Abstract
This article demonstrates how the combined approaches of informed pluralism and disciplined integration can help rebridge the distance between the seemingly disparate academic worlds of family science and family business. The authors establish the need for such a resynthesis by documenting trends within family enterprise research from 1985 to 2010. The analysis vividly illustrates not only the increased dominance of publication outlets and theoretical perspectives associated with business but also the near disappearance of those associated with family. In light of these trends, the authors suggest that renewed attention to integrating ideas from the two disciplines is likely to enrich both. To illustrate this claim, this study combines concepts from long-standing theories within the family science literature (structural functionalism and symbolic interactionism) with those from predominant perspectives within the family business literature (agency theory and the resource-based view). The outcome is a series of provocative yet relevant potential new directions for each field.
Keywords
Introduction
In an inspiring set of recent reflections on the field, family business scholars have been praised for expanding the variety of theoretical foundations considered (Sharma, 2011), reexamining theories from sister disciplines (Zahra & Sharma, 2004), and integrating thinking across multiple domains (Sharma, Hoy, Astrachan, & Korainen, 2007). Yet they have also been encouraged to do more. As Zahra and Sharma (2004) put it, “In addition, we must learn to communicate and connect with scholars in sister disciplines and find ways to give back to the disciplines from which we borrow” (p. 337). If family business researchers were to heed this call, we believe that the field of family business will not just join the “slow revolution” of this nature that is already underway in management more broadly (Okhuysen & Bonardi, 2011, p. 10), but might find itself at the forefront of such an exciting and important endeavour. This outcome seems plausible not only because the more established subdomains within management have made few inroads in this regard thus far (Agarwal & Hoetker, 2007) but also because the family business field seems uniquely poised to do so given its distinctive focus on the “reciprocal [italics added] influence of family and business” (Zahra & Sharma, 2004, p. 333). As emphasized by Sharma (2004), this focus is worthy of serious pursuit given that the neglect of either domain is likely to create a negative spiral that, over time, detracts from the well-being of both.
This article illustrates how the approaches of informed pluralism (Willmott, 2008) and disciplined integration (Agarwal & Hoetker, 2007) can be used to help accomplish the above-noted objectives. Informed pluralism involves drawing from different paradigms with the intent of determining whether and how each can enrich and extend (rather than discredit) the other. Disciplined integration involves doing so “based on a systematic examination of the underlying differences in assumptions, central research questions, and orientations of relevant ideas” rather than by “mixing a potpourri” of concepts (Agarwal & Hoetker, 2007, p. 1318). We demonstrate the power of these approaches by joining others such as Aldrich and Cliff (2003), Dyer (2006), Olson et al. (2003), Rogoff and Heck (2003), and Stafford, Duncan, Danes, and Winter (1999), in encouraging family business scholars to reconsider family science as an especially relevant sister discipline for such pluralistic learning.
Family science is an interdisciplinary, applied field of study in which scholarship focuses on the discovery of knowledge related to family processes, family relationships, family well-being, and the nature of family life in social, political, and economic contexts. Specific content areas include (but are not limited to) intimate relationships, parenting and attachment, child and youth development, counseling, aging, overall family health and well-being, and family policy (National Council of Family Relations, 2011). Although seemingly “worlds apart,” a rebridging of these two disciplines is especially timely at this juncture in light of the increasing use—and now dominance—of business-oriented outlets and approaches within family enterprise research over the past 25 years (as documented within our ensuing bibliographic analysis).
While such an emphasis has undeniably generated numerous important insights and has arguably enhanced the field’s legitimacy, it may have also bounded the types of questions that are asked and thus the breadth and depth of knowledge accumulated (cf. Okhuysen & Bonardi, 2011; Pfeffer, 1993). The increased use of business paradigms and corresponding decreased use of family paradigms, for example, are likely to have contributed to the field’s growing discomfort with overly simplistic dichotomous comparisons between family and nonfamily firms (a discontent voiced by scholars such as Chrisman, Sharma, & Taggar, 2007; Dyer, 2006; Klein, Astrachan, & Smyrnios, 2005; Miller, LeBreton-Miller, Lester, & Cannella, 2007; Westhead & Cowling, 1998). These trends are also likely to have contributed to the field’s narrowing focus on questions regarding the effects of family on business outcomes—and to the growing disregard of questions pertaining to the effects of business on family outcomes. Such a preoccupation not only seems at odds with the field’s distinctive focus on the reciprocal roles played by both family and business (Sharma, 2004) but may also explain the relative lack of attention to family business research within the field of family science. By joining others in arguing for a more inclusive and pluralistic approach to research on family firms in general, and by demonstrating how long-standing family theories can be integrated with prevailing business perspectives in particular, we too hope to stimulate “greater excitement about doing research at the intersection of cross-disciplines” (Zahra & Sharma, 2004, p. 344).
Trends in Publication Outlets and Theoretical Approaches
Overview
Several informative reviews of the family enterprise literature have been published since the inception of the Family Business Review 25 years ago. Listed chronologically, illustrative examples include those by Dyer and Sanchez (1998), Sharma (2004), Sharma et al. (2007), Chrisman, Chua, Kellermanns, Matherne, and Debicki (2008), Debicki, Matherne, Kellermans, and Chrisman (2009), and, most recently, Chrisman, Kellermanns, Chan, and Liano (2010). Our analysis extends each of these prior reviews in one or both of the following ways. First, in the interest of being as inclusive as possible in our coverage of extant family business research, we consider articles published in scholarly journals associated with any discipline—not just those in the fields of entrepreneurship and/or management. This extension is especially important for the first part of our analysis, in which we document trends in the outlets in which family business papers have been published over the past two and a half decades. Had we followed the more restricted approach adopted within some of the above-noted reviews, our analysis would have indicated that the field has become even more dominated by business-oriented paradigms than what is suggested by the findings below.
