2.1 Trust, Gender, and Women as Leaders

Leaders of an organization may set a strong corporate culture and tone, but it is developed, maintained, and implemented by the firm's employees. Employee perceptions of leadership, including the abilities of women in those leadership positions, are critical to framing and maintaining an organization's culture. Employee perceptions of a company's authenticity of its leadership, job satisfaction, and work flexibility affect organizational culture, because the strength of those attributes exemplify the firm's values (^{Azanza et al., 2013}). Building trust in the organization is foundational to building a strong culture (^{Wang & Hsieh, 2013}). When employees trust their firm, they are more likely to embrace internal and external strategies and decisions, the corporate culture, and its perceived outcomes (^{Fukuyama, 1995}; ^{Wang & Hsieh, 2013}).

Trust is "the mutual confidence that no party to an exchange will exploit another's vulnerability" (^{Sabel, 1993}, p. 1133). It includes notions of competence, openness, and reliability (^{Fukuyama, 1995}), and can determine how employees perceive strategic decisions and firm performance (^{Korsgaard et al., 1995}). High organizational trust helps the achievement of organizational goals (^{Mayer et al. 1995}); it also influences how people view their firm's reputation, performance, and social standing (^{Shockley-Zalabak et al., 2000}). At its most fundamental, trust is the "preparedness to be vulnerable" (^{Bevelander & Page, 2011}), and the confidence we place in something when we cannot fully control the outcome.

Employees put their trust in their workplace, recognizing that firm strategies involve risks that are likely to affect them; perhaps negatively. Employees want to trust that their firm will act, not just in the best interests of shareholders but in the interests of all stakeholders, including its employees. When employees have a high level of trust in their firm, they are likely to be more productive (^{Nyhan & Marlowe, 1997}), engage in more critical decisions (^{Korsgaard et al., 1995}), be less corrupt (^{Uslaner, 2004}), and support the corporate strategy (^{Korsgaard et al., 1995}). They may even relinquish many of their own concerns, believing the firm has their best interests at heart (^{Uslaner, 2004}). Because of its pervasiveness within corporate culture, trust sheds light on how people respond to managerial structures and decisions (^{Wang & Hsieh, 2013}). It helps shape the confidence people have in the organization and its progress towards its long-term goals.

The perception of women as leaders impacts that organization on several performance dimensions. Larger firms that employ high percentages of women in management positions, and whose associates have a strong positive perception on their abilities, have high return on equity, return on assets, return on sales, and return on investments (^{Shrader et al., 1997}). Among large, public Australian firms, strong social performance was the positive link that mediated between women on boards and financial performance (^{Galbreath, 2018}). Firms that support equitable policies and practices, such as those that actively support women as leaders, may see strong strategic benefits alongside benefits of strong organizational trust (^{Joshi & Diekman, 2022}).

Indeed, women in leadership positions are often associated with stronger perceived firm performance (^{Katzenbach et al., 1995}; ^{Krishnan & Park, 2005}), suggesting that a positive perception of women's ability to lead is associated with a positive overall perception of the firm. For example, in their study of US firms from 1992-2004, ^{Khan & Vieito (2013)} found that firms with women chief executive officers (CEOs) showed performance improvements compared to firms with male CEOs, and the firm's risk level was considered to be lower when women held a key leadership role. Thus, the perception of women as managers will influence employees' perception of the firm's performance. Based on the preceding, we hypothesize the following:

Hypothesis 1: The greater the organizational trust, the more positive the perception of organizational performance.

Hypothesis 2: The more positive the perception of women as managers, the more positive the perception of organizational performance.

Organizational trust influences employees' perception of women and their perceived performance in leadership roles (^{Javalgi et al., 2011}). It encourages employees to accept decisions of top management (^{Uslaner, 2004}) and to be a part of implementing such decisions. In this case, characteristics of the trustee is tightly coupled with their trustworthiness, such that the level of trust a person has in someone is transferred to the entity associated with that individual. In other words, people who trust organizations will also have greater trust in a specific organization (^{Pirson, et al., 2019}). Higher organizational trust will drive employees to favor and embrace the firm's managerial decisions, including those decisions to engage more women as managers, and the decisions of those women managers.

