Consumer research in family businesses reveals that family firms are perceived as more trustworthy among their customers, relative to non-family firms. Despite this, the literature has not theoretically examined family firms as trustors and how they make sense of trust with non-kinship outside partners. This is alarming because the literature indicates that family firms are least likely to maintain relationships with partners due to their insularity. This insularity stems from their risk aversiveness, resistance to change, and fewer outside stakeholders. Trust is significant for relationship maintenance; thus, this research aims to understand how trust is built over time between family firms and their major suppliers.
The research was conducted in Trinidad, and an explanatory case study method was used. This method illustrated the process of maintaining trust between the Chief Executive Officers (CEOs) of family businesses and their major suppliers via five cases. The first three cases illustrated family firm buyers in relational exchanges with family firm suppliers, while the last two cases focused on family firms in relational exchanges with non-family firm suppliers. In total, 18 in-depth interviews were undertaken with key participants. A maximum of 3 to 4 interviews was held per case. This entailed three family members from the buying family firm side and one representative from the supplier side. The interviews ranged in length from 30 minutes to 90 minutes. Each case was theoretically framed based on Mayer’s (1995) trust model: Ability, Benevolence, and Integrity.
The study found that interpersonal trust was more important for family firms than inter-organizational trust. More so, trust is further enhanced between family firms working with other family firms because family firms, regardless of their asymmetry (i.e., size), seem to identify with each other. As a result, in inter-family firm relational exchanges, there is a higher degree of personal benevolence (emotional closeness, generosity), professional benevolence (availability/responsiveness), relational bonding (values alignment, friendly ties), and familiarity with each other over time. This scenario was least observed among family firms in relational exchanges with non-family firms as the relationship was more impersonal with almost no signs of benevolence. Specifically, at the maintenance stage of the relationship, family firms working with other family firms seem to have more of a long-term horizon perspective of the relationship relative to working with non-family firms. More so, actively involving multiple generations (e.g., the 2nd. 3rd etc.) in the stages of the buyer-supplier relationship increases the cultural imprint and the chances of the buyer-supplier relationship continuity for the next generation of successors.
Past studies indicate that trust is higher among families and their kinship networks. While research purports strong ties may exist among families and their kinship network, to a lesser extent, there is no research on the role of trust in other associative arrangements of family firms. This research fills this gap by showing that family firms could also build longstanding fruitful relationships in other relational exchanges. Despite this, the study was limited to qualitative inquiry. Future research could further measure the antecedent and impact of the trust relationship between family businesses and their suppliers.
This study could help practitioners tailor their business models to determine the most dominant forms of practice to increase trust and family firm allegiance.
This dissertation proposes to widen the perspective of buyer-supplier trust within the family business context.
Keywords: Family Businesses, Familiness, Buyer-Supplier Relationships, Trust
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