The phenomenon of trust and trust building has been widely researched with regard to different contexts and subjects. Nevertheless, the factors that influence trust building in mergers and acquisitions (M&As) and the way in which trust affects the post-M&A process remain unclear. This study explores trust development in the cross-cultural integration process following emerging country firms’ acquisitions in an advanced economy. A grounded theory model was developed to link the contextual characteristics of Chinese M&As in Germany that require the development of trust and the way in which managers understand sources of trust building. The perceived future uncertainty, different levels of technology and management, previous public discourses, and differences in institutional and cultural norms require the development of trust. The data reveal that a range of factors can foster trust development, including economic factors as well as emotional factors, such as mutual understanding, reliability, familiarity, and emotional bonding. A three-stage cross-cultural trust development theory is proposed, asserting that trust can be established based on economic factors, improved through mutual understanding and reliability, and further developed based on familiarity and emotional bonding. Trust development influences the acquiring firm’s behavior with regard to the transparency in information policies, the integration in decision-making, the exercise of control over the acquired firm, and the granting of autonomy in the cross-cultural integration processes.
|Number of pages||24|
|Journal||International Journal of Cross Cultural Management|
|Early online date||1 Jul 2019|
|Publication status||Published - Jul 2019|