7. Conclusion
In a family firm’s early stages, a high level of trust among family members can lower transaction costs and provide effective governance mechanisms (Steier, 2001). However, as the firm goes through the stages of its life cycle, the family ties that created a high level of trust at the outset may become frayed, an atmosphere of distrust can develop and alternative governance mechanisms may be needed to supplement or replace trust as a governance structure (Steier, 2001; Sundaramurthy, 2008). Yet, when the family firm leader turns over the business to the next generation of family members, a sense of trust and confidence that the successors will preserve the family legacy is implied (Steier & Miller, 2010). This confidence perhaps enhances the entire family’s perception of socioemotional wealth derived from the business, based on an exchange system that stresses cooperation, honesty, stewardship and thus ethical behavior (Long & Mathews, 2011). As an exploratory qualitative study, the findings presented here provide insights on how trust might be maintained in family firms as a next generation prepares for leadership. We examined situations in which an incumbentfamily business leader chooses to transfer the firm to a group of successors, rather than a single individual. The results may indicate that the incumbent is displaying trust in multiple successors to fill the leadership role of the company and the successors are trusting each other to shoulder their share of responsibility. Instead of exit situations such as seen in the cases of monarchs and generals (Sonnenfeld & Spence, 1989 in which the incumbent may be jealous of his/her successor or does not trust the successor enough to let go of power, the presence of a group of successors may stabilize trust by reducing one-on-one interactions that are seen in typical successions. Equal successors may become experienced at relying on each other as some are part of management teams before the ultimate turnover of power.
