Employee participation enhances organizational effectiveness. Trust in employees leads to encouragement and acceptance of participation in decision making. There has been recent and growing interest in understanding the basic characteristics of managerial mechanisms within township‐village enterprises (TVEs) in China and how these affect organizational performance. This empirical study investigates how trust influences managers’ decision‐making behavior in the township‐village enterprises in China. The findings of the study suggest that, although TVE managers develop a high level of trust in the dependability, predictability and good faith of their employees, only trust in employee dependability is positively related to participation in the decision‐making process.
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