Family Firms and Mergers and Acquisitions: The Importance of Transfer of Trust

Danielle Tucker (dtucker@essex.ac.uk) and Stella Lind (stellalind@kpmg.com)
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Danielle Tucker: University of Essex
Stella Lind: KPMG AG Wirtschaftsprüfungsgesellschaft

Chapter Chapter 16 in Effective Implementation of Transformation Strategies, 2022, pp 387-406 from Springer

Abstract: Abstract This chapter explains the challenges family firms encounter when merging with or acquiring other organisations. Prime among these challenges are the heightened emotional and personal investment that employees and owners have with the organisation. The relational bond between a family firm and its employees is often strong; when the dynamics of this relationship change, this is experienced acutely by organisational members. However, since family firms are characterised by a high level of organisational trust, it should be possible to achieve merger or acquisition success if the right approach is adopted, which acknowledges the different nature of this trust relationship. High trust means that employees are vulnerable because they have positive expectations that the organisation acts with the best of intentions towards them. This means that when a change in trust referent occurs, it is not enough to focus on whether two organisations can be effectively combined/integrated across strategic key areas; it is critical to ensure that the new workforce is given the time and appropriate level of support to affirm and reaffirm trust in one another.

Keywords: Family firms; Mergers and acquisitions; M&A; Trust; Organisational trust (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-19-2336-4_16

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DOI: 10.1007/978-981-19-2336-4_16

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