Silence & Trust

Organizational Trust and Employee Silence Running head: Organizational Trust and Employee Silence

The role of silence on employees’ attitudes “the day after” a merger

Ioannis Nikolaou

Maria Vakola

Athens University of Economics and

Athens University of Economics and

Business

Business

Department of Management Science

Department of Marketing and

and Technology,

Management,

76, Patission Ave., 104 34, Athens,

76, Patission Ave., 104 34, Athens,

Greece

Greece

E-mail: inikol@aueb.gr,

E-mail: mvakola@aueb.gr,

Tel: +302108203449

Tel: +302108203417

Dimitris Bourantas Athens University of Economics and Business Department of Management Science and Technology, 76, Patission Ave., 104 34, Athens, Greece E-mail: dbour@aueb.gr, Tel: +302108203656

Address for Correspondence:

Dr Ioannis Nikolaou Department of Management Science and Technology Athens University of Economics and Business 76, Patission Ave., 104 34, Athens, Greece E-mail: inikol@aueb.gr, Tel: +302108203449

ACCEPTED FOR PUBLICATION IN PERSONNEL REVIEW

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Organizational Trust and Employee Silence About the authors Ioannis Nikolaou is an Assistant Professor in Organizational Behaviour at the Department of Management Science and Technology, Athens University of Economics and Business. His research interests include personnel selection and assessment, applicant and fairness reactions and the role of individual differences (e.g. personality and emotional intelligence) at work. Ioannis Nikolaou is the corresponding author and can be contacted at: inikol@aueb.gr Maria Vakola is a Assistant Professor in HRM at the Department of Marketing and Management, Athens University of Economics and Business. Her research interests include change management, organizational culture and the role of individual differences at work.

Dimitris Bourantas is a Professor in Organizational Behaviour at the Department of Management Science and Technology, Athens University of Economics and Business. His research interests include leadership and leadership development, change management and organizational culture.

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Organizational Trust and Employee Silence The role of silence on employees’ attitudes “the day after” a merger

Abstract Purpose: To explore the role of organizational silence and trust on employees’ attitudes in a post-merger stage.

Design/methodology/approach: The results of two independent studies are presented; participants completed measures of organizational trust, organizational silence and merger attitudes (organizational commitment and employee satisfaction) a few months following the announcement of the merger. Hierarchical regression analyzes were used to explore the hypotheses.

Findings: The results show that organizational trust is negatively related to organizational silence and positively to merger attitudes. Further, the significant role of organizational silence in a post-merger state was also identified through the negative relationships with merger attitudes, but mainly through the significant mediating effect of silence between organizational trust and merger attitudes.

Research limitations/implications: The study used self-report measures, but necessary actions were taken in order to reduce the effect of common method variance. Therefore, it should be cross-validated with different research designs (e.g. longitudinal research) in other countries.

Practical implications: The findings provide further support on the significance of organizational silence in work settings, especially at major organizational turnarounds.

Originality/value: The most significant contribution of the study is that it explores for the first time the role of organizational silence in a post-merger stage and its relationship to organizational trust.

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Organizational Trust and Employee Silence Paper type: Research Paper Keywords: organizational silence, organizational trust, post-merger attitudes, employee satisfaction, organizational commitment.

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Organizational Trust and Employee Silence The role of organizational silence on employees’ trust and attitudes in the aftermath of a merger

Many authors have analyzed the continuing high level of mergers and acquisitions (M&As) and their high failure rate (Cartwright, 2005; Cooper & Gregory, 2001). While there are positive outcomes associates with M&A activity, such as growth and development, some of their disappointing results are associated with the mismanagement of the human side of it (Cartwright & Schoenberg, 2006).

Employees are asked to adapt to some painful new realities which are associated with changing the nature, orientation and character of one or both of the merger partners.

Evidence from the literature shows that although M&As are well planned in terms of strategic, financial and legal aspects, poor results associated with M&A activity are attributed to human factors, especially at a post-merger stage (Buono & Bowditch, 1989).

Mergers increase employees’ uncertainty and stress and, as a result, there is a decrease in satisfaction and commitment, less intention to remain with the organization and lower perceptions of the organization’s trustworthiness (Appelbaum, Gandell, Yortis, Proper & Jobin, 2000; Schweiger & DeNisi, 1991). Within this context, trust in the organization, leadership and supervisor play a very important role in organizational crisis and transformation (Pillai, Schriesheim & Williams, 1999). As Siegel, Brockner and Tyler (1995) suggest, organizational commitment can be preserved during organizational change, if trust is established with employees. Trust in one’s supervisor or leader may play an especially important role not only in attitude formulation but also in the employee’s decision to be involved in a number of

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Organizational Trust and Employee Silence behaviors, such as supporting the change or speaking up at work (Eby et al., 2000; Oreg, 2006; Premeaux & Bedeian, 2003).

