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This chapter examines the effect an informal control namely trust-in-superior and subordinates’ truthfulness in revealing their private information on budgetary slack. A laboratory experiment was conducted. A one-way analysis of variance (ANOVA) and ordinary least squares (OLS) regression were used to test the hypotheses proposed in this chapter. The independent variables were trust-in-superior and subordinates’ truthfulness in revealing their private information. The dependent variable was budgetary slack. The results indicate that trust-in-superior reduces the budgetary slack created by subordinates under private information condition. In addition, the results show that subordinates’ truthfulness in revealing their private information mediates the effect of trust-in-superior on budgetary slack.

As proposed in this paper, in public accounting firms, supervisors and managers provide junior accountants with career-related benefits that include: career development support; social support; and role modeling. Also, employees who receive such career-related benefits are more likely to believe that the firm provides career growth opportunities and more likely to trust their managers. Career growth opportunities and trust, in turn, positively affect organizational commitment, which reduces turnover intentions. In summary, the relation between career benefits and turnover is mediated by several variables: career growth opportunities, trust in managers, and organizational commitment. Results of a survey of junior employees in public accounting firms support these assertions (with the exception of social support).

The purpose of this paper is to explore how leaders' emotional intelligence (EI) influences subordinates' trust and to examine the roles played in the process by abusive supervision (a negative leadership) and leader‐member exchange (LMX) (a positive leadership).

According to revelations in the case of Foxconn's jumping events and LMX theory, this paper argues that low levels of leaders' EI affect their subordinates' perception of abusive supervision and tends to cause their mistrust of employers in return, further damaging the employer‐employee relationship. Tension will develop or be intensified among such relationships as time evolves and relationship length extends. A superior‐subordinate matching questionnaire survey was conducted among enterprises in Shenzhen, China. About 202 valid samples were eventually collected. The data were analyzed through correlation analysis, regression analysis, CFA, EFA and SEM using SPSS and LISREL.

The EI of superiors has a significant positive impact on the personal trust between subordinates and superiors, in which both abusive supervision and LMX play a partial mediating role; and the relationship length of superiors and subordinates plays a moderating role between LMX and affective trust.

The paper advises that when selecting leaders, more emphasis should be placed on EI, and managers should be trained to improve their emotional skills.

The paper extends the research on the antecedent and consequence variables of abusive supervision in Chinese enterprises, discussing both positive and negative leadership.

This article investigates (in)direct relationships between team-level entrepreneurial orientation and team performance, where team entrepreneurial orientation (EO) is measured as a team-level construct, not as concentration of team members' scores. In this article, the authors present and explore how EO-oriented behaviour within a team affect its performance, taking into account the team's trust in a manager and commitment to team and company goals.

This article focuses on a quantitative analysis of 55 teams operating within a large high-tech manufacturing enterprise, gathered through a traditional survey. The conceptual framework for this research was based on the theories of organisational citizenship, extra-role behaviour and social exchange. The authors explain how contextual factors establish a framework which enables team EO transformation towards higher performance of teams.

The results show that (team) performance benefits from EO-related behaviours. However, individual dimensions of EO are not universally beneficial and need to be combined with a mutual trust and/or commitment to team enterprise's goals to achieve high performance.

The findings provide important insight into which team factors may be targeted at the intervention or support of team members, including managers and immediate superiors who lack an active personality and are not willing to take risks at workplace. The authors adopted EO instruments, mutual trust and commitment from an individual scale to a team one, and also offer new opportunities to analyse such phenomena from a new level and evaluate them from the perspective of team managers.

Purpose – The purpose of this study is to investigate the process by which nonfinancial performance measures affect employee perceptions of how fair are their organizations' performance evaluation procedures. With increased interest in performance measurement systems that rely heavily on nonfinancial measures (e.g., balanced scorecard), it is important to understand the ramifications of these measures.

Methodology – Data are drawn from mail survey questionnaire responses of 121 Australian managers and analyzed by structural equation modeling.

Findings – The results provide support for the proposition that employees perceive the use of nonfinancial measures as fair. However, these effects are found to be indirect through (1) the enhancement of employee role clarity, and (2) the enhancement of the trust the employees have in their supervisors.

Research limitations and practical implications – This study does not directly address the issue of whether nonfinancial measures will ultimately lead to improved overall organizational performance. However, the results do suggest that the use of nonfinancial measures for employee performance evaluation is beneficial. Hence, there may scope for increasing their role in the workplace. This may ultimately lead to improved organizational performance.

Value of paper – The current interest in multidimensional performance systems clearly necessitates systematic empirical investigation to ascertain their effectiveness and benefits. This study contributes in this regard by focusing on nonfinancial measures, a key component of multidimensional performance measurement systems. It also adds to our understanding of the process by such systems influence employee reactions and ultimately overall organizational performance.

