The business family 3.0: Dynastic business families as families, organizations and networks—Outline of a theory extension

Abstract

This paper's point of departure is that business families are permanently confronted with a dual function: They engage in typical family relations yet also have formal decision‐making processes for business and family strategy. However, large business families—which may consist of several hundred shareholders who own one or more family businesses—are confronted with an additional challenge. Alongside being simultaneously a family and an organization, they also have to establish and maintain notions of membership and modes of communication between distantly related shareholders. This we have called family network or family 3.0. The challenges involved in initiating, shaping and maintaining such networks require new strategic reconsideration in the family itself and an extension of the existing theoretical observations regarding family businesses, thereby establishing the basis for a better understanding of large‐scale business families. For this, we try to combine family business research, organization studies and systems theory.

Managerial Controls in Private Family Firms: The Influence of a Family’s Decision Premises

“…Whereas, formal controls create transparency and reduce information asymmetry, participative controls stimulate communication, which creates trust among the parties involved. This finding is in line with Kleve et al [46] who argue that communication is key to make organizations grow. Von Schlippe et al [91] found that later generation families realized they must put in place formal governance structures to conduct the business and manage business-related communications.…”

“…Recent studies supported by the nST combined insights from the governance and management literature by particularly investigating the relationship between decision premises and the adoption of governance and managerial mechanisms [24], trust [25], and social forms related to family business families [46]. In the next subsection, we explore the hypotheses considering the influence of decision premises (FCI and TGO) on the design of formal and participative managerial controls such as target setting and performance measurement.…”

Embedded but not asleep: Entrepreneurship and family business research in the 21st century

“…For example, researchers might seek to understand how family harmony, role conflict, as well as goal alignment and family firms' decision-making, is affected by the role of in-laws and extended family members (in case of remarriage) in a situation of proliferation of households within an enterprising family. These lines of research can advance debates on life cycle patterns (Morioka, 1967), role of in-laws (Santiago, 2011) and family branches (Gilding, 2000;Kleve et al, 2020).…”

Family Home Business in Kibbutz Industry Sustainability

“…Once, family businesses passed from parents to children, but contemporary definitions are changing. In Germany, for example, a family business may have numerous owners/operators, only a few of whom belong to the original nuclear family [6]. New structures affect internal relationships: kinship family members maintain close interaction, while others exhibit more formal relationships, as they would in any other organization with its own regulations and hierarchy [23].…”

“…The results can shed light on an organization's dependence on its surroundings [3] by demonstrating how the kibbutz community strove for its sustainability through the acceptance of new forms of familial business. This development can supply knowledge to other communities, recommending familial business changes that can help them to overcome difficulties and survive [4][5][6].…”