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The career staff that I’ve worked with who are even high level, they have the institutional knowledge. They can say, “This didn’t work before.” Or, “This is what happened in the past when we tried that.” Or, “We tried that 15 years ago under blah-blah-blah, and this is what happened. . . . Terrible idea.” —Anonymous career middle manager at the Department of Education26 I think one of the hardest things for new leadership is to involve career staff who have been there, who have been with the programs, with the operations, but to move ahead with your agenda. I know in the Bush administration they were very closed-door for a long time. That loosened up over time, but it was just such an obviously shortsighted technique. —Anonymous career middle manager at the Department of Education27 This chapter focuses on how stratified trust (i.e., the trust established between career executives and political appointees) and politicization (i.e., the number and character of appointees in a given organization) affect an agency’s capacity to develop intellectual capital. While trust can become an asset created and leveraged through relationships, these relationships are conditioned by many factors—what Oliver Williamson (1993) referred to as “embeddedness attributes.” Transactions between individuals depend not only on the attributes of the individuals involved but on the attributes of the trading environment that shape the transaction. Embeddedness attributes that are particularly important to public organizations include the (1) structural characteristics of the organization (e.g., level of red tape, rela3 Connecting Trust to Intellectual Capital through the Multileveled Environment of the Executive Branch Connecting Trust to Intellectual Capital 75 tive hierarchy, merit protections), (2) political attributes of the organization (e.g., the number of political appointees, the organization’s chief policy domain ’s placement on the president’s agenda, the organization’s susceptibility to legislative oversight, the continuity of appointed leadership), (3) professional and technical attributes of the organization (e.g., the level of specialized expertise required of its employees), (4) organization’s culture (e.g., the informal norms of the organization) (Barnard, 1938, 1968), and (5) relative “looseness” of the organization’s network ties (Burt, 1997). Of course, it takes time to build trust. And the relationship between trust and knowledge exchange is reciprocal. Each exchange or combination of information is presumably spurred by a perception of value toward the achievement of individual and collective goals (accordant with calculative accounts of trust). Increased “anticipation of value through such exchanges” should follow (Nahapiet & Ghoshal, 1998). Therefore, it is difficult to separate the endogeneity inherent to trust and intellectual capital building in dyadic relationships, especially as it concerns calculative accounts of trust. In other words, “I will trust you when I perceive that my interests are encapsulated in your own, and I gain that perception through repeated exchanges of information that advance those interests” (paraphrased in my own terms from Hardin, 2006b). However, while it is difficult to overcome the endogeneity of trust and intellectual capital building in individual, dyadic relationships between superiors and subordinates, we can more easily distinguish the connection between perceptions of intellectual capital capacity at lower levels of an organization and trust established at higher levels in the organization if we can measure trust established at these levels separately from the individual survey responses of employees at lower levels of the organization. Therefore, in the model developed in this chapter and tested in the subsequent chapter, I do not propose a causal direction for dyadic subordinate-supervisor trust in proximal relationships, though I do expect a positive association. At the same time, I can separate the dyadic trust established among actors at higher levels of the organization as agency-level attributes that help define the context in which lower-level employees operate. In particular, the utilization of hierarchical linear modeling techniques provides the most appropriate method of approximating these relationships—a point that I delve into further in this chapter. 76 Rethinking the Administrative Presidency Conceptualizing Embeddedness Attributes I refer to the trust established at executive ranks in discrete, dyadic relationships that are analytically separable from the relationships between superiors and subordinates at lower levels of the organization as “stratified trust.” I expect that stratified trust will positively impact perceptions of intellectual capital capacity at lower levels of the organization as well as moderate the importance that lower-level employees attribute to the dyadic trust they have in their own direct superiors. Stratified trust therefore acts as an embeddedness attribute in the...


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