Trust in leadership is associated with positive organizational performance, work attitudes and organizational citizenship behaviors (^{Dirks & Ferrin, 2002}). Likewise, employees' perceptions of the firm's other behaviors, such as corporate social responsibility, positively influence their perceptions of the firm's performance (^{Young & Makhija, 2014}).

Trust usually occurs because of the belief that the trustworthy party embodies attributes such as competence, concern, openness, and reliability (^{Mishra, 1996}). When employees have high levels of trust in the people in their organizations, personified by ability, benevolence, and integrity (^{Mayer et al., 1995}; Mayer & Davis, 1999), that trust will extend to other aspects of the organization (^{Tan & Lim, 2009}), including how leaders are identified and whether women are included in that process. Thus, if trust increases the confidence one has in another party (^{Schoorman et al., 2007}), we suggest that the employees' perceptions of women as managers will influence the relationship between organizational trust in the firm and how employees view its performance.

So, if employees trust their firm, they will trust managerial strategies and decisions. The more that employees trust their firm, the more positive their perceptions of women leaders in their organization will be. Similarly, if employees perceive women in leadership as positive, the relationship between organizational trust and organizational performance will be more positive. Because of this, we posit the following relationship:

Hypothesis 3: The perception of women as managers mediates the relationship between organizational trust and organizational performance.

Men and women behave differently in organizations (^{Sánchez & Lehnert, 2019}) and an employee's gender may influence the relationship between organizational trust, their perception of women as managers, and organizational performance (^{Correll, 2017}). Men and women perceive each other differently especially as they serve in leadership roles (^{Prime et al., 2009}). For example, a study about leadership styles found that women transformational leaders were less favored and more often criticized by male subordinates, compared to women subordinates (^{Ayman et al., 2009}).

Men are often reluctant to work for a woman manager, whereas women who identify with being a woman in a managerial role, may be more empathetic and understanding (^{Berkery et al., 2013}). Men tend to gendertype managerial roles with a preference towards other males, while women classify managerial roles as being for both men and women (^{Britton 2017}). A study of women leaders in academia found that values typically attributed to women (e.g., multi-tasking, supporting and nurturing, people and communication skills, and teamwork), frequently conflict with universities' norms and cultures (^{Joyner & Preston, 1998}; ^{Priola, 2004}) that tend to value a more masculine culture. In settings where women are more likely to see themselves in a leadership role, they will not see much distinction between themselves and other women as managers (^{Sánchez & Lehnert, 2019}). Men may perceive women leaders as an anomaly, as something different, unique, and outside of their ordinary experience. Women, on the other hand, are experienced leaders de facto and often operate without the title and recognition, therefore, they often perceive women leaders as just leaders. This difference between the way men and women perceive women leaders will influence the relationship between trust and the perception of the latter as managers, as posited below:

Hypothesis 4: Gender moderates the relationship between organizational trust and the perception of women as managers, since men see women as managers as different, while women do not.

Figure 1 highlights our theoretical model. It proposes that trust is important to understanding the relationship between an employee and how they perceive women as leaders in their organization. This component of trust drives an understanding of the organizational culture. Further, gender plays an important role in this association, moderating the relationship between trust and women as leaders, because men and women perceive women leaders differently. This provides a stronger understanding of how employees perceive their organization and its performance.

Source: own elaboration.

Figure 1 Theoretical Model: Organizational Trust, Gender, and Women as Managers 

3.1 Variables, Scale Development, and Reliability

Respondents answered 53 questions comprising eight subscales, using a seven-point Likert scale. The principal constructs were organizational trust, perception of women as managers, and perception of organizational performance.

To measure organizational trust, we adopted questions from ^{Huff and Kelly (2005)} and ^{Sánchez and Lehnert (2019)}. Exemplar questions measuring trust include: "There is a very high level of trust throughout my firm," and "I am willing to depend on my firm to back me up in difficult situations."

