Family Business Towards an Enterprising Family: A Theoretical Review of Performance Measurement

Abstract

Family businesses have an important role in the economy, and on the other hand also have deviations from the general assumptions of a firm. The existence of a family element in its activities makes family businesses tend to be irrational. This review aims to examine models related to their definition and performance measurement. By using a descriptive approach and literature review techniques, it is hoped that we will be able to present a clear definition of family business performance towards an entrepreneurial family. Various literature and theories provide a definition that family business is a metasystem consisting of a feedback cycle between the family unit, business entity and family members. Family business enterprises (FBE) are expected to generate transgenerational profits and wealth so that they can guarantee the creation of an entrepreneurial family. FBE performance that supports entrepreneurial families requires supernormal profits from business activities. Where FBE performance is influenced by system performance, which comes from resources and capabilities. Meanwhile, FBE's competitiveness comes from distinctive familiarity. So it can be concluded that the role of distinctive familiness is important for FBE performance and the success of creating transgenerational wealth.