Chiefdoms and Family Firm Regimes: Variations on the Same Anthropological Themes

Abstract

Family owned and managed firms exhibit remarkable parallels to pre-industrial chiefdoms because the typical economic environment in which they exist limits them to a size and scale equivalent to that of a chiefdom. Using anthropological research this study inventories all known procedures of accommodating multiple heirs to the paramountcy of pre-industrial chiefdoms. It uses this exhaustive inventory to characterize the succession process in modern family owned and managed firms. The major theoretical concept adopted from anthropology is that of polity, defined as an autonomous system of institutional finance and organizational support (resource control and governance). Using terms such as polity helps us to recognize the universality of succession processes. Succession processes in family firms are less idiosyncratic than we once thought. Thus, we can fruitfully explore structural similarities between pre-industrial organizations and modern family firms using the considerable body of field research literature on chiefdoms (Goody, 1958; Barrett, 1965) which finds that every scheme to accommodate multiple successors falls into one of two categories: (a) personnel strategies and (b) asset strategies. A second critical concept is that while it is possible to inventory all possible outcomes (here, succession strategies) in any dynamic system, no single outcome can be accurately predicted in advance. The purpose of this paper is to provide an exhaustive inventory of possible outcomes of the succession process, rather than trying to predict the strategy chosen in a given case. The anthropological perspective provides a much-needed, empirically based, comprehensive model of succession processes in family firms and permits a more nomothetic approach to family firm research.