Brokering Trust: The Construction of Transnational Family Business Networks, 1980-2010

Abstract

Abstract Family capitalism became considerably empowered over the three decades prior to the great recession in 2008. This article argues that the construction of transnational family business networks through the coordinated action of individuals and institutions was crucial to the overall legitimization of family capitalism. The rise of a family business institutional infrastructure in the United States and its creative translation into the European context are first described and then analysed in the light of organizational communication theory. Building on the communication as constitutive of organizations view (CCO) and on Casson’s studies on the economics of trust, the article shows that interpersonal and inter-organizational trust and communication played a key role in the institutionalization of family business on both sides of the Atlantic. Consultants and the other drivers of this fascinating process acted primarily as trust brokers, helping to reduce transaction and information costs and bridge the gap between business owners, external professionals, and society. Finally, the story of the family business movement confirms that elites can easily manage cultural differences to engage in transnational networking. However, structural differences between US and European networks suggest that national institutional settings strongly influence communication among interest groups and its organizational outcome.