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478 The impacts of trust, leadership, and collective efficacy on cross-functional team performance Wen-Wei Chuang 1 , Huey-Wen Chou 1 , and Ying-Jing Yeh 2 1 Department of Information Management, National Central University 2 Department of Business Administration, National Central University ABSTRACT Today’s business environment consists of flattened hierarchies and self-management (Cohen and Ledford, 1994). Co-operative working and teamwork is essential in almost all organizations. Working together often involves interdependence and trust, and people must therefore depend on one another in various ways to accomplish their personal and organizational goals. New emphasis is given on interpersonal and group dynamics at the workplace, where trust is seen as one of the critical elements. In the present study, the impacts of leadership style and trust on collective efficacy and team performance were examined. The results confirmed the proposed research framework. Trust in Team member significantly impacts on collective efficacy and team performance. In addition, leadership style also has significant indirect effects on collective efficacy and team performance via trust in team member. Suggestions for future implication conclude the study. 1. Introduction Today’s business environment consists of flattened hierarchies and self-management (Cohen and Ledford, 1994). Co-operative working and teamwork is essential in almost all organizations. Another organizational trend toward the self-managing team, which arises in response to the competitive challenges of the past two decades (Cohen and Ledford, 1994), suggests that the notion of team-level constructs deserve increased study. Many researchers have begun to study team level issues and found some important variables that impact team’s performance. Trust is one of those variables that underpins effective co-operative behaviors and therefore has a significant effect on change processes and associated risks (Erdem et al., 2003). Among all kinds of teams, cross-functional teams begin to catch more attention recently. Many project teams, especially teams taking charge of implementation of information system, are made up of employees from different sections of an organization. Members in cross-functional teams often have different skills and experience, and sometimes have to work on more than one project at a time. Working together often involves interdependence and trust, and people must therefore depend on one another in various ways to accomplish their personal and organizational goals. Current trends in both workforce composition and the dispersed workplace suggest that the importance of trust is likely to increase during the coming years. The emergences of self-directed teams and a reliance on empowered workers greatly increase the importance of trust (Golembiewski and McConkie, 1975; Larson and LaFasto, 1989) as many control mechanisms are reduced and interaction increases. Proceedings of the Second Workshop on Knowledge Economy and Electronic Commerce

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The impacts of trust, leadership, and collective efficacy on cross-functional team performance

Wen-Wei Chuang1, Huey-Wen Chou1, and Ying-Jing Yeh2

1Department of Information Management, National Central University 2Department of Business Administration, National Central University

ABSTRACT

Today’s business environment consists of flattened hierarchies and self-management (Cohen and Ledford, 1994). Co-operative working and teamwork is essential in almost all organizations. Working together often involves interdependence and trust, and people must therefore depend on one another in various ways to accomplish their personal and organizational goals. New emphasis is given on interpersonal and group dynamics at the workplace, where trust is seen as one of the critical elements. In the present study, the impacts of leadership style and trust on collective efficacy and team performance were examined. The results confirmed the proposed research framework. Trust in Team member significantly impacts on collective efficacy and team performance. In addition, leadership style also has significant indirect effects on collective efficacy and team performance via trust in team member. Suggestions for future implication conclude the study.

1. Introduction Today’s business environment consists of flattened hierarchies and self-management (Cohen and

Ledford, 1994). Co-operative working and teamwork is essential in almost all organizations. Another organizational trend toward the self-managing team, which arises in response to the competitive challenges of the past two decades (Cohen and Ledford, 1994), suggests that the notion of team-level constructs deserve increased study. Many researchers have begun to study team level issues and found some important variables that impact team’s performance. Trust is one of those variables that underpins effective co-operative behaviors and therefore has a significant effect on change processes and associated risks (Erdem et al., 2003).

Among all kinds of teams, cross-functional teams begin to catch more attention recently. Many project teams, especially teams taking charge of implementation of information system, are made up of employees from different sections of an organization. Members in cross-functional teams often have different skills and experience, and sometimes have to work on more than one project at a time.

Working together often involves interdependence and trust, and people must therefore depend on one another in various ways to accomplish their personal and organizational goals. Current trends in both workforce composition and the dispersed workplace suggest that the importance of trust is likely to increase during the coming years. The emergences of self-directed teams and a reliance on empowered workers greatly increase the importance of trust (Golembiewski and McConkie, 1975; Larson and LaFasto, 1989) as many control mechanisms are reduced and interaction increases.

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1.1 Trust

Scholars have long been interested in the study of trust in organizations. During the past few years this interest has turned into a major focus of organizational literature and research, leading to a renewed emphasis on the nature, causes and consequences of trust (Costa, 2003; Hosmer, 1995; Kramer, 1999; Shaw, 1997; Rousseau et al., 1998). As organizations have become flattened that emphasizes co-ordination, sharing of responsibilities and the participation of the workers in the decision process (Keen, 1990). New emphasis is given on interpersonal and group dynamics at the workplace, where trust is seen as one of the critical elements. If trust is absent, no one will risk moving first and all members will sacrifice the gains from collaboration and co-operation in increasing effectiveness (Sabel, 1993). Where there is a lack of trust, there will be failings in communication, delegation, empowerment, and quality (Erdem et al., 2003).

