M&As in family firms: keeping trust in the equation
ISSN: 0275-6668
Article publication date: 17 April 2020
Issue publication date: 26 May 2021
Abstract
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.
Keywords
Citation
Lind, S.C. and Lattuch, F. (2021), "M&As in family firms: keeping trust in the equation", Journal of Business Strategy, Vol. 42 No. 3, pp. 188-195. https://doi.org/10.1108/JBS-01-2020-0009
Publisher
:Emerald Publishing Limited
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