Family businesses significantly contribute to the economy, employment rate, and development of every country around the globe. However, academic research on family businesses is relatively young and diversified. Therefore, this thesis conducts a report on the literature-based analysis on family business issues with a focus on culture and values in a strategic management perspective.
The aim of this paper is to examine family businesses characteristics and to recognize their uniqueness in terms of culture, values, and behaviour. The main themes of the research are the following: in-depth analysis of prior family business research on family business definition issues, key family business features (in the contrast to non-family businesses), family business system characteristics, family business influence, family business organizational culture, and the influence of national culture on family business performance.
The research methodology employs qualitative research including selection, discussion, and comparing relevant family business theoretical and empirical studies.
The findings are used to extend the insights of the family business research on fundamental management and communication theories, and to provide a concept of family business organizational culture on the micro and macro level of analysis for potential future research in the family business practice.
Table of Contents
1 INTRODUCTION
1.1 BACKGROUND
1.2 RESEARCH PURPOSE AND RESEARCH QUESTIONS
1.3 LITERATURE REVIEW
1.4 METHODOLOGY
1.5 STRUCTURE OF THE RESEARCH
2 FAMILY BUSINESS AS AN OBJECT OF SCIENTIFIC ANALYSIS
2.1 A HISTORICAL BACKGROUND OF A FAMILY ENTERPRISE
2.2 EVOLUTION OF FAMILY BUSINESS STUDIES
2.3 DEFINING FAMILY BUSINESS
2.4 LEVELS OF ANALYSIS IN FAMILY BUSINESS STUDIES
3 UNDERSTANDING KEY CHARACTERISTICS OF FAMILY BUSINESS
3.1 MAIN DIFFERENCES BETWEEN FAMILY AND NON-FAMILY BUSINESS
3.2 FAMILY BUSINESS SYSTEM IN A DYNAMIC PERSPECTIVE
3.2.1 Family system
3.2.2 Ownership systems
3.2.3 Business system
3.3 CONCEPTUALIZING FAMILY INFLUENCE IN FAMILY BUSINESS: F-PEC SCALE
3.3.1 Power
3.3.2 Experience
3.3.3 Culture
4 CENTRAL THEORIES IN FAMILY BUSINESS
4.1 AGENCY THEORY AND STEWARDSHIP THEORY
4.1.1 Family owner vs. external manager (employee)
4.1.2 Family owner vs. external shareholder (not family member)
4.1.3 Family owner vs. family manager
4.2 RESOURCE-BASED VIEW AND SOCIAL CAPITAL THEORY
4.2.1 The concept of familiness
4.2.2 Parsimony, personalism, and particularism
4.2.3 Family business longevity and resources orchestration
4.2.4 Social capital as a specifically important resource of family firms
4.3 COMMUNICATION THEORIES: CASUAL LINKS TO FAMILY BUSINESS THEORIES
4.3.1 Trust, self-disclosure, and predictability
4.3.2 Social Penetration Theory
4.3.3 Uncertainty Reduction Theory
4.3.4 Interpersonal and institutional trust in family business
5 CONCEPTUALIZING CULTURE AND VALUES IN FAMILY BUSINESS
5.1 ESSENTIALS OF CULTURE AND ORGANIZATIONAL CULTURE
5.1.1 Culture: fundamental characteristics
5.1.2 Organizational culture
5.2 ORGANIZATIONAL CULTURE AND BUSINESS PERFORMANCE
5.2.1 Impact of culture on performance
5.2.2 Culture as a source of competitive advantage
5.3 FAMILY BUSINESS CULTURE AND VALUES RESEARCH
6 CULTURE AND VALUES IN FAMILY BUSINESS: MICRO PERSPECTIVE
6.1 VALUES IN FAMILY BUSINESS
6.1.1 The power of values in family business
6.1.2 Frequent family business values
6.2 BUILDING FAMILY BUSINESS CULTURE
6.2.1 How do family values become core values in family business culture?
6.2.2 Dilemmas in managing family business culture
6.3 FAMILY BUSINESS CULTURE AND VALUES AS COMPETITIVE ADVANTAGE
6.3.1 Managing family business culture
6.3.2 Family business culture as a source of competitive advantage
7 CULTURE AND VALUES IN FAMILY BUSINESS: MACRO PERSPECTIVE
7.1 FUNDAMENTAL MODELS OF CULTURE DIFFERENCES
7.1.1 Hall’s high context and low context culture
7.1.2 Hofstede's cultural dimensions’ theory
7.2 THE EVIDENCE OF CULTURAL DIFFERENCES IN FAMILY BUSINESS
7.2.1 German and Japanese family business and culture
7.2.2 Cross-cultural variations in family business
8 SUMMARY
8.1 FINDINGS
8.2 THEORETICAL IMPLICATIONS
8.3 PRACTICAL IMPLICATIONS
8.4 LIMITATIONS
8.5 FUTURE RESEARCH DIRECTIONS
Research Objectives and Topics
The primary aim of this thesis is to explore the key characteristics of family businesses by integrating economic and communication theories, and to examine how family culture and values influence firm performance at both micro and macro levels.