Although trust for employees (Whitney, 1994), trust for management (Mishra, 1996; Robinson, 1996), interorganizational trust (Gulati, 1995), and trust in leadership (Argyris, 1962; Likert, 1967; McGregor, 1967) have all been examined in recent scholarly literature, studies on trust in team members remains very few. Leadership style has been found as a critical factor significant impacting trust in team leader. Therefore, in the present study it would be examined if leadership style has any influences on trust in team members. The first research question in this study is: 1. Do different leadership styles have different impacts on trust? 1.2 Collective Efficacy

In addition to trust, collective efficacy is another important issue in team-level research. Collective

efficacy has become an important construct in team-level research because several prior studies indicted a strong, positive relationship between collective efficacy and group performance in various work group settings (Campion, Medsker and Higgs, 1993; Guzzo, Yost, Campbell and Shea, 1993; Jung and Sosik, 1999; Jung and Sosik, 2002). Compared with plenty of studies examining the relationship between collective efficacy and performance, there is few research on studying the collective efficacy’s antecedents. In this study, I also want to find out if trust has any influence on collective efficacy.

If we can find out the antecedents and consequence of the trust more clearly, managers and team leaders will more understand how to lead a team and build trust. Also we can find out whether trust is important when considering the team’s effectiveness and performance. Therefore, the second research question in this study is: 2. Does different trust have different impacts on team efficacy?

The present study is composed of five sections. The first section introduces the research context, motivations and purposes, and research questions. The second section reviews related literature on constructs included in the research framework. Research framework and hypotheses were proposed

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based on theoretical inferences in the third section. The fourth section describes the research method and data analysis method. Finally, the fifth section indicates the conclusions on the research findings, the application and limitations of the present study.

2. Literature Review In the present study, there are some main constructs: trust, leadership style, and collective efficacy.

Trust is the focus of this study. In this section, some literature review about trust, and relationships of trust and other constructs were summarized. 2.1 Trust

There are more and more organizations adopt team forms to deal with projects or work instead of

traditional hierarchical forms. Working as a team is significantly different from working in a hierarchical relationship. Team members have to be interdependent on other members while not be very familiar with them. Trust can have the effect of accelerating the appropriate levels of interaction in relationships that are based on trust, co-operative behaviors are much more likely (Jones and George, 1998). Team members must keep interrelating with one another in trying to arrive at viable solutions (Meyerson et al., 1996). This continuous “interrelating” keeps the issue of trust salient throughout the life of a team (Meyerson et al., 1996).

The topic of trust is generating increased interest in organizational studies (Mayer et al., 1995). The importance of trust has been cited in such areas as communication (Giffin, 1967), leadership (Atwater, 1988), management by objectives (Scott, D., 1980), negotiation (Bazerman, 1994), game theory (Milgrom and Roberts, 1992), performance appraisal (Cummings, 1983), labor-management relations (Taylor, 1989), and implementation of self-managed work teams (Lawler, 1992).

To date no definition of trust has been universally accepted. In most definition, trust appears related to individual attributions about other people’s intentions and motives underlying their behavior (Smith and Barclay, 1997). For example, for Lewicki and Bunker (1996) trust involves “positive expectations about others”. These attributions influence and are influenced by general beliefs and expectations of individuals about the treatment they will receive from others (Mayer et al., 1995). In turn, these are closely linked to the engagement, or the willingness to engage cooperative behaviors when interacting with others (Gambetta, 1988; Deutsch, 1962; Kramer et al., 1996).

Mayer et al. (1995) had 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”. Being vulnerable implies that there is something of importance to be lost (Mayer et al., 1995). Making oneself vulnerable is taking risk.

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“The willingness to be vulnerable” from Mayer et al. (1995) is one of the most cited definition of trust and has played a central role in many conceptualizations. For instance, McKnight et al. (1998) refer to trust as the belief and the willingness to depend on another party. Jones and George (1998) associate the willingness to become vulnerable to a set of behavioral expectations that allows individuals to manage the uncertainty or risk associated with their actions. Rousseau et al. (1998) proposed the definition of trust: “a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another”. This definition was also used by Dirks and Ferrin (2002) in their meta-analysis in trust in leadership.

Although “the willingness to be vulnerable” is the most common conceptual core, individual researchers have used different operational definitions, which has resulted in the measurement of potentially different definitions of trust. These potential differences have been recognized by scholars, suggesting that trust comprised multiple dimensions (Clark and Payne, 1997; Cook and Wall, 1980; McAllister, 1995). McAllister (1995) suggested that interpersonal trust could be categorized into two different dimensions: cognitive and affective. Cognitive forms of trust reflect issues such as the reliability, integrity, honesty, and fairness of a referent. Trust is cognition-based in that “we choose whom we will trust in which respects and under what circumstances, and we base the choice on what we take to be ‘good reasons,’ constituting evidence of trust-worthiness (Lewis and Weigert, 1985). Available knowledge and “good reasons” serve as foundations for trust decisions, the platform from which people make leaps of faith, like those involved in trusting (Luhmann, 1979; Simmel, 1964).

Affective foundations for trust also exist, consisting of the emotional bonds between individuals (Lewis and Weigert, 1985). Affective forms of trust reflect a special relationship with the referent that may cause the referent to demonstrate concern about one’s welfare. Ultimately, the emotional ties linking individuals can provide the basis for trust (McAllister, 1995).

