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JMP
19,6

Transformational leadership
and shared values: the building
blocks of trust

588

Nicole A. Gillespie
Melbourne Business School, University of Melbourne, Carlton, Victoria, Australia

Leon Mann
School of Behavioural Sciences, University of Melbourne, Victoria, Australia
Keywords Trust, Leadership, Team leaders, Research, Development
Abstract Interpersonal trust is central to sustaining team effectiveness. Whilst leaders play the
primary role in establishing and developing trust, little research has examined the specific
leadership practices which engender trust toward team leaders. This study investigated the
relationship between a set of leadership practices (transformational, transactional, and
consultative) and members trust in their leader, in research and development (R&D) teams.
Usable questionnaires were completed by 83 team members drawn from 33 R&D project teams.
Three factors together predicted 67 per cent of the variance in team members trust towards
leaders, namely: consulting team members when making decisions, communicating a collective
vision, and sharing common values with the leader. Trust in the leader was also strongly associated
with the leaders effectiveness. The implications of these findings for leadership development, team
building and future research are discussed.

Journal of Managerial Psychology

Vol. 19 No. 6, 2004
pp. 588-607
q Emerald Group Publishing Limited
0268-3946
DOI 10.1108/02683940410551507

The central importance of interpersonal trust for sustaining team and organisational
effectiveness is increasingly being recognised (Dirks and Ferrin, 2001). Employees
trust in their leaders has been related to a range of productivity-related processes and
outcomes, such as the quality of communication and problem-solving, discretionary
effort, organisational citizenship behaviour, organisational commitment and the rate of
employee turnover (Dirks and Ferrin, 2002). Trust towards leaders has also been
directly related to team performance (Dirks, 1999, 2000), as well as bottom line
indicators of organisational performance, such as sales levels and net profits (Davis
et al., 2000; Rich, 1997). Trust is also a major contributor to organisational
competitiveness because it cannot be easily imitated or replicated ( Jones and George,
1998). Fairholm (1994) succinctly summarises the importance of trust in leaders,
stating . . . no organisation can take place without interpersonal trust, and no
organisational leader can ignore the powerful element of trust ( p. 98).
Leaders are believed to play the primary role in establishing and developing trust in
teams and organisations (Creed and Miles, 1996; Fairholm, 1994; McAllister, 1995;
Shaw, 1997). Trust in leaders is particularly important for effective functioning in
teams and organizations where tasks are complex and unstructured, and require high
levels of interdependence, cooperation and information sharing (Creed and Miles, 1996;
Zand, 1972). These features are typical of research and development (R&D) teams.
The authors would like to thank two anonymous reviewers for their helpful comments and
suggestions on this paper.

R&D work involves considerable interdependence between team members who bring
diverse and highly specialised knowledge and skills to the team. The success of these
teams requires high levels of cooperation and collaboration between team members
and with the leader. Team members often have more up-to-date knowledge than their
leaders, and the teams rely on members to share novel scientific ideas openly and
provide honest feedback on each others work to produce innovative products
and processes. The team leader typically plays a vital role in managing the team and
project, negotiating adequate resources and sponsorship for the team, and representing
its work to higher levels of the organisation.
This study focuses on the question of how R&D project leaders earn the trust of
their team members. Specifically, this study examines the relationship between a broad
set of leadership practices and members trust in their team leaders. To date, no
research has examined this relationship in the context of R&D teams. Podsakoff et al.
(1990) highlight the need to examine how a wide range of leadership practices impact
on followers trust. This study examines the relationship between transformational,
transactional, consultative, active-corrective, and passive-avoidant leadership
practices, and followers trust in the leader. In addition to these leadership practices,
this study also examines how shared values between leaders and team members relate
to team members trust in the leader.
The following section describes the definition and conceptualisation of trust used in
this study. Then the theory and research relating each of the leadership practices, as
well as shared leader-member values, to team members trust in the leader is discussed,
and hypotheses are posed.
Conceptualisation and measurement of trust
Rousseau et al. (1998) note growing convergence around the following definition of
trust: Trust is a psychological state comprising the intention to accept vulnerability
based upon positive expectations of the intentions or behaviour of another (p. 395).
This definition draws heavily on the work of Mayer et al. (1995).
Trust is a complex multidimensional construct (Mayer et al., 1995; Rousseau et al.,
1998). Theoretical and empirical work suggests that trust has cognitive, affective, and
behavioural bases (Clark and Payne, 1997; Cummings and Bromiley, 1996; McAllister,
1995). Cognitive trust refers to beliefs about anothers trustworthiness, whilst affective
trust refers to the important role of emotions in the trust process. Recent research
identifies two common forms of behavioural trust in teams, namely: relying on another
and disclosing sensitive information to another (Gillespie, 2003).
Podsakoff et al. (1990) identified the need for future research on leadership and trust
to employ a comprehensive measure of trust. Indeed, it is important for leaders to act in
ways that not only build followers beliefs about the leaders trustworthiness, but also
build followers behavioural and emotional trust towards the leader. Till date, no
studies have examined the relationship between leadership and trust, using a
comprehensive measure inclusive of these multiple components of trust. The measure
of trust used in this study assessed the multiple components of trust.
Transformational leadership and trust
Research on leadership in the past decade has focused on the transformational theory
of leadership, which is arguably the dominant model of effective leadership (House and

