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IJEBR 2, 1 3 6 Unders tanding family bus inesses: iss ues for further research Rob Goffee London Business School, London  Family businesses continue to represent an important form of work  organization wit hin adva nced indust rial econo mies. M ost sma ll- and medium- sized enterprises are family concerns and a small but important number of very large businesses remain owned, and substantially controlled, by private families (Scott, 1986). In both advanced and developing economies, the great majority of business enter prises are family owned, and t ogether they typ ically acco unt for well o ver half of all existing and newly created jobs. Despite th eir persistence and continuing reproduction the research litera ture on family businesses is limited. Th is refl ects both a bias towards t he study of l arge organizations as well as an assumption that within these ownership is widely dispers ed. Eve n where it is acknowledged that ownership (and control – once the share structure has been analysed) remains largely concentrated within a single private family, such information is rarely applied to explanations of managerial or organizational behaviour. By thus divorcing the issue of  ownership from that of managerial control it is possible to construct organizational models wh ich depict small- and medium- sized (family) businesses as “simple” (Mintzberg, 1979) while larger (publicly owned) enterpr ises are regarded as compl ex”. Such analyses miss th e point tha t most family businesses, though relatively small in scale, involve highly complex interrelatio nships between t wo analyticall y sep arat e but inextric ably linke d social sys tems : th e family and t he bus iness (Go ff ee and Scase, 198 5; Lansb erg, 1983). This paper sets out an agenda for research into such issues which would place family businesses in the mainstream of entrepreneurial and organizational studies. Four areas for further research are identified and, in conclusion, some possible research methodologies are reviewed. Ownership and control in the family busines s Theoretical and empirical investigations of the relationship between structures of ownership and control within capitalist enterprises have a long and distinguished history (Giddens, 1973). An early and central debate concerned the possible separation of ownership from control in the large industrial enterp rise and t he associated implic at ions fo r emerging oc cupat ional and social class structures (Bendix, 1956). Indeed, much of the conventional wisdom concerning the so-called “functions of management” turns on distinctions originat ing in t hese early discussions (Po llard, 19 68 ) . C ontempora ry a tt empts t o International Journal of Entrepreneurial Behaviour & Research, Vol. 2 No. 1, 1996, pp. 36-48. © MC B Univers ity Press , 1 355-255 4

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Understanding familybusines ses : issues for

further researchRob Goffee

London Business School, London 

Family businesses continue to represent an important form of work 

organization within advanced industrial economies. Most small- and medium-sized enterprises are family concerns and a small but important number of very large businesses remain owned, and substantially controlled, by privatefamilies (Scott, 1986). In both advanced and developing economies, the greatmajority of business enterprises are family owned, and together they typicallyaccount for well over half of all existing and newly created jobs. Despite theirpersistence and continuing reproduction the research litera ture on familybusinesses is limited. This reflects both a bias towards the study of largeorganizations as well as an assumption that within these ownership is widelydispersed. Even where it is acknowledged that ownership (and control – oncethe share structure has been analysed) remains largely concentrated within asingle private family, such information is rarely applied to explanations of 

managerial or organizational behaviour. By thus divorcing the issue of ownership from that of managerial control it is possible to constructorganizational models wh ich depict small- and medium-sized (family)businesses as “simple” (Mintzberg, 1979) while larger (publicly owned)enterprises are regarded as “complex”. Such analyses miss the point that mostfamily businesses, though relatively small in scale, involve highly complexinterrelationships between two analytically separate but inextricably linkedsocial systems: the family and the business (Goffee and Scase, 1985; Lansberg,1983). This paper sets out an agenda for research into such issues whichwould place family businesses in the mainstream of entrepreneurial andorganizational studies. Four areas for further research are identified and, inconclusion, some possible research methodologies are reviewed.