This two-dimensional trust ‘s concept was adapted in most research studying trust in virtual teams (Jarvenpaa et al., 1998; Aubert and Kelsey, 2003). Other definitions have implicitly combined these two dimensions into an overall measure of trust – which were considered to be a combination of affective and cognitive forms – or have implicitly or explicitly focused on one of them. However, there is another perspective on trust. Dirks and Ferrin (2002) used the definition above in their meta-analysis research. The figure 1 shows their framework.

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Figure 1. Dirks and Ferrin’s framework (2002).

The definition above is based on that trust is a belief-expectation, but there are other scholars think

trust in a behavioral intention (Mayer and Davis, 1999). Although empirical research using the latter definition appears to be growing, still most of the empirical research on trust to date has used the former. In this study, I adapted the former definition.

Scholars found that trust positively affect team’s performance (McAllister, 1995; Costa, 2003). Trust is a kind of “hygiene factor" for team performance, a necessary underpinning but not sufficient in itself (Erdem et al., 2003). It is a hygiene factor in that, in a collective effort that is not based on trust, team members will be unable to explain their ideas fully and sincerely, unable to display their actions intimately and will refrain from helping others willingly (Erdem et al., 2003). In virtual teams, trust is also be recognized an important factor affecting virtual team’s performance (Kanawattanachai and Yoo, 2002). Because trust is found to be critical while considering teams’ performance, it becomes more important to find out trust’s antecedents. 2.2 Collective Efficacy Collective efficacy is another construct in team-research. Collective efficacy refers to group members’ shared perceptions about how capable their group is regarding a specific task (Bandura, 1997). In recognition of the fact that success in many activities and tasks requires the combined efforts of people working in groups, Bandura (1986, 1997) proposed collective efficacy as an extension of self-efficacy. Bandura suggested that collective efficacy is more than just the sum of individual efficacy levels within the group (Kozub and McDonnell, 2000). Collective efficacy involves the individuals’ perceptions regarding the group’s performance capabilities (Kozub and McDonnell, 2000). Collective efficacy becomes so critical because several prior studies indicted a strong, positive relationship between collective efficacy and group performance in various work group settings (e.g., Campion, Medsker and Higgs, 1993; Guzzo, Yost, Campbell and Shea, 1993; Jung and Sosik, 1999). Campion et al (1993) tested 19 group characteristics and found that collective efficacy was the strongest predictors of six effectiveness criteria. In recent meta-analysis based on 53 empirical studies, collective efficacy

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was found to be positively related to performance (Gully, Beaubien, Incalcaterra and Joshi, in press).

In previous studies, collective efficacy has been defined in a variety of ways. Bandura (1986) referred to it as people’s perceptions of the groups’ efficacy to effect change. Zaccaro et al. (1995) define collective efficacy as “a sense of collective competence shared among individuals when allocating, coordinating, and integrating their resources in a successful concerted response to specific situational demands.

Shea and Guzzo (1987) described a very similar construct, called group potency, as “the collective belief of a group that it can be effective”. The difference between group potency and collective efficacy is that group potency is the general group efficacy or group members’ shared beliefs about general effectiveness across multiple tasks encountered by the group (Guzzo et al., 1993). Unlike group potency, collective efficacy is specified to one task or one competence, not referred to general confidence. For example, one team may feel confident to deal with the task they are facing now (collective efficacy), but they might not be so confident about the next task they will face (team potency).

2.2.1 Trust and Collective Efficacy Scholars have found that collective efficacy has influence upon team performance, but what is the

collective efficacy’s antecedent is still remain unclear. However, we can still find some hint behind some research. Dvir et al. mentioned that given the strong group cohesiveness developed in groups empowered by transformational leadership, group members are more likely to share common expectations and stronger collective efficacy (Dvir et al., in press; Jung and Avolio, 1999). Spink (1990) also found that group cohesion was an important factor associated with task-specific group efficacy. However, some research indicates that there are no direct relationship between group cohesion and collective efficacy. This may be confused what is the real relationship between this two construct, and what is the factor really influence collective efficacy. Trust might be the answer. Because a primary factor leading to team cohesion is the degree of trust among team members (Cohen and Bailey, 1997). It might be trust that influences collective efficacy. And also if the whole team gains trust to each other by interacting, it seems natural that they will be more confident about the team’s ability to deal with the task they’re facing. In this study, I would like to check if trust has any influence upon collective efficacy.

Therefore, even there is no research studying the relationship between trust and collective efficacy, but based on the literature review before, we found that trust among team members may have positive impacts on collective efficacy. Compared with trust among team members, trust in team leaders may not have the same degree of positive impacts upon collective efficacy. Therefore, in this study I suppose that trust in team members will have stronger positive affect on collective efficacy than trust in team leaders. H1: Trust in team members has stronger positive impacts on collective efficacy than trust in team

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leaders does. 2.3 Leadership Style

Over the last two decades, there has been an emergence of new genre of leadership theories and models, oftentimes referred to as transformational and/or charismatic. Transformational leaders exert influence by broadening and elevating followers’ goals and providing them with the confidence to go beyond minimally acceptable expectations specified in the exchange, while transactional leaders exert influence by setting goals, clarifying desired outcomes, providing feedback, and exchanging rewards and recognition for accomplishments (Bass, 1985). 2.3.1 Leadership Style and Trust

Many studies have examined the relationship between leadership styles and trust in leaders (Dirks and Ferrin, 2002; Arnold et al., 2001; Jung and Avolio, 2000). Among theories of leadership, trust in leaders has perhaps been most frequently cited in the literature on transformational leadership. According to several scholars, transformational leaders engage in actions that gain the trust of their followers and that in turn result in desirable outcomes (Podsakoff et al., 1990). Pillai et al. (1999) suggested that transformational leaders might operate by establishing a social exchange relationship with followers. For instance, transformational leaders may build trust by demonstrating individualized concern and respect for followers (Jung and Avolio, 2000). In contrast, transactional leaders are said to focus more effort on ensuring that employees are rewarded fairly (contingent reward) and that followers recognize that they will fulfill the work contract.