Our second extension, which is to focus upon theoretical approaches rather than topic areas, stems from widely held beliefs regarding “the importance of theory to the scientific endeavor” (Colquitt & Zapata-Phelan, 2007, p. 1281; see also Reay & Whetten, 2011; Sutton & Staw, 1995; Whetten, 1989). Although the reviews of topic areas appearing within several of the above-noted reviews are undeniably beneficial, we are interested in documenting trends within the theoretical perspectives that have been adopted within family business research regardless of the specific topics addressed. We use the terms theoretical perspective and theoretical approach synonymously to capture the essence of theory as a framework—or compilation of assumptions, constructs and assertions—that forms a lens through which to view phenomena (Kilduff, 2006; Weick, 1995; Whetten, 1989). A social theory, theoretical approach or perspective, then, tells a story about the way that the researcher understands the social world, using systematic principles, concepts, and assumptions as way of explanation (Albanese, 2010; DiMaggio, 1995; Doherty, Boss, LaRossa, Schumm, & Steinmetz, 2004).
Method
To build the data set for analyzing trends in the publication outlets and theoretical perspectives associated with family enterprise research, we identified relevant articles by conducting Boolean keyword and subject term searches of all scholarly articles (excluding book reviews) published in the ABI Inform, Academic Search Complete, Business Source Complete, and Sociological Abstracts databases. Our search terms consisted of truncated combinations of the word “family” with the synonyms “business,” “enterprise,” and “firm.” We restricted our search to the 25-year period between 1985 and 2010 inclusive. The resulting data set contained a total of 2,240 articles. 1
We categorized each of these articles in two ways. The first was by journal type; namely, “business,” “family,” “economics,” or “other.” Business journals consisted of those with titles that included the word “business” and/or topic areas usually taught in business schools (e.g., accounting, finance, management, human relations, entrepreneurship). Example journals include the Academy of Management Journal, International Review of Finance, and Journal of Accountancy. Family journals consisted of those with terms such as “family,” “marriage,” “household,” and/or “human ecology” in their titles: Examples include Community, Work & Family, Journal of Family and Economic Issues, and Marriage & Family Review. 2 Economics journals consisted of those with the word “economics” in the title, but neither “business” nor “family,” thereby including journals such as Applied Economics, Economic History, and the American Journal of Economics and Sociology yet excluding those such as Business Economics and Household Economics (which were coded into the business and family categories, respectively). The remaining “other” category consisted of journals that did not fit neatly within any of the preceding classifications; this category was composed primarily of those associated with the fields of sociology, psychology, and history.
The second means of categorizing the articles was by theoretical approach. This was accomplished by content analyzing each article’s abstract, noting either explicit mentions of a specific theory—for example., “Based on agency theory . . .” (Vilaseca, 2002)—or the use of trigger words and/or phrases typically associated with a certain perspective. The abstract for McConaughy (2000), for example, contains the phrases “incentive alignment hypothesis” and “incentive-based pay,” which are common within research adopting an agency lens. Each article was then classified into one of five overarching theory categories 3 : “business,” “family,” “economic,” “other,” or “unstated.” The “other” category consisted primarily of articles using sociological or psychological perspectives. The “unstated” category contained those for which the abstract lacked an identifiable reference to a specific theory or recognizable trigger words/phrases associated with a theoretical perspective from any of the other four categories. 4
Findings
Figure 1 offers a visual summary of the results from our journal type analysis, with additional details for selected years presented in Table 1. As indicated, business journals began to supersede all other publication outlet types as far back as 1987. Since then, they have become the increasingly predominant outlet in which family business research has been published. By 2010, the overwhelming majority of all scholarly articles on family enterprise (just more than 70%) were published within business journals. Equally as striking, the proportion published within family journals fell from almost 12% in 1985 to less than 4% in 2010.
Published scholarly family business articles by journal type
Distribution of Scholarly Family Business Articles by Journal Type for Selected Years
Year in which business journals first became the most common publication outlet.
Proportions for 2010 excluding the subset of 17 additional Family Business Review articles (N = 208): business (69%), family (4%), economic (9%), other (18%).
Figure 2 contains the results of our theory base analysis, with additional details for selected years presented in Table 2. Although not quite as stark as that for the journal type analysis, there has clearly been an increasing use—and now dominance—of business-oriented theories within the family business literature. In 1985, business theories were less likely to be used than family theories within those articles in which specific theoretical perspectives could be identified, comprising 18% versus 29%, respectively, of all scholarly work published within that year. By 1997, business theories started to overtake all other categories in frequency of use and from this point forward continuously outnumbered the others (albeit to varying degrees). In 2010, business theories represented almost 49% of all identifiable theoretical approaches. Perhaps even more striking, family theories seem to have all but disappeared from the field by the end of our 25-year search period, being explicitly mentioned within less than 1% of the abstracts in 2010.
Published scholarly family business articles by theoretical base
Distribution of Scholarly Family Business Articles by Theory Base for Selected Years
Year in which business-oriented perspectives first became the most frequently mentioned theoretical base.
Proportions for 2010 excluding the subset of 17 additional Family Business Review articles (N = 208): business (47%), family (1%), economic (3%), other (20%), unstated (29%).
Critical Reflection on Observed Trends
Potential Explanations for Dominance of Business Perspectives
The trends identified through our bibliographic analysis tell a familiar story about the development of a research field. In initial stages, fields tend to “display considerable diversity in approach and form” (DiMaggio & Powell, 1983, p. 148; see also Agarwal & Hoetker, 2007). As indicated by the data reported for 1985, heterogeneity characterized both the publication outlets and theoretical perspectives associated with family business research 25 years ago. At that time, a sizeable proportion of articles (more than one third) were classified into the “unstated theory” category, many of which were case studies, which represent an acceptable academic approach in the absence of prescribed approaches (Cooper & Morgan, 2008) and/or when “little is known about a phenomenon” (Eisenhardt, 1989, p. 348). Moreover, when theoretical approaches were specified, they tended to be drawn in a more balanced manner from the disciplines of family science and business than what is observable today. This is likely at least partially attributable to the motivations of the field’s pioneering scholars. Personal exchanges with five of these scholars revealed that they all possessed, as John Davis (2011) phrased it, a “practical orientation” stemming from backgrounds in family businesses of their own. Craig Aronoff offered this further noteworthy observation: “importantly, the original members of the Family Firm Institute were all from org development, social psychology—behavioural science disciplines—and certainly not economics.” As fields begin to mature, however, there is an “inexorable push towards homogenization,” with sharply defined “structures of domination and patterns of coalition” (DiMaggio & Powell, 1983, p. 148; see also Agarwal & Hoetker, 2007). Our analysis not only reveals the existence of such a structuration process, but also clearly demonstrates that the field has become increasingly dominated by research conducted primarily from a business rather than a family lens. We offer four potential and interrelated explanations.
