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Family Business and Social Capital

Edited by Ritch L. Sorenson

The chapters in this cutting edge book comprise scholarly work on social capital in family business along with chapters written by family business owners and advisors. Topics covered include social capital as it relates to governance, trust, family and business identity, communication, family councils, work–family balance, and the use of advisors and continuing education to build social capital. Novel in its approach of integrating the voices of scholars, business families, and advisors, this book is useful not only for business research and classroom use, but also for business families and their advisors.
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Chapter 6: Summary of dialogue: observations about trust and ethics in family business

Trina S. Smith

Extract

In discussing trust in family business, including ways to generate trust, it is important to recognize that trust in a family business is qualitatively different than trust in a normal business because of the family. Thus, as a participant noted, there seems to be genuine trust in family businesses because the members are looking out for each other’s best interests. This allows room for frankness. In other words, as stated by a participant speaking about family members, “If your butt looks too big in those jeans, they will tell you.” This relates to other comments centering on the resiliency of trust in family business. As such, participants discussed that trust is resilient in families because you can stretch bonds further inside a family than you can outside, as there is a strong innate desire within families to trust. Family members do not always have to prove themselves. For example, a participant noted, “even when family members get the sense that, ‘I don’t trust you,’ time can pass, and they can have lunch, and say, ‘you know we’re brother and sister, we need to get over this.’” Thus, the family bond provides resiliency.

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