Sustaining trust as informal governance;mechanism: a competitive edge for family firms?

Jörg Freiling and S.M. Laudien
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S.M. Laudien: Otto von Guericke University Magdeburg

Economia Marche / Journal of Applied Economics, 2012, vol. XXXI, issue 2, 9-24

Abstract: Trust is an informal mechanism of governance that seems to work in family businesses differently from other types of companies. This conceptual paper analyzes the impact of internal trust on the competitiveness of firms over time. To this end, we introduce different modes of intra-firm trust, develop a set of research propositions, and introduce a stage model on the development of trust in family businesses over time. By comparing family and non-family businesses, we discuss how the differences may influence the competitiveness. The paper advances research by a holistic approach of trust and a multidimensional view of trust.

Keywords: Family Firms; Firm Competitiveness; Informal Governance; Internal Trust (search for similar items in EconPapers)
JEL-codes: L14 M10 M16 M21 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:mer:review:v:xxxi:y:2012:i:2:n:2

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