Exploring the Influence of Organizational Trust in Post-merger Integration Processes : A Multiple Case Study of Family Businesses

Abstract: Background: In recent years, there has been an increasing recognition of the significance of mergers and acquisitions (M&As) involving family businesses, highlighting their pivotal role in the business landscape. Notably, in the M&A literature, the issue of employees’ trust in the organization emerges as a crucial component in facilitating a successful post-M&A integration. However, existing theories of organizational trust in the post-merger integration process, where the outcome of M&As is ultimately determined, may only partially apply to the distinctive dynamics inherent in family business M&As. This divergence can be attributed to the unique characteristics displayed by family businesses. Hence, this thesis aims to address this research gap by comprehensively examining how organizational trust can be applied in the context of family business M&As.  Purpose: Our research aims to explore how organizational trust influences the post-merger integration process of family businesses. The objective of this dissertation is to offer insights to family businesses concerning M&A endeavors, specifically focusing on the post-merger integration phase, by highlighting the crucial role of organizational trust and its consequential influence on the overall M&A outcome. As a result, the fundamental research question of this thesis is as follows: “How does organizational trust influence the post-merger integration process of family businesses?”  Method: As for the methodology, by leaning towards internal realism as our ontological standpoint and social constructionism as our epistemological standpoint, a more comprehensive understanding of organizational trust in the post-merger integration process of family businesses is achieved. This qualitative study applies the abductive approach as it facilitates the exploration of the phenomena in question and the modification of existing theories by combining previously established knowledge and new observations. A multiple case study is conducted, and data is collected through 12 semi-structured in-depth interviews to reach our aim.  Conclusion: Through combining existing literature and qualitative data, a comprehensive framework on organizational trust is created that is specifically tailored to the context of family businesses that have undergone an M&A and that highlights the significance of the following elements of organizational trust: ability, openness, visibility, and benevolence. This framework holds considerable value as it not only entails visibility as an element, which is novel to the literature, and represents, hence, our main contribution, but it also elucidates how family businesses can leverage their unique characteristics to effectively preserve and nurture employees’ organizational trust even in the aftermath of M&As. By recognizing and harnessing their unique attributes, such as longevity and emotional involvement, family businesses can transform these inherent qualities into strategic assets that sustain employees’ organizational trust, ultimately facilitating a smoother post-merger integration process and an overall successful M&A.