The first derives from comparing the proportion of businesses that are family businesses against the proportion of families that are business-owning families. As noted by Steier (2009), family firms constitute the dominant organizational form the world over, with illustrative estimates ranging from 57% of Japan’s smallest public companies to 80% of all German firms (Colli, Fernandez Perez, & Rose, 2003). In contrast, business-owning families represent only a small percentage of households. In their study of U.S. households, for example, Winter, Fitzgerald, Heck, Haynes, and Danes (1998) estimated that only 12% were composed of one or more family members who owned or managed a business. Given these fundamental differences in the salience of the two phenomena, it is understandable that a smaller proportion of family scholars would focus their attention on business-owning families whereas a comparatively larger proportion of business scholars would select family firms as their focal unit of analysis. 5
The second potential explanation draws on the notion of institutional logics, which are defined as “socially constructed, historical pattern of material practices, assumptions, values, beliefs, and rules by which individuals produce and reproduce their material subsistence, organize time and space, and provide meaning to their social reality” (Thornton & Ocasio, 1999, p. 804). In the context of academic research, institutional logics are argued to influence the topics that are examined, the questions that can be asked, and the methods employed (March & Olsen, 1976). To shed light on this possible explanation, we investigated the educational backgrounds and current affiliations for 6 of the field’s pioneers and 10 of its most productive scholars. The set of six pioneers is not meant to be an exhaustive list of all the early scholars who contributed so generously to the foundation of the field. Instead, they are representative of the first author’s own journey into the literature; that is, they constitute the set of scholars who directly, or indirectly through later authors, influenced the foundation of his understanding of the field. The list of the field’s 10 most productive scholars was obtained from Debicki et al. (2009). Data on the 16 scholars were collected via various sources: the website of the scholar’s academic institution, Internet searches for the scholar’s curriculum vitae, and, in a small number of cases, direct phone and/or e-mail communication with the scholar. Table 3 summarizes our findings. These provide support for Chrisman et al.’s (2008) contention that the field’s most prominent scholars “were originally trained in one of the various fields subsumed within the management discipline” (p. 928). They also echo those from Dyer and Sanchez’s (1998) authorship analysis in demonstrating the preponderance of family business researchers who are currently affiliated with management relative to other fields. As such, it is not surprising that much family business scholarship now draws primarily on business-oriented paradigms.
Education and Affiliation of Prominent Family Business Scholars
A third potential explanation derives from the importance of legitimacy acquisition to those engaged in entrepreneurial pursuits (Zimmerman & Zeitz, 2002). Legitimacy is defined as an externally perceived “condition of cultural alignment, normative support, or consonance with relevant rules and laws” (Scott, 1995, p. 45), in which the actions of the perceived entity are deemed “desirable, proper and appropriate” (Suchman, 1995, p. 574). Because resource holders judge entrepreneurial ventures according to their understandings of desirable and appropriate opportunities, one way for entrepreneurs to overcome legitimacy challenges is to align the expression of their identified opportunity according to “environmentally preferred symbols” (Rao, 1994, p. 30; see also Aldrich & Fiol, 1994; Lounsbury & Glynn, 2001). If we consider those who conducted pioneering work on family enterprise as “academic entrepreneurs,” it is plausible that such scholars selected questions, theoretical approaches, analytic techniques and reporting outlets consistent with the preferred symbols of powerful resource holders within their fields (i.e., reviewers, editors, faculty evaluation committee members) to help establish the legitimacy of their work (cf. Agarwal & Hoetker, 2007). Given the results presented in Table 3, which indicate that these pioneering family business scholars were primarily affiliated with business schools, the notion of legitimacy acquisition thus offers another potential explanation for the current predominance of business-oriented perspectives. Likewise, although the ten highly productive scholars listed in this table would not necessarily be considered “pioneers” within the field, many were among the first in their respective institutions to conduct research within the emerging domain; as such, it is likely that their decisions regarding theoretical perspectives and publication outlets were at least partially influenced by similar mechanisms.
A fourth potential explanation is related to the raison d’être of this special issue—the introduction of Family Business Review in 1988. 6 Its launch may have provided scholars trained in business schools a relatively easy-to-access “business” outlet in which to publish their work on family firms. Moreover, all five editors of the journal to date have been or are currently housed in business schools, which is likely to have further tilted the focus and language of the journal (and the field) in the direction of business. This is because editors consciously or unconsciously set the language of knowledge production within the journals that they edit, thereby influencing the materiality of scholarly knowledge within the field that the journal represents (Puxty & Tinker, 1995).
Critique of Grounding Assumptions Implicit Within Business-Oriented Perspectives
Irrespective of the reasons why business-oriented approaches have come to dominate the field of family business, much has been accomplished over the past 25 years. Consider, for example, the incredible strides that have been made in terms of establishing the domain’s academic legitimacy, which has benefitted the entire community of family enterprise scholars through increased access to research opportunities and resources (Sharma et al., 2007). As a result, we now possess a much stronger collective understanding of such important topics as the governance, succession and comparative advantage of family firms (Debicki et al., 2009). And yet, as emphasized by Chrisman et al. (2010), much still remains unknown. We wonder if more could be learned going forward if scholars were open to the critically reflexive practice of “rethinking the grounding assumptions that have guided past [family] business research” (Litz, 1997, p. 63; see also Zahra & Sharma, 2004, p. 339).
