Trust in management in organizations

Abstract

Delegating authority can make firms more productive and profitable, as employees are often better informed than managers. Managers must be able to trust that employees will not misuse their autonomy, and employees need to trust that managers will keep their promises. If they are trusted, managers can delegate decision-making to employees with confidence that a promised future reward will be sufficient to appropriately motivate them. Consequently, trust is an important input into running a firm well. One policy option to facilitate better-run firms is to promote management training programs, much like a modernized version of the state-sponsored training programs offered in the US in the post WWII period. ELEVATOR PITCH