Harvard Business Review Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise by Josh Baron and Rob Lachenauer, Harvard Business Review Press
Navigate the complex decisions and critical relationships necessary to create and sustain a healthy family business–and business family. Though “family business” may sound like it refers only to mom-and-pop shops, businesses owned by families are among the most significant and numerous in the world. But surprisingly few resources exist to help navigate the unique challenges you face when you share the executive suite, financial statements, and holidays. How do you make the right decisions, critical to the long-term survival of any business, with the added challenge of having to do so within the context of a family? The “HBR Family Business Handbook” brings you sophisticated guidance and practical advice from family business experts Josh Baron and Rob Lachenauer.
Vazquez, Pedro. 2018. “Family Business Ethics: At the Crossroads of Business Ethics and Family Business.” Journal of Business Ethics 150 (3): 691–709. https://doi.org/10.1007/s10551-016-3171-1.
In spite of the considerable development of research in the fields of business ethics and family business, a comprehensive review and integration of the area where both disciplines intersect has not been undertaken so far. This paper aims at contributing to the call for more research on family business ethics by answering the following research questions: What is the status of the current research at the intersection of business ethics and family business? Why and how do family firms differ from nonfamily firms regarding business ethics? And, what are the key directions for further research? To answer these questions, this study combines a systematic approach for the selection of articles, resulting in a sample of 31 articles over 35 years, with a narrative review to analyze the literature. This paper finds that research on family business ethics is scarce but increasing and that family firms are considerably different from non-family firms regarding ethical issues. Particular stakeholders, goals, relationships, and practices are found to be the forces behind the peculiarity of family business ethics. Ultimately, research development on family business ethics is encouraged and future research directions flowing from the key findings and reflections of this review are provided.
Astrachan, Joseph H., Claudia Binz Astrachan, Giovanna Campopiano, and Massimo Baù. 2020. “Values, Spirituality and Religion: Family Business and the Roots of Sustainable Ethical Behavior.” Journal of Business Ethics 163 (4): 637–45. https://doi.org/10.1007/s10551-019-04392-5.
The inclusion of morally binding values such as religious—or in a broader sense, spiritual—values fundamentally alter organizational decision-making and ethical behavior. Family firms, being a particularly value-driven type of organization, provide ample room for religious beliefs to affect family, business, and individual decisions. The influence that the owning family is able to exert on value formation and preservation in the family business makes religious family firms an incubator for value-driven and faith-led decision-making and behavior. They represent a particularly rich and relevant context to re-assess the relationship between ethical beliefs, decision-making processes and behaviors in business organizations at the interface between family and professional logics. This Special Issue is dedicated to deepening our understanding of the role religious values and spirituality play in the formation of organizational ethical practices in faith-led family firms and resulting organizational and family-related outcomes. In this editorial, we introduce the 10 papers included in this Special Issue, which investigate the relationship between religion or spirituality and family firm ethical behavior in various geographical, cultural and religious contexts, using a multitude of qualitative and quantitative methodologies. By focusing on the effects of religious or spiritual orientations on both the business and the family, as well as on the values, norms and goals present in the family business system, further research can gain a more nuanced understanding of the relationship between religious and spiritual believes, and sustainable ethical behavior in family firms.
Carradus, Angela, Ricardo Zozimo, and Allan Discua Cruz. 2020. “Exploring a Faith-Led Open-Systems Perspective of Stewardship in Family Businesses.” Journal of Business Ethics 163 (4): 701–14. https://doi.org/10.1007/s10551-019-04387-2.
The purpose of this study is to examine how faith-led practices in family firms affect organizational stewardship. Current studies highlight the relevance of religious adherence for family businesses, yet provide limited understanding of how this shapes the key traits of these organizations. Drawing on six autobiographies of family business leaders who openly express their adherence to their faith, and adopting an open-systems analysis of these autobiographies, we demonstrate that faith-led values influence organizational and leadership practices. Overall, our study suggests that the influence of religious beliefs in the organizational practices of family businesses have greater repercussions than previously thought. By introducing a faith-led approach to stewardship, we enrich the theoretical discussion around stewardship and the relevance of religion in family business.
Discua Cruz, Allan. 2013. “Christian Family Businesses: Opportunities for Future Research.” Journal of Biblical Integration in Business 16 (2). https://cbfa-jbib.org/index.php/jbib/article/view/129.
Family businesses dominate the business landscape around the world. Traditionally, research has concentrated on understanding the complex processes that underpin the creation, development, and survival of family businesses. To date, however, a Christian perspective on family business research has been largely overlooked. The aim of this paper is to explore the connections between a Christian perspective and the most prevalent business form worldwide. This paper contributes by reviewing relevant literature in the family business field and by suggesting future research paths.