- The role of family influence, power, and experience in defining family businesses.
- The application of Agency and Stewardship theories to explain family business management.
- The significance of culture and values as a driver for sustainable competitive advantage.
- The impact of national culture on family business practices using a comparative analysis of Germany and Japan.
- The synthesis of communication theories (e.g., Social Penetration, Uncertainty Reduction) within the context of family firms.
Excerpt from the Book
3.1 Main differences between family and non-family business
Carr & Bateman (2010) conducted interesting research on the question of whether there are differences in performance between family and non-family firms. They compared and contrasted performances of 65 of the world’s largest family firms against a selected peer group of non-family firms. The researchers took these key performance indicators ratios: average Return on Capital Employed (RoCE), sales growth, average profit margin, average R&D/sales, capital expenditure/sales, sales and general administrative/sales. All performance metrics were analyzed in terms of the 20-year period between 1983 and 2003.
For the purposes of this study family businesses were defined in line with Ward (1986) as a firm “whereby a family has to own over 50 percent of the business in a private firm or more than 10 percent of a public company” (as cited by Carr & Bateman, 2010).
The researchers set the following hypotheses: “(H1a) Family businesses are outperformed by non-family businesses on a worldwide basis, in terms of sustained profitability and sales growth. (H1b) This performance relationship worldwide is accentuated at higher levels of family control. (H2) This performance relationship is substantially the same across many regions and clusters of the world, and beyond those most studied such as the USA and Continental Europe” (Carr & Bateman, 2010, p. 244).
Summary of Chapters
1 INTRODUCTION: Outlines the significance of family businesses globally and defines the research scope and methodology used throughout the thesis.
2 FAMILY BUSINESS AS AN OBJECT OF SCIENTIFIC ANALYSIS: Reviews the historical development of family enterprises and the evolution of academic research in this field.
3 UNDERSTANDING KEY CHARACTERISTICS OF FAMILY BUSINESS: Analyzes the distinct systems of family, ownership, and business, and conceptualizes family influence using the F-PEC scale.
4 CENTRAL THEORIES IN FAMILY BUSINESS: Examines Agency, Stewardship, and Resource-Based View theories, alongside communication theories to explain firm behavior.
5 CONCEPTUALIZING CULTURE AND VALUES IN FAMILY BUSINESS: Defines core cultural concepts and explores how organizational culture impacts business performance.
6 CULTURE AND VALUES IN FAMILY BUSINESS: MICRO PERSPECTIVE: Investigates specific family values and how they are managed to foster competitive advantage at the firm level.
7 CULTURE AND VALUES IN FAMILY BUSINESS: MACRO PERSPECTIVE: Compares national cultural contexts, specifically Germany and Japan, and their impact on family business outcomes.
8 SUMMARY: Concludes the thesis by summarizing key findings, theoretical/practical implications, and future research directions.
Keywords
family business, family business system, family influence, family business values, family business culture, stewardship theory, agency theory, resource-based view, familiness, organizational culture, social capital, competitive advantage, cross-cultural studies, succession, strategic management
Frequently Asked Questions
What is the core focus of this Master's thesis?
This thesis examines the characteristics of family businesses, focusing on how culture and values serve as strategic drivers for performance and competitive advantage at both micro and macro levels.
Which central theoretical frameworks are utilized?
The research primarily relies on Agency Theory, Stewardship Theory, the Resource-Based View (RBV), and Social Capital Theory, while incorporating communication theories to explain interpersonal dynamics.
What is the primary research goal?
The aim is to synthesize economic and communication theories to explain why and how family businesses differ from non-family firms and how they achieve long-term success.
What research methodology is employed?
The thesis adopts a qualitative approach based on extensive literature analysis, triangulation of theories from economics and organizational communication, and comparative empirical studies.
What specific aspects of family business are treated in the main chapters?
The main chapters cover the system perspective of family firms, the F-PEC scale for measuring family influence, management dilemmas, and cross-cultural analyses.
Which key terms characterize the research?
Key terms include "familiness," "stewardship," "resource orchestration," "culture," "values," and "cross-cultural variation."
How does national culture impact family businesses?
Using the examples of Germany and Japan, the research demonstrates how national values and cultural dimensions—such as power distance and long-term orientation—influence business succession, governance, and organizational professionalization.
Why is the comparison between Germany and Japan significant?
These countries were chosen due to their historical longevity of family firms and the significant role family businesses play in their respective national economies, despite their differing cultural frameworks.
- Quote paper
- Iaroslava Blyshchuk (Author), 2016, Exploring family business. Culture and values as a competitive advantage, Munich, GRIN Verlag, https://www.grin.com/document/353142