Ownership and control in the family busines sTheoretical and empirical investigations of the relationship between structuresof ownership and control within capitalist enterprises have a long anddistinguished history (Giddens, 1973). An early and central debate concernedthe possible separation of ownership from control in the large industrialenterprise and the associated implications for emerging occupational and socialclass structures (Bendix, 1956). Indeed, much of the conventional wisdomconcerning the so-called “functions of management” turns on distinctionsoriginating in these early discussions (Pollard, 1968). Contemporary attempts to

International Journal of 

Entrepreneurial Behaviour &

Research, Vol. 2 No. 1, 1996, pp. 36-48.

© MCB Univers ity Press , 1355-2554

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distinguish “entrepreneurial” from “managerial” att ributes have similarantecedents (Kanter, 1983, 1990).

Despite this rich tradition, detailed empirical research into the continuinglinkages between ownership and control within contemporary familybusinesses is rare. Several explanations are possible including:

• intellectual acceptance of the managerialist thesis (hence, owner-managed enterprises are seen as increasingly marginal to moderneconomies);

• greater availability of research and consulting funds for the study of larger publicly owned corporations; and

• difficulties in gaining research access – particularly at the most seniorlevels – to privately owned family businesses.

Those studies which have been conducted over recent years suggest severalpotentially fruitful areas for further research. For example, the extent to whichdifferent organizational str uctures facilitate the retention of proprietorialcontrol has recently been explored in a UK study of family firms (Goffee andScase, 1991). Given market uncertainties, unpredictable work processes and theneed for flexibility, the firms which they study tend to develop “quasi-organic”rat her than mechanistic st ructures (Bur ns and Stalker, 1961). These arecharacterized by a high level of informality and some decentralization. As such,they enable senior managers to enjoy considerable autonomy in day-to-daydecision making without challenging owners’ prerogatives. Although, then,quasi-organic structures often appear more flexible and democratic thanmechanistic forms, they may actually serve to reinforce owners’ control. Theabsence of formally defined decision-making processes, for example, givesowners greater possibilities to exercise discretion and to implement arbitrarydecisions. In effect, senior managers have freedom to decide only up until thepoint where owners decide differently! Either they accept this prerogative or,typically, they must leave. The commonly observed “happy” and “open”atmosphere of family firms is partially a function of this selective process(Curran and Stanworth, 1979).

Even where more formal hierarchies are in place, the proprietors of familybusinesses may retain “owners’ rights” to send contradictory messages aboutmanagerial control of the enterprise. Schein (1985) describes the owner-founder

of a successful family retail business who:

stated a philosophy of delegation and decentralization but retained tight centralized control,

intervened frequently on very detailed issues, and felt free to go around thehierarchy…Subordinates will tolerate and accommodate to contradictory messages because,

in a sense, founders, owners and “higher” levels are always granted the “right” to beinconsistent or, in any case, are too powerful to be confronted (pp. 223-4).

These examples point up the need for more detailed investigations of the waysin which owners of family businesses pursue strategies which allow for growthbut which help them to retain control. The issue of legal ownership is clearly

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important here but so too is the emergence of distinctive organizationalstructures – and the manner in which these are applied, manipulated or evenignored by owner-founders. Holding company str uctures, for example, intheory promise considerable opportunities for independence and autonomy atsubsidiary company level. Indeed, they can be a useful vehicle for founders todevelop entrepreneurial qualities among those who may succeed them (Leach,1991). On the other hand, the actual implementation of such structures by manyproprietors suggests that they can be used to facilitate owner intervention,divide managers against one another, limit their development and block promotion to where power may really lie: on the holding company board (Goffeeand Scase, 1991).

Managers in family firms, in turn, should not be seen as merely the passiverecipients of such strategies. In many cases, of course, acceptable workingcompromises may be reached which, for example, balance the experience of owner-founders with the expertise of managers recruited as the firm grows(Swieringa and Wierdsma, 1992). More generally, they may develop copingstrategies which enable them to accommodate – or even “manage around” – theidiosyncrasies of their proprietors. Indeed, in extreme cases, “subordinates orthe board of directors may have to find ways to move the founder out altogether,as has happened in a number of first generation companies” (Schein, 1985,p. 224).

