‘Trust or Power’ What is more effective in coordinating social relationships in a successful private sector organization?


There is no longer a secret the fact that the most difficult work is the one with humans. People are very different from each other, and so are the organizations that come in many shapes and sizes. A company, an organization or a firm is an economic entity with unique management. A private organization has one or more owners, each holding a percentage of company shares. With ownership in more than one hand, it is imperative that the leaders and subordinates will also come from more than one background, and hence will bring varied sets of culture, ethos, and relationship building styles. Thus, bringing an important question: What is more effective in coordinating social relationships in a successful private sector organization? Is it Trust or is it Power? The purpose of this essay is to raise awareness of the social relationships in privately held companies and present the most effective methods whereby these relationships can manage more productively and more efficiently.

Insertion to Organizational Behavior

An organization is a collection of people who work together and coordinate their actions to achieve a wide variety of goals. Organizational behavior (OB) is the study of the many factors that have an impact on how people as individuals or a group act, think, feel and respond to work, and how privately held companies respond to their environments. Understanding how people behave in a firm is important because most people work for a company at some point in their lives and are affected – both positively and negatively – by their experiences in it. An understanding of a firm’s form and structure can help people to enhance the positive and also while reducing the negative effects of working in organizations. The study of a firm’s form provides guidelines that help people at work to understand and appreciate the many forces that affect behavior in privately held companies. It allows employees at all levels in a firm to make correct decisions about how to behave and work with other people to achieve organizational goals. OB replaces intuition and gut feeling with a well-researched body of theories and systematic guidelines for managing behavior in organizations (Jennifer M. George, 2008). OB also offers guidelines for managers and employees to awareness the implications of their actions on others (Steve Ellis, 2006).

Employee Engagements and Empowerment

All stakeholders of a private organization are expected to align through their social relationships. In this context engagement and empowerment promises to be a crucial tool and ascertains that the relations are effectively managed and aligned with the cultural expectations of the organization. While the human relations model encompasses a certain degree of suppleness, from an engagement point of view the internal focus should mandatorily include training. It is essential for the broader improvement of human interaction that in turn accelerates engagement process. Once the people start communicating at a higher level, it helps in attaining cohesion and thereby providing a strong boost to employee morale. This model of organizational values referred to as ‘group engagement culture’ since it links with trust and participation through teamwork. That is the reason managers in most private organizations would prefer to pursue employee engagement processes that inspire and mentor the employees and help the organization reach greater heights (Bradley and Parker, 2006).

Empowering employees is another tactic that modern day organizations, especially the privately owned ones are resorting. A delegation of authority is is a key concept towards empowering the workforce to extract maximum efficiency unless each feels strong about the level of commitment required; at a personal level, it is not possible that power can be a handful tool. Schein (2004) asserts that the composition of the empowered group of employees is pretentious by the degree of trust and sincerity within the organization. Predominantly, on deciding if senior level employees, who often hinder decision-making discussions during meetings with subordinates, should refrain from giving such opportunities.

Schein (2004) has also expressed further refinement, by taking a cultural view to the proposal of empowerment. He feels that the process should initiate with a combination of a heterogeneous group since the level of power and trust across employee designations that may act as boundaries surpass the first hurdle of a cultural barrier. Thereby, allowing the group of employees to experience the scope of engaging in fruitful communication and enhancing social relationships that are often not inhibited by the presence of materialistic reasoning.

The Project Manager

Generally, in a company, a project is led by a single manager who has full authority and responsibility for the complete project management. Depending on his professional and managerial capacity, talent and style of work, this ‘team leader’ must ensure that the other people involved in the project have all the necessary conditions to get the job done in the most organized and efficient manner. This means that he must manage relationships within the project team and all other stakeholders. Watson (2006) stressed the fact that a significant trend in managerial conduct in the recent times has been one of the inspiring managers to try to build the resilient organizational culture and social relationships. The work of a project manager should not mandatory be a supervisory one. He must work with different types of people, in situations full of uncertainties, using many resources and keeping compact in budget constraints.

However, the most powerful ‘weapon’ of a project manager will always be his team. An important potential benefit of having a diverse workforce is the ability to make higher quality decisions. In any work team, people will usually have different opinions and perspectives. Thereby, in these teams, individuals are more likely to consider more alternatives and think outside the box when making decisions. When team members think about a problem, they may identify new and original solutions. The more diversity of a team the bigger the chance to make higher quality decisions (McLeod, 1996).

