When family members share a healthy and enriching relationship characterized by trust and respect, such family firms tend to outperform their counterparts. A core element is trust, especially a trustor’s belief that a trustee will act beneficially because the trustee cares about the trustor’s welfare. High trust within a business environment can enhance firm confidence, stimulate firm performance during times of market uncertainty, and trust facilitates the formation of alliances and resource exchange.
Therefore, many Family Businesses survive over generations because they fulfill the socioemotional needs of their owners in pursuit of non-economic objectives. These, in turn, significantly influence the financial performance of the firm. In the absence of family commitment, cohesion, new generation experiences, trust and increasing unresolved differences in the family, the same strategic resources can lead to premature death of the family enterprise.