There is a general lack of empirically substantiated models which map thedistinctive strategies of managerial control which are pursued by owner-

proprietors (Davis, 1990). One approach (Scase and Goffee, 1982) links theinternal development of organizational control sys tems with the external degree of market orientation. This produces a typology as follows (Table I):

Managerial owners are highly geared to market opportunities, give priority toprofit maximization and take pride in their ownership of efficient and,frequently, quite complex organizational structures. They develop meritocraticrather than paternal relations with their employees, offering a “fair wage” inreturn for a “fair day’s work”. Although these owners have typically acquiredtheir businesses through inheritance they do not seek legitimacy in these terms.On the contrary, the development of a successful company is regarded as proof 

Development of control systemMarket orientation Highly developed Underdeveloped

High Managerial (1) Entrepreneurial (2)

Low Paternal (3) Family custodial (4)

Table I.Development of controlsystem

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enough of their personal competence. Even without birthright, they would haveachieved, they claim, a position of comparable status.

Entrepreneurial owners are highly market oriented but their businesses haveunderdeveloped control systems. Most are founder-owners who have expandedtheir businesses rapidly, often contracting out work in order to avoid theproblems they a ssociate with t he development of complex managementstructures. Typically, they do not regard themselves as managers; employmentrelationships are defined primarily in terms of the wage nexus and businessdecisions are legitimated by reference to the market. If employees aredissatisfied they can leave, or indeed, start their own business.

Paternal owners tend to have inherited long-established businesses which

have typically experienced steady growth. Market orientation is low but controlsystems have been developed which, despite the existence of formal rules,emphasize the social and moral obligations of employment. The psychologicalcontract thus delivers concern for welfare in retur n for employee loyalty.Paternal owners, then, do not simply run profit-making enterprises; they alsosee themselves as having social responsibilities for employees, customers andthe wider society.

Family custodial owners have inherited well-established businesses whichhave experienced little growth, and sometimes stagnation, over recent years.Either through choice or incompetence their firms have a low marketorientation and poorly developed organizational structures. These owners havelittle ambition for growth or change; traditional practices tend to persist

regardless of operating efficiency. Indeed, their own personal involvement isfrequently low; “tried and trusted” managers run the business while ownersdevelop life interests – sport, cultural activities, community involvement and soon – outside work. In t he absence of more committed heirs or ma nagersemerging to run the business, the long-term fate of these companies is eithertypically decline or takeover (Scase and Goffee, 1982, pp. 174-82).

Such a typology may be used to describe different patterns of developmentamong family businesses. Many begin as entrepreneurial owners, exploiting amarket opportunity but failing to develop management control systems whichcan cope with growth. Most will fail as a result of these shortcomings, but asmall minority may develop the organizational mechanisms necessary to makea successful transition to managerial ownership. From this position, substantialgrowth – often to publicly quoted status – is possible. But over time, bothentrepreneurial (if they su rvive) and managerial owners may slip into thepaternal mode, often sacrificing market opportunities in order to sustainemployment relationships characterized by loyalty and mutual responsibilities.Within part icular market n iches, paternal owners can su rvive for lengthyperiods, but there is a risk that over time they may drift to custodial status asthe active involvement of inheritors diminishes. From th is point, decline isinevitable unless professional managers, a new generation of family membersor, indeed, a new family make the commitments necessary for corporaterenewal.

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Just as it is useful to differentiate businesses according to distinct managerialcontrol strategies so it is appropriate to distinguish families according to anumber of criteria. These are discussed below.

