Giving Up Control without Losing Control

Abstract

Because involving lower echelon employees in decision making requires risk on the part of managers, we suggest that certain contextual features must be in place for managers to be more willing to do so. We hypothesize that managers’trust in employees, and two impersonal substitutes for trust—performance information and incentives—will increase managers’ involvement of lower echelon employees in decision making. Managers’involvement of lower echelon employees is further hypothesized to enhance organizational performance. Path analysis of survey data from the automotive industry provides support for the hypotheses.