Morrison and Milliken (2000) suggest than one of the major obstacles to organizational change is what they describe as organizational silence, which is the employee’s choice to hold back their opinions and concerns about organizational issues. Silence can become an even more serious problem in a post-merger stage where a positive communication climate is needed in order to avoid distrust and suspicion (Appelbaum et al., 2000). In addition, organizational silence may have a negative impact on the process of change since ‘hard’ truths, alternative views, or negative feedback are not easily ‘heard’ or taken into consideration.

A review of the management literature revealed that there are research findings related to somewhat similar concepts, such as the employee’s voice, whistle-blowing or issue-selling, that help us understand why people are encouraged to speak up at work. However, as Morrison and Milliken (2003) indicate «…Each focuses on a somewhat different form of speaking up, and there is little in the way of an overarching framework for integrating the various perspectives. Research on silence within organizations is more recent and more sparse» (p. 1354). Van Dyne, Ang and Botero (2003) claim that, although silence and voice appear to be polar opposites, this is not the case. They suggest that «the key feature that differentiates silence and voice is not the presence or absence of speaking up, but the actor’s motivation to withhold versus express ideas, information, and opinions about work-related improvements» (p. 1360). Similarly, the concepts of issue-selling and whistle-blowing emphasize the motivating power of the employee, whereas silence has more to with the existence of collective phenomena in an organization, such as a climate of silence. Another major difference between silence and especially issue-selling and whistle-blowing is that

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Organizational Trust and Employee Silence these two constructs have focused on explaining why an employee might violate the existing norm of silence and speak about an issue, rather than why such a norm exists in the first place, which is what silence is all about (Morrison & Milliken, 2000).

Many authors suggest that while organizational silence is pervasive in organizations, research in this matter remains limited (Pinder & Harlos, 2001; Van Dyne et al., 2003).

In the current study we explored the post-merger attitudes of employee satisfaction and organizational commitment. These are not only the most commonly explored employee attitudes in organizational behavior research, but they have also been studied in the past as consequences of organizational change (Elias, 2009; Schweiger & DeNisi, 1991), trust (Connell, Ferres & Travaglione, 2003) and employee silence at work (Morrison & Milliken, 2000). Therefore, it is reasonable to explore these variables, as outcomes of our research. Also, from a practical point of view, satisfaction and commitment are two important employee outcomes in a postmerger stage. Employees who remain optimistic, satisfied and committed to their company, following a merger, would be expected to stand by their company’s efforts and actively contribute to organizational success.

Thus, the aim of the current paper is to explore the role of organizational trust and employees’ silence in a post-merger stage. This is an important issue for change management research and practice, since these may influence employees’ attitudes and, as a consequence, their work behavior in the aftermath of a merger. It is expected that the investigation of this topic will assist researchers and practitioners in further understanding the construct of organizational silence, especially during major organizational change interventions, such as a merger. From a theory development perspective, organizational trust and silence may have an important role to play on

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Organizational Trust and Employee Silence merger attitudes. In particular, the latter has not been thoroughly explored in change management literature and the current study can provide some very useful insights about its utility and usefulness. Moreover, the practical implications of the study can also be significant. If employees’ trust and silence are related to their attitudes in a post-merger stage, then organizations should concentrate more on taking the necessary steps to deal effectively with those issues, for example by developing appropriate communication plans and strategies.

Organizational trust Organizational trust is a significant issue for most organizations because, as Kramer (1999) indicated, trust can have a number of significant benefits for the organization and its members. Dirks and Ferrin (2001) defined organizational trust as a psychological state providing a representation of how individuals understand their relationship with another party in situations involving high risk or vulnerability. A merger or an acquisition is widely considered as a high-risk situation. On the other hand, Mayer, Davis and Schoorman (1995 p. 712) defined trust as the “willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party”. Mayer et al. (1995) emphasize trustworthiness as an aggregate of ability, benevolence and integrity. Ability is domain specific, therefore the trustee can be trusted about one topic and not trusted about another; benevolence describes the extent to which the trustee is believed to want to do good to the trustor (p. 718), and integrity involves the trustor’s perception that the trustee adheres to a set of principles that the trustor finds acceptable. These three conditions are especially applicable in a merger. Employees are expected, from top management, to trust them during this endeavour. However, it is more likely for

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Organizational Trust and Employee Silence employees to trust them, if they consider them as ethical, able to handle the merger successfully and also taking employees’ best interests into consideration, along with their own and the company’s best interests.

Organizational trust is a critical success factor in M&As, since it is essential for the successful completion of the integration process (Buono & Bowditch, 1989).

Appelbaum et al. (2000) indicate that, during the post-merger stage, employees face many adjustment problems such as fear of possible job loss, uncertainty about the new manager or the new team members, loss of situational control, etc. Marks and Mirvis (1992) argued that, although mergers cause emotional distress and negative attitudes to some employees, thus negatively affecting their performance, commitment and job satisfaction, there are also employees who have more positive attitudes following a merger (Mishra & Spreitzer, 1998). If employees perceive their organization as competent and capable of dealing with a merger, this may improve the acceptance of the merger itself and have a positive impact on post-merger attitudes.

