Uses of Information Systems to Develop Trust in Family Firms

Abstract

The family business literature has not addressed the role of information systems (IS) in the development of trust in family businesses. Through an in-depth analysis of a Chinese industrial family business in Qingdao, this study shows how several IS contribute to trust within the organization. Trust is conceptualized according to three dimensions, namely interpersonal trust, competence trust, and systems trust. Three main IS have been identified in the organization, namely WeChat, DingTalk, and the Enterprise Resource Planning system (ERP). This exploratory study analyzed how eight departments use these IS to understand which institutional logic is embedded within each IS. Each information system is conceptualized as embedded in a specific institutional logic which is not neutral in terms of trust building. These findings highlight the fact that Chinese executives use specific information systems to develop trust. ERP (here SAP) has a specific inherent institutional logic, namely rational managerialism, which contributes to system trust. Social media such as WeChat and DingTalk are embedded in their own institutional logic which makes them more adapted to specific activities. Unlike rational managerialism, the institutional logic associated with WeChat includes a strong focus on interpersonal communication, cooperation and problem-solving. WeChat is associated with the development of interpersonal trust whereas rational managerialism is rather associated with transparence and formality, thus unsuitable for developing interpersonal trust. Chinese executives use WeChat to create an informal and dynamic social space which promotes the development of stronger social ties with each other. DingTalk is associated with another logic which promotes formal information sharing, reliability and internal management. This information system contributes to the development of another type of trust, namely competence trust. The two social media contribute to sustaining interpersonal trust and competence-based trust which are critical in the development stage of a family business. Findings also show that family members need to create a forum without their presence for employees to exchange freely, thus creating a space in which trust can blossom. This paper concludes with theoretical contributions and implications for practitioners.