Perceptions of women as managers was measured using ^{Terborg et al.'s (1977)} women as managers (WAMS) scale. WAMS has been used extensively in management literature to understand how men and women perceive women in management and leadership (^{Baldner and Pierro, 2024}) and includes 21 items such as statements related to intention, ability, responsibility, and aggressiveness. These items highlight the stereotypes that women may face in managerial positions with higher rating reflecting a more negative position towards women as leaders (^{Contu, et al, 2023}). The validity and reliability of WAMS was established during the initial development (Terborg et al., 1977) and has continued to show strong reliability over the last four decades (e.g., ^{Javalgi et al., 2011}; Baldner and Pierro, 2024; and ^{Contu et al. 2023}).

Organizational performance was measured by asking respondents if they perceived their firm was much better than competitors in terms of revenue growth, net income growth, and overall performance (c.f., ^{Sánchez & Lehnert, 2018}). We averaged these measures to determine perceptions of firm performance. ^{Delaney and Huselid (1996)} noted that perceptions of organizational performance are valid and appropriate measures, especially to assure respondents of confidentiality protection, since our study surveyed people working for firms in Latin America and the United States, and many of those were private or family-held.

Further, previous research in management has measured respondents' perceptions of firm performance, which tends to be positively correlated with objective measures of financial performance such as return on assets and growth in sales (^{Chadwick et al, 2015}), making perceptions a valuable way to measure performance (^{Harel & Tzafrir, 1999}).

We verified our constructs and ran tests of convergent and discriminant validity for all scales utilizing ^{Fornell and Larcker's (1981)} average variance extracted (AVE) and composite reliability measures as an alternate measure of reliability than Cronbach's alpha. Convergent validity of all items loading on each construct was above recommended levels for scalar reliability (0.6; ^{Fornell & Larcker, 1981}). Tables 1 and 2 present the AVEs and the results of these tests confirm both discriminant and convergent validity of the scale measures, and reliability within each measure for both the Latin America and USA samples.

To test for common methods variance, (^{Chang et al., 2010}), we performed both the Harman one factor test and constrained the measurement models as recommended by ^{Podsakoff et al. (2003)}. Both tests indicated that our Latin sample did not exhibit any common methods variance. The US sample single factor exhibited 53% total variance, indicating a potential for common method variance.

To follow up on the level of common method variance (^{Fuller et al., 2016}), we employed ^{Lindell and Whitney's (2001)} partial correlational analysis. We used marker variables (economic climate and financial weakness) with no theoretical correlations to the other variables to parse out common methods bias (^{Lindell & Whitney, 2001}). These measures were adopted by ^{Venard (2009)}. Sample questions for economic climate included "Inflation is problematic for the operation and growth of firms like mine." and for financial weakness were "High interest rates are problematic for the operation and growth of firms like mine." After running the zero-ordered correlations and partial correlations on our constructs and response with a marker variable for both the Latin and the USA models, we conclude that the model is not influenced by common method bias, with no significant differences between correlations. Furthermore, these results support the validity of the models.

5.1 Managerial relevance

Our results have several implications for managerial practice. There is an opportunity for a novel approach to improving representation of women in leadership by working to shift men's perceptions (^{Liu & Wilson, 2001}) toward greater acceptance of and confidence in women's abilities, as may be the case in the Latin American countries. Women as leaders are associated with higher organizational earnings (e.g., ^{Krishnan & Parsons, 2008}), and improved performance and growth (^{Dwyer et al. 2003}). As firms elevate more women to leadership, those firms experience positive financial results and additional associated effects, including more emphasis on work-life balance (see ^{Adame, Caplliure, & Miquel, 2016}).

Positive perceptions by both men and women of women's abilities to lead may be crucial to achieving organizational success because they influence other factors that result in a more trustworthy, and more successful, organization (^{Joshi & Diekman, 2022}). Men who view women leaders favorably allow the trust they have in their organizations to positively impact their confidence in the firm's performance. Trust is the key to making this happen. Indeed, organizational trust is important to organizational success because working with others, including women colleagues and leaders, requires significant interdependence, respect, and trust one another to reach organizational goals (^{Joshi & Diekman, 2022}). By facilitating organizational trust, it may be possible to overcome gender barriers to having women as managers. Firms that want to build organizational trust might try designing recruitment materials that boast substantial gender and other types of diversity, as suggested by ^{Kroeper, Williams, & Murphy (2022)}.