Family s tructures , cultures and life cyclesMany discussions of family businesses appear to assume that the simple prefix“family” is itself sufficient to dist inguish these from other, presumably “non-family”, enterprises. Indeed, in practice, the term is often used as shorthand todistinguish the use of more traditional/part icularistic, face-to-face forms of authority – paternalism, for example – from more rational/universalistic andimpersonal modes – bureaucracy, for example (Newby et al., 1978). But clearly

it is a mistake to assume from this that all families actually exhibit similarattributes. It follows that family businesses will only share characteristics in sofar as the families themselves are alike and share similar relationships withassociated business enterprises. Beyond family members’ legally defined rightsof ownership over business assets the common characteristics of suchenterprises are less than obvious. Equally, it is possible to identify a number of potentially significant sources of difference which derive from the varyingstr uctures, cultures and life cycle stages of “business families” (Leach, 1991).

First, the st ructu ring of roles within families as well as the extent andinterconnectedness of kinship networks will vary according to factors such associal class, ethnicity, age and nationality (Ward, 1991; Ward and Jenkins, 1984).The structure and distribution of roles within a wealthy, white, middle-class,

American family, for example, will differ substantially from a poor, black,working-class, migrant family in The Netherlands (Boissevain and Grotenbreg,1987). Domestic divisions of labour, expectations placed on children, links withkin beyond the nuclear family – all will be different. Yet both may run familybusinesses.

Second, just as role structures vary, so too will cultures – that pattern of attitudes, values, beliefs and assumptions which family members share. It isthese assumptions which will shape, for example, the role models whichindividual family members choose. First-born sons in most western nuclearfamilies often choose their fathers – but not always. Herein may lie the seeds of disappointment for many frustrated male entrepreneurs who find themselvesunable to interest their offspring in their business (Levinson, 1983). Culturalassumptions will also shape individuals work-related goals concerning, forexample, the accumulation of personal wealth, exposure to personal r isk,search for recognition, status and personal fulfilment (Hunt, 1992). It would besurprising if these goals did not, in turn, shape the character of any businesswhich they might found or inherit.

Families will also differ in the manner in which they relate to businesseswhich they own. In some cultures it may be that family and business overlapand intersect to such a degree that they become virtually indistinguishable(Lansberg, 1983). Indeed, the regional concentration of such (extended) familieshas sometimes been used to explain entrepreneurial subcultures (Goodman et 

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al., 1989). Bamford (1987), for example, argues that the rapid contemporarydevelopment of small firms in certain regions of Italy – the “Terza Italia” – can:

only be understood by t he peculiar social str ucture of the area...the smooth transfer from

share-cropping agriculture to small firm industrialisation has been able to occur because of 

the s ignificance of the complex family form” (p. 23).

Elsewhere, by contrast, attempts may be made to separate and insulate theprivate world of family relationships from the public domain of business. In itsmost extreme form, this may mean that a family business may have no otherreferent than that of legal ownership.

The extent to which individual members are able or wish to involve

themselves in business will itself be influenced by the point a t which theenterprise is established in the family life cycle. Second- or third-generationsons and daughters who grow up in the context of an established business mayfind it difficult to contemplate alternatives to entering the family firm. But thosewho, in adult life, choose to assist fathers or mothers in start-up not only differin their experience of other means of earning a living; their terms of entry to thebusiness may also be distinguished from those who, much later, follow in theirparents’ footsteps. Similar observations may be made for the partners of business founders; the roles played by wives of male entrepreneurs, forexample, are likely to be influenced by whether marriage occurs before or afterstart-up and, where relevant, the phasing of childbirth and child rearing (Leach,1991).

In the industr ialized West, however, an increas ing number of businessfounders are women. For them, the links between family and business lifecycles may be rather different. But once again the empirical evidence is sparse.One study in the USA during the 1970s found that most women proprietors:

have been in the workforce for several years prior to starting their own businesses, had

created – not inherited – their businesses, and had started their businesses alone – without a

par tner or spouse (Interagency Task Force on Women Business Owners, 1978, p. 5).