Personality Speaks Up

Personality represents a complex of attributes through which an individual can integrate into a group with the same features. According to Ellis S. & Dick P. (2006), personality is concerned with understanding how individuals behave in patterned ways across time and situations. They also claim that there are two assumptions about personality: homothetic (predictable, measurable and largely inherited and resistant to change) and idiographic (cannot be measured meaningfully and the environmental and social influences are seen as critical. Because the study of personality is so central to an understanding of human nature, you might assume it has always occupied a prominent position in psychology. For more than half of psychology’s history as a science, however, psychologists paid the low level of attention to personality (Duane P. Schultz, 2005).

A very interesting comparison of the human personality but also of group individuality and originality of various organizations can carry out as described in Ellis S. & Dick P.’s book. In Western organizations evaluation methods are used to observe the efficiency and performance of employees. The direction oriented towards achievements and results, so everything focuses on performance outcomes and related behaviors, rather than on personality attributes. The employees of these organizations make different attributions for poor performance levels. The project managers tend to blame the employees’ personal skills for unsatisfying accomplishments and performance while the employees put this to their circumstances. We can see that Western project managers are encouraged to focus on realizations rather than the person because individuals can demotivate if they feel they are blamed for poor performance. This what we can call a ‘power’ way to lead and coordinate relationships in a private sector organization.

On the other hand, there is the Chinese model. These organizations are usually family owned businesses, so the main objective is to keep the business in the family. Therefore, the targets of these organizations are the satisfaction of employees and also the minimization of state unemployment. These objectives have a great impact on a Chinese project manager’s thinking and also on his style of communication with employees. The personality of the project managers is influenced by cultural characteristics of Mianzi culture and Confucianism, with some attributes like morality, the effort prized over ability, the importance of hierarchical relationships and a harmonious style of social relationships. On a large scale, we can consider this a based on trust way to lead and coordinate relationships in a private sector organization.

Trust of Management & the Management of Trust

A specific example where this ‘trust’ type of management concept can apply is the online teamwork projects. Traditionally, trust is assumed to build gradually within teams over time based on an individual’s cognitive assessment of the other person’s behavior. However, the lack of shared social context and limitations of personal interaction and communication among team members in virtual teams decrease the potential for trust. Trust on a collaborative level is more complicated and more pivotal than dyadic trust because the collaborative relationships involve multiple trustees, each with different attributes (Hung-Wei Tseng, 2003).

Trust between teammates can only be built by sharing thoughts, ideas, conclusions, and feelings and having the other group members respond with acceptance, support, and reciprocation of disclosures (Johnson, 2000). Good communication among team members comes with good team spirit, building this ‘all-in-the-family feeling’, and there is a good team performance culture (McShane, 2008).

Communication within the team is crucial for the proper performance of work. Both people from the team and the team leader must possess good communication skills because everyone must be aware of the functions, tasks, and expectations. Besides, when problems arise, and there is no communication between team members and leaders, the task might be jeopardized. A team with high level of trust is more likely to see the spirit of cooperation and information sharing among members (Peters L., 2009), even with the low level of shared expertise. The team leader must be aware of client’s high expectations, communicate and find solutions when these are not realistic or deadlines are hard to reach. He must be flexible, understand the requirements and maintain a close link with the client throughout the project. A proper leadership will successfully fulfill the role of mediator between employees and customers (Schruijer, 2010).

Teamwork is a key element in every business, whether it’s a small business or a multinational company. The productivity of a team depends not only on the level of training of individuals but also on the way it managed and on the efficiency of communication. Thus, tasks will be completed promptly and the results will be as expected. Regarding team cohesion, O’Reilly C. A. (1989) defined this as the attraction to the group, satisfaction with everybody from the group, and social interaction between the group members. The cohesion of a team allows team members to bind together and also communicate more effectively to coordinate their efforts, and enables the group to remain intact and productive in spite of difficulties, which in turn promotes trust (Deutsch M., 2011).

Prof. David Buchanan suggest that the factors that determine group cohesion are: attractiveness of the group, the opportunity to interact with all other members, sharing of common goals, difficulty of entry to the group, status congruence (consensus between group members over hierarchy), equity of reward for members, success of the group, stable membership, external threat to group and also a small size of the group (David Buchanan, 1997).