Three types of organizational trust A number of studies addressed the importance of organizational trust in a change context (e.g. Whitener, Brodt, Korsgaard & Werner, 1998; Rousseau, Sitkin, Burt & Camerer, 1998; Gomez & Rosen, 2001; Galford & Drapeau, 2003). Trust is explored in the current study following Galford and Drapeau’s (2003) categorization about three kinds of trust - which are theoretically equally important - and which employees refer to when they use the word trust. The first kind is based on employees’ perceptions regarding their organization’s competence to cope with external threats, to meet its goals and to manage human resources effectively. The second kind refers to leadership trust where employees perceive their top managers as competent enough to make the right decisions, to allocate resources and

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Organizational Trust and Employee Silence responsibilities and to support organizational success. Finally, the third kind refers to personal trust where employees consider their managers as trustworthy enough in order to manage people fairly and contribute to organizational effectiveness. Galford and Drapeau (2003) argue that although these three types of trust are distinct, they are closely linked. They mention that when an individual manager violates the personal trust of her subordinates their organizational trust is shaken.

Trust in organization Trust in an organization refers to the relationship established between individuals and organizations based on the messages an employee receives regarding organizational expectations and, more importantly, employee perceptions of desired managerial actions (Brockner, Siegel, Daly, Martin & Tyler, 1997). During and/or after organizational change, some employees may feel uncertain about the ability of their organization to meet their expectations or keep its promises. This is particularly the case when an organization is associated with previous record of psychological contract breaches (Robinson & Morrison, 2000). Employees’ perceptions of organizational capabilities and competence in dealing with a merger, that demonstrate efficiency, stability and problem-solving ability, may improve acceptance of the merger and, therefore, have an impact on post-merger attitudes. Therefore, we hypothesize that: H1:

There is a positive association between trust in organization and

employees’ merger attitudes (i.e. organizational commitment and employee satisfaction).

Trust in leadership The success of a change depends on powerful and visionary leadership. Kotter (1996) claims that change always demands strong leadership. He argues that, if

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Organizational Trust and Employee Silence change is needed in a division of a company, the division’s general manager is a key person. The role of top management is considered crucial for the success of the change in the change management literature (Beer & Nohria, 2000). It is also considered crucial for the eventual success of a merger (Cartwright & Cooper, 1993; Appelbaum et al., 2000), since trust in top management can reduce feelings of uncertainty and unfounded fears (Weber & Weber, 2001). Appelbaum et al. (2000) argued that during the post-merger stage employees are in the most desperate need of an effective leader or, more specifically, a leader whose influence is perceived as being highly correlated with high levels of employee satisfaction. Therefore, we hypothesize that: H2:

There is a positive association between trust in leadership (top

management and employees’ merger attitudes (i.e. organizational commitment and employee satisfaction).

Trust in supervision Trust in supervision can affect various aspects of an employee’s work behavior due to the power that the supervisor holds over employee attitudes, as well as due to the proximal nature of the supervisor-subordinate relationship (Pierce, Dunham & Cummings, 1984). Research on the effects of trust on job satisfaction showed that trust in management directly results in increased satisfaction, employee productivity and co-operation (Rich, 1997; Dirks & Ferrin, 2001; Mishra & Morrisey, 1990).

Fedor (1991) suggested that an employee is likely to doubt the accuracy of a supervisor’s feedback, to not take it into consideration and to not expend extra effort to improve performance, if he/she perceives their supervisor as untrustworthy.

Managers also play an important role in influencing an employee’s attitudes towards a merger. Napier, Simmons and Stratton (1989) and Bastien (1987) have

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Organizational Trust and Employee Silence shown that it was the individual manager and how he/she handled the situation that was the major focal point for most employees during a merger. Kanter (1984) also suggests that managers should allow employees to participate, provide a clear picture or vision of the future, share information, demonstrate commitment to the change, tell people exactly what is expected of them and offer positive reinforcement in order to build commitment to change. Therefore, we hypothesize that: H3:

There is a positive association between trust in

supervisors/management and employees’ merger attitudes (i.e. organizational commitment and employee satisfaction) Organizational silence and post-merger attitudes The phenomenon of silence is dominant in the workplace (Pinder & Harlos, 2001; Morrison & Milliken, 2000). When a culture of silence exists, organizational members work in the middle of a paradox where most employees know the truth about certain issues and problems within the organization yet dare not speak that truth to their supervisors (Morrison & Milliken, 2000). Also, employee silence can create stress, cynicism, dissatisfaction and disengagement among employees (Beer & Eisenstat, 2000). Moreover, Van Dyne et al. (2003) explored the reasons behind negative consequences for silent employees and suggested this is true due to the fact that silence is more ambiguous than voice, that observers are more likely to misattribute employee motives for silence than for voice and, finally, silence engenders more incongruent consequences for an employee than voice.

The uncertainty of a major organizational change, such as a merger, may enhance organizational silence and increase employees’ feelings of insecurity and anxiety. Appelbaum et al. (2000) claim that poor communication during a merger may result in reduced productivity and employee absenteeism or turnover.