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590

Shamir, 1993). Transformational leaders motivate their followers to perform beyond

expectations by making them more aware of the importance and value of goals,
inducing them to transcend self-interest for the good of the group/organisation, and
appealing to followers higher order needs (Bass, 1985). Whilst theories of
transformational leadership differ in some of the specific leadership behaviours they
identify, all theories posit trust as a central feature of the relationship such leaders have
with their followers, and postulate that it is through followers trust and respect in their
leader that they are motivated to perform beyond expectations (Bennis and Nanus,
1985; Conger and Kanungo, 1987; House, 1977; Podsakoff et al., 1990; Sashkin, 1988;
Shamir et al., 1994; Yukl, 1989).
In a recent meta-analysis on trust and leadership, Dirks and Ferrin (2002) report that
the transformational leadership is strongly predictive of trust[1]. However, empirical
work on the relationship between specific transformational leadership behaviours and
trust in the leader shows mixed and inconsistent findings. The findings suggest that
some transformational leadership practices, such as providing an appropriate model,
individualised support, and fostering acceptance of group goals, are consistently
positively associated with trust in the leader (Butler et al., 1999; MacKenzie et al., 2001;
Podsakoff et al., 1996, 1990). However, mixed results have been found for other
transformational practices, such as articulating a vision, setting high expectations, and
stimulating new ways of thinking. For example, in a study of managers and
professionals, Podsakoff et al. (1996) report that these three behaviours have no
significant association with trust. However, in a study of salespeople, Podsakoff et al.
(1990) report that high performance expectations and intellectual stimulation have a
negative impact on trust. In contrast to these studies by Podsakoff and his colleagues,
Butler et al. (1999) report that all six of these transformational leadership practices
have a positive impact on trust in the leader, in self-directed work teams.
Studies using related measures of charismatic leadership behaviour also yield
inconsistent findings. For example, in a study of managers, Conger et al. (2000) found
that only one charismatic leadership behaviour (sensitivity to the environment)
predicted trust in the leader, whereas other behaviours, such as articulating a vision
and sensitivity to member needs (similar to individualised support), had no effect. In a
study of military units, Shamir et al. (1998) found that supportive leadership and
emphasizing a collective identity were associated with identification and trust in the
leader, whilst emphasizing collective values and mission, and demonstrating
commitment to values and goals, had only low correlations.
Overall, these studies show mixed findings for the relationship between specific
transformational leadership practices and trust. The fact that four of the studies
showing inconsistent findings used the same leadership measure and similar methods
(Butler et al., 1999; MacKenzie et al., 2001; Podsakoff et al., 1996, 1990), suggests that
the impact of specific leadership behaviours on followers trust in the leader may be
sample or setting specific. This paper does not aim to resolve the inconsistent findings
reported in earlier studies. Rather, this paper aims to examine which leadership
practices are predictive of followers trust in the leader, in the context of R&D teams.
To date, only one study (Butler et al., 1999) has examined the relationship between
transformational leadership practices and trust in the leader, in the context of teams.
The current study focuses on the theory of transformational leadership developed
by Bass (1985) and colleagues. This model is assessed through the multifactor

leadership questionnaire (MLQ; Bass and Avolio, 1995, 1997), which is the most widely
used and researched instrument to measure transformational leadership (Conger and
Hunt, 1999). The MLQ measures four transformational leadership practices, namely:
idealised influence (communicating important values and a shared sense of purpose),
inspirational motivation (confidently communicating a compelling vision and goals),
individualised consideration (treating followers as individuals and supporting their
development), and intellectual stimulation (challenging old ways of thinking and
encouraging different perspectives). The MLQ also measures attributed charisma
(followers attributions of pride, respect and confidence in the leader).
In the context of R&D teams, it is expected that the team leaders use of each of these
transformational leadership practices will be positively associated with team members
trust in the leader. By communicating and role-modelling important values and a shared
sense of purpose (i.e. idealised influence), team leaders demonstrate their integrity,
competence, and hence trustworthiness. By confidently communicating attractive and
attainable goals for the team (i.e. inspirational motivation), leaders motivate and focus
team members efforts on a set of shared goals, which in turn facilitate trust (Bennis and
Nanus, 1985; Fairholm, 1994; Sashkin and Fulmer, 1988). The alignment of leaders
and team members goals helps team members to predict their leaders future behaviour
and suggests that the leader will act in mutually beneficial ways.
By communicating their willingness to understand the individual needs and
capabilities of followers, and to put effort into developing their individual strengths
and serving their needs (i.e. individualised consideration), the leader demonstrates that
they value and care about their team members, and hence, can be trusted (Conger et al.,
2000; Fairholm, 1994; Jung and Avolio, 2000). As Bass (1985) notes, the more
supportive leaders are perceived to be, the deeper and more enduring their followers
trust in them. In the context of R&D teams, leaders who encourage and teach their
team members to approach problems in new ways and critically re-examine
assumptions (i.e. intellectual stimulation), are essentially coaching and developing
their members. Such behaviour reinforces the leaders commitment to the development
of their team members, as well as to rigorous scientific thinking in the team, and hence
will build trust. Finally, when leaders act in ways that build the respect, pride and
confidence of their team members (i.e. attributed charisma), they will be trusted. The
following hypothesis is made:
H1a. In R&D teams, members perceptions of their leaders idealised influence,
inspirational motivation, individualised consideration, intellectual
stimulation, and attributed charisma, will be positively associated with
members trust towards the leader.
Transactional leadership and trust
Transactional leadership, also known as contingent reward, is based on the leader
providing assistance and rewards that meet followers needs contingent on the
followers performance. In contrast to transformational leadership, transactional
leadership is not believed to require a high level of trust between leaders and followers
(Bass, 1985; Jung and Avolio, 2000). Jung and Avolio (2000) argue that transactional
leadership, including contingent reward, is inadequate for building the level of trust
to achieve the full potential of a workforce. Rather, intellectually stimulating,

