Abstract
While family businesses are known to consistently outperform non-family businesses in financial terms over the long run, family businesses have received comparatively little attention from researchers. In this article an explanation is offered for this superior performance in the form of the concept of "familiness" - the unique contribution that family involvement brings to any business (which is divided into founder capital and family capital). It is explained that family businesses possess no general competitive advantage over non-family businesses. The unique strength of successful family businesses does not lie in their espoused advantages, but in their ability to sustain and adapt, through family capital, the culture created by the founder. An evolutionary conceptual model of the creation and transmission of familiness is provided to explain how this unique strength influences family business performance over the long run.
Highlights
Even though the family business is the most prevalent form of business throughout the world (Upton & Petty 2000:28; Kim, Kandemir & Cavusgil 2003:1-2; Heck, Upton, Bellet, Dunn & Parady 1994:2), it has received comparatively little attention from researchers (Litz 1997:55)
The statistics that reveal that one in three family businesses are continued by the following generation and that their average lifespan is 24 years, have appeared in countless articles on family business since it appeared in Beckhard & Dyer (1983:5)
Various empirical studies have shown that family businesses tend to approach the pursuit of financial performance differently from non-family businesses and consistently outperform non-family businesses according to financial measures
Summary
While family businesses are known to consistently outperform non-family businesses in financial terms over the long run, family businesses have received comparatively little attention from researchers. In this article an explanation is offered for this superior performance in the form of the concept of “familiness” – the unique contribution that family involvement brings to any business (which is divided into founder capital and family capital). It is explained that family businesses possess no general competitive advantage over non-family businesses. The unique strength of successful family businesses does not lie in their espoused advantages, but in their ability to sustain and adapt, through family capital, the culture created by the founder. An evolutionary conceptual model of the creation and transmission of familiness is provided to explain how this unique strength influences family business performance over the long run
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