In sum, transformational leadership behaviors operate partially because of care and concern perceived in the relationship; transactional leaders seem to put less emphasis on the relationship and more emphasis on ensuring that they are seen as fair, dependable, and having integrity.

What’s the relationship between leadership style and trust in team members? There are sparse studies addressing this question. It may be intuitive that since transformational leadership gains more trust of their followers, there should be more trust among team members under transformational leadership style. However, we may also think if transactional leader try to build a fair circumstances for team members, each team member may think no one is treated differently, and then build trust and good feelings about his team members.

On the other hand, some research indicates that leadership style has indirect impacts on team’s performance and satisfaction via trust. Jung and Avlio (2000) found that both transformational leadership and transactional leadership had indirect effects on followers’ performance mediated through followers’ trust. Podsakoff et al. (1990) also had similar conclusion that trust played a mediating role of transformational leadership on performance. However, in these studies trust is referred to trust in leaders, not trust in both leaders and team members. Therefore, trust in team members’ role is still unknown.

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Because it is still unclear which leadership style will have more impacts on trust in team members,

this study want to examine it and find out some result. While in the present study trust in team members construct is drawn out from trust in team leader construct, it is believed that since different leadership style would have different effect on trust in team leader, it may be found the same condition on trust in team members. Therefore, two hypotheses formed in the present study: H2: Compared with transactional leadership style, transformational leadership style has stronger effects on trust in team leader. H3: Different leadership styles have different impacts on trust in team members.

2.3.2 Leadership Style and Collective Efficacy Scholars have found that different leadership style will have different impacts on collective

efficacy (Jung and Avolio, 1999; Jung and Sosik, 2002). It was found that transformational leadership would positively affect collective efficacy than transactional leadership. In this study I will examine this relationship. Also, what role does trust play is still unclear now. While it is found that leadership style has indirect impacts on team’s performance, there might be same situation on collective efficacy. Therefore, in the present study it is supposed that leadership style has indirect impacts on collective efficacy via trust. In this study, this relationship would be tested to find out if trust mediates from leadership style and collective efficacy.

H4: Transformational leadership style will have stronger positive impacts on collective efficacy than transactional leadership style. H5: Leadership style has indirect impacts on collective efficacy via trust. H5a: Leadership style has indirect impacts on collective efficacy via trust in team leader. H5b: Leadership style has indirect impacts on collective efficacy via trust in team members.

2.4 Performance

Performance is the final construct in the present study’s framework. To team leader or manager, team performance is the most important issue that he/she should try to find out how to promote performance. When one construct is found to have positive impacts on team performance, this construct will be interested by both scholars and managers. Therefore, it is important to examine if constructs in the present study have positive impacts on team performance.

2.4.1 Trust and Performance Trust, both in team leaders and team members, has been recognized a critical factor influencing

team’s performance (McAllister, 1995; Costa, 2003). There are some studies indicating that leadership style has indirect impacts on team’s performance via trust (Podsakoff et al. 1990; Yukl, 1998). Therefore,

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in this study, I suppose that leadership style has indirect impacts on team performance via trust. H6: Leadership style has indirect impacts on team performance via trust. H6a: Leadership style has indirect impacts on team performance via trust in team leader. H6b: Leadership style has indirect impacts on team performance via trust in team members.

2.4.2 Collective Efficacy and Performance Collective efficacy has been found to have positive impacts on team’s performance (Campion,

Medsker, and Higgs, 1993; Guzzo, Yost, Campbell, and Shea, 1993; Jung and Sosik, 1999). Also, Erdem et al. (2003) suggest that there should be some factors affecting team performance and affected by the level of trust. Therefore, in this study I would like to examine if trust has indirect impacts on team performance via collective efficacy. H7: Trust has indirect impacts on team performance via collective efficacy. H7a: Trust in team leader has indirect impacts on team performance via collective efficacy. H7b: Trust in team members has indirect impacts on team performance via collective efficacy.

3. Research Methods According to the literature review, I develop this study’s framework. In this study, I want to find

out the relationship between leadership styles and trust. Trust can be categorized into two types: Trust in leaders and trust in team members. And I also want to find out the relationship between trust and collective efficacy. In addition to these two relationships, previous research suggest that leadership style would have influence on collective efficacy, and both trust and collective efficacy impact team performance, too. Figure 2 depicts research framework of this study.

Figure 2. Framework of this study.

3.1 Data Collection

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Cross-functional teams are more and more common in many organizations. Therefore, cross-functional teams are chosen to be the sample source in the present study. The samples come from different industry types, and two team members from each cross-functional team will be required to answer the questionnaire to confirm the representative of the responses.

A total of 64 teams participate the study, making 128 questionnaires returned. The t-test result showed the pair of responses in each team are significantly correlated (the t value is 34.265, and significance level is 0.000). 3.2 Measures

The team is used as the unit of analysis, therefore the scales are measured at the team level. The first section in the questionnaire is aimed to collect team’s background information, such as the number of members in this team, how long this team has been lasting, what kind of this team, etc.

