only on making money by selling their product. Instead, it should strive to focus on various initiatives that can also foster the well-being of its employees. Many companies that try to make profit only find it very difficult to achieve trust and overall organizational growth and success. Earning trust is a long-term process which depends on the ability of managers to build meaningful and powerful relationships with other coworkers. One way to build authenticity in the organization is through helping others. Hall (2018) notes that one way managers should offer help to their subordinates, other employees, and team members when they have something that is of value which they can offer. Doing this enables the managers to earn influence and trust among their subordinates.
Managers should also remember that they are dealing with humans when carrying out various business endeavors. Trust can be built through fair treatment and treating everyone not as an employee, but as another human being. Building trust with the customers can be enhanced through customer services. Even though there has been an increased automation in the past few years, human connection is still required to run every organization. Customers highly value the human element that can be retained in an organization when dealing with customers. Offering customer service on a personal level retains a human touch and ensures that trust is developed among employees and customers (Sun, 2018).
Kramer and Pittinsky (2012) analyzed various ways that leaders in an organization can restore trust through different challenges that could face organizations. Their study noted that there have been recent events around the world today which has several undermined the trust of employees and customers on both public and private organizations. They note that the effect of declining trust can be seen through the widespread loss in leadership between institutions and organizations. Kramer and Pittinsky note that the need to restore trust within an organization is more important than ever. They propose that one way which trust can be built in an organization is restructuring the organizational climate to create a different structural and psychological change.
Organizations that would like to build trust as a trait should also understand that trust and risk go hand in hand. Trusting someone comes with a risk but organizations should not forget that trust is a resource which can reduce risk and make various developments in the organization become successful. Managers should understand the relationship between risk and trust in order to build a successful organization. The risk associated with trusting employees is usually an acceptable cost of building relationships. Understanding the relationship and using it to the advantage of employers can be advantageous for organizations. Colquitt (2007) analyzed the relationship between trust and risk-taking in an organization. The author argued that trust has an advantage over other methods of managing risk in an organization because it is informal, generalizable, and is derived from social information. Trust can thus be viewed as an organizational resource which can be used to extend and manage the risks within an organization.
In conclusion, trust can improve decision making abilities of employees through enhancing the relationships and ensuring that the process of decision making is achieved quickly. Employee participation is a high determinant in maintaining trust and it has a direct effect on decision making for the organization. Managers that allow their subordinates to participate in the decision making process will be trust their employers and will be able to air out their opinions eloquently. Trust also improves decision outcomes by ensuring that the decision is made with the correct outcome and that the decision made is correct. Organizations should strive to build trust through building proper relationships and maintaining a human element in running the organization.
References
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