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Organizational Trust and Employee Silence Organizational silence can lead to lack of feedback, lack of information and lack of analysis of ideas and alternatives and, therefore, the organization will suffer from less effective organizational processes (Morrison & Milliken, 2000). Moreover, organizational silence can result in employees’ feelings of not being valued, employees’ perceived lack of control and employees’ cognitive dissonance. All these factors lead to low commitment and satisfaction (Morrison & Milliken, 2000) and, therefore, have a negative impact on employee’s merger attitudes. Therefore, we hypothesize that: H4:

There is a negative association between organizational silence and

employees’ merger attitudes (i.e. organizational commitment and employee satisfaction).

As mentioned earlier, trust is related with many positive employee behaviors, such as co-operation and performance (Mayer, Davis & Schoorman, 1995). In times of change, employees decide whether to raise an issue to their supervisors or not by «reading the context» for clues regarding context favourability (Dutton, Ashford, O'Neill, Hayes & Wierba, 1997). Previous research suggests that employees weigh these costs against each other when considering whether or not to speak up about issues and concerns (Dutton et al., 1997; Miceli & Near, 1992). When there is a climate of trust, even under unfavourable conditions, such as those in the aftermath of a merger, it is likely that employees might take the initiative to speak up and raise concerns to top management and their supervisors, since they will probably consider the context as favourable. On the contrary, when silence prevails and there is a situation where speaking your mind or the unwanted truth, contradicting the boss, or bearing bad news is perceived as useless or even dangerous, and certainly

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Organizational Trust and Employee Silence unfavourable, levels of trust are low (Buttery & Richter, 2003). Therefore, we hypothesize that: Η5:

Organizational silence mediates the relationship between

organizational trust and employees’ merger attitudes (i.e. organizational commitment and employee satisfaction).

Method Two separate studies are described in the following paragraphs. Study 1 describes the results of the merger of two holding companies operating in the same industry (Information Technology) in Greece. The data collection was carried almost a year after the companies’ boards announced their intention to merge their companies and, six months later, the two merging companies started operating as one company in the Athens Stock Exchange. Each of the merging companies operated a number of small subsidiaries (ranging from eight up to eighty-seven employees), which were also in the process of merging in the new scheme. The results of the study regarding the subsidiaries of these holding companies are presented in study 2. The researchers carried out study 2 while the absorption of the subsidiaries was ongoing, following the announcement of the merger of the holding companies. Despite the fact that the same measures were used in both studies, we have decided to present their results separately, since the two studies were not carried out simultaneously (six months apart). Moreover, due to the large sample size, the possibility of a Type I error was increased and it is also mentioned in the literature as a precaution against common method variance. In both cases, the mergers were completed smoothly, without any immediate job losses or major redundancies, at least until both studies were completed. However, there were increased worries amongst employees regarding their own and the company’s future. Finally, although not mandatory by the law, the

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Organizational Trust and Employee Silence management of the companies held a series of information talks with union representatives, immediately after the announcement of the mergers, in order to reduce fears for job losses or any other breach of the existing employment agreements.

Participants & Procedure The response rate was very high in both studies (above 75%) because employees were asked to participate in an effort to assess and deal with the effects of the merger. Since there were no official voice mechanisms established, employees were encouraged to participate in the survey. The objective of this project underlined the need for anonymity and confidentiality and, as a result, no demographic information was required but only the respondent’s department and position.

Researchers also highlighted the confidentiality and anonymity of the process and remained at the company’s premises in order to supervise the procedure and collect the completed questionnaires.The total number of participants was 327 employees in study 1 and 285 for study 2. They were employed in senior (4.3% in study 1 and 11.6% in study 2) and middle management positions (18.5% in study 1 and 13.2% in study 2), as IT specialists (48.4% in study 1 and 42.2% in study 2), and various other positions (28.8% in study 1 and 33% in study 2); they originated from departments such as technical (26% in study 1 and 39% in study 2), customer services (38.8% in study 1 and 29.5% in study 2), sales (15.7% in study 1 and 9% in study 2), finance (8.6% in study 1 and 7% in study 2), and various other departments (21.2% in study 1 and 26% in study 2).

Measures Organizational Trust: Numerous measures exist in the literature assessing organizational trust. Dietz and den Hartog (2006), in an excellent review of the

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Organizational Trust and Employee Silence existing intra-organizational trust measures, argued that this is probably the result of the continuing dissatisfaction with the existing measures of trust and the different conceptualizations adopted. They identified and analyzed 14 empirical measures of intra-organizational trust. Unfortunately, none of these measures were deemed appropriate for our study, since they did not capture the theoretical model of Galford and Drapeau (2003).

Subsequently, we had to use a new measure specifically developed for the purposes of the current study. The items were developed by the authors, following standard psychometric procedures, as described by Rust & Golombok (1999) and Nunnally and Bernstein (1994). The authors developed an initial pool of 54 items, bearing in mind the Galford and Drapeau (2003) categorization, and the respondents evaluated their trust to organization, leadership and immediate supervisor in three different sections. The participants of the studies were given a series of statements in order to indicate on a 5-point scale whether they agree or not (1=strongly disagree, 5=strongly agree). This was the case for all measures in both studies. A principal component factor analysis with oblimin rotation was carried out for study 1 in order to explore the factor structure of the measure. The factor analysis identified nine factors with eigenvalues above the cut-off point of 1.0 explaining 64% of the total variance.