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592

developmentally oriented, inspirational, and therefore transformational modes of

leadership, are required to achieve high levels of follower trust. Podsakoff et al. (1990)
and Pillai et al. (1999) provide empirical support for this view, reporting that
transactional leadership does not influence trust.
In contrast to this position, Shamir (1995) argues that consistent honouring of
transactional agreements characterised by contingent reward, can build team
members trust in their leaders. In support of this view, Butler et al. (1999), Jung and
Avolio (2000) and MacKenzie et al. (2001) report a significant empirical relationship
between transactional leadership and trust. In their meta-analysis, Dirks and Ferrin
(2002) also report a moderate to strong association between transactional leadership
and trust in the leader[1]. Hence, there are competing theories and mixed findings
about the effect of transactional leadership on followers trust.
In the context of R&D teams, the leaders use of contingent reward is expected to
build team members trust towards the leader. By clarifying role responsibilities for
meeting objectives and providing rewards when objectives are met, the leader
facilitates the teams achievement of goals, and hence will be seen as competent. Such
behaviour also demonstrates the leaders commitment to providing rewards as
promised when expectations are met and to treating followers in a consistent and fair
manner.
H1b. In R&D teams, members perceptions of their leaders use of contingent
reward will be positively associated with their trust towards the leader.
Consultative leadership and trust
Podsakoff et al. (1990) suggest that followers trust in their leader may be most
influenced by the leaders consultation and consideration of the interests and welfare of
their followers when making important decisions. This consultative leadership style is
likely to build trust as it provides an opportunity for followers to voice their opinions,
needs and concerns, and have greater influence and control over their work
environment. This in turn acts to reduce their feelings of risk and uncertainty.
Consultative leadership also communicates that the leader respects and values team
members views and input. Korsgaard et al. (1995) provide empirical support for the
relationship between consultative leadership and trust in the leader. In an experimental
design involving 20 intact management teams, these authors found that members
trust in the leader increased if the leader considered the members input, but decreased
if their input was not considered. On the basis of this theory and research, the following
hypothesis is made:
H1c. In R&D teams, members perceptions of their leaders use of consultative
leadership will be positively associated with their trust towards the leader.
Corrective, passive and avoidant leadership and trust
While it is important to understand which leadership practices contribute to trust, it is
also informative to understand common leadership practices that may adversely affect
trust. In their full range leadership model, Bass and Avolio (1997) identified three
ineffective leadership styles characterised by active corrective leadership (e.g. leading
by monitoring and focusing on mistakes), passive corrective leadership (e.g. waiting

for things to go wrong before intervening), and laissez-faire leadership (e.g. avoiding
getting involved when important issues arise).
The impact of active corrective leadership on trust may depend on the
organisational context. For example, in industries where adherence to rules has little
relationship with success and goal achievement, such corrective behaviour may be
perceived as micro-management, a threat to the confidence and self-esteem of
followers, and a source of frustration. In these contexts, active corrective leadership is
likely to diminish trust. However, in industries where close attention and adherence to
procedures, rules, and regulations on the job is necessary for success or the avoidance
of negative consequences (e.g. scientific organisations, chemical plants, nuclear plants,
armed forces, etc.), leaders will be expected to vigilantly pay attention to monitoring
and correcting deviations and mistakes. Hence, in this environment, such behaviour is
unlikely to undermine trust.
In the context of scientists working in R&D teams, where following rigorous
research methodology, checking and double checking results, and adhering to
established standards is necessary to produce good work, active corrective leadership
is not expected to be associated with trust in the leader. On the one hand, team
members may feel more willing to trust a leader who they know pays attention to
ensuring all scientific work is completed to the required standards. On the other hand,
team members may be hesitant to trust a critical leader who they perceive to be overly
focused on the negatives. Hence, no overall association is expected between active
corrective leadership and trust in the leader, in the context of R&D work.
H2a. In R&D teams, members perceptions of their leaders use of active corrective
leadership will not be associated with their trust in the leader.
Through their avoidance of taking an active leadership role, passive and avoidant
leaders lose the opportunity to build the trust of their followers, or if a level of trust
already exists, such behaviour is likely to undermine that trust with time. Such
behaviour sends the signal that the leader is not reliable or competent, and is not
actively committed to facilitating or achieving the teams goals.
H2b. In R&D teams, members perceptions of their leaders use of Laissez-faire and
passive corrective leadership will be negatively associated with their trust in
the leader.
Shared values and trust
In a review of the literature on trust within organisations, Bigley and Pearce (1998)
recommend that researchers examine a range of trust determinants within the same
study, and identify whether some determinants are substitutes for others. Several
scholars have pointed to the important role that shared values play in establishing high
levels of trust. Lewicki et al. (1998) suggest that a determining characteristic of high
trust relationships is the extent to which both parties identify with each others values.
Jones and George (1998) argue that shared values are the primary vehicle through
which people experience the highest form of trust, unconditional trust. Barber (1983)
further suggests a reciprocal process between shared values and trust, with shared
values helping to create a relationship built on trust, and trust serving to maintain and
express those shared values.

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shared values

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Although several scholars have proposed that shared values play an important role
in building trust between leaders and followers, there has been little empirical work
testing this relationship. This study provides an opportunity to test and compare the
effects of shared values and a range of leadership practices on followers trust in their
leaders.

