Interdependence of the Effectiveness of the Enterprise and the Level of Trust in the Employee
Journal Title: Економічний часопис Східноєвропейського національного університету імені Лесі Українки - Year 2017, Vol 4, Issue
Abstract
Coming out of the global financial crisis, businesses have fallen into a deeper one – a crisis of confidence. Trust and economic progress are closely interconnected, the more we trust each other, the better we can work together, the higher chances of economic growth. Low-credence organizations are uncompetitive, and vice versa, those based on high trust have better opportunities to achieve predictable business outcomes in rapidly changing and stressful conditions. Confidence between business partners increases the market value of the enterprise and its profitability, as high reputation is accompanied by a reduction in the cost of monitoring partners, which in turn contributes to beneficial for both contracting parties flexible interpretation of agreements where, as a result of incomplete information, the ability to foresee all scenarios for the development of events is limited. There is a correlation between employee empowerment and profitability. Extremely important is the impact of trust on transactional expenses, which include the cost of obtaining the necessary information on prices and quality of goods, negotiating, contracting, entering into agreements, monitoring of their execution and legal protection of the rights of the owner in case of violation. The trust in the client, employee, supplier and loyalty that results out of it has positive impact on the cost of their communication. Oral agreement instead of laborious negotiations gets real weight then, especially in situations where innovation-oriented changes are taking place. In all these cases, trust acts as a filler of gaps in mutual understanding. It can be easily destroyed by a desire to evaluate the staff. Regular assessments should be replaced by conversations between the supervisor and the subordinate employee about what each of them expects from another, and from the company as a whole, what needs to be done, so that they can perform their work better. Without trust, there can be no talk of a successful motivation of employees.
Authors and Affiliations
Lyubov Lipych
Keywords
Related Articles
- EP ID EP409077
- DOI 10.29038/2411-4014-2017-04-45-52
- Views 104
- Downloads 0
STATISTICAL INVESTIGATION OF WOOD EXPORT IN UKRAINE
In this article absolute and relative export indicators of Ukrainian goods are analysed in general, as well as wood and wood products are examined in particular. The share of wood and wood products export in total export...
Decentralization of Local Finances Management in the Developed Federal and Unitary Countries: Experience for Ukraine
The article analyzes the experience of decentralization of local finance management in the current conditions in such countries as the USA, Canada, Germany, France, United Kingdom. On the basis of this experience the nec...
Revising the Trade and Economic Relations of Right – Bank Ukraine and west Ukrainian Lands with Poland in the Latter Half of the 16 th by the Close of 18 th Century
The situation concerning the trade and economic relations of the Ukrainian lands with Poland in the latter half of the 16 th by the close of 18th century is examined in this article as well as the transport of goods by r...
Institutional Economic Theory: the Scientific and Theoretical Preconditions of Origin (German Historical School)
The article deals with the scientific achievements of the scholars of the German historical school of classical political economy, which positively influenced the further development of economic science and, in particula...
Theoretical Aspects in the Regional Real Estate Markets
The article reveals the main approaches to the category of «competition», defines the features and types of competing models in a market economy, investigates a competing environment in the residential real estate market...