Subsequently, the scree test was used in order to decide upon the number of the main factors (Kline, 1994), after which five main factors were identified. The subsequent factor analysis requesting five factors, including all 54 items, explained 56% of the total variance. Most items loaded on the first three factors, which allowed us to drop the items of the two smaller factors, keeping only the items with the highest factor loadings on each of the first three factors. The resulting factor analysis, using 16 items in total, explained 67% of the variance, eliciting three factors (five items assessing

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Organizational Trust and Employee Silence trust in organization, five items assessing trust in leadership, and six items assessing trust in supervisor), with acceptable factor loadings and high internal consistency.

Factor loadings ranged between .55 and .84 1 in all three factors with a minimum of .55. The items were summated to create three scales with acceptable internal consistency, namely .83 for trust in organization, .86 for trust in leadership, and .92 for trust in supervisor (.89, .83 and .93 for study 2 respectively). In order to further examine the factor structure of the measure, a confirmatory factor analysis was carried out on the sample of study 2. The perspective results were all within the expected range (χ2/df = 3.02; TLI: .93; NFI: .91; CFI: .94; RMSEA: .08). These fit indexes were considered acceptable, according to the relevant literature, and we decided not to shorten further the measure since this could have jeopardized the quality of the measure, thus leaving out important aspects of the three types of trust.

Organizational Silence: This was measured through a 7-item scale, including two reversed items, summated to create a scale, with response options ranging from 1 (strongly disagree) through to 5 (strongly agree). It was specifically developed by the authors for the purposes of the current study, since at the time the study was initiated there were no organizational silence measures published (e.g. van Dyne et al., 2003).

The instructions asked respondents to indicate their level of agreement with seven items assessing organizational silence at that point of time, since we were interested in employees’ perceptions of organizational silence during the post-merger period. A principal component factor analysis with oblimin rotation was carried out for study 1 in order to explore the factor structure of the measure. The results of the factor analysis yielded one factor with loadings ranging from .60 up to .74, explaining 48% of the variance. In order to further examine the factor structure of the measure, a 1

The results of the factor analyses along with the items of measure are not presented here due to lack of space, but are available from the authors.

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Organizational Trust and Employee Silence confirmatory factor analysis was carried out on the sample of study 2. The results of a CFA confirmed the existence of one dimension, measuring organizational silence (χ2/df = 2.54; TLI: .96; NFI: .97; CFI: .98; RMSEA: .07). The alphas were also at an acceptable level, with .81 and .87 for study 1 and 2 respectively.

Organizational Commitment: This scale consisted of five items, including one reversed item, adapted from a 15-item questionnaire by Porter, Steers, Mowday and Boulian (1974), with response options ranging from 1 (strongly disagree) through to 5 (strongly agree). Following the suggestions of a reviewer, we conducted factor analyses for the commitment scale. The principal component factor analysis with oblimin rotation in study 1 yielded one factor with loadings ranging from .44 up to .84, explaining 55% of the variance. The results of a CFA in study 2 confirmed the existence of one dimension, measuring organizational commitment (χ2/df = 1.30; TLI: .99; NFI: .99; CFI: .99; RMSEA: .073). The five items were summated to create a scale (alphas = .77 & .81 – studies 1 & 2 respectively).

Employee Satisfaction: Employee satisfaction was measured with a 10-item scale assessing 10 different facets of employee satisfaction, adapted from Hackman and Oldham (1980). Response options ranged from 1 (very dissatisfied) to 5 (very satisfied). Similar to the commitment measure, a principal component factor analysis with oblimin rotation in study 1 yielded two factors explaining 58% of the variance.

However, since the second factor included only the three items on financial rewards, we decided to request a one-factor solution in order to keep the original measure intact. The one factor solution explained 43% of the variance with loadings ranging from .46 up to .74. The results of a CFA in study 2 confirmed the existence of one dimension, measuring employee satisfaction (χ2/df = 2.97; TLI: .95; NFI: .95; CFI: .97; RMSEA: .08). The items were summated to create a scale (alphas = .85 & .91 –

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Organizational Trust and Employee Silence studies 1 & 2 respectively). The scales used in the study are available upon request from the authors.

Results Preliminary Analyses Prior to discussing our results, it is important to acknowledge that our decision to use self-report measures raises the possibility of common method variance problems. However, the nature of our constructs requires the use of self-report measures. Nevertheless, follwoing the suggestions made by Podsakoff, MacKenzie, Lee and Podsakoff (2003), we performed a post-hoc factor analysis (Harman’s singlefactor test). An exploratory factor analysis, including all the variables of our study, elicited eight factors in study 1 (seven factors in study 2) with eigenvalues above 1.0, explaining 66% (83% in study 2) of the total variance, where the first factor explained 32% (47% in study 2) of the total variance. While the results of this analysis do not preclude the possibility of common method variance, they do suggest that it is not a likely explanation for the reported findings. Further, we also followed the general factor covariate technique (Podsakoff et al., 2003), partialling out a general factor score, which is often assumed to contain the best approximation of common method variance. We then reanalyzed the relationships between the independent and the dependent variables. After conducting this procedure, we found that both the nature and the significance of the results, as demonstrated in the inter-correlation matrix of Table I, remained unchanged in both studies. The results of these analyses can be obtained by the authors.

