Familienunternehmen und KMU Edited by A. Hack, Berne A. Calabrò, Witten/Herdecke H. Frank, Vienna F. W. Kellermanns, Tennessee T. Zellweger, St. Gallen
Both Family Firms and Small and Medium Sized Enterprises (SME) feature a number of distinct behaviors and characteristics which could provide them with a competitive advantage in the market but could also lead to certain risks. The scientific series at hand presents research which provides an empirical and theoretical contribution to the investigation on these specific characteristics and their impact on business practice. The overall aim of this series is to advance the development of theory in the areas of family firm and SME management. Edited by Professor Dr. Andreas Hack University of Berne Professor Dr. Hermann Frank Vienna University of Economics and Business Professor Dr. Andrea Calabrò University of Witten/Herdecke Professor Franz W. Kellermanns, Ph.D. University of Tennessee Professor Dr. Thomas Zellweger University of St. Gallen
Hannes Hauswald Stakeholder Trust in Family Businesses Foreword by Prof. Dr. Andreas Hack
Hannes Hauswald Vallendar, Germany Dissertation WHU Otto Beisheim School of Management, Vallendar, 2012 ISBN 978-3-658-01602-9 DOI 10.1007/978-3-658-01603-6 ISBN 978-3-658-01603-6 (ebook) The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at http://dnb.d-nb.de. Library of Congress Control Number: 2013938480 Springer Gabler Springer Fachmedien Wiesbaden 2013 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein. Printed on acid-free paper Springer Gabler is a brand of Springer DE. Springer DE is part of Springer Science+Business Media. www.springer-gabler.de
Foreword V Foreword To be trusted is a greater compliment than being loved. George McDonald This quotation from George McDonald, a Scottish author and poet, is especially true for relationships in the business world, where a desire for the revival of the honorable merchants concept is seen to be increasing. This concept is as old as business itself: doing business on a handshake without the need to protect transactions with a comprehensive contract. In other words, there is a growing need for trustworthy relationships. But an honorable merchant stands for more than simply trusted relations with business partners. He also stands for a distinctive sense of responsibility for his own business, for society, and for the environment. In short, he takes a proactive stakeholder position. For a long time the advantages and disadvantages of family businesses and the possible reasons for a superior performance compared to nonfamily businesses have been much discussed. We know that stakeholders increased perception of a business s trustworthiness can translate into beneficial outcomes. The increased trust of customers can, for example, enhance marketing efficiency; the increased trust of employees can improve their flexibility; and the increased trust of suppliers can lead to more favorable purchasing conditions. Maybe trust or rather, the ability to generate trust is one of the key determinants distinguishing family businesses from other types of business. But do stakeholders indeed trust family businesses more than nonfamily businesses? And if so, why? This is the central theme of Hannes Hauswald s dissertation. He approaches this complex question first by developing a comprehensive model of trust generation in family businesses, and second by empirically testing parts of his model with real stakeholders. His conceptual model is ground breaking. He is the first to introduce to literature a comprehensive model that explains why stakeholders might perceive family businesses as more trustworthy. In addition, and this is a very strong contribution, for the first time, he incorporates the concept of categorization into trust considerations. Furthermore, he is a pioneer in exploring the dark side of socioemotional wealth in a conceptual framework. But Hannes Hauswald does not limit his work to conceptual thinking. He furthers our knowledge of trust perception by analyzing the attraction that job seekers have for family
VI Foreword businesses. Applying an ambitious method (i.e., a metric conjoint experiment) on a sample of more than 200 job seekers, he finds out that job seekers are indeed more committed to an organization if their perception of family influence on the business is high. But what is even more interesting is that this positive relationship between perceived family influence and job seekers commitment is more pronounced if there is a strong person-to-organization fit and if the economic environment is perceived as hostile. For this reason, Hannes Hauswald s dissertation is not only a very valuable piece of work for researchers but also for practitioners, and especially for family business principals who are debating whether featuring the family influence more prominently is the right thing to do. In conclusion, this dissertation deserves to attract a broad readership. Prof. Dr. Andreas Hack
Acknowledgements VII Acknowledgements First, I would like to thank my doctoral adviser Prof. Dr. Andreas Hack, for his great guidance, his constructive feedback, and his confidence in my research work. Further, I want to thank my second doctoral adviser Prof. Franz W. Kellermanns, Ph.D. Special thanks also go to Prof. Dr. Dr. Holger Patzelt for helping me with the methodological hurdles of conjoint analysis. Second, I want to thank my fellow doctoral students for both, being a great help in the day to day work, and for creating a fun working environment which made me return to my desk also during the hard times of this dissertation project. Lastly, I would like to express my warmest gratitude to my family, who always supported me unconditionally. Hannes Hauswald
