Toward a Measurable Definition of Family Business: Surname Matching and its Application in the Czech Republic

Abstract

Family-controlled enterprises play a powerful role in the world economy constituting more than 30 % of all companies with sales in excess of $1 billion. It is therefore no wonder that academics have been attracted to studying family businesses. As an emerging field, the family business discipline has been developing in two areas: defining family business and measuring performance gaps between family and non-family businesses. In the Czech Republic, “succession issues” are of particular interest. In the early 1990’s there were fewer family businesses due to the existence of a state-controlled economy (with the possible exception of those who ran family businesses before the nationalization of private companies by the communist government after the SecondWorld War). Now it is quite common for owners (fathers and mothers) to transfer businesses to their heirs or to at least consider it. From this perspective, the family business situation in the Czech Republic resembles the situation in other non-socialistic countries around the world. However, the role of family businesses in the Czech Republic has been neglected and there has not been any significant research pertaining to this issue. The definition of family business is crucial because researchers compare family and non-family businesses from differing perspectives. Researchers conclude that due to unique institutional legal contexts in various countries it makes no sense to derive a universal definition. Nevertheless, each study must explicitly state what is understood by the term “family business” because different definitions lead to different findings. Despite the fact that there is no universal definition, three dimensions are inherent in each definition of family business: ownership (one or several families hold a significant part of the share capital), management (family members hold top management positions), or board-membership (family members retain significant control over the company via membership in the executive or supervisory board). Int Adv Econ Res (2015) 21:119–120 DOI 10.1007/s11294-014-9487-7