Hypothesis testing Table I presents the descriptive statistics and the intercorrelation matrix of all variables for both studies. An examination of the intercorrelation matrix demonstrates

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Organizational Trust and Employee Silence a number of statistically significant correlations for all three types of organizational trust on a post-merger stage, identifying positive correlations between all three types of organizational trust and merger attitudes. Further, the negative correlations between organizational silence and merger attitudes suggest that ‘silent’ employees experience negative feelings in a post-merger stage, resulting in decreased employee satisfaction and organizational commitment.

------------------------------------------------Insert Table I about here ------------------------------------------------Subsequently, we explored the effect of organizational trust on silence and merger attitudes through a series of hierarchical regression analyses, controlling for participants’ position and department. The three types of organizational trust predict a significant percentage of silence’s variance (up to 38% in study 2), whereas, as far as the merger attitudes are concerned, organizational trust accounts for a significant percentage of the total variance, ranging up to 63% of employee satisfaction for study 2, with the exception of organization commitment in study 2, which is independent of organizational trust. The results of the regression analyses (Table II) suggest that the participants of the current studies evaluate as very significant the contribution of organizational trust to both organizational silence and employees’ attitudes, such as organizational commitment and employee satisfaction. The results presented in Table II provide partial support to the first four hypotheses of our study.

-----------------------------------------Insert Table II about here ------------------------------------------

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Organizational Trust and Employee Silence Finally, we explored our last hypothesis regarding the mediating effect of organizational silence. A series of mediated regression analyses as described by Cohen and Cohen (1983) were carried out. There are two requirements that must be satisfied for mediation to be present. First, the independent variable (i.e. organizational trust) must be related to the dependent variables (i.e. employee satisfaction, and organizational commitment). Second, the mediator (i.e. organizational silence) must be related to the dependent variables. Finally, the relationship between the independent variable and the dependent variables must be reduced after adjusting for the effects of the mediator. The percent effect mediated was calculated following Judge, Thoresen, Pucik and Welbourne’s (1999) suggestions by dividing (a) the incremental variance explained by the independent variable after controlling for the mediator by (b) the total variance explained by the independent variables when entered into the regressions alone, and then subtracting this proportion from 1.0. Furthermore, in order to explore whether the drop of the β coefficient is statistically significant, we carried out the Sobel test (Sobel, 1982), following Baron and Kenny’s (1986) guidelines.

-----------------------------------------Insert table III about here

-----------------------------------Table III provides the results of the multiple regression analyses linking organizational silence, organizational trust, and silence and trust combined to the merger attitudes, where one can note that the first two requirements of mediation are clearly satisfied, with one exception. Specifically, when entered into the regression equations alone, the organizational trust variables explained a significant variance of

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Organizational Trust and Employee Silence merger attitudes, in both studies. Similarly, organizational silence, when entered into the regressions alone, explained significant variance in merger attitudes in both studies. Although the first two requirements for mediation were generally satisfied, the last requirement supported the hypothesis of partial, but strong, mediation effects although, in a few cases, full mediation effects were observed. Specifically, in most cases when the effect of the mediator (i.e. organizational silence) is taken into account, the effect of organizational trust on merger attitudes is reduced significantly.

On average, 59% and 68% of the total variance in studies 1 and 2 respectively is due to the effect of organizational silence, suggesting the significant role of this organizational construct. However, two significant issues have to be noted, as well: first, that no suppressor effects were observed, indicating that organizational trust did not explain more variance controlling for organizational silence and, second, due to the large sample sizes, the β coefficients remain statistically significant when silence was controlled, with the exception of trust to leadership on employee satisfaction in study 2, where full mediation exists.

Discussion The current studies investigated the role of organizational trust and organizational silence on employees’ post-merger attitudes. Organizational trust was negatively related to organizational silence and positively to post-merger attitudes.

Further, the significant role of organizational silence in a post-merger state was also identified through the negative relationships with merger attitudes but mainly through the significant mediating effect of silence between organizational trust and merger attitudes.

Organizational trust was dealt with in the current study using a three-type approach, especially applicable in re-structuring and re-organization attempts, such as

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Organizational Trust and Employee Silence a merger; trust in the organization, trust in leadership and trust in supervisor. The results for all three types of organizational trust suggest that it is positively linked with a series of positive employees’ attitudes, in line with earlier findings (Dirks & Ferrin, 2001). In both studies, the effect sizes between organizational trust and merger attitudes were quite strong. These findings were further supported by the results of the multiple regression analyses where, in most cases, a significant percentage of merger attitudes, ranging up to 63% of the total variance, is explained by organizational trust.