594

H3. The extent to which team members perceive they share common values with
their leader will be positively associated with their trust in the leader.
The impact of trust on leader effectiveness
A secondary aim of this study was to examine the relationship between trust in the
team leader and the leaders effectiveness in R&D teams. In line with theory and
empirical research indicating that trust enhances cooperation, openness of
communication, and commitment in relationships (for a review of this literature see
Dirks and Ferrin, 2001) and is an important predictor of the general effectiveness of the
relationship (Gomez and Rosen, 2001; Graen and Uhl-Bien, 1995; McAllister, 1995;
Robinson, 1996), it was expected that team members trust in their leader would be
positively associated with their perceptions of the leaders effectiveness, their
satisfaction with the leader, and the effectiveness of their relationship with the leader.
In a recent meta-analysis, Dirks and Ferrin (2002) report that trust in the leader is
associated with the discretionary effort employees put into their work. In the current
study, this association was tested in the context of R&D teams. Specifically, the
following hypothesis was made.
H4. Team members trust in their leader will be positively associated with their
ratings of the extra effort they put into their work, the leaders effectiveness,
satisfaction with the leader, and the effectiveness of the leader-member
relationship.
In summary, this study contributes to the literature by examining the relationship
between team members trust in their leader, and a broad range of leadership practices,
namely: transformational practices (idealised influence, inspirational motivation,
individualised support, intellectual stimulation, and attributed charisma), consultative
leadership, contingent reward, active corrective leadership, and passive-avoidant
leadership, as well as common values between leaders and members. These
relationships are examined in the context of R&D teams. A comprehensive measure of
trust, encompassing team members cognitive, affective, and behavioural trust in their
leader is used.
Methodology
Data collection and selection of participants
Project teams in a large, public R&D organisation based in Australia were studied. At
the time of data collection, the organisation was undergoing significant government
funding cuts and downsizing. Data were collected from 33 teams across two divisions.
Teams ranged in size from 2 to 15 members, with a median of six members. The project
leader and two team members (randomly chosen), completed a questionnaire assessing
leadership and trust. The two team members were randomly labelled team member 1
(TM1) and team member 2 (TM2). Only team members who had been working in

the team for a minimum of three months and reported directly to the leader were
selected. Thirty-three team leaders, 33 TM1, and 32 TM2 returned the questionnaire. In
one division, questionnaires were administered to all team members. This resulted in
an additional 20 questionnaires from nine teams. In sum, completed questionnaires
were received from 33 team leaders and 85 team members. Only the demographic data
collected from team leaders are described in this paper.

Leadership and
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595
Sample demographics
The mean age of team members and team leaders was 40 and 46 years, respectively.
Thirty-five per cent of team members and 22 per cent of leaders were female. On
average, team members had been employed by the organisation for 10.5 years, and
leaders for 14.5 years. Team leaders typically had seven years experience in the role of
managing a team, and on average team members had worked directly with the leader
for four years. Team members typically spent just over four hours a week in
face-to-face contact with their leader and 85 per cent of dyads reported working in an
interdependent fashion.
Questionnaire measures
Trust
Cognitive trust. A short-form of the conditions of trust inventory (CTI; Butler, 1991),
was used to measure team members cognitive-based trust in their leader. The original
44-item CTI assesses whether the target person is judged to be trustworthy on the
following ten conditions; competence, integrity, promise fulfilment, reliability, loyalty,
consistency, discreetness, fairness, openness and availability. The short-form of the
CTI comprised the 11 items with the highest factor loading for the respective trust
condition, that were appropriate for rating leaders and team members. These are items
4, 5, 9, 15, 20, 22, 25, 29, 35, 40, 42 from the original CTI. An example item is: To what
extent do you agree that your leader . . . does things that he/she promises to do for you.
The items were rated on a five-point scale (1 strongly disagree, 5 strongly agree,
a 0.94). The validity of the original CTI has been demonstrated (Butler, 1991). In a
study of 236 team members drawn from 88 R&D teams, Gillespie (2004) reports
evidence of the convergent, divergent and construct validity of the CTI short-form, as
well as its unidimensional factor structure.
Affective trust. This four-item scale, derived from McAllister (1995) and 15 pilot
interviews, measures team members affective bonds with the leader. An example item
is I feel comfortable depending on my leader. A five-point scale was used
(1 strongly disagree, 5 strongly agree, a 0.88).
Behavioural trust. This six-item scale measured the extent to which team members
trust their leader professionally, by relying on the leaders skills and judgements, and
personally by sharing their beliefs, feelings and personal information with the leader.
The scale was constructed on the basis of Zands (1972) reciprocal model of trust and
from content analysis of 15 pilot interviews. Two example items are: To what extent
do you trust your leader in regards to . . . Relying on his/her task-related skills and
abilities? Sharing your personal beliefs? A seven-point scale was used (1 no trust,
7 complete trust). The alpha reliability for the six item scale was a 0.89 (with
a 0.84 for the professional trust factor, and a 0.92 for the personal trust factor).

