The Reciprocal Involvement of Family Business Owners and Communities in Business Success

Jennifer Johnson Jorgensen,Diane Masuo,Linda Manikowske,Yoon Lee

doi:10.3390/su12104048

Abstract

It is believed that highly involved business owners and community members will yield benefits to ensure business and community sustainability over time. However, little research has delved into understanding the role of business owners’ involvement and the community’s involvement in business outcomes. Thus, the purpose of this study was to investigate the reciprocal involvement of family business owners and the community. To investigate this phenomenon, this study utilized survey data from a rare group of business owners who currently operate long-standing businesses. Results indicate that more involved business owners perceived higher levels of business success. When seeking a profit, business owners also tended to be more involved in the community than owners not seeking a profit. However, family-owned businesses felt that the community did not contribute to their businesses and did not stay involved over time. Overall, business owners felt that they contributed more than the community provided in return. Recommendation is made to stress in entrepreneurship curricula the importance of reciprocal involvement between businesses and their communities and vice versa to promote business and community sustainability over time.

Highlights

According to the 2019 U.S Small Business Administration (SBA), there are 30.7 million small businesses in the U.S, accounting for 99.9% of all businesses [1]
The current study focuses on external social capital by examining how the level of owner involvement in the community and community involvement in the family business are associated with business success
The mean value of perceived community involvement for CS7—“My business participates in organizations in the community”—was the lowest (M = 2.8), showing that only 26.8% of the study sample reported that their businesses participated in an organization in the community

Summary

Introduction

According to the 2019 U.S Small Business Administration (SBA), there are 30.7 million small businesses in the U.S, accounting for 99.9% of all businesses [1]. Businesses with less than 100 employees make up the largest share of this business employment—many of which may be family businesses. Family-owned businesses are key supporters of the local economy in terms of workers, capital, management, and entrepreneurial capabilities. Family-owned businesses provide income for their families, job opportunities for non-family members and bring dollars into the community [2], but they can offer leadership and financial support for community projects, civic clubs, and other local organizations [3]. Family-owned businesses can foster local pride and contribute to the quality of life, making the community even more attractive for additional business opportunities and in-migration [4]. Understanding how family-owned businesses perceive success helps to guide entrepreneurship education for future generations

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Results

Discussion

Conclusion