The transformational leadership style’s questionnaire developed by Bass’s (1985) Multifactor Leadership Questionnaire was adapted from Cheung et al’s (2001). The wordings of some items were refined to adapt to the cross-functional team context. Each of the four dimensions of the transformational leadership style, including charisma (e.g., “The project team leader makes me feel proud to be associated with him”), individualized consideration (e.g., “The project team leader gives personal attention to members who seem being neglected”), intellectual stimulation (e.g., “The project team leader enables me to think about old problems in new ways”), and inspirational motivation (e.g., “The project team leader stimulate enthusiasm among project design team members for the work of the group”), was measure by six items, which makes 24 items in total.

The transactional leadership style’s questionnaire developed by Bass and Avolio (1997) in Manual for the Multifactor Leadership Questionnaire was widely used in measuring transactional leadership style. Several scholars’ questionnaires such as Hwang’s (1997), Shieh’s (2002) and Kuo’s (2002), refined from Bass and Avolio’s questionnaire, were adopted and modified to adapt to the cross-functional team context. Two dimensions of transactional leadership style (contingent reward e.g., “The project team leader provides reasonable rewards while we achieve our goals”, and exception management, e.g., “The project team leader keeps track our mistakes”, were measured by 14 items.

In this study trust is divided into two sub-constructs: trust in the team leader and trust in team members. The questionnaire was adopted from Dirks and Ferrin’s (2002) classification. Dirks and Ferrin (2002) conceptualized the trust to four dimensions: Affective trust, cognitive trust, willingness to be vulnerable, and overall trust. The first two dimensions, affective trust and cognitive trust is refined from Kanawattanacai and Yoo (2002) (e.g., “we could both feel a sense of loss if one of us was transferred and we could no longer work together”, “we see no reason to doubt his/her competence and preparation for the job”). The “willingness to be vulnerable” dimension adopts from Aubert and

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Kelsey’s (2003) questionnaire (e.g., “we would be comfortable giving the team leader complete responsibility for the completion of this project”). The “overall trust” adopts from Dirks and Ferrin’s (2002) questionnaire (“we trust him/her”). Wordings have been refined to adapt both two sub-constructs: trust in team leader and trust in team members. There are 11 items in total.

The questionnaire of collective efficacy was adopted from Edmondson’s (1999) and Jung et al. (2002)’s questionnaires (e.g., “My group members go above and beyond the call of duty”). The latter scholar’s questionnaire was refined from Bandura (1986), the first scholar bringing out the idea of collective efficacy. Wordings are refined to adapt to the cross-functional team context. There are 8 items in total.

Items to measure performance were adopted from Gemuenden and Lechler (1997) and Hoegl and Gemueden (2001) to measure the effectiveness and efficiency of team performance. There are six items in total. The effectiveness dimension of team performance measured the quality of team’s performance after the project finished. Questions such as “From the company’s prospective, all project goals were achieved” were used. On the other hand, the efficiency dimension measured the team’s project progress (e.g., “From the company’s perspective one could be satisfied with how the project progressed”) and whether the budgets this team used within constraint (e.g., “The project was within budget”).

All items except the two leadership styles are measured on a five-point Likert scale. The entire questionnaire is reviewed and refined by academic scholars and professionals in the industry. The content validity of each measure was confirmed.

4. Data Analysis A total of 64 teams replied questionnaires, with two questionnaires in each team. The average

number of team members is 9. The team’s lasting time is 20 months in average. Most teams (38 teams) are product-developing teams. And most teams (58teams) are temporary-based teams. 4.1 Validity

Principle-component factor analysis is used to measure the validity of constructs. While using

factor analysis, KMO value must be checked first. If KMO value is smaller than 0.5, it is not suitable to use factor analysis (Wu, 2000). Transformational leadership style construct’s KMO value is 0.875, which means it is suitable to use factor analysis. The cumulative variance explained percentage is 55.221%. While extracting one factor, all items in transformational leadership style fall in this factor, implying the validity of transformational leadership style construct is high.

While checking the transactional leadership style construct, again, KMO value is checked before employing principle factor analysis. Here KMO value is 0.783, which means it is suitable for using

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factor analysis. The cumulative variance explained percentage is 40.191%. While extracting one factor, there are three items (transactional_12, transactional_13, and transactional_14) not falling into this factor. Therefore, while analyzing data later, these three items’ score would be removed.

Trust construct’s validity is also high. KMO value here is 0.826, which means it is suitable for using factor analysis. Because trust is divided into trust in team leader and trust in team members these two sub-constructs, the number of extracting factor is 2. While the extracting factors are larger than 1, it is suggested that using rotation would make loading factors more meaningful. Here the cumulative variance explained percentage after rotation is 60.158. Items are perfectly loading into two factors. In other words, items in trust in team leader all fall in one factor, while items in trust in team members fall in another factor.

Then collective efficacy construct is checked. KMO value is 0.832, which means it is suitable to use factor analysis. The cumulative variance explained percentage is 53.188%. While extracting one factor, all items in collective efficacy construct all fall in this factor, implying the high validity of collective efficacy construct.

Finally the performance construct is checked. KMO value is 0.872, which means it is suitable to use factor analysis. The cumulative variance explained percentage is 75.922 %. While extracting one factor, all items in performance construct fall in this factor. This implies that the validity of performance construct is high.

