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15 - The dynamics of trust across cultures in family firms

Published online by Cambridge University Press:  05 June 2012

By
Isabelle Mari
Edited by
Mark N. K. Saunders ,
Denise Skinner ,
Graham Dietz ,
Nicole Gillespie  and
Roy J. Lewicki
Isabelle Mari
Affiliation:
Jönköping International Business School
Mark N. K. Saunders
Affiliation:
University of Surrey
Denise Skinner
Affiliation:
Coventry University
Graham Dietz
Affiliation:
University of Durham
Nicole Gillespie
Affiliation:
University of Queensland
Roy J. Lewicki
Affiliation:
Ohio State University
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Summary

Summary

The aim of this chapter is to provide new insight into how chief executive officers of family businesses (who are themselves family members) create trust with the firm's owners. I argue that, in the family firm, three interacting subcultures (family, business and ownership) influence chief executive officer (CEO) and owner behaviour in keeping with their governance roles. Because of distinct values and norms of behaviour, the interactions of these three subcultures are often a source of interpersonal conflict, and often undermine relationships of trust built up over generations. Through an exploratory case study and application of the Economies of Worth Model, this chapter examines and illustrates how CEOs of family firms enhance their legitimacy and thus build, maintain, and repair trust.

Introduction

Around the world, family firms dominate the economic landscape (Chrisman et al., 2005; Morck and Yeung, 2004). Family businesses are those where ownership and management are concentrated within a family unit, and where its members work to achieve or maintain intra-organizational family-based relatedness (Litz, 1995). Their corporate governance structure may be composed of the same people, or at least people from the same family (Gersick et al.. 1997; Wortman, 1994). This overlap of ownership and management influences the relationships between the CEO, the board of directors and the owners, as well as the strategy of the family firm (Melin, 2001; Nordqvist, 2005). Indeed, their relationships are founded on three interacting subcultures (family, business and ownership) that may conflict.

Type
Chapter
Information
Organizational Trust
A Cultural Perspective
 , pp. 383 - 404
Publisher: Cambridge University Press
Print publication year: 2010

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