One implicit assumption evident within certain strands of research is the tendency to portray members of business-owning families as being predisposed to behave in a homogeneous manner—whether it be as principals rather than agents, altruists toward kin members, perpetuators of historical family feuds, or what have you. Yet the striking diversity of family structures, values, and interaction patterns evident to even the casual observer calls into question the validity of such a grounding assumption. In fact, this observation forms the basis of early frameworks for capturing the heterogeneity of family enterprise systems, such as Tagiuri and Davis’s (1982/1996) three-circle model, Ward’s (1987, 1991) distinction between different forms of family ownership, and Gersick, Davis, Hampton, and Lansberg’s (1997) three-dimensional developmental framework. It also underlies more recent classification schemes, such as those suggested by Birley (2001), Dyer (2006), and Sharma and Nordqvist (2008). To further this resurgence of interest in “capturing the heterogeneity among family enterprises” (Sharma, 2011, p. 6), we echo the call for greater attention to “previous work by scholars in the family sciences” on the diversity of families (Dyer, 2006, p. 269; see also Gersick et al., 1997, p. 19).
Another implicit assumption evident within recent family enterprise research, in particular, is the tendency to deem consequences for the organization—such as firm survival, change, and performance—as the critical (if not the only) outcome variables of interest. In our view, this grounding assumption contributes to the field’s preoccupation with questions about whether, why, and how family deleteriously or advantageously affects the performance of business organizations and to the disregard of causally reversed yet equally important questions about whether, why and how business ownership might affect the well-being of family members. The latter types of questions are not only consistent with the argument that “it is the reciprocal role of family and business that distinguishes family business studies from its sister disciplines” (Zahra & Sharma, 2004, p. 333; citing Astrachan, 2003; Rogoff & Heck, 2003), but need not be relegated to scholars in other fields to answer. As two Academy of Management Journal editors convincingly argued in a recent essay:
Peripheral stakeholders may serve as another distal and hard-to-reach, yet crucially important, data source for a wide range of organizational inquiries . . . Indeed, children [and other family members] can be viewed as one of the most important (not to mention, one of the largest) yet least explored stakeholder community in organizational studies . . . (Bamberger & Pratt, 2010, p. 668).
Just as the family science literature is a natural place to look for guidance on how to capture the diversity of business-owning families, so too is it a logical place to turn for direction on how to explore questions regarding the wellbeing of family members. Within the following sections, we demonstrate how the disciplined integration (Agarwal & Hoetker, 2007) of theoretical perspectives from family science and family business research can result in provocative yet relevant new directions for both fields.
Overview of Selected Family and Business Theories
Focal Family Theories
Rationale and overview of selected theories
We selected two influential family theories as the basis for our ensuing discussion: structural functionalism and symbolic interactionism. Although a host of family theories (i.e., systems theory, life course theory, social exchange theory, etc.) are potentially informative, we chose structural functionalism and symbolic interactionism for two main reasons. First, as noted by Sharma (2008), systems theory has already been found helpful for understanding some of the overlap issues and flows between family and business systems. Examples of pioneering work drawing on this theoretical perspective include Hollander and Elman (1988), Lansberg (1983), McCollom Hamptom (1988), and Whiteside and Brown (1991). Examples of later work include the conceptual and empirical pieces on the sustainable family business model (Olson et al., 2003; Stafford et al., 1999) as well as even more recent articles by Bjornberg and Nicholson (2007), and Distelberg and Blow (2011). Because we review the extant and potential contributions of family systems theory in greater depth within another forum (Jennings, Breitkreuz, & James, IN PRESS), 7 here we would like to showcase how two influential theoretical perspectives within the family science literature can enrich family business research (and vice versa).
Our second reason for focusing on structural functionalism and symbolic interactionism, in particular, is that they are similar to systems theory in terms of being among the most enduring and commonly used theories in family scholarship (Taylor & Bagdi, 2005). Symbolic interactionism is the older of the two, emerging in the early 20th century, and is still considered relevant and instructive for understanding the importance of meaning and interaction within the family (LaRossa & Reitzes, 2004). Structural functionalism emerged in the early to mid 20th century. Although sometimes critiqued as outdated, it continues to be a dominant theoretical approach in family studies—particularly in research that does not identify a specific perspective but implicitly uses neo structural-functionalist assumptions to identify research problems and questions (Allen, 2000; Lempert & DeVault, 2000; MacDermid, Roy, & Zvonkovic, 2005; Smith, 1993). Furthermore, at the level of family policy development, especially in the United States, structural-functionalist assumptions predominate perspectives on family (Biblarz & Stacey, 2010; Stacey, 2000).
Both structural-functionalist theory and symbolic interactionism assume that families are the core building blocks of society. Parsons (1951), one of the first structural functionalists, argued that society was made of individual social institutions that worked together to create a stronger “whole.” Each of these social institutions had specific and prescribed functions to fill in order to keep society stable and balanced, and families comprised a key social institution to guarantee stability. Within the family, like in other institutions, each member had clearly defined roles to fulfill in order to guarantee successful functioning of the family unit (Albanese, 2010, p. 17). In a similar fashion, symbolic interactionists also viewed the family as central to the development of the social. Mead (1934/1967), for example, stated that “all such larger units or forms of human social organization as the clan or the state are ultimately based upon, and whether directly or indirectly are developments from or extension of, the family” (p. 229).
There are, however, important distinctions between the two approaches. While structural functionalists focus more on how the family and its members serve a particular function as an important building block of society, symbolic interactionists pay greater attention to how interactions between family members shape individuals and family life, which, in turn, shape larger organizations. Structural functionalism, as the name suggests, is a structural theory focused on how family is influenced by, and affects, other social institutions. In contrast, symbolic interactionism is focused on the microlevel analysis of interactions among family members. We provide further details below, explicating the core constructs, key assumptions, and fundamental questions associated with each approach.
