Cultural Management in Family Business

Patricia Amelia Tomei

doi:10.15728/bbr.2010.7.3.2

Abstract

This article’s main goal is to analyze how the evolution of organizational culture can impact business performance. A theoretical framework was developed based on a review of the literature relating to organizational culture and family business succession management models. A single case study methodology was adopted based on primary and secondary data obtained through documentary research, participant observation and interviews at Guapo Loco, a Brazilian chain of Mexican restaurants / fun bars, which is a family company and was founded in Rio de Janeiro in 1996. We focused on its leader’s trajectory and its implications for the life cycle of the family business, the founder’s dream and vision, succession and cultural management difficulties. We conclude that it is possible for an organization to become trapped by its cultural formation. We will see that as it reaches maturity, the organizational, family and shareholder dimensions need to adapt in a similar fashion. At this stage, the organizational culture may become dysfunctional, jeopardizing the organization’s survival.

Highlights

The current world scenario, which is extremely competitive and dynamic, has been responsible for a significant increase in the speed of changes taking place inside organizations
The research began with a literature review, and a study of the main concepts relating to organizational culture, family business and cultural management and used methodologies and cultural typologies
Based on the cultural diagnosis of the Guapo Loco organization, we sought to understand the impact of culture on the various phases of a family organization’s life cycle and performance

Summary

Introduction

The current world scenario, which is extremely competitive and dynamic, has been responsible for a significant increase in the speed of changes taking place inside organizations. Newspapers often publish accounts of fusions, acquisitions and privatizations that can be translated into strategies to face new challenges. According to Zago (2000), the variability of the environment and economic uncertainty promote a constant flow of product innovation, flexibility and development, and organizations are embracing these challenges. The organizations that have acquired this vision are rethinking their attitude, and attaching more importance to knowledge and structural reconfigurations that enhance flexibility and dynamism, qualities that both require constant changes and innovation and are crucial for company performance. The organizations that have acquired this vision are rethinking their attitude, and attaching more importance to knowledge and structural reconfigurations that enhance flexibility and dynamism, qualities that both require constant changes and innovation and are crucial for company performance. (ANDREWS & DOWLING, 1998; SAFFOLD, 1988; DENISON & MISHRA, 1995, MARCOULIDES & HECK, 1993).

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