The three types of organizational trust did not demonstrate an unequivocal pattern of relationships with merger attitudes across the two studies. In the majority of the cases, trust to leadership displayed the strongest relationships with merger attitudes, especially organizational commitment, suggesting the significant role of top management through organization’s uncertain periods. Apparently, when employees feel that the top management of the company holds the necessary knowledge, skills and abilities to carry through the transition phase successfully, they exhibit more positive post-merger attitudes and commitment to the organization. On the other hand, trust to supervisor displayed its most significant effect on employee satisfaction, emphasizing the important job of first-line supervisor in retaining high employee morale and satisfaction during organizational change.

We believe the most significant contribution of the current research is the identification of the role of organizational silence. Organizational silence was negatively related to the three dimensions of organizational trust, which predicted a strong percentage of silence’s variance, reaching a level of 38% in study 2. It may be suggested then that one of the reasons why employees remain “silent” at work is the lack of trust towards their organization, their top management and their supervision.

The strongest predictor was trust to the organization. One interpretation is that, in the

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Organizational Trust and Employee Silence aftermath of a merger, organizational trust is a significant factor influencing employees’ silent behavior. When employees feel that their organization is trustworthy and able to deal with a difficult situation such as a merger, they tend to demonstrate decreased levels of silent behavior, and this was especially the case for merged companies in study 2.

The last research question concerned the mediating effect of organizational silence. Our analyses show that, when organizational silence is used first to predict the merger attitudes, the effect of the three types of trust is reduced, in some cases, dramatically. The practical implications, if it is confirmed by future studies, will be significant. Organizational silence is related to employees’ attitudes, such as commitment and satisfaction (Morrison & Milliken, 2000). The same applies for organizational trust, as shown in the current study as well. However, if the effect of trust on employees’ attitudes is largely subject to a climate of silence, then organizations should take a further step than simply try to improve organizational image and employees’ communication with top management and supervisors in order to increase employees’ trust. They will have to deal more with issues that lead to a climate of silence, such as organizational structure and policies (e.g. increased centralization of decision making), managerial practices (e.g. management’s fear of negative feedback), implicit managerial beliefs, etc. (Morrison & Milliken, 2000) in order to decrease employees’ resistance to organizational changes. A climate of silence and a lack of communication and consultation can lead to poor morale and job dissatisfaction as employees contemplate the move from the old to the new situation.

Limitations of the study These results, however, cannot be used to provide unequivocal support for the mediating role of organizational silence. For example, all the data were obtained using

24

Organizational Trust and Employee Silence a one-shot questionnaire methodology, and it is often argued that common-method variance rather than causal links may explain some of the relationships identified.

Spector (1987), in a review of shared method variance, concluded that it is largely mythical. He noted that well-developed measures with sound psychometric properties seemed free of this problem. In the present study, organizational commitment and employee satisfaction were taken from previous studies with sound psychometric properties, whereas the remaining measures, specifically developed for the current study, demonstrated acceptable internal consistency and construct/discriminant validity. We also took a number of steps to reduce the effect of common method variance, as described in the results section.

Another limitation of the study is not only the lack of demographic information of our samples but, most importantly, the lack of pre-merger measures of trust, silence, and attitudes. As a result, one can only speculate that the effects of trust on organizational silence and employee attitudes can be positively attributed to the merger. Finally, one last limitation is the use of new measures for a few of our constructs (i.e. trust and silence). These measures were constructed following a rigorous psychometric approach and demonstrated increased levels of reliability and validity. Nevertheless, further research is required on their psychometric properties, across languages and organizational settings.

Implications for practice The result showed that trust in organization, leadership and supervision are positively related to merger attitudes and, as a result, organizations need to develop a climate of ‘trustworthiness’ supported by leaders’ and supervisors’ behavior. More specifically, managers can consider involving employees in organizational processes, such as decision-making or determination of work roles, which was found to

25

Organizational Trust and Employee Silence positively influence the development of trust (Driscoll, 1978). Moreover, it will be important for managers to establish open communication with emphasis on feedback, accurate information, adequate explanation of decisions and open exchange of thoughts and ideas (Butler, 1991).

Some organizational characteristics, which allow the above managerial behaviors to take place, may support the development of trust (Whitener et al., 1998).

First, organizations with a high degree of centralization and formalization will constrain development of trustworthy behavior, such as delegation and open communication. Second, Human Resource Management systems and practices, such as performance appraisal, reward, and control, may support or inhibit the development of trust. Third, organizational culture that shares those values, such as open communication and inclusiveness, will enhance and establish trustworthy behaviors.

Leaders can also start considering trustworthy behavior as a source of competitive advantage. The fact that a lot of organizations are moving to a flat and team-oriented structure shows that there is need to increase trust in all levels in order to be able to make good decisions and be engaged in multidimensional work (Whitener et al., 1998). Barney and Hansen (1994) reported that organizations that successfully attain high levels of managerial trustworthiness should be at a competitive advantage in the marketplace compared to those that do not. Especially during organizational change interventions, as shown in the current study, dealing with organizational trust and silence can provide a significant benefit for organizations.

