Abstract
While family businesses are the dominant form of enterprise in most economies, multi-family businesses with two or more unrelated founding families are not common in the family business environment. The involvement of family in a firm makes these entities and their operations more complex; managing a family firm with multiple unrelated families is even more challenging due to their higher susceptibility to inter- and intra-family conflicts. In this study, we examine why some multi-family businesses are able to avoid or manage intergroup conflicts, and how multi-family businesses can work harmoniously. We utilize a qualitative and grounded theory approach to explore five multi-family businesses using in-depth interviews with nineteen organizational members. Our analysis indicates that trust within and between families emerges as a core construct for these entities. We present a theoretical framework that explains the antecedents and outcomes of this trust and a moderating effect on the antecedent-trust relationship.