Academic journal article Social Behavior and Personality: an international journal

The Relationship of Leadership, Team Trust and Team Performance: A Comparison of the Service and Manufacturing Industries

Academic journal article Social Behavior and Personality: an international journal

The Relationship of Leadership, Team Trust and Team Performance: A Comparison of the Service and Manufacturing Industries

Article excerpt

The objective of this study was to investigate and compare the relationships and variations among leadership, team trust and team performance in the service and manufacturing industries. The results of using structural equation modeling to conduct hypotheses testing show that leadership has a positive effect on team trust and team performance, and that team trust also has a positive effect on team performance. By using MANOVA analysis to test for significant variances in leadership, team trust and team performance in the service and manufacturing industries, a significant variance was discovered in the testing of instructed leadership, relational trust and institutional trust in both industries.

Keywords: leadership, team trust, team performance, service industry, manufacturing industry, Taiwan.

Drucker (1998) posited that teams are already the basic unit of the majority of today's enterprises. This is primarily because, at a time when the environment changes with increasing speed and the problems that enterprises face are increasingly complex, enterprises are no longer able to rely solely on the strengths of individual members to complete tasks. Instead, increasing the organization's competitiveness and taking advantage of development opportunities require the amalgamation and application of the characteristics and abilities of all of the organization's members through the united efforts of teams. The primary precondition for maximizing team performance is the ability of team members to cooperate with each other in order to produce amplified positive results. Conflict within teams has the opposite effect, and resources are wasted. One of the most important elements that determine the ability of teams to cooperate effectively is the ability of each team member to trust the entire team and each of the other team members (Hosmer, 1995; Rousseau, Sitkin, Burt, & Camerer, 1998).

Moreover, establishing effective teams is dependent on the leadership of the team leader. Zand (1997) contended that when subordinates trust leaders, subordinates are willing to take risks to achieve the objectives and tasks leaders assign because they believe that their own rights and interests will not be abused. Accordingly, there is a positive effect between leadership and interpersonal commitment (Hurley & Huit, 2000). Leadership is especially important when enterprises face changes (Kotter, 1990). With this in mind, we posed the following hypotheses:

Hypothesis 1: Leadership produces a positive effect on team trust.

Hypothesis 2: Team trust produces a positive effect on team performance.

Because trust is a function of the interaction between people, its interactive quality is more pronounced in teams than in individual relationships; thus, in this study team trust is defined as two-way "dynamic" trust. In other words, team trust is a dynamic concept which describes faith in or positive expectations for the thoughts, words and actions of others and the willingness to rely on others and take risks, and signifies the existence of team-to-individual and individual-to-team interdependence.

Scholarly perspectives on team trust can, in general, be classified into three trust types: the cognition type, the affect type and the institution type (Rousseau et al., 1998). Sheng (2004) considered the cognition type and the affect type to be of a similar nature, since trust is generated in both when one person possesses a certain degree of understanding and recognition of the other. In this study Sheng 's perspective is complied with, and trust is classified into two categories: the affect type and the institution type. Numerous studies have shown that team trust substantially affects team performance because trust within teams enables them to maximize the positive effects of productive interaction and mitigate the negative effects of conflict.

In Ulis study it is suggested that trust can have the effect of generating good team interaction. …

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