| This study explores the thesis that trust in family-owned businesses is essential in terms of quality of life of members, organizational performance, and continuity of family ownership. Seven case studies are presented from in-depth interviews with 60 participants of family-owned companies, ranging from first through fifth generation family ownership, with annual revenues between approximately {dollar}10 mm and {dollar}150 mm.; In this research, the role of trust is explored from the perspectives of family history, norms and values; espoused leadership values and practices; succession, and other significant family and business transitions. Findings suggest that relatively high and low trust in family businesses is created and maintained by the attitudes, leadership practices, and interpersonal relationships of family members, who serve as a primary constellation of role models for those who are involved with the organization. The ensuing general level of trust in the organization develops from the example of the family constellation (based on their family histories, norms, and values), which characterize the standards from which others expect to be treated.; Four primary dimensions were found to constitute trust in family-owned businesses: Character, Competency, Predictability, and Supportive Behavior. Leadership practices pertaining to these dimensions create and reinforce relative trust or mistrust in the organization. Specifically, the research data point to the importance of: effective communication processes, involvement in decision making, and approaching trust-building as a proactive process. When the foundation of trust is established by family business leadership, it grows through reciprocation of trust-building attitudes and behaviors by members of the organization, thus creating a circular reinforcing process.; To the extent that relatively high trust exists in the family business, there is greater receptivity and effectiveness in several key areas such as, engaging in meaningful dialoguing and planning processes significant for the family and business continuity. In addition, higher trust environments correlate with motivation, commitment, cooperation, participation, productivity, and loyalty of members of the organization; increasing performance and continuity of the business. Conversely, relatively low trust promotes inconsistency, ambivalence, self-interest, competition, and confusion in members of family-owned businesses; thereby contributing to decreasing performance and adversely affecting continuity. |
