Bound by blood in the family firm? Examining the effects of trusting and feeling trusted in the family firm top management team
Faherty, Catherine
(2018)
Bound by blood in the family firm? Examining the effects of trusting and feeling trusted in the family firm top management team.
PhD thesis, Dublin City University.
This study integrates the organisational trust and family firm literatures to examine the effects of trusting and feeling trusted in family firms—that is, enterprises that are significantly influenced by members of the same family. Data from 79 organisational triads comprised of family and nonfamily top management team (TMT) members (n = 158) and chief executive officers (CEOs) (n = 79) demonstrate that trusting in, and feeling trusted by, the CEO of a family firm has benefits for TMT job performance, commitment, and voice behaviour. In addition to demonstrating the impact of trusting and feeling trusted, this study adopts a social identity theory perspective to examine differences in trust-related perceptions and behaviours among family and nonfamily TMT members. Results indicate that family TMT members feel more trusted by the family CEO, and perceive the family CEO as more trustworthy, than nonfamily TMT members do. Furthermore, family TMT members are willing to be more vulnerable to, and engage in more trust-based behaviours toward, family CEOs. Results also demonstrate that as family firms evolve across generations, perceptions of CEO trustworthiness decrease. Specifically, later generation CEOs are viewed by TMT members as significantly less able to manage the firm than founders. This study contributes a nuanced perspective to research on organisational trust by examining the trust process in the family firm and in doing so it makes a number of meaningful theoretical advances in the organisational trust and family firm fields. This research also has important implications for practice, establishing that next-generation leaders have an extra burden of proof in demonstrating their ability to lead in family firms based on merit rather than on lineage alone.