That perception appears to be holding. A newly published report reveals that people trust family businesses significantly more than businesses in general.
The trust levels are ~75% for family-owned businesses versus just 59% overall.
That finding comes from a survey of ~15,000 respondents age 18 or older conducted by research firm Edelman Intelligence, which is part of the Edelman marketing communications firm.
The research was conducted across 12 country markets and are contained in the 2017 Edelman Trust Barometer report. In addition to the United States, the other country markets that were surveyed included:
- Saudi Arabia
- United Kingdom
Not only do the respondents in the Edelman survey trust family businesses more, they themselves would rather work for a family business.
Moreover, if they know a company is a family-run business, they’re three times more likely to be willing to pay more for its products or services.
Not everything is quite so positive, however. Compared to businesses in general, family-run businesses aren’t viewed as innovators (only ~15% compared to ~45%), or drivers of financial success (just ~15% vs. ~43%).
Even more discouraging is this finding: Although in actuality family-run businesses are often major sources of philanthropy, only ~17% of the Edelman survey respondents view these companies as leaders in helping to address societal challenges. So, more work appears to be needed to attain the recognition that is deserved in this arena.
Another common perception – and this may be a more accurate one in reality – is that family-run businesses are skimpy in their willingness to share financial and other information about how their businesses are run.
But the most potentially harmful perception is the opinion the general public has about successive generations of family members managing family-run businesses. “Next-generation” CEOs are ~17% less trusted than founders. They’re also considered far more likely to mismanage the business – not to mention being seen as less committed to the success of their enterprises.
In short, an inherited business, like inherited wealth, is viewed with suspicion by many people, and it’s more likely to be perceived as “undeserved.”
So, the portrait of family businesses isn’t completely rosy … but the reputation of these enterprises remains better than for businesses in general.
More information and key findings from the Edelman report can be found here.