More strikingly, perhaps, another survey found that at the beginning of the1980s only 27 per cent of women business owners were married, despite the factthat more than 60 per cent were more than 44 years old (United StatesDepar tment of Commerce, 1980, pp. 5-8). These US data also indicate thatwomen entrepreneurs come from business backgrounds, have close, supportive

families and tend to use their parents as role models.A study in the UK (Goffee and Scase, 1985) differentiates female

entrepreneurs, first, according to attachment to entrepreneurial ideals (belief ineconomic self-advancement; adherence to individualism and self-help; supportfor work ethic and high rewards for those who make the effort), and second,according to acceptance of conventionally defined gender roles (acceptance of subordination to men; acquiescence in vicarious identity determined throughpersonal partner relationship with men). When combined these two dimensionsproduce a typology as shown in Table II.

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Empirical evidence from this survey shows that so-called “conventional”and “domestic” entrepreneurs tend to start up businesses after marriage andchildbearing. In this sense, business activit ies are “grafted on” to well-established tr aditional female roles. Such bu sinesses may provide animportant (additional) income as well as scope for self-fulfilment and personalautonomy, but they are always seen by these women as secondary to theirprimary roles as wives and mothers. Innovative and r adical proprietors, bycontr ast, are much more likely to regard their businesses as a centra l lifeinterest offering scope – through individual or collective endeavour – toachieve the power and self-determinat ion frequently denied most women. Fewhave permanent male partners or children; those who do have invariably

established their enterprises prior to making such commitments and tend toselect par tners and to plan families in ways which will not undermine theirbusiness commitments. Linkages between family and business in women-owned enterprises have been fur ther explored in other UK studies (Allen andTruman, 1991).

The structure, culture and functioning of families – and the differingimplications this may have for associated enterprises – have been neglected inthe family business literature. Each of the areas listed above requires furtherresearch. But for established family businesses it is important that such work does not ignore a number of key intergenerational dyna mics. These areexplored in the following section.

Establishing a dynasty: succession processes and intergenerationaldynamicsSuccessful family businesses are able to pass down their enterprises from one

generation to another. Th is succession may be regarded as t he ultimatedelegation. But business proprietors are not always good delegators – evenwithin their own families; indeed, it is their failure with this management skillwhich contributes to the demise of many enterprises (Lansberg, 1988). Mostfamily businesses fail after one generation. Among those which survive thefamily influence diminishes. Data from the USA indicate that of the 10 per centof family businesses which survive to a third generation, only one in ten has afamily member still involved in management (International Centre for FamilyEnterprises, Montreal).

Attachment to conventional gender rolesAttachment to entrepreneurial ideals High Low

High Conventional (1) Innovative (2)

Low Domestic (3) Radical (4)

Table II.Attachment toconventional genderroles

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Passing on a family business and ensuring continuity involves more thandelegation, however. The success of the process will also be shaped by the(largely unexplored) ability of the founder to create and communicate aworkable culture; one which assists members in coping with environmentalrealities. How do founders get t heir own approaches an d ass umptionsembedded within the act ions, thoughts a nd feelings of others in t heirbusiness? According to Schein (1985) the process involves both conscious anddeliberate action as well as that which is unconscious and unintended. Hedescribes five “primary mechanisms” for embedding and reinforcing culture:

(1) what leaders pay attention to, measure and control;

(2) leader reactions to critical incidents and organizational crises;(3) deliberate role modelling, teaching, and coaching by leaders;

(4) criteria for allocation of rewards and status;

(5) criteria for recr uitment, selection, promotion, retirement andexcommunication (pp. 224-5).

In add ition, there are five “secondar y” art iculation and reinforcementmechanisms:

(1) the organization’s design and structure;

(2) organizational systems and procedures;

(3) design of physical space, façades, and buildings;

(4) stories, legends, myths and parables about important events andpeople;

(5) formal statements of organizational philosophy, creeds, and charters(p. 237).

