M&As in family firms: keeping trust in the equation
- Purpose. Experience suggests that a loss of trust may occur on both sides of the merger and acquisition (M&A) equation – acquirer and acquiree – though the latter is more generally considered the most affected. The purpose of this paper is to explore how a loss of trust during the M&A process in family firms can be avoided. An acquisition potentially triggers a loss of trust in the workplace and, as a result, a loss of productivity thereby causing the merged business to totter. Moreover, trust in a firm’s owner tends to be a key driver in merging family firms. Design/methodology/approach. The authors investigated an expanding German family firm that recently acquired other family firms. They conducted in-depth interviews on all hierarchical levels in both the acquiring and the acquired firm. These cases are taken from a wider study of acquiring family firms completed in 2019. Findings. Value congruence, integrity and openness are found to enhance trust during M&As, in particular, if the new owner of a merged enterprise is also a family entrepreneur. Under certain circumstances, the trust of employees in the acquired firm’s previous owner can be transferred to the new owner. Originality/value. This study explores how specific circumstances of family firms impacts organizational trust in M&A processes. The developed framework helps family firms to use characteristics of their specific nature as an asset to maintain their employees’ organizational trust before, during and even after M&As.
Author: | S. C. Lind, F. Lattuch |
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DOI: | https://doi.org/10.1108/JBS-01-2020-0009 |
Parent Title (English): | Journal of Business Strategy |
Document Type: | Article |
Language: | English |
Date of Publication (online): | 2020/06/25 |
Year of first Publication: | 2021 |
Provider of the Publication Server: | FH Münster - University of Applied Sciences |
Release Date: | 2020/06/25 |
Tag: | Trust, Change, Values, Family Firms, Merger, Acquisition |
Volume: | 42 |
Issue: | 3 |
First Page: | 188 |
Last Page: | 195 |
Faculties: | Oecotrophologie · Facility Management (OEF) |
Center for Real Estate & Organization Dynamics | |
Publication list: | Lattuch, Frank |
Licence (German): | Bibliographische Daten |