“I'm Your Leader Now, but Do You Trust Me?”: Analysis of Leadership and Trust in Family Firms

Leadership succession is inevitable for most family businesses. To effectively face this challenging transition, next-generation leaders need to have the ability to gain the trust and respect of their employees, however, the impact of employees’ trust during a change in family leadership is challenging given the incumbent’s shadow. The chapter aims to explore how trust in family leaders can impact on succession when a business is passed from one generation to the next. This chapter presents two comparative examples of family business cases operating in the transportation sector in Italy. In the first business, the succession already took place and the next-generation leader is currently running the firm, while in the other firm, the incumbent generation is still in charge of the company and is not passing the baton. Results show that the incumbent and next-generation leader’s perception of their leadership style correspond to non-family employees’ perceptions. However, employees’ trust in the incumbent is higher than the trust in the successor.