Reassessing the Limits of Structural Empowerment: Organizational Constitution and Trust as Controls

Abstract

There is a growing belief among some that employee empowerment provides the most appropriate basis for designing and implementing new organizations. However, from a structural perspective, empowerment represents a moral hazard dilemma for managers, with the possibility of control loss and decreased organizational outcome. While there are several mechanisms for tempering the potential downside of empowerment, we focus on two: organizational constitutions and the development of trusting relationships. We present six specific propositions relating to organizational constitution and trust as controls for tempering the potential downside of empowerment.