The secondary mechanisms are so termed because they are less powerful,more ambiguous and will only have impact in so far as they are consistentwith primary mechanisms.

Schein’s framework should provide a useful star ting point for empiricalanalyses of the growth and development of family businesses. In particular, itmay help shed light on the processes which enable some businesses to achievesubstantial scale without undermining the shared assumption that theyremain a family firm. In the process of growth it is quite likely, of course, that

some cultural assumptions are challenged and ultimately replaced. Indeed, inmany cases this may be one of the constructive functions of the successionprocess. Even where organizational members continue t o see theirs a s afamily business, the deeper meanings which they attach to such a conceptmay be liable to change over time. In the 1990s, for example, a number of largefamily controlled businesses are explicitly attempting to shift from paternalto more egalitarian and meritocratic cultures (Harvey-Jones, 1990).

The nature of succession processes within these businesses will also beshaped by a variety of factors linked to the intergenerational dynamics of 

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different families. What contrasts may be drawn, for example, betweenbusinesses passed between father and son, by comparison to those involvingmother and daughter (Lansberg, 1988)? A whole range of permutations arepossible, involving not only differences related to gender, but also to kinshipnetwork (nuclear versus extended family) and to generational tr ansfer(sometimes a generation is, in effect, skipped).

In studying these patterns, at least within the nuclear family, the issues of birt h order a nd family s ize are also import ant (Hunt, 1992). If, as somepsychologists argue, for example, the motivational profile of first-born sonsdiffers from others, what impact does this have on the family successionprocess? Are pat terns reinforced between generations? Where first-born sonspass on their businesses to their first-born sons, for example, what are theconsequences? What happens in larger families where heirs may enter insta ges, siblings achieve differing degrees of success an d some may b eeffectively excluded (Feber and Mazlish, 1988)? How are these processes inturn affected by the life and death cycles of individual families? When almost50 per cent of modern Western marriages end in divorce how might this affectthe growth prospects and longevity of contemporary family businesses? Thesocial science research literature provides few answers to these questions; atbest, there are a small number of case study business histories, at worst, thereis little more than anecdotal evidence.

Cross-national differences

As in other areas, much of the existing body of work on the management andorganization of family businesses is either American or Western European.Inevitably, this limits our conception of what such businesses might look like,as well as the functions they might perform. The issues for further researchidentified in this pap er, too, are unavoidably shap ed by the biases andlimitations of this exist ing body of knowledge.

There are three major ways in which cross-national differences may affectthe family enterprise. First, the st ru cture and functioning of familybusinesses will be influenced by the wider economic context within whichthey are embedded (Burrows, 1991). At a general level, materialopportunities for business formation and growth vary significantly acrosscountries. This is the outcome of a complex mix of historical, political

and socioeconomic circumstances – one outcome of which is a significantvariation in the str ucture and composition of capital in different nation states(Scase, 1991). Differences between highly capital-intensive manufactur ingand more labour-intensive service sectors are well documented. Buteven within manufacturing there are striking differences in levels of concentration and the role played by small businesses. Within Europe, forexample, their importan ce is far g reater in Ita ly than in Britain; WestGermany and France sit in the middle with over one-third of allmanufactur ing enterpr ises having less than 200 employees. Even sharper

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contrasts exist, of course, between the mature and newly developingindustrial economies (Gigoutzi et al., 1988).

Second, against this wider economic context, the role of the nation statevaries. Where the state has been controlled by predominantly conservative orliberal-democrat ic regimes – as in the USA, the UK, Australia and Japan –there are typically fewer laws regulat ing employment and working conditionsand, generally, far less state intervention in the economy (Davis and Scase,1985). Such conditions are generally favourable to small business formation.Elsewhere, under more social democratic regimes, such as in Scandinavia,legislation to improve employment conditions and welfare right s has oftenincreased the costs of business ownership and so limited opportunities for

sta rt -up. Such regimes are a lso more likely to place limits on the rightsconferred by private capital ownership. In effect, interventionist statesmediate the relationship between ownership and control in ways which maylimit managerial prerogatives, reduce options on possible structuralconfigurations and diminish the opportunities for business owners to passdown capital assets across generations (Johannisson, 1987).

