Research On The Relationship Between Trust And Team Effectiveness Within Top Management Teams Of Family Businesses

A lot of literature has explored the matter of trust governance within family businesses and had a wide recognition of its positive effects. With the progress of research, the black side of trust has been attracting more and more attention while little related empirical research has been conducted to support it. Therefore, it is an urgent need to deeply explore the nature, structure and efficacy of trust inside family businesses embedded in the wide Chinese social trust context. Specially, we focus on the trust among members of top management team (TMT) which is one of the most representative matters of trust phenomenon in family firms. Owing to TMT’s incomparable strategic position, trust will directly affect team’s decision-making and task-executing process, and then influence on the direction and level of changes in firm’s performance. In the case of family firms, family members who have natural kinship, pan-family members who have close social relationship with family members and special groups of professional managers may coexist. Do they trust each other? What is the feature of the trust among them? And how does the trust impact on the team’s process and then the results? Furthermore, what are the differences between different TMTs in the trust-team performance relationship?This paper tries to analyze the real influence that trust has on team effectiveness from a top management team perspective so as to make contribution to both family business research and Upper Echelons Theory model. Empirical data from100family firms shows that trust can help promote TMT’s social effectiveness, i.e. the extent to motivate team members and satisfy their needs, as well as task effectiveness, i.e. the amount of the contribution the quantity and quality of team’s output bringing to stakeholders. There exists a linear positive correlation between trust and team’s social effectiveness and a quadratic curve relationship between trust and task effectiveness. Specially, when professional managers are introduced into TMT, the relationship between trust and social effectiveness will be strengthened; and there is an inverse U-shaped curvilinear relationship between trust and team’s task effectiveness which means only a moderate level of trust can lead to the best task results.