Berrone, Pascual, Cristina Cruz, and Luis R. Gomez-Mejia. 2012. “Socioemotional Wealth in Family Firms: Theoretical Dimensions, Assessment Approaches, and Agenda for Future Research.” Family Business Review 25 (3): 258–79. https://doi.org/10.1177/0894486511435355.
This article makes the case for the socioemotional wealth (SEW) approach as the potential dominant paradigm in the family business field. The authors argue that SEW is the most important differentiator of the family firm as a unique entity and, as such, helps explain why family firms behave distinctively. In doing so, the authors review the concept of SEW, its different dimensions, and its links with other theoretical approaches. The authors also address the issue of how to measure this construct and offer various alternatives for operationalizing it. Finally, they offer a set of topics that can be pursued in future studies using the SEW approach.
Habbershon, Timothy G., and Mary L. Williams. 1999. “A Resource-Based Framework for Assessing the Strategic Advantages of Family Firms.” Family Business Review 12 (1): 1–25. https://doi.org/10.1111/j.1741-6248.1999.00001.x.
The Resource-Based View (RBV) of competitive advantage provides a theoretical framework from the field of strategic management for assessing the competitive advantages of family firms. The RBV isolates idiosyncratic resources that are complex, intangible, and dynamic within a particular firm. The bundle of resources that are distinctive to a firm as a result of family involvement are identified as the ?familiness? of the firm. This approach provides a research and practice method for assessing the specific behavioral and social phenomena within a firm that provide an advantage. Using a familiness model for assessing competitive advantage overcomes many of the problems associated with the generic claim that family companies have an advantage over nonfamily companies. It also provides a unified systems perspective of family firm performance.
Chrisman, James J., Pramodita Sharma, and Simon Taggar. 2007. “Family Influences on Firms: An Introduction.” Journal of Business Research 60 (10): 1005–11. https://doi.org/10.1016/j.jbusres.2007.02.016.
Starting with a historical review of the developments in family business studies, the articles in this special issue emphasize the differential influences of family on the managerial behaviors and financial performance of family firms. This introduction explains why such investigations are important for the development of a theory of the family firm, provides a brief review of the contents and contributions of the articles, and concludes with a call for additional research on how and why families influence managerial behaviors and firm performance.
“Socioemotional Wealth and Business Risks in Family-Controlled Firms: Evidence from Spanish Olive Oil Mills.” Gómez-Mejía, Luis R., Katalin Takács Haynes, Manuel Núñez-Nickel, Kathyrn J. L. Jacobson, and José Moyano-Fuentes. 2007. Administrative Science Quarterly 52 (1): 106–37.
This paper challenges the prevalent notion that family-owned firms are more risk averse than publicly owned firms. Using behavioral theory, we argue that for family firms, the primary reference point is the loss of their socioemotional wealth, and to avoid those losses, family firms are willing to accept a significant risk to their performance; yet at the same time, they avoid risky business decisions that might aggravate that risk. Thus, we propose that the predictions of behavioral theory differ depending on family ownership. We confirm our hypotheses using a population of 1,237 family-owned olive oil mills in Southern Spain who faced the choice during a 54-year period of becoming a member of a cooperative, a decision associated with loss of family control but lower business risk, or remaining independent, which preserves the family’s socioemotional wealth but greatly increases its performance hazard. As shown in this study, family firms may be risk willing and risk averse at the same time.
Davis, James H., F. David Schoorman, and Lex Donaldson. 1997. “Toward a Stewardship Theory of Management.” The Academy of Management Review 22 (1): 20–47. https://doi.org/10.2307/259223.
Recent thinking about top management has been influenced by alternative models of man. Economic approaches to governance such as agency theory tend to assume some form of homo-economicus, which depict subordinates as individualistic, opportunistic, and self-serving. Alternatively, sociological and psychological approaches to governance such as stewardship theory depict subordinates as collectivists, pro-organizational, and trustworthy. Through this research, we attempt to reconcile the differences between these assumptions by proposing a model based upon the subordinate’s psychological attributes and the organization’s situational characteristics.
“Bivalent Attributes of the Family Firm.” Tagiuri, Renato, and John Davis. 1996 Family Business Review 9, no. 2 (June 1, 1996): 199–208.
Although family-owned and managed firms are the predominant form of business organization in the world today, little systematic research exists on these companies. This paper builds upon insights found in the emerging literature on these enterprises and upon our own observations to provide a conceptual framework to better understand these complex organizations. We introduce the concept of the Bivalent Attributes, a unique, inherent feature of an organization that is the source of both advantages and disadvantages? to explain the dynamics of the family firm.