All constructs show high validity except three items in transactional leadership style construct have to be removed. After checking out the validity of every construct, next the reliability of all constructs must be measured. 4.2 Reliability and Correlation

Table 1 shows the reliability of every construct respectively. Cronbach’s α coefficients was used to measure the internal consistency of the scales. All scales employed in the present study demonstrate strong reliability (the Cronbach’s α coefficients are between 0.8710 and 0.9635). Table 1. Reliability coefficients of each construct. Constructs Cronbach’sα coefficinetsTransformational Leadership Style 0.9635 Transactional Leadership Style 0.9019

Trust in Team Leader 0.9376 Trust Trust in Team Members 0.9201

0.9438

Collective Efficacy 0.8710 Performance 0.9357

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4.2.1 Correlation coefficients among constructs

Table 2 shows the summary of correlation coefficients among constructs. Every construct’s score is the sum of all items in that construct. The correlation coefficient is using Pearson’s correlation. All constructs are highly correlated with one another, which suggest there might be some relationships among these constructs. However, it is not clearly what relationships among them by just observing correlation coefficients. To find out more precise relationships, multiple regression method is used in the next section.

Table 2 Correlation coefficients among constructs

Transformational Leadership Style

Transactional Leadership

Style

Trust in Team

Leader

Trust in Team

Members

Collective Efficacy

Performance

Pearson 1 0.698** 0.850** 0.668** 0.637** 0.521** Transformational Leadership Style Sig. . 0.000 0.000 0.000 0.000 0.000

Pearson 0.698** 1 0.523** 0.501** 0.492** 0.306* Transactional Leadership Style Sig. 0.000 . 0.000 0.000 0.000 0.014

Pearson 0.850** 0.523** 1 0.567** 0.584** 0.520** Trust in Team Leader Sig. 0.000 0.000 . 0.000 0.000 0.000

Pearson 0.668** 0.501** 0.567** 1 0.689** 0.443** Trust in Team Members Sig. 0.000 0.000 0.000 . 0.000 0.000

Pearson 0.637** 0.492** 0.584** 0.689** 1 0.624** Collective Efficacy Sig. 0.000 0.000 0.000 0.000 . 0.000

Pearson 0.521** 0.306* 0.520** 0.443** 0.624** 1 Performance Sig. 0.000 0.014 0.000 0.000 0.000 .

4.3 Hypotheses Testing

The relationship among constructs in the present study was empirically tested. First the correlation coefficients among all constructs would be tested, after then structured equation model method would be used to test if the hypotheses are empirically supported. 4.3.1 Path Analysis Method

In order to find out more precise relationships among all constructs in the research framework, path analysis is used to test every path in the framework. In path analysis, the method is multiple regression analysis. By observing the research framework, the constructs that arrows point are “effects”, also called dependent variables in multiple regression analysis. On the other hand, the constructs that arrows start from are “causes”, also called independent variables in multiple regression analysis.

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H2: Compared with transactional leadership style, transformational leadership style has strongly effect on trust in team leader. Table 3. Statistical results of H2.

Unstandardized Coefficients

Standardized Coefficients

Model DV: Trust in team leader

Beta Std. Error

Beta

T value Sig.

(Constant) 24.684 4.522 5.459 0.000 Transformational Leadership Style 0.405 0.040 0.946 10.220 0.000 Transactional Leadership Style -0.129 0.087 -0.137 -1.481 0.144

In this analysis, the dependent variable is trust in team leader construct, and independent variables

are transformational leadership style construct and transactional leadership style construct. The result is shown in table 3. The model’s adjusted R square is 0.723. The result demonstrated that transformational leadership style has significant impacts on trust in leader, but transactional leadership style doesn’t. H3: Transformational leadership style and transactional leadership style have different impacts on trust in team members.

In this analysis, the dependent variable is trust in team members construct, and independent variables are transformational leadership style and transactional leadership style. The result is shown in table 4. The model‘s adjusted R square is 0.431. Table 4. Statistical results of H3.

Unstandardized Coefficients

Standardized Coefficients

Model DV: Trust in team members

Beta Std. Error

Beta

T value Sig.

(Constant) 42.599 5.174 8.233 0.000 Transformational Leadership Style 0.212 0.045 0.621 4.677 0.000 Transactional Leadership Style 5.078E-02 0.099 0.068 0.511 0.611

The result demonstrated that transformational leadership style has significant impacts on trust in team members, while transactional leadership style doesn’t. H1: Trust in team members has stronger positive impacts on collective efficacy than trust in team leaders. H4: Transformational leadership style will have stronger positive impacts on collective efficacy than transactional leadership style. H5: Leadership style has indirect impacts on collective efficacy via trust. H5a: Leadership style has indirect impacts on collective efficacy via trust in team leader. H5b: Leadership style has indirect impacts on collective efficacy via trust in team members.

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In this analysis, the dependent variable is collective efficacy construct, and independent variables

are transformational leadership style construct, transactional leadership style construct, trust in team leader construct, and trust in team members construct. The result is shown in table 5. The model’s adjusted R square is 0.510. Table 5. Statistical results of H1, H4, H5, H5a, H5b.

Unstandardized Coefficients

Standardized Coefficients

Model DV: Collective efficacy

Beta Std. Error

Beta

T value Sig.