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Overall trust. The following item was used to capture team members overall trust
towards the leader, How would you rate your overall trust in your project leader?
A seven-point scale was used (1 no trust, 7 complete trust).
Leadership
The multifactor leadership questionnaire (MLQ (Form 5X); Bass and Avolio, 1995).
The MLQ measures nine leadership dimensions, comprising five transformational
leadership scales (inspirational motivation, idealised influence, individualised
consideration, intellectual stimulation, attributed charisma); contingent reward; two
corrective leadership scales (active and passive management by exception), and an
avoidant leadership scale (Laissez-faire). The questionnaire uses a five-point scale
(0 not at all, 4 frequently=always). Table I describes each leadership scale and
provides example items. Bass and Avolio (1997) report evidence of the convergent and
discriminant validity of the MLQ scales. The reliabilities for these leadership scales
range from a 0:73 to 0.91 (Bass and Avolio, 1997).
Leadership scale

Description

Transformational leadership practices

Attributed charisma
Followers attributions of pride,
respect, and confidence in the
leader
Idealised influence
Communicating and modeling
important values and a shared
purpose
Inspirational motivation
Confidently communicating a
compelling vision and goals
Intellectual stimulation
Questioning of old ways of
doing and thinking
Individualised
consideration
Transactional leadership
Contingent reward

Treating followers in an
equitable but individual
manner and encouraging their
development
Facilitating the achievement of
agreed upon objectives and
appropriate rewards

Ineffective leadership practices

Corrective (active)
Management by monitoring
and focusing on mistakes
Corrective (passive)
Laissez-faire

Table I.
Description of the
leadership scales

Consultative leadership
Consultative leadership

Example item
Acts in ways that builds my
respect
Considers the moral and ethical
consequences of decisions
Talks enthusiastically about
what needs to be accomplished
Re-examines critical assumptions
to question whether they are
appropriate
Considers me as having different
needs, abilities and aspirations
from others
Discusses in specific terms who
is responsible for achieving
performance targets

Intervenes only when things go

wrong
Absence of leadership and
avoidance of intervention

Focuses attention on
irregularities, mistakes,
exceptions, and deviations from
standards
Fails to interfere until problems
become serious
Avoids getting involved when
important issues arise

Consulting and considering

team members input in
leadership

Consulting team members before

making important decisions that
affect them

Consultative leadership. This three-item scale was based on Yukl (1998)

and assesses how well the leader consults team members, considers their input, and
uses their suggestions before making important decisions. A seven-point scale was
used (1 not at all well, 7 extremely well, a 0.88). See Table I for an example
item.
Leadership outcomes. Three scales from the MLQ (Bass and Avolio, 1995) measure
satisfaction with the leader, the effectiveness of the leader, and the extra effort team
members put into their work due to the motivating influence of their leader. The
reliabilities for these scales range from a 0.77 to 0.84 (Bass and Avolio, 1997). The
following item was also included, How effective is your working relationship with
your leader? This item is reported to be the single best measure of the quality of
leader-member exchange (Graen and Uhl-Bien, 1995). It uses a seven-point scale
(1 extremely ineffective, 7 extremely effective).
Common values
Two items measured the extent to which team members share common values with
their leader and identify with their leaders values. An example item is, To what
extent do you share common values with your leader? A seven-point scale was used
(1 to a very small extent, 7 to a very great extent, a 0.78).
Results
Levels of trust and transformational leadership
On average team members had high to very high overall trust in their leaders
(M 4:7; SD 0:90; 1-7 scale). However 10 per cent of team members reported little
or no trust. The means for the different components of trust indicated that, on
average, leaders were trustworthy (cognitive trust, M 4:2; SD 0:75; 1-5 scale), and
members had positive feelings towards their leader (affective trust, M 3:9;
SD 0:73; 1-5 scale). Team members were able to rely on their leaders skills and
judgments (professional behavioural trust, M 5:3; SD 1:1; 1-7 scale) and share
their personal thoughts and beliefs with their leader (personal behavioural trust,
M 4:6; SD 1:4; 1-7 scale). Team members reported significantly higher
professional trust in their leaders, than personal trust [t81 5:91; p , 0.01].
As expected, the cognitive, affective, and behavioural measures of trust were
inter-correlated with correlations ranging from r 0:68 to 0.80 ( p , 0.01). The overall
trust item also correlated with each of these measures, ranging from r 0:70 to 0.81
( p , 0.01). An aggregate index of all three components of trust (labeled global trust)
was computed a 0:94: Table II displays the means and standard deviations for
team members ratings of trust in their leader using this global trust scale, as well as
their ratings of the leaders performance of the leadership practices, the extent of
common values, and the outcomes of leadership.
The means for the MLQ scales were similar to the normative data reported by Bass
and Avolio (1997), indicating that team leaders were about average in their use of
transformational, transactional, corrective, passive and laissez-faire leadership
practices, and in their effectiveness. Leaders were perceived to consult well with
their followers, and team members reported having common values with their leader to
a moderate-high extent.

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Table II.
Means, standard
deviations, and
correlations between the
trust, leadership, common
values, and leadership
outcome variables
(N 83)
2