Structural functionalism
The Parsonian version of structural functionalism became an especially important theory of family sociology in the postwar era, dominating research from the early 1940s to the mid 1960s (Mann, Grimes, Kemp, & Jenkins, 1997). Today, it continues to be a predominant theory in family scholarship, although it is often implicitly rather than explicitly stated (Stacey, 2000). Implicitly, structural functionalist assumptions have often shaped the kinds of questions family scholars often ask, focusing on the topics such as the implications of nonnormative family structure on child outcomes (Potter, 2010), the impact of wives’ employment on marital stability and happiness (MacDermid et al., 2005), and the implications of alternate family forms on time spent with children (Kending & Bianchi, 2008). Structural functionalism arose as a response to one of the pressing questions of the time: How could citizens be assured stability and safety within a postindustrial society? Parsons’s answer lay in the construction of a functional family unit that would comply to narrowly prescribed social norms. Importantly, structural functionalism must be understood within the context of a society that was recovering from war and searching for stability (Kingsbury & Scanzoni, 2004).
Structural-functionalist theory is built on a few key assumptions. Structural functionalists acknowledge that the societal context is important, recognizing that outside forces influence families. In Parsons’s conceptualization, these outside forces were often considered threats, and the role of the family unit was to serve as a buffer between these threats and the well-being of family members. At the heart of structural functionalism is the assumption that families socialize children, as this function is essential for the maintenance of society (Smith, Hamon, Ingoldsby, & Miller, 2009). Family exists to fulfill the socialization function, and in turn this function “enhances the survivability of the larger group” by providing stability (Smith et al., 2009, p. 41). This stability is best achieved when there is equilibrium, or balance, in the family. In family science, equilibrium refers to the extent to which families are able to maintain stability amidst threats, whether internal or external (Kingsbury & Scanzoni, 2004). From a structural-functionalist perspective, balance is best maintained through compliance with a narrowly defined notion of family; that is, the traditional structure consisting of husband, wife, and children.
Moreover, in the structural-functional conceptualization of the traditional family, each spouse has a specific role. The husband plays the instrumental role of the breadwinner and serves as the bridge between the family and the outside world, his purpose being to maintain economic viability within the home as well as protecting the family from the hazards of the outer world. The wife plays the expressive role, focusing on maintaining relationships within the family, and providing a safe haven where the family can develop emotional relationships, also preserving equilibrium. Finally, structural functionalists assume interdependence between the different players within the family. Although instrumental and expressive roles are distinct and differentiated by sex, they both serve vital functions within the family (Kingsbury & Scanzoni, 2004). Structural functional analysis typically involves examining the effects of family structure on family members as well as behavioral consequences for social group(s) to which family members belong (Pittman, 2004).
In short, the role of families within structural functionalism can be summed up as follows: “The family, organized around a unique and unalterable type of role structure, operates or functions for something larger than itself” (Kingsbury & Scanzoni, 2004, p. 197). A key theoretical outcome of structural functionalism is that diversions from traditional family forms will promote instability in other social groups. The fundamental question within this paradigm, then, is as follows: What are the effects of family stability and instability on other institutions?
Symbolic interactionism
Symbolic interaction theory is a perspective associated with Mead, Blumer, Cooley, and others that seeks to understand the behaviors of individuals through the creation of meaning that comes through interactions with others. Symbolic interaction is interested in “how humans in concert with one another create symbolic worlds and how these worlds, in turn shape human behavior” (LaRossa & Reitzes, 2004, p. 136). Mead argued that the self is developed through a continual interaction between “I” and “me.” In this conceptualization, the “I” represents the spontaneous self, whereas the “me” represents the social self that learns how to behave through interaction with others. In a similar vein, Cooley (1956) discussed the concept of the “looking-glass self” whereby individuals develop their identity through interactions with, and responses from, others. In this process, we attain feedback about our behaviors, largely from our “primary” social groups such as the family (Smith et al., 2009).
According to symbolic interactionist family scholars, families are social groups in which individual identities develop through interactions with other family members. In this process, values are attained and appraised (Burgess, 1926; Handel, 1985). Individual family members align their behaviors within meanings held by others within their family, and each family and its members ultimately develop behavioral and role norms (LaRossa & Reitzes, 2004; Smith et al., 2009). Individual identity is thus shaped within the context of families, and the meaning of the interactions occurring within them. A theoretical outcome of symbolic interactionism is that a strongly developed identity in an individual will result in behaviors consistent with that identity (LaRossa & Reitzes, 2004). The fundamental question within this paradigm can be expressed as follows: How do a family’s symbolic meanings and interaction patterns affect how individual family members think, feel and act?
Focal Business Theories
Rationale for selected theories
As was the case for the focal family theories, we selected two of the most commonly used and influential business theories within extant family enterprise research as the basis for our illustrative integrations. Although the stewardship perspective is certainly gaining in popularity (e.g., Eddleston & Kellermanns, 2002; Eddleston, Kellermanns, & Zellweger, 2010; Miller & LeBreton-Miller, 2006; Miller, LeBreton-Miller, & Scholnick, 2008), we selected agency theory and the resource-based view (RBV) based on the findings reported by Chrisman et al. (2010), which suggest that these perspectives have historically represented the two predominant business-oriented approaches. Of the 25 most frequently cited articles reviewed within their study, for instance, almost three quarters (12 and 6 articles, respectively) were identified as having adopted at least one of these approaches as their main theoretical base. Given that the typical Family Business Review reader is likely to be highly familiar with these theories, we provide considerably briefer summaries of their core constructs, central premises, and fundamental questions below.
Agency theory
Agency theorists are interested in the role behavior of principals (i.e., business owners) and agents (i.e., business managers). Agency theory assumes the presence of self-interest for both parties, that these interests are likely to diverge, and that there are costs associated with divergence (Fama & Jensen, 1983; Jensen & Meckling, 1976). The central debate in the context of family firms concerns the nature and consequences of principal–agent behaviors when both actors belong to the same family. Whereas some have argued that family ownership and management reduces agency costs, others have countered that such conditions expose firms to additional agency hazards that threaten organizational effectiveness (Schulze, Lubatkin, & Dino, 2003; Schulze, Lubatkin, Dino, & Buchholtz, 2001). The fundamental question within agency-oriented research can thus be expressed as follows: Are agency costs lower or higher in family firms relative to non-family firms—and with what implications for comparative firm performance?
