Employee trust in general manager and performance of small and medium enterprises
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Date
2005-06
Authors
Teoh, Poh Ming
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Abstract
The purpose of the research is to investigate the internal organizational characteristics underlying resource-based view, more specifically a trusted general manager, as a strategy leading to sustainable competitive advantage for small and medium enterprises. Also, the research attempts to determine the trust antecedents that provide general manager alternatives to influence the level of employees’ trust toward them. However, there is relatively little empirical evidence to support trust in general manager in terms of resource-based view explanations of organizational performance and sustainable competitive advantage. A framework was developed to address these gaps from past literature in strategic management in order to explore the relationships between trust antecedents and trust in general manager, and subsequently to the organizational performance. The research was conducted on small and medium enterprises in Peninsular Malaysia. A total of 107 enterprises participated in the research. Data was collected through mail survey based on a convenience sample. Using the collected primary data, the research indicated perceived managerial ability was a significant predictor and positively related with trust in general manager among other antecedents, such as benevolence, integrity, discretion and power, participative leadership style and openness. Also, trust in general manager was a significant predictor to organizational commitment and employee turnover, but not in the case of financial performance. Finally, a trusted general manager should possess strong perceived managerial characteristics and play an important role in order to enhance organizational trust and performance. The research implied that firms should appoint younger general managers with strong perceived managerial characteristics, who were in their forties.
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Keywords
Business Administration , Employee Trust , Small and Medium Enterprises