10

11

12

0.90
1.00
0.61
0.66
1.00
0.72
0.66
0.84
1.00
0.82
0.48
0.85
0.72
1.00
0.80
0.52
0.76
0.49
0.61
1.00
0.75
0.59
0.80
0.65
0.56
0.46
1.00
0.72
0.41
0.76
0.54
0.50
0.46
0.56
1.00
0.76
0.55
0.76
0.60
0.59
0.61
0.71
0.53
1.00
1.3
0.69
0.67
0.61
0.52
0.39
0.63
0.56
0.63
1.00
1.0
0.73
0.69
0.68
0.55
0.46
0.68
0.40
0.50
0.55
1.00
0.83 20.03
0.02
0.06 20.02
0.06 20.10
0.06
0.16
0.05 20.14
1.00
0.83 20.39 2 0.46 2 0.38 20.42 20.26 20.39 20.42 20.30 20.35 20.42
0.20
1.00
0.72 20.53 2 0.50 2 0.45 20.48 20.21 20.45 20.45 20.40 20.47 20.39
0.15
0.65
0.93
0.63
0.73
0.68
0.62
0.45
0.62
0.58
0.58
0.70
0.69
0.08 2 0.39
0.78
0.73
0.70
0.70
0.59
0.43
0.63
0.49
0.59
0.77
0.70 20.19 2 0.41
0.99
0.76
0.70
0.68
0.59
0.41
0.64
0.52
0.58
0.74
0.75 20.20 2 0.48
1.3
0.65
0.68
0.70
0.58
0.38
0.61
0.47
0.53
0.63
0.69 20.09 2 0.42

1.00
2 0.46
2 0.52
2 0.59
2 0.51

13

15

16

17

1.00
0.73 1.00
0.75 0.83 1.00
0.66 0.74 0.77 1.00

14

Notes: Correlations above r 0.19 are significant to p , 0.05, and correlations above r 0.25 are significant to p , 0.01 (one-tail); aIndicates
transformed variables were used. Means and SDs of the untransformed variables are reported, and the true direction of the associations between
untransformed variables

4.71
2.46
2.50
2.75
2.15
2.50
2.40
2.37
5.42
4.54
1.40
1.17
0.89
2.48
2.96
3.00
5.46

SD

598

1. Global trusta
2. Transformational total
3. Attributed charisma
4. Inspirational motivation
5. Idealised influence
6. Individual consideration
7. Intellectual stimulation
8. Contingent Reward
9. Consultativea
10. Common values
11. Corrective active
12. Corrective passive
13. Laissez-faire
14. Extra effort
15. Leader effectiveness
16. Leader satisfaction
17. Effectiveness of r/s

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Data cleaning
All variables were screened for outliers and normality before correlations were
computed. The measures for global trust and consultative leadership were moderately
negatively skewed. These measures were transformed using the formula NEWX
SQRTk 2 X; where k is the largest value for the variable (Tabachnick and Fidell,
1996). Two cases had values that were identified as outliers, and therefore, were
omitted from further analyses.
Correlations between the leadership practices and trust in the leader
Correlations were computed between the leadership practices and trust using three
rater groups viz; TM1s ratings N 32 TM2s ratings N 31; and all team
members ratings N 83: With few exceptions[2], the strength and significance of
the correlations was similar across the different rating groups. Hence, all subsequent
analyses were based on the sample of 83 team member ratings to maximise the
statistical power of the analyses. Table II displays the correlations between team
members ratings of trust in their leader, the leaders performance of the leadership
practices and the outcomes of leadership N 83:.
In support of H1, the correlations indicate that each of the transformational,
contingent reward, and consultative leadership practices were positively correlated
with team members trust in their leader. Consultative leadership had the strongest
association with trust r 0:69; followed by attributed charisma r 0:66 and
individual consideration r 0:59: A Fishers Z-test showed that the association
between intellectual stimulation and global trust in the leader r 0:41 was
significantly lower than the correlation between the mean of the other four
transformational leadership practices and trust (r 0:68; Z1 2 Z2 20:39; p , 0.05).
H2 was also supported. Passive corrective and laissez-faire leadership had negative
relationships with trust (r 20:53 and 2 0.39, respectively), whereas active corrective
leadership had no relationship with trust in the leader r 20:03: There was strong
support for H3. Sharing common values with the project leader had a strong
association with trust in the leader r 0:73:
In support of H4, trust in the leader was found to be strongly positively related to
ratings of satisfaction with, and the effectiveness of, the leader (r 0:76 and 0.73,
respectively), the extra effort team members put into their work r 0:63; and the
effectiveness of the leader-follower relationship r 0:65:
Identifying the strongest predictors of trust in the leader
The correlations show that each of the transformational leadership practices, as well
contingent reward, consultative leadership, and common values, have significant,
positive associations with team members trust in the leader. An interesting question to
explore is What is the best set of factors for predicting team members trust towards
their leaders? To answer this question, a standard multiple regression was computed.
This analysis was exploratory in nature, with no hypotheses posed.
An examination of the inter-correlations between the predictor variables (Table II)
revealed high correlations exceeding r 0:70 between two pairs of leadership
variables, namely between contingent reward and individual consideration (r 0:71;
p , 0.01), and between inspirational motivation and charisma (r 0:72; p , 0.01). As
the aim of multiple regression is to produce the most parsimonious and predictive