(Constant) 19.990 5.015 3.986 0.000 Transformational Leadership Style

2.548E-02 0.048 0.115 0.533 0.596

Transactional Leadership Style

4.124E-02 0.061 0.085 0.675 0.502

Trust in team leader 9.106E-02 0.088 0.176 1.031 0.307 Trust in team members 0.305 0.077 0.470 3.957 0.000

The result demonstrated that only trust in team members construct has significant impacts on collective efficacy, and the other three constructs don’t. H6: Leadership style has indirect impacts on team performance via trust. H6a: Leadership style has indirect impacts on team performance via trust in team leader. H6b: Leadership style has indirect impacts on team performance via trust in team members. H7: Trust has indirect impacts on team performance via collective efficacy. H7a: Trust in team leader has indirect impacts on team performance via collective efficacy. H7b: Trust in team members has indirect impacts on team performance via collective efficacy.

In this analysis, the dependent variable is team performance construct, and independent variables are transformational leadership style construct, transactional leadership style construct, trust in team leader construct, trust in team members construct, and collective efficacy construct. The result is shown in table 6. The model’s adjusted R square is 0.390. Table 6. Statistical results of H6, H6a, H6b, H7, H7a, H7b.

Unstandardized Coefficients

Standardized Coefficients

Model Dependent Variable: Performance Beta Std.

Error Beta

T value Sig.

(Constant) 3.536 6.760 0.523 0.603 Transformational Leadership Style

4.498E-02

0.057 0.189 0.784 0.436

Transactional Leadership Style

-6.922E-02

0.073 -0.134 -0.953 0.345

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Trust in team leader 9.154E-02

0.107 0.165 0.859 0.394

Trust in team members

-4.801E-02

0.104 -0.069 -0.462 0.646

Collective Efficacy 0.559 0.156 0.521 3.589 0.000

The result demonstrated that only collective efficacy construct has significant impacts on team performance, while other four constructs don’t. 4.4 Summary of findings Table 7 shows the direct relationships between all constructs. Transformational leadership style construct has significant impacts on both trust in team leader construct and trust in team members construct. This supports the hypothesis 2 and hypothesis 3 that compared to transactional leadership style, transformational leadership style has stronger positive impacts on trust. Transactional leadership style even has negative impacts on trust in team leader, although it is not significant. Table 7. Summary of the path analysis result. Trust in Team

Leader Trust in Team Members

Collective Efficacy

Performance Adjusted R Square

Transformational Leadership Style

0.946** Model 1

Transactional Leadership Style

-0.137

0.723

Transformational Leadership Style

0.621** Model 2

Transactional Leadership Style

0.068

0.431

Transformational Leadership Style

0.115

Transactional Leadership Style

0.085

Trust in Team Leader

0.176

Model 3

Trust in Team Members

0.470**

0.510

Transformational Leadership Style

0.189

Transactional Leadership Style

-0.134

Trust in Team Leader

0.165

Trust in Team Members

-0.069

Model 4

Collective Efficacy

0.521**

0.390

Note: 1. Standardized coefficients are presented in each cell.

D.V. I.V.

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2. “D.V.” represents dependent variables, and “I.V.” represents independent variables. As to collective efficacy, only trust in team members construct has significant impacts on this

construct, which strongly supports the hypothesis 1. In model 4, collective efficacy has significant impacts on team performance, therefore hypothesis 7 is partly supported. Figure 3 shows more clear relationships between all constructs.

Figure 3. Research result.

Figure 3 shows the indirect relationships. Because transformational leadership style significantly impact trust in team members construct, and trust in team members construct significantly impact collective efficacy construct, and transformational leadership style does not significantly impact collective efficacy, leadership style has indirect impacts on collective efficacy via trust in team members. Therefore hypothesis 5b is supported. It is same that trust in team members has indirect impacts on team performance via collective efficacy. Therefore, hypothesis 7b is supported.

Table 8 shows the summation of direct and indirect effects of the independent variable on the corresponding dependent variable. It is clear that transformational leadership style construct has more positive impacts on trust than the transactional leadership style does.

Transactional leadership style even has negative impacts on trust in team leader. Among those factors influencing collective efficacy, transformational leadership style has the most influences. However, the direct impact from transformational leadership style upon collective efficacy is not very

Transformational Leadership Style

Transactional Leadership Style

Trust in team leader

Trust in team members

Collective Efficacy

Team performance

0.946**

0.621**

-0.137

0.068

0.176

0.470**

-0.069

0.115

0.085 -0.134

0.165

0.189

0.521**

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strong, even weaker than the impact from trust upon collective efficacy (trust in team members has most influence as to direct effect). Most transformational leadership style’s influences to collective efficacy came from indirect effects. It is the same situation as to team performance. Among those factors influencing team performance, transformational leadership style has the most influences. Again, the direct impact from transformational leadership style to team performance is weak, and most influences came from indirect effects. The collective efficacy has the most influences as to direct effects. Table 8. Summary of direct and indirect effects.

Trust in Leader

Trust in Members Collective Efficacy Team Performance

Direct Effect

Direct Effect

Direct Effect

Indirect Effect

Total Effect

DirectEffect

Indirect Effect

Total Effect

Transformational Leadership Style 0.946 0.621 0.115 0.4584 0.5734 0.189 0.4120 0.6010

Transactional Leadership Style -0.137 0.068 0.085 0.0078 0.0929 -0.134 0.0211 -0.1129

Trust in Leader 0.176 0.176 0.165 0.0917 0.2567

Trust in Members 0.47 0.47 -0.069 0.2449 0.1759

Collective Efficacy 0.521 0.519

Note: “D.V.” represents dependent variables, and “I.V.” represents independent variables. 4.5 Discussion

Trust is an important key factor in teamwork (Erdem et al., 2003). The present study serves as in initial step to understand the clear role which trust plays in cross-functional team context, and the relationships among different leadership style, trust, collective efficacy, and team performance.