This conceptual paper focuses on trust and its context. Previous research indicates the importance of the specific‐situational nature of trust, which is affected by both interpersonal and organizational contextual factors. Hypotheses are formulated, and they revolve around trust and various interpersonal and organizational contextual variables. The interpersonal contextual factors included are the types of trustor‐trustee relationships, ethnicity of the trustors and trustees, perceived inequity, and the importance of a cooperative or noncooperative act to the receiving party. The organizational contextual factors included are politics, ownership structure, and organizational form. In addition to main effects, some of these variables may have interaction effects on trust. Also, the organizational contextual variables mediated by the interpersonal contextual variables may have indirect effects on trust.

Because of the importance of accounting information to a manager’s decision-making process, his/her working relationship with his/her supporting management accountant is used as a paradigm of a superior-subordinate working relationship. This paper aims to analyze the drivers of trust in this relationship.

Based on responses from 446 managers, the authors tested a structural equation model for various trust drivers.

The authors found that when management accounting generally has a powerful role in a company, it positively affects the manager’s perceptions of his subordinate’s trustworthiness. Although the absolute level of trust remains stable over time, the influences of the bases of the trust change significantly. Over the long run, perceived trustworthiness fully mediates other trust factors, such as the manager’s trust disposition and the organizational setting, which highlights the importance of the individual trust relationship even for strong and functional superior–subordinate relationships.

Consistent with other studies, the results contain the classic limitations of survey studies. This study investigates the drivers of trust and provides insights into the trust relationship between managers and management accountants. Future studies should verify these findings for other important work relationships.

Trust research has typically focused only indirectly on the relevance of the trust that a superior has in his supporting subordinate. The authors show how these trust drivers intertwine and how their influences shift over time.

This study aims to examine the role of trust-in-supervisor and organizational commitment on the relationship between a budget-based incentive compensation scheme and job performance.

A survey was conducted involving 120 managers from Australian manufacturing firms listed in the Who’s Who in Business in Australia electronic database. A partial least squares approach was used to assess the psychometric properties of the theoretical model and proposed hypotheses. Data analysis was conducted using WarpPLS Version 5.0.

The results suggest that the reliance on a high budget-based incentive compensation scheme was found to lead to higher trust-in supervisor, which in turn resulted in higher organizational commitment and improved subordinate job performance.

This study is subject to the limitations of survey-based research.

This study may assist top management to better understand the importance of designing an effective budget-based incentive compensation scheme to promote high interpersonal trust and organizational commitment among subordinates. Cultivating a climate of trust may help to enhance interpersonal trust between subordinates and their superior, which in turn may lead to higher levels of organizational commitment and improvement in subordinate job performance.

This paper elucidates and contributes to the existing literature by suggesting that a budget-based incentive compensation scheme can directly affect subordinates’ level of trust in their supervisor, and that trust-in-supervisor can serve as an antecedent to the development and cultivation of subordinates’ commitment to the organization, which in turn improves their job performance.

The purpose of this paper is to evaluate whether trust and distrust in upper-level managers exert different influences on the budgetary proposals of middle managers. Such proposals involve different levels of managerial effort that impact overall budgetary slack.

This paper is based on a laboratory experiment with 160 business managers.

The results show that the more (less) middle managers trust (distrust) their upper-level managers, the more (the less) effort they commit to budgetary proposals. The authors also find that middle managers with low trust are prone to invest more effort and thus create less budgetary slack than managers with high distrust. The results also show that the introduction of suspicion does not vary this initial choice of effort and budgetary slack.

This paper shows the importance of trust and distrust as informal control systems in organizations. The findings support the importance of extrinsic motivation for enhancing effort and reducing budgetary slack. There are a wide range of exogenous variables that have an effect on the development of trust and distrust.

Practitioners may improve their management control by facilitating trust and preventing distrust in interpersonal relationships because both are informal controls that can reduce and increase, respectively, dysfunctional behaviors in organizations, such as budgetary slack.

This paper is among the first to show the distinct effects of trust and distrust (high and low) in the efforts of middle managers. This study provides a dynamic viewpoint of trust through the introduction of suspicion in a budget negotiation.

In the last few years a new management style and paradigm has emerged with the aim of improving employee motivation, commitment and satisfaction through participatory management practices and more democratic organizational structures. Based on this new paradigm, this study examines the consequences of participative decision making for job satisfaction and trust.

To examine the proposed relationships structural equation modelling was used on a sample of 3,364 employees conducted by the European Foundation for the Improvement of Living and Working Conditions (Eurofound).

Results confirm that participative decisions positively influence job satisfaction both directly and indirectly by means of employees' perception of trust.

Based on democratic management style, this study shows how participative decisions and trust can increase job satisfaction.