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model with the least number of predictor variables (Tabachnick and Fidell, 1996), the
variable in each of these pairs with the lower correlation with global trust, namely
contingent reward r 0:55 and inspirational motivation r 0:48; were excluded
from the analysis[3]. As the purpose of the analysis was to identify effective practices
that were conducive to building trust (as opposed to ineffective practices), the
laissez-faire and corrective leadership practices were not included. This produced a
final set of six predictors[4].
Accordingly, a standard multiple regression was performed between global trust in
the leader as the dependent variable, and attributed charisma, idealised influence,
individual consideration, intellectual stimulation, consultative leadership, and common
values, as the predictor variables. The backwards method for entering variables was
used. This method enters all variables into the equation, then successively drops
variables with the smallest partial correlations. The process stops when a noticeable
change from the full equations multiple R 2 is noted. An advantage of this method is
that it enables a clear identification of the proportion of variance accounted for by the
final set of predictors.
Table III displays the unstandardised regression coefficients (B) and intercept, the
standardised regression coefficients (b), the semi-partial correlations (sr 2), R 2 and
adjusted R 2. R for regression was significantly different from zero, F(3, 76) 54.89,
p , 0.001. Only three of the independent variables contributed significantly to the
prediction of team members trust in their leader; common values sr 2i 0:27;
consultative leadership sr 2i 0:25 and idealised influence sr2i 0:08: These three
variables in combination contributed another 7 per cent in shared variability.
Altogether, 68 per cent (67 per cent adjusted) of the variability in trust towards the
leader was predicted by the variables. There was no significant difference in R 2 from
the initial six predictor regression model to the final three predictor model
(R 2 difference 0.012, p . 0.05), indicating that the other factors did not contribute to
the prediction of trust once common values, consultative leadership and idealised
influence had been entered.
Variables
Common values
Consultative leadershipa
Idealised influence
Attribute charisma
Intellectual stimulation
Individual consideration

Table III.
Regression statistics for
transformational
leadership practices,
consultative leadership,
and common values
predicting team
members trust in their
project leader (N 83)

sr 2 (unique)

0.113**
0.287**
0.061*
0.043
0.040
0.018

0.434
0.389
0.184
0.122
0.110
0.052

0.27
0.25
0.08
0.02
0.02
0.00
Intercept 1.68
R 2 0.68b
Adjusted R 2 0.67
R 0.83**

Notes: All statistics are based on the final model with three predictors, with the exception of the
statistics for the three non-significant predictors. These are based on the initial six predictor model;
Indicates transformed variables were used. The true direction of the associations between
untransformed variables is reported; bunique variability=0.60; shared variability=0.07; *p, 0.05;
**p , 0.01

To test for the potential confound of same-source bias in ratings of leadership practices
and trust in the leader, TM1s rating of the leaders leadership practices was correlated
with TM2s trust in the same leader n 31: A similar pattern of significant
relationships between trust in the leader and the six predictor variables emerged,
although the relationships were not as strong, with correlations ranging from r 0:38
( p , 0.05) to 0.46 ( p , 0.01). These findings suggest that the observed relationship
between trust and leadership practices cannot be dismissed as an artifact of
same-source bias.
Discussion
This study examined the relationship between a broad set of leadership practices, as
well as common values between leaders and members, on team members trust in the
leader in R&D teams. Broadly, the results provide empirical support for the essential
role of effective leadership and shared values in building trust towards team leaders.
The correlational results support the hypothesis that an active leadership style
characterised by transformational leadership, consultative leadership, and contingent
reward is associated with team members trust in their leaders (H1). The extent to
which team members share common values with the leader was also strongly
associated with trust (H3). In contrast, passive-corrective and laissez-faire leadership
practices were negatively associated with trust in the leader (H2). However,
active-corrective leadership practices, where the leader focuses on mistakes,
irregularities and deviations from standards, had little association with trust. Given
the emphasis in R&D organisations on adherence to proper scientific rules and
procedures and maintaining organisational safety standards, active-corrective
leadership practices are likely to be regarded as appropriate leadership behaviour.
The correlational results are consistent with Butler et al. (1999) finding that in
self-managed teams each of the transformational leadership practices are significantly
associated with trust in the leader. In the current study, although intellectual
stimulation was positively associated with trust, it should be noted that this
relationship was significantly weaker than that for the other transformational
leadership practices and trust. This is consistent with earlier research which shows a
weak relationship between intellectual stimulation and trust (Butler et al., 1999). We
surmise that highly educated scientists and technologists working in R&D teams are
intrinsically motivated by the nature of their work. The leaders use of intellectual
stimulation, while important, may be less crucial for establishing trust in this setting,
where discussion of novel and challenging ideas and learning new scientific procedures
and techniques are common place.
The results also provide support for Shamirs (1995) view that providing rewards
contingent upon the achievement of objectives (contingent reward) builds followers
trust in their leader, and Podsakoff et al.s (1990) proposition that trust in the leader is
strongly influenced by the leaders consultation and involvement of team members
when making important decisions.
We found that the strongest predictors of trust in the leader were consultative
leadership, common values, and idealised influence. Hence, common values between
leaders and members, together with a leadership style are characterised by consulting
team members when making important decisions, and communicating a collective,
value-driven vision, accounts for a very substantial proportion (up to 67 per cent)

