Family Business, Ethnicity and Gender in the New Business Venture

What is a family business? There is no finite definition of ‘a family business’ It is estimated that family businesses (large and

small) comprise 75% of all businesses in the UK and employ over 50% of the workforce

Westhead and Storey(1997):          Those having undergone an intergenerational

transition          Those having more than 50% of shares owned

by family members          And/or more than 50% of family members are

involved in day-to-day management          Where the company considers itself to be a

family firm

Families and Businesses as Systems

FAMILY SYSTEM BUSINESS SYSTEM

Emotion-based Task-based

Subconscious behaviour Conscious behaviour

Inward looking Outward looking

Minimising change Exploiting change

Lifetime membership Perform or leave

Personal nurturing Profit generating

Family:      Emotion based      Subconscious behaviour      Inward Looking      Averse to change

Friction and Conflict

Business:      Task-based      Conscious Behaviour      Outward Looking      Embraces Change      Perform or leave

     

(Leach 1999)

 

The Characteristics of Female Entrepreneurs Until the mid 1980s it was assumed that

female behaviour conformed to that found in studies which used male samples.

The studies have been subsequently criticised, they were highly important in delineating a hitherto ‘invisible’ group, and challenging the view that entrepreneurship is a gender-neutral activity

Early Studies

Schreier (1973) found that the female entrepreneur had much in common with her male counterpart.

Difference focused on the sectors of activity selected by females (services and retailing)

Schwartz (1976) found particular barriers for females in: Access to finance Lack of training and business knowledge Underestimating the financial and emotional cost of

starting a business

Hisrich and Brush (1986)

Motivations for start-up Search for job satisfaction Independence and achievement

Problems Initial undercapitalisation Lack of knowledge anf training in business skills Social belief that women are not as serious about

business as men

Watkins and Watkins (1984)

Women often had no relevant experience to enable them to start up a business, forcing them into traditionally female sectors

Choice of business sector tended to be where barriers were lower, not a conscious choice to enter ‘female sectors’

Goffee and Scase (1985)

Developed a typology based on Attachment to traditional entrepreneurialism

(individualism and self reliance) Willingness to accept traditional gender roles, often

subordinate to men Conventional – committed to both Innovative – strong entrepreneurial ideals, but low

gender convention Domestic – strong conventional belief, low

entrepreneurial ideals Radicals – low attachment to both

This research represented progress in that female entrepreneurs were recognised as a non-homogenous group

Research subsequently criticised

Management of Female-owned businesses Carter and Cannon (1992) Areas perceived by female owners as being

gender-related: Late payment of bills Tendency to undercharge Getting business and finding clients Effect of proprietorship on personal and

domestic circumstances