The Trust/Culture Conundrum: Leaders' and Managers' Intangible Capitals, Phronesis, Involvement, and Control Strategy

Abstract

Organizational cultures affect trust levels but findings are contradictory. Fox’s theory of high- and low-discretion syndromes and Bourdieu’s field, practice, habitus, and capital concepts help explain contradictions by different or changing strategies of superiors, who either trust employees or seduce/coerce them. Conservative transactional leaders usually prefer seduction/coercion, but transformational leaders who have succeeded by trusting employees, also turn to seduction/coercion when entering dysfunction phases. Such a leader may preside for decades over a large firm/organizational field where innovative managers with practical wisdom, phronesis, and habituses of involvement in subordinates problem-solving that enhances high-trust cultures preserve such cultures in their units, innovate, and achieve successes. They advance less than the leader's conservative loyalists with political acumen who use seduction/coercion, while their successes help continue the mix of high- and low-trust unit cultures for decades that helps explain the contradictory findings. Longitudinal ethnography of a large organizational field in Israel supports this analysis.

Keywords: transformational/transactional leaders, field gravity, high/low-trust cultures, intangible capitals, managerial practices, phronesis (practical wisdom).

JEL Classification: M14, O31, P13, P32