Trickle-down Trust: How TMT Behavior, CEO Leadership, and Firm Ownership Influence Employee Trust

Members in a top management team (TMT) that work closely together, collaborate, and share information openly are referred to in the upper echelon literature as behaviorally integrated. Behavioral integration has been shown to be highly predictive of numerous positive firm outcomes, but has yet to be studied in relation to its multi-level impacts on individual employees. In this study, we integrate macro (upper echelons) and micro (employee trust) theories to create a contingent, trickle-down model of employee trust in the organization. We first argue that TMT behavioral integration positively influences middle manager trust in the organization and then investigate whether CEO authoritarian behaviors and firm ownership jointly alter this relationship. Finally, we examine whether the three-way interaction effect (TMT behavioral integration, CEO authoritarian behaviors, and firm ownership) may trickle-down from middle managers to employees. Supportive results suggest promising future research directions for both macro-level TMT research and micro-level trust research.