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of team members trust in their team leader. While the strength of this association is no
doubt inflated by common method variance, the consistent positive association
between leadership practices, as rated by one team member, with trust in the leader, as
rated by another team member, demonstrates that the relationship is not simply an
artifact of same-source bias.
Although the correlational analyses and earlier research (Butler et al., 1999) indicate
that each of the transformational leadership practices are associated with trust when
analysed separately, the regression results indicate that once idealised influence,
common values, and consultative leadership are accounted for, the remaining leadership
practices do not add significantly to the prediction of trust. That is, only one
transformational leadership behaviour, idealised influence, made a significant unique
contribution to the prediction of trust. Idealised influence, the communication and role
modeling of a collective vision based on important values, is highly interconnected with
the other transformational leadership practices, particularly inspirational motivation.
Indeed, as Butler et al. (1999) note, in a practical sense it would be difficult for a leader to
practice one transformational leadership behaviour without engaging to some extent in
the others. In sum, consulting followers when making decisions, and communicating
and modeling a collective vision, can be viewed as the key to a set of team leadership
practices which elicit the trust and confidence of team members.
There are at least two mechanisms through which common values, as well as these
two leadership practices, may build trust in the leader. As values are commonly
believed to guide behaviour, sharing common values helps team members to predict
how the leader will act in the future, and gives them the assurance that the leader is
unlikely to act contrary to the shared values. Similarly, a common vision aligns leaders
and team members actions and focuses them on the achievement of shared goals. As
with values, goals direct and motivate behaviour and help team members to predict the
leaders future behaviour. Finally, focusing on consultative leadership, involving and
consulting followers in decisions conveys that the leader values team member input
and is concerned about their views, interests and needs.
In short, shared values, shared goals and consultative decision-making reduce
uncertainty about the leaders future behaviour and send a signal that the leader is
unlikely to breach trust. With such confident expectations, followers will be more
willing to make themselves vulnerable to the leader by engaging in trusting
behaviours, like disclosing sensitive information and relying on the leaders
judgments. The process of establishing and verifying common values and goals and
making important decisions is also likely to build team members trust towards the
leader, as it requires open, honest communication and sharing of what is important to
each individual.
The second mechanism by which these leadership practices and common values
may build trust is through the demonstration and reciprocation of trust. By engaging
in these leadership practices, the leader both places herself in a position of vulnerability
and demonstrates trust in her team members. These practices require the leader to
openly communicate her ideas, vision and values, and delegate power and
responsibility to team members. The trust, the leader conveys to team members
through these actions, encourages the reciprocation of trust by team members.

Practical implications
The findings of this study have practical implications for leadership development,
team functioning and selection processes in R&D organisations. To obtain the benefits
that flow from trusting relationships, leadership training and development programs
should equip leaders with the skills to formulate and communicate a collective vision
for the team and the important values that underlie the vision and the teams work.
Such leadership training should also equip leaders with skills in consulting and
involving team members in important decisions. Team building programs may also
benefit from developing processes that assist team members and leaders to identify
and collectively establish a common set of values to guide the work of the team. The
challenge is to design procedures that also encourage acceptance and respect for
differences in values and individual goals. Finally, our results suggest that when
selecting team members, it is important to consider the value fit between potential
new team members and/or leaders, and the existing members of the project team.
Future research
This study has raised some interesting questions about the role of shared values in
building trust. For example, which values are most important for leaders and team
members to share remains to be explored. Analysis of interview data collected as part
of this study indicates that in this rapidly changing R&D organisation, values around
scientific excellence, science for the good of society vs commercial gain, and team
advancement over individual advancement, had an important influence on trust. These
values cut to the heart of why the organisation and teams exist.
Another pertinent question to explore is whether shared values are a necessary
condition for establishing trust, or a condition that enhances but is not essential for
trust. Jones and George (1998) proposed that shared values are only required for the
highest forms of unconditional trust but are not required for lower, conditional
forms of trust. Establishment of shared values is also an important mechanism by
which transformational leaders build followers trust (Bass, 1985; Bennis and Nanus,
1985; Shamir et al., 1993). Similarly, consultative leadership may engender trust
through development of shared values, as taking into account the followers opinions
conveys the leaders respect for his/her followers. Extending this line of research to
examine the potential mediating role shared values play in the relationship between
leadership behaviours and trust is recommended.
Theory and research testing the potential differential impact of leadership practices
and shared values on the various components of trust (cognitive, affective, and
behavioural), is another promising line of research. In order to conduct such research, it
is first necessary to examine whether these components are empirically distinct. In the
current study, the cognitive, affective and behavioural components were found to be
highly inter-correlated, and the small sample size precluded analysis of the discriminant
validity of these components. The design of the present study also made it difficult to
define the direction of causality between leadership practices and trust in the leader.
Longitudinal research examining the causal direction of this relationship, and how
leadership and trust may reciprocally reinforce each other, is called for.
Conclusion
To our knowledge, this is the first study to examine the relationship between
transformational leadership practices and follower trust in R&D project teams.

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The study investigated the behaviour of team leaders who have the task of managing
teams of highly educated, committed and often individualistic scientists and
technologists working together in organisations where professional values
predominate and trust is earned, not assumed. In this challenging setting, sharing
common values with team members, together with a set of interrelated leadership
practices based on consultative decision-making and communicating and modelling a
collective, value-driven vision, predicted the trust of team members. These results are a
step towards a deeper understanding of how to build interpersonal trust in
knowledge-based teams.
Notes
1. The results of an earlier version of this paper, presented at the 2000 Academy of
Management conference, were included in this meta-analysis.
2. The exceptions were for intellectual stimulation and passive corrective leadership. These
variables showed lower correlations for the TM1 sample compared to the TM2 sample. This
discrepancy is in line with the inconsistent findings between intellectual stimulation and
trust in the leader reported in the literature (Butler et al., 1999; Podsakoff et al., 1996, 1990).
3. A standard regression model with all transformational and transactional leadership
variables included violated the criteria for multicollinearity due to the high inter-correlations
between predictor variables. Once these two variables were excluded, all subsequent models
produced were below the criteria for multicollinearity.
4. Green (1991, cited in Tabachnick and Fidell, 1996) provides the following formula for the
cases-to-IV ratio required for multiple regression N $ (8/f 2)+(m2 1), where f 2 is the effect
size and m is the number of IVs. From the correlations it is estimated that the effect size is at
least medium (0.15), hence a minimum of 58 cases is required for six predictor variables. The
sample size of 83 in this study adequately meets this requirement.
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