“Comment on ‘Family Values or Crony Capitalism?’ (Harold James)” 2008 Randall Morck Capitalism and Society 3 (1).
The 20th century ran countless experiments to see what form of government works least badly. Unless things turn around unexpectedly, James I would have lost money betting on the absolute monarchy. The 21st century now gets to sort out what form of corporate governance works least badly; and I suspect Prof. James is premature in declaring for family firms.
“Family Values or Crony Capitalism?” Harold James Capitalism and Society 3 (1) 2008
Family firms are very prominent in many parts of the world, including in many of the most dynamic emerging markets. They are often thought to be associated with poor corporate and political governance. This article examines the debate about their durability and efficiency, using material drawn from the long experience of continental Europe and sketches out an ideal type of the family, in which there is a historical experience of entrepreneurship, a brand, and a network built around family enterprise. It then tests various common explanations for the prevalence of family firms, including Roman law versus common law traditions, tax incentives, share voting privileges, and inheritance law; and finds that each applies only in a quite particular historical epoch. Finally, the article suggests that family businesses offer advantages that are most apparent at times of shocks and discontinuities, and that they are thus a response to uneven development.
“The Bind that Ties: Socioemotional Wealth Preservation in Family Firms”
Luis R. Gomez-Mejia, Cristina Cruz, Pascual Berrone & Julio De Castro The Academy of Management Annals 5 (1): 653–707. 2011
A growing body of research shows that family firms are different from other organizations in significant ways. In this paper we review this literature by examining how family firms differ from nonfamily firms along five broad categories of managerial decisions. These categories encompass a set of key organizational choices concerning management processes, firm strategies, corporate governance, stakeholder relations and business venturing. We argue that socioemotional wealth or affective endowment of family owners explain many of these choices. We also examine some contingency factors (namely family stage, firm size, firm hazard, and the presence of nonfamily shareholders) that moderate the influence of socioemotional wealth preservation as a point of reference when making managerial decisions in family firms. Lastly, we explore the firm performance consequences of family ownership.
“The Role of Family in Family Firms,” Marianne Bertrand and Antoinette Schoar, The Journal of Economic Perspectives 20, no. 2 (2006): 73–96. (Open Access)
History is replete with examples of spectacular ascents of family businesses. Yet there are also numerous accounts of family businesses brought down by bitter feuds among family members, disappointed expectations between generations, and tragic sagas of later generations unable to manage their wealth. A large fraction of businesses throughout the world are organized around families. Why are family firms so prevalent? What are the implications of family control for the governance, financing and overall performance of these businesses?
“Corporate Ownership Around the World” Rafael La Porta, Florencio Lopez-De-Silanes, Andrei Shleifer The Journal of Finance 54 (2): 471–517. 1999 (Open Access)
We use data on ownership structures of large corporations in 27 wealthy economies to identify the ultimate controlling shareholders of these firms. We find that, except in economies with very good shareholder protection, relatively few of these firms are widely held, in contrast to Berle and Means’s image of ownership of the modern corporation. Rather, these firms are typically controlled by families or the State. Equity control by financial institutions is far less common. The controlling shareholders typically have power over firms significantly in excess of their cash flow rights, primarily through the use of pyramids and participation in management.
Journal of Family Business Management (JFBM) is a refereed journal publishing since 2011. JFBM provides broad and unrivalled coverage of all aspects of family business. JFBM offers a unique focus on behavioural and applied research, particularly considering the impact of research on policy and practice; it aims to communicate the latest family business research and knowledge worldwide for the benefit of scholars and family business practitioners. Other articles unique to JFBM are our ‘In conversation with’ series which provides insights from practicing family business advisors about how they are using theory in their practice now. JFBM aims to stimulate dialogue between scholars and practitioners in a timely manner.
The family business arena is dynamic. Family business owners, managers, and practitioners need to be aware of changing management approaches, processes and strategies which allow them to respond to global competition in an increasingly chaotic world, while keeping in mind the unique character, culture, and attributes of family owned businesses.
Journal of Family Business Strategy publishes research that contributes new knowledge and understanding to the field of family business. The Journal is international in scope and welcomes submissions that address all aspects of how family influences business and business influences family. Topics include, but are not limited to, the following:
Published as a refereed journal since 1988, Family Business Review (FBR) is the leading scholarly publication devoted exclusively to exploration of the dynamics of family-controlled enterprise, including firms ranging in size from the very large to the relatively small. FBR is focused not only the entrepreneurial founding generation, but also on family enterprises in the 2nd and 3rd generation and beyond, including some of the oldest companies in the world. In addition, the journal publishes interdisciplinary research on families of wealth, family foundations and offices. The journal covers areas such as but not limited to the following:
An introduction to the main family business concepts, defining where and how family firms are distinctive. How to plot your family firm’s stage of development, plus the varying and often overlapping roles, motivations and expectations of family members.