Building trust in the firm's selection of leaders is a crucial step in reducing the gender disparity between employees (^{Correll, 2017}). Wise company executives are aware of this. Organizational performance stands to benefit in firms where employees recognize the capabilities of its leaders, regardless of whether they are men or women (^{Javalgi et al., 2011}), and where competence, integrity, benevolence, and other characteristics of trust are embedded in employees' perception of the firm (^{Dirks, 2000}).

5.2 Limitations and future research

One of our study's limitations is the binary concept of gender. The masculine and feminine distinction of gender is necessarily limiting, especially as the cultural discussion on gender becomes broader and more inclusive in its understanding of gender-based identity. Future research might extend this study to a broader construct of gender identity and its impact on leadership.

A second limitation is based on the use of common methods. As we know, common methods variance may cause correlations to be either falsely inflated or deflated (^{Williams & Brown, 1994}). A conversation in the literature continues, however, as to what level common methods variance needs to rise to start creating concerns of biases (see ^{Brannick et al., 2010}). We recognized this concern from our construct creation and sample selection and attempted to mitigate the biases by conducting convergent and discriminant validity testing across sample populations, using multiple sample populations within different countries, and using marker variables to test for bias (^{Conway & Lance, 2010}).

A third and final limitation is the use of a sample from emerging market countries, and the caution required before generalizing the results to people and firms elsewhere. We recognized this concern and replicated the study using a USA sample. Nevertheless, as noted in the discussion about the lack of gender moderation in the Latin American sample, there may be cultural and institutional variables that also influence the trust, women as managers, and performance relationships in organizations in other countries.

5.3 Conclusion

There is need and opportunity to expand gender diversity among the leadership ranks in today's organizations (^{Abdallah & Jibai, 2020}). As organizations struggle with overcoming the barriers that hinder leadership diversity, our research suggests that building greater trust might help break them down. Many leaders are committed to establishing greater organizational trust, and it may be useful for them to consider that perceptions men and women have about women leaders may differ. Those different perceptions might make their organizations vulnerable, so, to avoid vulnerability, they might work to build more diverse, open, and trustworthy organizations. Since both men and women have the ability and the desire to lead (^{Sánchez & Lehnert, 2019}), and since men and women often lead differently, leaders of many firms might benefit from understanding how greater organizational trust by employees can drive strategic goals.

The differences in the ways men and women lead are important, and they are poised to positively impact the trajectories of modern organizations. The pace of change in firms is fast and furious, and to keep up with it, more women must serve in top leadership positions despite their current underrepresentation in the higher ranks.

Women still rise to organizational leadership at a very slow rate, and unless strategies and tactics to increase their numbers change radically, leadership diversity will not keep up. Furthermore, "women must be encouraged from the ground up to pursue opportunities, to seek supportive working relationships and to celebrate the accomplishments of other women" (^{Gillard & Okonjo-Iweala, 2022}).

We suggest that a key strategy to do this is to build trust among employees, particularly male employees, as firms adopt strategies to promote and appoint more capable and willing women to leadership positions. This trust building, we argue, will help break down barriers that may have led some employees, particularly men, to perceive that women may not be as qualified or as capable as men to lead. In other words, building trust and expanding leadership diversity to include more women are strategies that, if implemented in tandem, will reinforce one another and create a platform for positive organizational performance. Mellody Hobson, president of Ariel Investments, challenged her colleagues at a meeting of Fortune 500 leaders who said they were "working on" more leadership diversity. Her point was blunt: "You do not 'work on' better earnings...you either do, or you do not" (^{Heimer, 2017}), and she called for more women in powerful positions, period. Doing so is likely connected to greater perceptions of firm performance, and trust helps drive this relationship. This connection between greater gender equality in leadership and organizational trust can motivate organizational leaders to stop "working on" diversity, and to start delivering a more representative and equitable workplace that fosters trust among all individuals, thereby positioning the firm for stronger, more positive performance.