CEO trustworthiness : a universal or context-specific organizational advantage?

A basic premise of strategic management is that organizational leaders influence organizational outcomes. By definition, strategic leaders are challenged to envision and enact a future that will ensure the survival and strengthen the competitive performance of their organizations. This all-encompassing task of strategic leadership is the primary responsibility of those at the top of the organizational hierarchy Given this, the question becomes how strategic leadership translates into superior organizational performance

Leadership, at any organizational level, does not occur without the cooperation of constituents The importance of interpersonal trust as the foundation of cooperative activity is often acknowledged in the social sciences, but seldom examined empirically. This research study focuses on leader trustworthiness as a resource and develops two models of trustworthy strategic leadership as a potential source of organizational competitive advantage: (1) a universal advantage model based on organizational behavior and inter-firm relations perspectives; and (2) a resource-based contingency model suggesting that the strategic value of trustworthy leadership is dependent upon organizational and environmental contextual factors. Six hypotheses derived from these models are tested using archival and perceptual data from a multi-industry sample of 56 non diversified public firms Perceptual data was obtained from the CEO and multiple top management executives from each firm

Regression analyses of the data revealed a significant positive relationship between CEO trustworthiness and CEO accomplishment, between CEO accomplishment and organizational competitive performance, and between CEO trustworthiness and organizational competitive performance. Additional analyses revealed that CEO trustworthiness and organizational performance were more positively associated as organizational size, CEO tenure, and environmental uncertainty increased. Significant main effects for trustworthiness were observed in the presence of moderation by the other variables. These findings support both the behaviorally-based universal model and the resource-based contingency model of the value of strategic leader trustworthiness as a source of competitive advantage