Trust Issue in Family Businesses and Its Relationships with Institutionalization

Though family businesses dominate business environment globally, there is a lack of research about these businesses. A literature review yields that trust among family members is such an issue. With the aim of contributing in this sense, this study considers intra-family trust within family businesses. Literature unveils that another faint area of research pertains to family business institutionalization. A general view is that institutionalization of family businesses means professionalization not only in business operations and management, but also in organizational culture passed through family members’ generations. The lack of in-depth studies related to pillars and nature of this institutionalization however, is an issue, which is worth considering. Therefore, this study also aims to make a contribution by finding out facts about family business institutionalization. Beyond these, the ultimate gap to be filled in is how an informal issue such as intra-family trust can be related with a more formal issue, professionalization or namely family business institutionalization. With this specific gap in mind, this study uniquely tries to unearth how intra-family trust and family business institutionalization are related. For these purposes, a pilot study and a detailed research are performed on family businesses in organized industrial zones in Istanbul, Turkey.