The Impact of Cutbacks From a Major State Financial Crisis on Organizational Trust

• Author: Marco Tulio Zanini,Carmen Migueles,Juliana Carvalho
• Published date: 01 April 2022
• DOI: 10.1177/02750740211053004
• Date: 01 April 2022
• Subject Matter: Articles

The Impact of Cutbacks From a Major

State Financial Crisis on Organizational

Trust

Marco Tulio Zanini

1

, Carmen Migueles

1

and Juliana Carvalho

1

Abstract

Previous research has shown that cutbacks in public spending often impact the range and quality of the public services deliv-

ered, leading to negative behaviors on the part of public servants. This article examines how sudden cutbacks caused by a

major state financial crisis have an impact on interpersonal trust within a special police unit. We present the results of a

longitudinal case study using a combination of qualitative methods. The lack of foreseeability and reliability caused by drastic

changes resulting from cutbacks has a negative effect on members’trust in their capacity to perform.

Keywords

cutback management, organizational trust, public safety, special police, financial crisis

Introduction

Cutbacks are a common way of overcoming a financial crisis

(Kickert, 2012). They are often susceptible, however, to

political calculations, leading to cuts that are not driven by

actual evidence, but by opportunistic behaviors. One conse-

quence of such a practice is the defunding of programs that

are vital to citizens, but are not the focus of politicians

(Pandey, 2010; Van der Voet & Van de Walle, 2018).

Such actions directly affect public servants’motivation and

behavior (Kiefer et al., 2015). Thus, although some scholars

claim that crises may serve as windows of opportunity for

organizational change (Cepiku & Bonomi Savignon, 2012;

Raudla et al., 2015), some research suggests the opposite

(Schmidt et al., 2017; Wright et al., 2013). Wright et al.

(2013), for example, argue that in times of austerity change

motivated by financial concerns may not find the same

support as changes aimed at improving organizational

quality or efficiency. Yet theories have not advanced

enough to develop specific hypotheses about how cutbacks

affect the capabilities of agencies within public organizations

(Park, 2019; Schmidt et al., 2017).

Cutbacks often impact the range and quality of services

delivered, leading to a misfit between what public servants

believe to be the focus of their work and the actual work that

is being done. The delivery of services that are considered defi-

cient can lead to frustration, a decrease in motivation, an

increase in negative behaviors, and a decrease in positive

behaviors vis-à-vis the organization (e.g., trust, loyalty, and

commitment), which affect performance (Jensen et al., 2020;

Pandey, 2010; Van der Voet & Vermeeren, 2017).

This study examines how cutbacks following a major

political and financial crisis produce internal uncertainty

and affect interpersonal trust within a public safety agency

at the local level. More specifically, this study looks to iden-

tify the effects of the internal uncertainties that are generated

by abrupt cutbacks in financial support and alterations in

public policies (that require significant short-term adjust-

ments in planning and operational tactics) on the interper-

sonal trust in the leader and in the team within a special

police unit.

Raaphorst (2018) observes that a deeper understanding of

how officials respond to specific kinds, conditions and

consequences of uncertainties is especially important in the

light of managerial improvements. We argue that the internal

uncertainties created by sudden cutbacks might be very neg-

ative when they affect a public safety agency’s critical resour-

ces that enable it to perform appropriately. It is expected that

constant and significant adjustments at short notice, which

are caused by internal uncertainty concerning support, have

a negative effect on the foreseeability and reliability of oper-

ational plans and tactics, which places stress on teams’con-

fidence in their capacity to act precisely. The empirical

1

The Brazilian School of Public and Business Administration at Getúlio

Vargas Foundation (EBAPE/FGV), Rio de Janeiro, Brazil

Corresponding Author:

The Brazilian School of Public and Business Administration at Getúlio Vargas

Foundation(EBAPE/FGV), Rua Jornalista Orlando Dantas 30, Botafogo, Rio

de Janeiro, Brazil.

Email: marco.zanini@fgv.br

Article

American Review of Public Administration

2022, Vol. 52(3) 235–247

© The Author(s) 2021

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DOI: 10.1177/02750740211053004

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