This study addressed a relatively new topic in organizational behavior and showed that the effects of organizational trust to merger attitudes are partly influenced by organizational silence. Although one may not argue about causal explanations of

26

Organizational Trust and Employee Silence the results, due to the research design adopted, the findings offer a significant insight in understanding the role of organizational trust and silence during organizational change.

27

Organizational Trust and Employee Silence

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Organizational Trust and Employee Silence

Tables Table I

Means, standard deviations and intercorrelations for study variables Mean

SD

Study 1

Mean

SD

1

2

3

4

5

6

Study 2

1. Trust to Organization

15.96

3.83

16.76

4.42

-

.36**

.60**

-.54**

.62**

.64**

2. Trust to Leadership

14.85

3.95

7.91

4.56

.46**

-

.27**

-.34**

.49**

.32**

3. Trust to Supervision

20.39

6.10

21.74

5.89

.45**

.39**

-

-.59**

.60**

.65**

4. Organizational Silence

20.08

5.05

17.03

5.49

-.45** -.38** -.45**

5. Organizational Commitment

15.18

3.64

16.16

4.07

.53**

.61**

.42**

-.47**

-

.68**

6. Employee Satisfaction

26.90

6.59

29.93

8.09

.53**

.51**

.53**

-.54**

.68**

-

-

-.61** -.65**

** p<.01 (two-tailed), * p<.05 (two-tailed) Note. Study 1 results (N=327) are presented below the diagonal; study 2 results (N=285) are above the diagonal

35

Organizational Trust and Employee Silence

Table II

Multiple regression analysis, regressing Organizational Silence, and post-merger attitudes on Organizational Trust.

Study 1 (N=327) Step 1

Step 2

Control Criterion

Study 2 (N=285)

Predictors

R

R2 Change

F Change

β

R

R2 Change

F Change

β

variables Organizational

Department /

Silence

Position

.14* .16

.02

4.45

Trust to Organization Trust to Leadership Trust to Supervision

.58

.31

52.41

-.35 .49

.24

2.88

.10*

.51*

-.28**

-.64*

-.15** -.27**

.79

.38

5.07

-.06 .05

Table continued

36

Organizational Trust and Employee Silence

Organizational

Department /

.00 .04

Commitment

.00

.23

Position Trust to Organization Trust to Leadership

.68

.46

94.25

Trust to Supervision Employee

.17

1.80

-.07

-.37

.28**

.61*

.44**

.66

.26

2.30

.11*

Department / .00

.00

Position Trust to Organization Trust to Leadership Trust to Supervision

.66

.44

.43

.21* .28*

.05 .06

Satisfaction

.13 .41

.44** .40

.16

1.77

-.07

-.44*

.29**

.37*

.29** .26**

.89

.63

15.68

.22* .55*

Note: ** p < .00, * p < .05 “βs” are from the final equation

37

Organizational Trust and Employee Silence

Table III Organizational silence as mediator of the relationship between Organizational Trust and merger attitudes Dependent Variables Predictor

Organizational Commitment (N=327)

Employee Satisfaction (N=285)

Study 1

Study 2

Study 1

Study 2

Organizational Silence a

22%**

37%**

29%**

42%**

β

-.47**

-.61**

-.54**

-.65**

Trust to Organization a

28%**

38%**

28%**

41%**

β

.53**

.62**

.52**

.64**

Trust to Leadership a

37%**

24%**

26%**

10%*

β

.61**

.49**

.51**

.32*

Trust to Supervisor a

17%**

35%**

28%**

43%**

β

.42**

.60**

.53**

.65** Table continued

38

Organizational Trust and Employee Silence

Silence and Trust to Organization a

35%**

49%**

39%**

54%**

Silence (β)

-.29**

-.39**

-.37**

-.43**

Trust to Organization (β)

.40**

.41**

.36**

.41**

ΔR2 (Trust to Organization) a

13%**

12%**

11%**

12%**

% mediated a

54%

69%

61%

71%

Sobel Test

.12**

.13**

.29**

.29**

Silence and Trust to Leadership a

44%**

55%**

40%**

50%**

Silence (β)

-.28**

-.59**

-.40**

-.66**

Trust to Leadership (β)

.50**

.29*

.36**

.10 1

ΔR2 (Trust to Leadership) a

21%**

0.08%*

11%**

0% 1

% mediated a

44%

99%

58%

100%

Sobel Test

.10**

.10**

.25**

.25** Table continued

39

Organizational Trust and Employee Silence

Silence and Trust to Supervisor a

28%**

46%**

39%**

54%**

Silence (β)

-.36**

-.40**

-.38**

-.40**

Trust to Supervisor (β)

.26**

.36**

.36**

.42**

0.05%**

0.09%**

10%**

11%

% mediated a

100%

99%

65%

75%

Sobel Test

.09**

.10**

.18**

.18**

ΔR2 (Trust to Supervisor) a

Note. a R2 values 1

n/s ** p < .00, * p < .05

40