Resource-based view
Those adopting an RBV approach (Barney, 1991) to family business research are interested in the strategic consequences of familiness; that is, “the unique bundle of resources a particular firm has because of the systems interactions between the family, its individual members, and the business” (Habbershon & Williams, 1999, p. 11). Family firms are conceptualized as possessing varying degrees of distinctive (i.e., advantageous) versus constrictive (i.e., disadvantageous) familiness, with consequent positive or negative strategic implications, respectively (Sirmon & Hitt, 2003). The fundamental question within RBV-oriented research can thus be expressed as follows: What unique bundle of resources—that is, distinctive (or constrictive) “familiness”—do family firms possess that contributes to their sustainable competitive advantage (or disadvantage) relative to nonfamily firms?
Research Directions Inspired by Informed Pluralism
Overarching Framework
Having summarized our focal family and business theories, we turn now to illustrating how these can be integrated to provide a more nuanced and holistic understanding of the complexity inherent in family enterprise. When doing so, we adopt the approach of informed pluralism (Willmott, 2008). That is, instead of positioning the family perspectives as alternatives to the business perspectives, our intent is to demonstrate how these different approaches, which are seemingly “worlds apart,” can act as complements to one another. Moreover, instead of appointing either set a privileged position, we strive to illustrate how both can be enriched by incorporating insights from the other. In the spirit of disciplined integration (Agarwal & Hoetker, 2007), we used these two guiding questions to structure our search for analytic openings within each domain:
Guiding Question 1: How can predominant family theories expand the scope of research conducted within prevailing business paradigms by either (a) suggesting extensions to existing fundamental questions or (b) suggesting entirely new questions to be explored?
Guiding Question 2: How can predominant business theories expand the scope of research conducted within prevailing family paradigms by either (a) suggesting extensions to existing fundamental questions or (b) suggesting entirely new questions to be explored?
New Directions Suggested by Family Theory: Business Theory Integrations
Table 4 summarizes our musings regarding the first of the above-noted guiding questions. We begin with potential extensions suggested by structural functionalism, followed by those suggested by symbolic interactionism. Although some family business researchers have certainly borrowed (either explicitly or implicitly) concepts consistent with each of these perspectives (such as Sharma & Manikutty, 2005; Bertrand & Schoar, 2006 respectively), we restrict our discussion below to how they can be integrated within work adopting an agency or RBV approach in particular.
New Directions Suggested by Family Theory: Business Theory Integrations
Structural functional extensions to agency research
A key way in which structural functionalism can extend family business research conducted from an agency perspective is by questioning underlying assumptions that agency costs are either invariably lower or invariably higher within family-controlled firms relative to nonfamily firms. Although we are not the first to argue for a contingency approach to family business questions in general (e.g., Casillas, Moreno, & Barbero, 2010; Royer, Roland, & Rafferty, 2008), or to suggest such an approach for reconciling the agency debate in particular (e.g., Dyer, 2006), we emphasize the structural functional literature as an especially viable place to turn for potential resolutions. More specifically, a structural functional lens suggests that agency costs are likely to depend on the structure of the controlling family. As just one illustrative structural characteristic, consider the ties between family members within the same and different generations (Bengtson, 2001). With respect to the issue of agency costs, research might reveal that intergenerational family ties are more influential than intragenerational marital ties. More specifically, agency costs are likely to be lower in firms operated by families with high-functioning ties between members of different generations yet higher in firms operated by families with dysfunctional inter-generational ties, because of the potential for greater alignment between the interests of principals (i.e., owners from the senior generation) and family agents (i.e., managers from junior generations) within the former type of family structure.
Another way in which structural functionalism can extend agency research conducted within the context of family firms is by positing even more novel, yet just as relevant, questions to be investigated. It seems to us, for instance, that agency researchers consider the comparative performance of family versus nonfamily firms to be a critical (if not the critical) endogenous outcome variable of interest. Applying a structural functional mind-set could lead to the consideration of hitherto unexamined—but potentially impactful—exogenous variables and their associated effects. Consider, for example, the major structural changes that families occasionally experience (e.g., divorce). To what extent do such exogenous shocks alter agency costs within family firms (i.e., both principal–agent and principal–principal), and with what implications for comparative performance (or even the very survival of these organizations)?
Structural-functional extensions to RBV research
Structural functionalism offers a parallel set of interesting new directions, with a similarly high degree of practical relevance, for family business research conducted from an RBV perspective. Building on the contingent logic already inherent in RBV research, a structural functional stance suggests that the search for those resources that contribute to distinctive versus constrictive familiness might be fruitfully expanded to include characteristics of the owning family’s structure. Future researchers might discover, for instance, that such structural characteristics as equilibrium are powerful discriminators of firms that enjoy distinctive familiness and those that suffer from the constrictive version of this construct. As noted in our overview of structural functionalism, the notion of equilibrium reflects a family’s ability to remain stable in spite of internal or external shocks (Kingsbury & Scanzoni, 2004)—a characteristic that seems likely to contribute positively to the sustainable competitive advantage of a family firm.
RBV research conducted within the context of family firms can be extended in even more novel directions by drawing on structural-functional theorists’ interest in the effects of family instability. Illustrative research questions are as follows. During periods of major structural upheaval within an owning family, such as the death of an influential family member, is it even possible for a family firm to retain its distinctive familiness? If so, what unique bundle of resources within the business and/or the family enables a family firm to do so? In exploring answers to such questions, we can envision the structural functional notion of family equilibrium being extended by Shepherd’s (2003) work on the grief recovery processes of entrepreneurs and enterprising families.
Symbolic interaction extensions to agency research
Symbolic interactionism also possesses the potential to extend family enterprise research in interesting new directions. Consider the opportunities for work using agency theory as the primary conceptual framework. As was the case for structural functionalism, a symbolic interactional lens would suggest that the current debate about whether agency costs are invariably lower or higher in family firms might be more productively resolved through a contingent approach. Symbolic interaction theorists, however, would suggest that agency costs in such organizations are likely to be especially dependent on the nature of key ideologies and interaction patterns within and between family and nonfamily members (rather than on the owning family’s structure). A symbolic interactionist might speculate, for instance, that agency costs are likely to be lower when the family business is symbolic of more than just a source of income—that is, when it provides greater socioemotional wealth (Berrone, Cruz, Gómez-Mejía, & Larraza-Kintana, 2010; Gómez-Mejía, Haynes, Núñez-Nickel, & Moyano-Fuentes, 2007; Zellweger & Astrachan, 2008)—for both emerging principals and nonfamily agents. Similarly, a symbolic interactionist might posit that such costs will also be lower when interactions between principals and agents are clear and well understood by both, thereby increasing the likelihood that the self-interest of both emerging principals and nonfamily agents at least partially incorporates the principal’s familial group interest.
