BUS603: Managing People

Trust is very important in every aspect of social life. It can promote individual friendships, create favorable bargaining and negotiation situations, and reduce transaction costs between individuals. Building trust may even be viewed as an important way to solve international political conflicts. Molm, Collett, and Schaefer stated that trust is the basic component of the effectiveness of social processes. In an organizational context, trust can be an effective predictor of employees' positive attitudes and behaviors, such as cooperative behavior, organizational citizenship behavior (OCB), organizational commitment, and employee loyalty. Thus, promoting employee's trust in their organization is the ideal goal of all employers, but how to establish organizational trust is still a challenge confronting organizations.

Some studies pointed out that trust is gradually formed in the process of social exchange between two parties. In an organizational context, the degree of social exchange between employee and organization reflects the level of employee-organization relationship (EOR). Therefore, EOR is an important predictor of organizational trust. The concept of EOR is based on social exchange theory and inducement-contribution theory. Social exchange theory proposed that interest exchange was formed during the beneficiary interaction between two parties. The inducement-contribution model suggested that employers can motivate employees to make contributions to organization by providing them with inducements. Previous literature has found that EOR will promote employee positive psychology and behavior. Hom argued that employees' organizational trust might be a mediator mechanism between EOR and employee behaviors, different extents of EOR would lead to different individual outcomes via mediator (e.g., organizational trust). Therefore, EOR is a key predictor of organizational trust.

Innovative behavior is the key resource for maintaining organizational competitive advantage and sustainable development. Previous studies have found that when employees trust in their organization, they will perceive the external environment as safe, and be more willing to take risks. Edmondson proposed that employees with psychological safety in the workplace may share ideas and knowledge with other employees, and even try creative ideas in their job. Therefore, employee's trust in their organization will lead them to be more likely to share ideas and knowledge (an important driver of innovative behavior) among employees, which means that organizational trust is positively related to employee innovative behavior, but few studies have tested this potential theoretical relationship. Therefore, we investigated the indirect effect of EOR on innovative behavior via organizational trust, which can help us deepen understanding of the role of organizational trust for explaining employee innovative behaviors.

According to the interactive model of organizational creativity, individual and organizational factors have interactive effects on individual innovative behavior. Amabile suggested that organizational innovative climate was an important contextual variable for individual innovative behavior; therefore, this study considers this important organizational contextual factor as a moderating variable in an interactive model of innovative behavior. As discussed before, organizational trust could increase employee innovative behavior in the workplace. However, if there is no guidance provided via an innovative climate, employees may not exhibit innovative behavior, because they might not know which behaviors are beneficial to the organization. Therefore, considering innovative climate as a moderator can help us understand the boundary conditions of the effect of organizational trust on employee innovative behavior, which is also consistent with Woodman's model of organizational creativity.

The aim of this research is to examine the mediating mechanism of organizational trust between EOR and innovative behavior, and to explore the boundary conditions of the relationship between organizational trust and innovative behavior. First, we tested the effect of EOR on employee organizational trust, and the effect of organizational trust on innovative behavior. Since research on the antecedents and outcomes of organizational trust is still under development, studying this topic can help us to uncover and deeply understand the formation and influential mechanisms of organizational trust. Secondly, we further tested a mediation mechanism to explain the relationship between EOR and innovative behavior. It can increase our knowledge on how EOR impacts on innovative behavior. Third, consistent with previous findings that innovative behavior is an interactive outcome of a multitude of factors, we examine the moderating role of innovation climate on the relationship between organizational trust and innovative behavior. We expect that innovative climate, as a perceived construct by the employee, will influence the sensitivity of the relationship between the individual's organizational trust and innovative behavior. We further proposed a moderated-mediation model to test whether the indirect effect of EOR on innovative behavior via organizational trust is moderated by innovative climate, which can help us understand boundary mechanisms that can impact the relationship between EOR and innovative behavior via organizational trust.