Third, the nature of family businesses is also likely to vary cross-nationallyaccording to the distinctive patterning of social values and norms of behaviour. Ambitious att empts have been made to categorize these valuedifferences (Hofstede, 1991) and link them to variations in social andworkplace attitudes and behaviour (Laurent, 1983; Trompenaars, 1993). Butfew studies have been conducted into the ways in which the such differences

may have an impact on family businesses. Each of the dimensions identifiedby Hofstede (Table III) – power distance; uncertainty avoidance;collectivism/individualism; and masculinity/ femininity – offer potentiallyrich starting points for the analysis of, for example, family size and rolestr ucture, social and economic divisions between men and women, kinship

Power distance T he ex ten t t o wh ich th e les s p ower fu l ex pect an d a ccep t t ha tpower is distributed unequally (more authoritarian regimes tend tobe associated with high power distance cultures; in such cultures,bosses have much more power than subordinates).

Uncertainty avoidance The extent to which uncertain or unknown situations are perceivedas th reatening (high uncertainty avoidance indicates a st rong

desire to structure and control the future).Collectivism/individualism The extent to which individuals and families are expected to look 

after themselves (more collectivist societies are characterized bystrong social ties which offer unconditional support and protectionthroughout life).

Masculinity/femininity The extent to which “masculine” values (assertiveness, ambition,achievement) dominate, as opposed to “feminine” values(relationsh ips, qua lity of life service). Gender roles are clearlydifferentiated in highly masculine societies; in more femininesocieties gender roles overlap.

Table III.Dimensions of 

difference (afterHofstede, 1991)

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networks, child-rearing practices and cross-generational relationships. Anillustration is provided in Table IV.

ConclusionsThis paper has identified four areas for further research into the social andorganizational features of family businesses. These are aspects where researchdata are limited but where policy implications are potentially significant. Theformation, growth and persistence of family firms is critically affected by themanagerial, organizational and cultural processes reviewed in this paper. Theagenda described here favours particular research methodologies. Exploratoryinvestigations into the complex relationships between proprietorial ownershipand managerial control favour an emphasis on qualitative research methodsrather than more quantitative survey techniques. Detailed case studies usingboth participant and non-participant observation are more likely to yieldinsight into the control strategies pursued by owner-proprietors and the copingresponses developed by managers and other employees. Equally, enquiries intothe manner in which cultures are embedded and intergenerational successionprocesses are handled favour ethnographies based on longitudinal observationrather than one-off, “snapshot” interviews – during which the dangers of post-hoc rationalization are high. Finally, the need for greater sensitivity to cross-national cultural differences puts a premium on research which utilizes thecomparative method.

Dimensions of difference Typical family/business characterist ics(after Hofstede, 1991) High Low

Power dist ance Deference to authority figures Egalitarianism in family and(in family and business); business relationships; moreacceptance of inequality; meritocratic relationships withinpaternalism or autocracy in family firms (less nepotism)family firms

Uncer tainty avoidance Child-rearing pract ices Child rearing pract ices “looser”disciplined; greater emphasis and person centred; greateron rules, hierarchy and tolerance of ambiguity andstructure in work flexibility in work relationshipsorganizations

Collectivism/individualism Close-knit, extended family Nuclear family; ownershipnetworks; ownership concentr ated in individualsdispersed among family

Masculinity/femininity Ownership and control highly Ownership and control lessconcentrated among men; concentrated among men;male and female work roles greater interchangeability of sharply different iated work roles; more women-owned

businesses

Table IV.Cultural differences andthe family business

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