An even more novel way in which symbolic interactionsim can extend agency-oriented research is by questioning whether the fundamental constructs of “principal,” “agent,” and “agency costs” mean different things to members of different families. Perhaps, for example, some owning families make very little distinction between principals and agents—a possibility that is especially likely in cultures such as the Canadian First Nations, where widely developed clan systems result in kinship systems that are not easily recognized or duplicated in Western societies (Wuttunee, 2004). Such kinship systems are characterized by particularly strong bonds between kin and clan members, which prioritize individual activities being directed toward community values and goals. Similarly, it is plausible that some owning families deem what others consider as “agency costs” to be “agency investments”: This is not just a matter of semantics, as one could argue that the correspondence between the interests of principals and agents is likely to be considerably greater in such scenarios. What are the implications of variability in the very meaning of agency theory’s core constructs for the relative performance of family firms?
Symbolic interaction extensions to RBV research
As for research adopting an RBV approach, one of the most natural extensions suggested by symbolic interactionism is to posit that the degree to which a firm possesses distinctive versus constrictive familiness is at least partially determined by the configuration of key interaction patterns within the owning family. Indeed, Dyer (2006) has previously suggested that certain typologies of families developed by family science scholars—such as those that distinguish between closed, random, open and synchronous paradigms (Constantine, 1993)—“may help us understand why certain firms owned and managed by families are at a comparative advantage or disadvantage” (Dyer, 2006, p. 270). It might also be the case that a family firm’s degree of distinctive versus constrictive familiness depends on the owning family’s degree of conflict. While one might be tempted to posit a simple main effect, a more complex hypothesis closer to the notion of interaction patterns, or configurations, might be as follows: A higher degree of family conflict will not necessarily lead to higher constrictive familiness when family members also possess a strong and consensually shared meaning regarding the family’s identity. Envision, for example, families composed of members who frequently fight among themselves yet quickly present a strong and unified front when interacting with nonfamily members (especially when threatened).
Another way in which a symbolic interactional lens can extend RBV-oriented research is by drawing attention to the possibilities engendered by a more critically reflexive stance toward the latter theory’s key premises. A symbolic interactionist’s interests in meaning, symbol, and social construction, for example, might lead to a questioning of whether the same bundle of unique family resources that is distinctive within a particular setting and/or during a certain period might actually be deemed constrictive in a different place or time. If so, does this call into question the very notion of “enduring distinctive familiness” capable of creating sustained comparative advantage for a family firm?
New Directions Suggested by Business Theory: Family Theory Integrations
Consistent with the approach of informed pluralism (Willmott, 2008), we complete our discussion by demonstrating how the business theories predominant within family enterprise research can, in turn, expand the scope of work conducted within both of the selected theories from family science. Table 5 summarizes our musings about potential extensions and new directions that could arise through such integrations. We expand on these below.
New Directions Suggested by Business Theory: Family Theory Integrations
Agency extensions to structural functional research
Interesting extensions to the family science literature, in general, and to work on structural functionalism, in particular, can be formulated by importing key constructs from agency-oriented research. Consider, for instance, the fundamental notion of a “principal.” Conceiving of some family members in this manner might lead structural functionalists to investigate the extent to which family structures and functionality are affected by parents also being business owners. More specifically, for example, we can envision research that addresses such critically important (yet virtually overlooked) questions as: Is divorce more prevalent among families that own businesses than among those that do not? We would hope that questions such as these are just as important as the more typical, yet causally-reversed, core question within agency-oriented research of whether family ownership impacts business functioning.
While the preceding question represents an extension of typical structural functional research, importing the other fundamental concept of “agent” into this literature’s lexicon suggests considerably more novel future directions for the field. Doing so, for instance, could lead structural functionalists to conceptualize and identify family members who typically act in an agentic manner; that is, those whose self-interested actions exhibit little alignment with the familial group’s interests. Although Sharma and Irving (2005) characterize some potential family successors in this manner and discuss consequences for the family firm, the following question is likely to be of even greater interest to structural functional scholars: What are the implications for a family’s “performance,” such as its well-being and/or stability, when one or more members behave closer to “agents” than to “principals?” The article by Lumpkin, Martin, and Vaughn (2008), which introduces the construct of “family orientation”—that is, the degree of an individuals’ linkage with his or her family—is likely to prove helpful for addressing this and similar questions.
Agency extensions to symbolic interaction research
Adopting an agency lens can also lead to intriguing new directions for the symbolic interactionism literature. In our view, some of the most interesting extensions stem from considering how the simultaneous existence of parent–child and principal–agent relationships influences interaction patterns within business families. In what ways, if any, does the initial overlay of the latter roles (i.e., principal–agent) on the former (i.e., parent–child) affect interactions within the entire family? Are some business-owning families more adept at handling these overlapping roles than others; and, if so, what sets them apart from those that are less effective at doing so?
An agency-oriented perspective could also lead symbolic interactionists to question whether families with members who are also business principals tend to possess different ideologies than other families. One plausible hypothesis, for example, is that business-owning families value entrepreneurial ideals to a greater extent than others. If so, how does this influence the career choices and trajectories of individual family members? Are children of business owners more likely than others to embark upon entrepreneurial careers of their own?
RBV extensions to structural functional research
The RBV of family firms offers a parallel set of intriguing directions for research conducted on families. Structural functionalists, for instance, are interested in how certain structures help buffer families from external forces. Applying an RBV lens could lead to the consideration of whether the unique resource bundle advantageous to the family business is also advantageous to the business family. One might speculate, for example, that those capable of handling crises effectively within the business might also be more adept at dealing with major changes within the family. More generally, to what extent are competence-enhancing resource bundles transferable across the two domains? Lansberg’s (1983) notion of “institutional overlap” certainly suggests that the bundle of practices that contributes to effective family functioning detracts from business functioning—but is the reverse necessarily the case?