According to the result shown in previous section, seven major hypotheses are confirmed. It was found that transformational leadership style has stronger significant positive impacts on trust in team leader (H2) and trust in team members (H3). The first two hypotheses are all supported. It is also found that trust in team members has positive and significant impacts on collective efficacy, which supports hypothesis 1. Hypothesis 4 is supported because transformational leadership style is found to have stronger positive impacts on collective efficacy than transactional leadership style. Hypothesis 5 and 7 are both partly supported. These two hypotheses are talking about the indirect effects. Transformational leadership style has found to have indirect impacts on collective efficacy through trust in team members. Also, Trust in team members has found to have indirect impacts on team performance through collective efficacy.

I.V.

D.V.

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However, it was found that trust in team leader does not have significant impacts on collective

efficacy or team performance. Moreover, transactional leadership style does not have significant impacts on trust, collective efficacy, or team performance as hypothesized. Even more, transactional leadership style has negative impacts on trust in leader and team performance.

Although transformational leadership style does not have direct impacts on team performance significantly, it is found that transformational leadership style does have indirect impacts on team performance, via two factors: trust in team members and collective efficacy.

5. Conclusion and Implications The present study is aimed to understand the trust’s role in cross-functional team. Moreover, trust

was divided into two sub-constructs: trust in team leader and trust in team members. It was of interest that which construct would be more important to team performance in the present study. In addition to trust, there are other constructs in the present study, like leadership style, collective efficacy and team performance. While the leadership style and collective efficacy were found to be very important issues, very few studies examine their relationships with trust. The present study provides the first step to open the black box to explore relationships among these constructs. Through empirical testing, there are some results listed below:

5.1 Transformational leadership style has positive impacts on trust

The present study confirmed that transformational leadership style has positive and significant impacts on both trust in team leader and trust in team members. On the other hand, it is found that transactional leadership style does not have significant impacts on trust. In order to stimulate the team’s members and promote the trust in team, no matter trust in team leader or trust in team members, the team’s leader should behave high degree of transformational leadership style.

5.2 Trust in team members has positive impacts on collective efficacy

Trust in team members has been confirmed to have significant positive impacts on collective efficacy in the present study. Trust in team leader, however, did not have significant impacts on collective efficacy. While collective efficacy was recognized as an important issue in team level research, promoting trust in team members would have much positive impacts on collective efficacy.

5.3 Collective efficacy has positive impacts on team performance

The present study has confirmed that collective efficacy has positive and significant impacts on

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team performance. Because promoting team performance is the final goal of all teams’ leaders and managers, it becomes important to promote collective efficacy first in order to improve team performance. 5.4 Transformational leadership has indirect impacts on team performance via

trust in team members and collective efficacy

Although the present study does not show significant direct effects of transformational leadership style on team performance, it does confirmed that transformational leadership style has indirect impacts on team performance – through two factors: trust in team members and collective efficacy. These two factors therefore deserve further study in the future. 5.5 Implications 5.5.1 Academic implication

The present study provides the initial step to understand more clearly about trust’s role in team level research. It is found that trust in team members has significant positive impacts on collective efficacy, and leadership style has indirect impacts on team performance via trust in team members and collective efficacy. Trust in team members is found to be more important in affecting collective efficacy and team performance than trust in team leader is. Future research should focus more on trust in team members. The present study used four dimensions of trust from Dirk and Ferrin’s (2002) research, and future research should find out if these four dimensions makes different when considering the impacts on collective efficacy and team performance. Future study may try to find out if there are different dimensions other scholars have suggested. Moreover, the present study only explored different leadership style as antecedents of trust and collective efficacy as the influence of trust. Future research could try to find out if there are some other antecedents and influences of trust. 5.5.2 Managerial implication

The present study has confirmed that transformational leadership style has positive impacts on trust. Team’s leader should behave more transformational leadership style to stimulate the team and promote trust within the team. Trust in team members is also found to be an important factor affecting the impacts of transformational leadership style on collective efficacy and team performance. Therefore, team’s leader should pay more attention in trust among team members. Team’s leader should take ways to stimulate the trust among team members, such as providing more chance to let all members communicate with each other. Because collective efficacy is confirmed as an important factor affecting team performance, team’ leader or manager should be more aware of team members’ collective efficacy, and try to enhance the degree of collective efficacy. 5.6 Research limitation

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There are few limitations in the present study. First, the sample size, 128, which means 64 teams’ questionnaires returned, is still to small. In order to get more precise result, the sample size should be a little bit larger. Second, while all team members may know each other before the team formed, trust may already exist before the leadership style behaviors. This might bias the study results. To get more clear understanding about the leadership style’s impacts on trust, the longitudinal research design should be used to find out if there are some differences as time passes by. Third, the present study focused on the two dimensions of trust. It is worth to dig into more in depth on the characteristics of trust. Finally, there may exist some relationships between the characteristics of teams and trust. The present study did not take this issue into consideration and may worth further study.

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