Table of contents IX Table of contents Foreword... V Acknowledgements... VII Table of contents... IX List of tables... XIII List of figures... XV Abbreviations... XVII 1. Introduction... 1 1.1. Background... 1 1.2. Research objectives... 2 1.3. Research approach... 3 1.4. Dissertation overview... 5 2. Theoretical background... 7 2.1. Family business research... 7 2.2. Stakeholder research... 12 2.3. Trust research... 14 3. Antecedents and outcomes of stakeholder trust in family businesses An application of the integrative model of organizational trust... 19 3.1. Introduction... 19 3.2. Theoretical basis... 20 3.2.1. Defining family influence and stakeholders... 20 3.2.2. The complexity of trust... 21 3.2.3. Trust formation according to the integrative model of organizational trust by Mayer et al. (1995)... 22 3.3. Impact of family influence on stakeholders perceptions of trustworthiness... 24 3.3.1. Impact of family influence on actual trustworthy behavior towards stakeholders... 25 3.3.2. Impact of family influence on categorization processes... 28 3.4. Impact of stakeholder trust on outcomes for the family business... 31 3.5. Conclusion and implications... 34
X Table of contents 3.5.1. Implications for future research... 35 3.5.2. Implications for practitioners... 36 4. The influence of family ownership on stakeholders perceptions of trustworthiness.. 38 4.1. Introduction... 38 4.2. Theoretical background... 40 4.2.1. Perceptions of trustworthiness... 40 4.2.2. Trustworthy behavior... 41 4.2.3. Categorization processes... 42 4.3. Impact of family ownership on actual trustworthy behavior... 43 4.4. Impact of (perceivable) family ownership on categorization processes... 49 4.5. Discussion... 53 4.5.1. Limitations... 56 4.5.2. Guidance for further research... 57 4.5.3. Implications for practice... 58 4.6. Conclusion... 58 5. Family businesses ability to attract new talent: who is attracted and under what conditions?... 59 5.1. Introduction... 59 5.2. Theoretical background... 62 5.2.1. Person-organization fit... 62 5.2.2. Job seekers perceived family influence... 63 5.2.3. Job seekers long-term commitment... 64 5. 3. Hypothesis... 65 5.3.1. The effect of different needs in different environments... 67 5.3.2. The effect of personal values... 68 5.4. Method... 74 5.4.1. Sample... 74 5.4.2. Conjoint analysis... 75
Table of contents XI 5.4.3. Experimental design... 77 5.4.4. Variables and measures... 78 5.4.5. Analysis and results... 80 5.5. Discussion... 87 5.5.1. Limitations & future research... 89 5.5.2. Conclusion... 91 6. Final conclusion... 92 6.1. Research questions revisited... 92 6.2. Overall contributions... 99 References... 103 Appendix... 123
List of tables XIII List of tables Table 1: Overview of research studies in parts 1-3... 6 Table 2: Exemplary effects of stakeholders perceptions of trustworthiness on outcomes for the stakeholder and the family business... 32 Table 3: Means and correlations... 82 Table 4: HLM results of the effect of economic environment (hostile vs. benign) and job seekers personal values on job seekers long-term commitment... 83
List of figures XV List of figures Figure 1: Delineation of family business definition applied in this dissertation with two other popular approaches... 9 Figure 2: Relationship between calculative and relational trust (Rousseau et al., 1998)... 15 Figure 3: Integrative model of organizational trust (Mayer et al., 1995)... 23 Figure 4: Impact of family influence on stakeholders perceptions of trustworthiness and effects on stakeholder trust and subsequent outcomes... 25 Figure 5: Conceptual model of relationship between (perceivable) family ownership and stakeholders perceptions of trustworthiness... 53 Figure 6: The effect of economic environment (hostile vs. benign) and job seekers personal values on the relationship of job seekers perceived family influence and job seekers long-term commitment... 65 Figure 7: Circular structure of Schwartz s value theory (Schwartz, 1992)... 69 Figure 8: Sample characteristics (n=203)... 75 Figure 9: Sample waterfall... 81 Figure 10: Interaction of job seekers perceived family influence (ownership, management, and culture) with economic environment (hostile vs. benign) and job seeker s long-term commitment... 85 Figure 11: Interaction of job seekers perceived family influence (ownership, management, experience, and culture) with job seekers personal values and job seekers long-term commitment... 85
Abbreviations XVII Abbreviations CEO Chief executive officer CFO Chief financial officer cf. Confer, compare e.g. Exempli gratia; for example Euro FIBER Dimensions of socioemotional wealth: a) Family control and influence, b) Identification of family members with the firm, c) Binding social ties, d) Emotional attachment of family members, and e) Renewal of family bonds to the firm (dynasty) F-PEC Family influence on power, experience, and culture scale i.e. Id est, that is GDP Gross domestic product HLM Hierarchical linear modeling HR Human resource M Million n Sample (number of participants) n/a Not applicable p p-value (probability of type I error) p./pp. Page/pages PhD Doctor of philosophy P-O fit Person-organization fit RBV Resource-based view SD Standard deviation SEW Socioemotional wealth SVS Schwartz value survey Vs. Versus WHU Wissenschaftliche Hochschule für Unternehmensführung