The Power of Good or the Go (O) D of Power

According to Steve Ellis & Penny Dick (2006), there are many kinds of leadership powers that a project manager can use to coordinate activity and relationships in a private sector organization. The referent power is coming from the leader’s personality characteristics that command identification and respect. Elected power is a power derived from votes of interested parties, such as trade union representatives. Resource power is the power to allow the use of exclusive resources such as land or capital. Legitimate power means the power coming from a formal position in the organization and the authority attached to it. The reward power is the one stemming from the leader’s ability to bestow rewards, financial or otherwise. Coercive power represents the power to punish or recommend punishment. Expert power is resulting from the leader’s knowledge or skill regarding the tasks performed by followers.

Pettinger (1996) describes the way that leadership styles vary from dictatorial, (in which employees have no input into the decision-making process and just told what to do) to democratic (decisions are taken only after full consideration of employee’s views). In-between are consultative (the leader consults those affected by the decision and may modify his or her position before making it), and participative (the leader encourages employees to propose their solutions and work out the implications of what is, in effect, their decision). The key point to recognize here is that none of the styles is universally applicable. The effective leader is one who can operate across the range of styles as is appropriate (Steve Ellis, 2006).

Manager’s behavior strongly influenced by forces coming from its personality and the problems he perceives regarding his expert knowledge and professional experience. A manager who runs a company in a based on power pattern ensures its management position rather by the things he is making than by who he is; he always adapts its behavior to meet the competitive needs of any situation. This leadership model is often used mainly in multicultural organizations since avoids the problem of using a leadership ‘foreign’ (imported) style in a different local and cultural context. This was demonstrated by using this model for a long period over many countries over the world (J.Wilson, 1997).

Managers differ widely regarding confidence they have in employees they lead at some point. Therefore, the answer to a question like ‘who is the best qualified to deal with this problem?’ Can determine a manager, justified or not, to have greater confidence in his skills than in the skills of his subordinates. Some managers feel more comfortable solving problems themselves and giving orders while some feel more comfortable taking on a role in the team, and continuously dividing functions and duties with subordinates.

The manager has the responsibility to identify problems and also to take decisions. However, instead of just announcing the decision, he has to make an extra effort on convincing his subordinates to accept it. By doing so, he accepts that he might face some resistance from those who will have to apply the decision and will seek to reduce this resistance, indicating, for example, what the subordinates have to win this decision. In this case, after taking a decision and struggling for it to be accepted, the manager gives his subordinates the chance to get explanations as clear and complete as possible about what he thought and what he intends to achieve. Accordingly, he invites his subordinates to ask any questions enabling him and them also to obtain a complete image of the implications of his decision.

The initiative of identification and diagnosis of a problem is the manager’s job, who, before meeting his team he had already reached a certain decision, but not a final one, rather an attempt or a try. The message of the manager for his subordinates will be something like this: ‘I would like to hear what you have to say about this plan that I developed myself. Your sincere reactions are welcome, but I reserve the right of taking the final decision’.

The higher the distance to the power the bigger a managers gain in social status. This makes him having a tendency to impose in relations considering the need to provide answers to professional problems. The manager is usually a person with rich consistent and successful professional experience and this role usually taken by an elderly person whose image is no longer nowadays a positive cultural stereotype especially in Western cultures and in especially in the Anglo-Saxon countries where aging is less associated with wisdom and more with decay and degradation. This mentality was surprised very plastic and also very cynical by a journalist in Sunday Times newspaper, in March 2009: ‘The great terror of our age is the age. […] It is clear that fear is not the elderly: is the fact that we will reach it. Elders are zombies at the end of our home horror movies.’


No matter if a manager relies on a power style to maintain relationships to get things done or how, based on trust he makes for an effective social relationships building measure and hence creating successful organizations, based on the preceding, organizations, irrespective of size should Endeavour to also consider the factors that are relevant to job satisfaction and employee performance. Such factors range from achievement through responsibility to security. Employees have multiple needs based on their individual and cultural values. Satisfying these needs will not only lead to job satisfaction but also to life satisfaction bearing in mind that to some extent, a satisfied employee is a happy citizen (Stephen I. Dugguh, 2014). But human relationships are those who, in most cases, lead to success (for all intents and purposes) of a company or its collapse. The environment is also equally important in a company, as a pleasant and relaxing social environment can lead to good results, besides a stressful and tensed one can also bring good results, but predispose to errors. Eventually, the best solution could be finding a balance between maintaining an authoritarian style of relationships and giving trust in employees, in their skills and a good communication between everyone involved in a project.


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