An RBV lens might even create opportunities for questioning some of the grounding assumptions underlying structural functional research. One such assumption is the supposed primacy of the familial group over the socialization of children. Yet consider those who spend the majority of their childhood in and around their parents’ business. To what extent are these children actually socialized according to business values, norms and principles—and by the organizational “resources” who uphold them? In other words, do the resources available to families made possible through business ownership alter the traditional importance of family in the care and socialization of children?
RBV extensions to symbolic interaction research
Our final set of hypothetical integrations pertains to potential extensions of symbolic interactionism offered by an RBV approach in general and its focus on “unique resource bundles” in particular. One such resource bundle that could be isolated within a family firm is its characteristic set of interaction patterns among organizational members (e.g., decision-making processes, conflict resolution styles, etc.). To what degree—and with what effects—do these characteristic patterns within the family business influence interactions within the business family?
This line of thought can be taken one step further. Instead of focusing on the objective resource bundles characterizing a family business, future researchers could also focus on the subjective perceptions and portrayals of these bundles. An RBV approach suggests that some bundles are likely to be perceived and portrayed as distinctive and advantageous, whereas others are likely to be perceived and portrayed as constrictive and disadvantageous. In what ways do such distinctions influence the self-identities of the family members involved in owning and operating each type of firm—and with what consequences for such important outcomes as personal and family well-being?
Concluding Remarks
Not that long ago, economists Bertrand and Schoar (2006). Wrote, “We believe that much can be learned by taking seriously the ‘family’ part of ‘family firms’” (p. 95). We couldn’t agree more, especially in light of the increasing dominance versus increasing disappearance of business and family approaches, respectively, highlighted within our bibliographic analysis of family enterprise research conducted over the past 25 years. Indeed, one of the objectives of this article was to join others such as Aldrich and Cliff (2003), Dyer (2006), Olson et al. (2003), Rogoff and Heck (2003), and Stafford et al. (1999) in calling for renewed attention to a rich, relevant and rigorous field of research—the family science literature—that already takes the notion of family quite seriously. This seems a particularly astute choice for those family business scholars who wish to adopt a more nuanced approach to this construct in future work, even if primarily for a very practical reason: “so as not to waste precious resources on reinventing the wheel” (Zahra & Sharma, 2004, p. 340).
Our even more ambitious goal was to provide a tangible example of how future scholars might contribute to actualizing Sharma et al.’s (2007) vision of family business as “a discipline that gives back to other disciplines as much, if not more, than the field has received” (p. 1019). In developing such an example, we were guided by Agarwal and Hoetker’s (2007) notion of disciplined integration as well as Zahra and Sharma’s (2004) more specific recommendations consistent with such an approach. That is, we “critically examin[ed]” implicit assumptions within the field’s prevailing theories, “integrated seemingly unrelated theories within a coherent framework”, and “identif[ied] opportunities for innovative research that lies within what [the field has] already found” (Zahra & Sharma, 2004, p. 339).
Inspired by the notion of informed pluralism (Willmott, 2008), we then took one step further. Instead of simply demonstrating how family business research can be enriched by attention to theories from family science, we also illustrated how family science research can be extended through greater attention to theories of family business. Although placing both fields on more equal footing runs counter to recommended approaches for integrating theories with seemingly incompatible underlying assumptions (see, e.g., Okhuysen & Bonardi, 2011), we consider this a potential means of countering the tendency of organizational scholars to borrow from other disciplines but not exert a strong reciprocal influence on them (as documented by Agarwal & Hoetker, 2007). To increase the likelihood that such efforts end up exerting such a reciprocal influence, it would be ideal if scholars were to take the even larger next step of recrafting their work for potential publication in top journals within the other discipline. Special issues of these journals—such as that being coedited by Michael Morris and Franz Kellermanns within Family Relations (a top journal in family science) 8 —will undoubtedly help facilitate the vision of giving back to the fields from which we have borrowed.
To improve the chances that our attempts at giving back are read, understood, and appreciated, it is important that family business scholars “learn to communicate and connect with scholars in sister disciplines” (Zahra & Sharma, 2004, p. 337). As pithy as this might sound, our main suggestion in this regard is as follows: Why not take a walk across campus and stroll through the buildings that house researchers affiliated with these other disciplines—or at least ask our doctoral students do so? Perhaps every doctoral student’s education in such an inherently interdisciplinary field as family business should consist of one or more graduate-level seminars outside of business. The understanding, of course, would be that doctoral students from these other disciplines would be more than welcome to register in our seminars. Small steps such as these are likely to go a long way toward not only rebridging the distance between family business and other disciplines but also exerting a reciprocal influence on one another.
On that note, as the two of us affiliated with our university’s School of Business bundled up for the 15-minute trek across campus to meet with our family science coauthor housed in the Department of Human Ecology, the challenges inherent in building cross-disciplinary collaborations certainly weren’t lost on us (especially as we trudged through knee-high snowdrifts and subzero temperatures). Such challenges receded, however, when we once again emerged from our brainstorming session energized from the enlightening experience of trying to build bridges across our respective disciplines. Perhaps it was helpful that the lead author was a doctoral student at the time of writing this article, whose supervisor (the second author) had “insisted” that he complete graduate-level courses in family theory if he was majoring in family enterprise (one of which turned out to be delivered by the third author). Whatever the reason, one of the biggest lessons that this rather unusual coauthorship team learned from the process of challenging ourselves to deliver an interdisciplinary collaboration for this special issue is that the two academic worlds of “business” and “family” need not be quite so far apart as they might initially appear.
Footnotes
Acknowledgements
This manuscript benefited greatly from the detailed, knowledgeable, and encouraging feedback provided by the special issue reviewers and our handling editor, Pramodita Sharma.
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article:
The authors would like to acknowledge the financial support provided by SSHRC Grant No. 410-2009-0321 awarded to the second author.
Notes
References
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
