A Study of Trust in Global Leadership in Turbulent Times
Sat, October 14, 12:00 to 13:00, SQUARE, Arc Room
This study examines the difficulty leaders of global organizations experience building trust with their followers, particularly in changing, chaotic, and challenging environments. Presenters will share new findings and describe how, in this era of turbulence, leaders establish honesty, integrity, fairness, and transparency with stakeholders to gain and maintain trust within their organizations.
The world finds itself in turbulent times as businesses, educational systems, and countries vie for leadership and where trust is largely lost. A prominent theme within the literature review on leadership finds trust as an essential element of leadership. Trust exists at many levels and between many stakeholders. Trust is operationalized as the degree to which followers place faith in the leader’s and are willing followers of their decisions.
The global environment as most know it today would not exist without the bonds of trust between leaders and followers. However, trust builds a vibrant global market place is under attack. The results of a study conducted by Costigan, Insinga, Kranas, Kureshov, and Ilter (2004) concluded, “Distrust emerged when followers perceived that top leaders were incompetent or indifferent to followers’ needs” (p. 200). During the past few years’ corporations, governments, and individuals have been responsible for ethical failures, loss in judgment, and acting in behalf of their personal interests rather than those of stakeholders.
Trust in Global Business
Global organizations are facing turbulent times and followers such as employees, customers and other stakeholders have lost trust in their leaders. Trust between employers and employees are tenable as business leaders are replacing workers with technology or shifting jobs to other parts of the world where conditions for profit are more favorable.
Businesses rely on customer satisfaction to retain current customers and to gain others. To gain loyalty from its customers, a relationship of trust becomes a vital ingredient to any business and provides a competitive advantage to a company that has it. Stockholders and investors trust our business leaders to protect our capital and help us to show a return on our investments. Stories of insider trading, profiteering, fraudulent financial information, and mismanagement by CEO’s, CFO’s, Broker’s and others are prolific.
Today, problems with identity theft, stock market manipulation, credit card abuses, and other crimes and misdemeanors plague local, national, and international economies. These indiscretions are causing a loss of trust by customers, employees and other stakeholders in business leaders around the world. Global Leadership is also more complex to lead due to distance challenges, cultural differences, and cross-cultural barriers. (Youssef, C.M. and Luthans, F. 2013)
The decision was reached to conduct this study on trust in global leadership during such challenging times as indicated by world events such as high profile data breaches, China’s stock market downturn, the FIFA bribery scandal, VW’s manipulation of emissions data, massive corruption at Petrobras, and exchange-rate manipulation by the world’s largest banks. (Edelman, 2017) These highly publicized events have created difficult times for world leaders and leaders of global organizations.
We began our study with the understanding that trust is at an all-time low in the United States (US). Using General Social Survey (GSS) data, the US between 1972 to 2014 “respondents agreeing with the statement ‘most people can be trusted’ has gone from 46% to 31% respectively” (Ortiz-Ospina, Roser, 2016, para I-1). Looking at a global picture we can compare differences in the levels of trust across countries. Countries such as Norway, Sweden and Finland, had 60% of the respondents agreeing with this same statement, while countries such as Colombia, Brazil, Ecuador and Peru, had less than 10% of the respondents agreeing with the statement that most people can be trusted. Looking at a map of the world and the data from GSS, one can conclude that those countries with the highest ratings of agreement with the statement that most people can be trusted are the least turbulent while those experiencing war, poverty or political instability are the least trusting. Nikezic, et.al. (2012), concluded that; “The leader may have an impressive stability in one period of time, but little consistency in the turbulent situation” (p. 293). So the question remains how do global leaders build trust in today’s environment?
Employing a quantitative method of research this current study provides empirical data regarding global leaders’ relationships with their followers using an international survey. The target audience for participation in this survey includes senior leaders of global businesses. Examples of types of senior leaders and global organizations include; CEO’s of Fortune 500 Companies with high EQ’s (emotional quotient) e.g. Jamie Dimon of JPMorgan Chase, Indra Nooyi of Pepsi, and John Mackey of Whole Foods Market.
Studies and Findings to Date
Historical research, conducted in an attempt to identify trust and the impact of trust on organizational performance has concluded that trust in leaders is essential the success of organizations; however, a theory of trust that integrates many variables continues to be elusive. (Hurley, 2006, Kramer, 1999, Ospina, and Roser, 2016). “Without trust, influence wanes, intimacy erodes, relationships crumble, careers derail, organizations fail to prosper (and ultimately, also crumble) and, in short, nothing much works” (Warrel, 2015, para 5). When decisions are not completely thought out mistakes are made and goals are not achieved. Laying blame rather than seeking solutions does not improve the organization. Trust impacts loyalty, productivity, quality, motivation and organizational reputations.
Faith and confidence in others is a foundation upon which trust is built. “Consequently, executive leaders are viewed to be trustworthy to the extent that they are seen as being competent, possessing integrity, and exhibiting benevolence toward others” (Judge, 1999 p. 156). Subordinates who believe their leader to be trustworthy and who willingly invest in leadership are more likely to be motivated, resulting in increased productivity. A Leader who does not trust his or her followers limits creativity. (Judge, 1999)
This study examines the difficulty leaders of global organizations experience in building trust with their followers in today’s changing and challenging environment. This quantitative research project examines how the leaders overcome those difficulties when delivering their message of honesty, integrity, fairness and transparency to their organizations that have multi-cultural customers, employees and other stakeholders. This study shows how leaders build trust in a global environment. Our presentation will explain updated findings and demonstrate how leaders gain and maintain trust within their organizations in today’s challenging environment.