The IFB Research Foundation published open-access Family Business Challenges case studies dealing with key topics. The first, in particular, provides a good starting point:
We are an internationally-recognised, research-led, teaching and engagement Centre that collaborates to inspire and support the better management of family firms.
The Institute of Family Business and Mittelstand at WHU (ifbm@WHU) is a thought leader in the field of family business and small and medium-sized enterprises. With a dedicated team of scholars and practitioners, we aim to study different aspects of family firms, hidden champions as well as small and medium-sized enterprises. Our most current research projects, for instance, aim to advance our understanding of innovation, leadership and employee satisfaction, succession, inertia, business ethics and financing of family firms as well as family offices.
At the FEC we value and support the Family Enterprise Community. As the oldest family business center in the world, we offer programs for enhancing the collective interests of families and businesses. We engage in industry-shaping research as well as undergraduate and graduate education through the Coles College of Business. At the core of these efforts remains our commitment to education as a crucial tool for enhancing the wealth and success of the entire family enterprise community.
The Center of Family Enterprise Research (COFER) helps to fill an important need in our society. Family businesses represent the vast majority of both new ventures and existing enterprises and contribute substantially to the U.S. economy. Furthermore, family businesses are not necessarily small; many very large companies such as Wal-Mart, Cargill, Johnson & Johnson, and Ford Motor are family businesses. However, the longevity of family businesses across generations is tenuous and many do not survive beyond the tenure of the founder.
At the University of Vermont’s Grossman School of Business, the Family Business Institute is pioneering family business research and education at the heart of business as a force of good for our planet and people. Our research-based internationally renowned in-person and online courses, forums, awards, and case competitions support the learning and networking needs of students, educators, family business advisors, and leaders.
We are a world-leading center of excellence in research, education, and outreach for family enterprises globally.
Enterprising families are at the heart of the world economy and society. In our work, we help these enterprising families, their boards, and executives become the best version of themselves to ensure family unity and multi-generational success.
Established in 1999, the John L. Ward Center for Family Enterprises pioneered much of what is known about the collective challenges that family businesses and their leaders and owners face, making the Ward Center synonymous with new ways of thinking about the ownership and leadership of family enterprises. Clinical Professor Emeritus John Ward, along with co-founder Lloyd Shefsky and numerous faculty and staff aligned with the Ward Center, developed a world-class teaching and research center that provides cutting-edge thinking and guidance for family business purpose, vision and strategy, governance, leadership, succession, entrepreneurship in family business, family engagement and cohesion and family business culture.
Wharton Global Family Alliance (Wharton GFA) – The Wharton Global Family Alliance is a Wharton initiative that centers on a broad set of issues faced by global families that control substantial enterprises and resources. The Wharton GFA is globally recognized as the leading institution for the creation and dissemination of knowledge and practices of multi-generational families and their businesses; The Wharton GFA seeks to foster the longevity, harmony, and prosperity of multi-generational, multi-branch families and their businesses. The Wharton GFA transcends boundaries to enable collaboration and effective communication between researchers and families for mutual benefit and for the benefit of society at large; it enables thought leadership, knowledge transfer, and sharing of ideas and best practices among influential families; it publishes in a range of leading academic and practitioners’ outlets cutting edge theoretical, empirical, and field research on key issues affecting families and their businesses; and it initiates, manages, and participates in global forums and conferences.
With more than 20 years of expertise in the unique dynamics of family enterprises, the Wendel International Centre for Family Enterprise (WICFE) is a leading international resource for family business. In 1997, the Wendel family founded the Large Family Firm Chair and INSEAD offered our first Family Business MBA elective. Since then we have been continuously generating research and sharing knowledge that benefits family businesses.
For more than thirty years, the Family Firm Institute (FFI) has been engaged in educating, connecting, and inspiring professionals who serve family enterprises. FFI is the leading association worldwide for family enterprise professionals and the organization of choice for the advisors, consultants, educators, and researchers who help perpetuate trans-generational family enterprise. In adopting a multidisciplinary and global perspective, FFI understands family enterprise as a fundamental driver of global economic growth, prosperity, and stability.
We were founded in 2001 by a group of families coming together to help families, their businesses and communities to thrive and prosper for generations to come. Today, we are the largest UK family business organisation and the UK Chapter or Family Business International (FBN).
The Family Business Network (FBN) is the world’s leading organization of business families. Founded in 1989 and headquartered in Lausanne, FBN is a federation of Member Associations spanning 65 countries. A vibrant community, FBN brings together 4,000 business families – encompassing 17,000 individual members of which 6,400 are Next Generation (between 18 ans 40 years old).