Title

Family identity and family governance

Publication Type

Conference Paper

Publication Date

7-2016

Abstract

Familybusiness governance is of great interest to researchers as the family membersby purpose and design determine if the business continues to be a familybusiness through ownership, management, direction or influence throughsubsequent generations. Family businessgovernance has primarily focused on the business sphere, examining the governanceof the corporations within the fold of a family business. The theoretical basis for corporategovernance of these corporations stems from the field of finance andeconomics. On the family sphere, familybusiness literature has provided case examples of family governance and bestpractice. Empirical research has examined the influence of family successionand selected family governance practices on corporate governance and firmperformance. The perspective applied has the business as the priority: that thefamily governance systems are recommended for the purposes of keeping thebusinesses intact as family businesses. Yet this approach has put the cartbefore the horse because the family is central to a family business. Families, who are not well governed, are often replete with conflictsand strife, causing issues for the business. However, there has been little examination of thetheoretical basis of the family governance prescriptions with the family at theforefront. Researchershave recently employed social identity theory in family business research toexplore the boundaries between the family and business spheres, and to theorisethe linkage between family identity and the non-financial goals of the familyfirms (e.g. Sundaramurthy and Kreiner, 2008; and Zellweger, Nason,Nordqvist & Brush,2013). This paper extends this stream of research. Family identity theory positsthat organizational, symbolic and dynamic principles are at work in a family inthe relationships and interactions resulting either in the continuity of thefamily or its breakdown (generativity or degenerativity). This paper seeks to explore the applicabilityof this theory as an explanation for family governance. Family identity theory mightprovide an alternative explanation or family governance mechanisms as opposedto the suggestion that they are substitutes for the corporate governancemechanisms absent from the family sphere. It arguesthat the family identity is key to understanding the development of familysystems, particularly the informal systems that keep the family together. It argues that family governance is an outworking, or extension of family activities and characteristics that distinguisha family as a well-defined unit in society. What the “family” becomes, constrainsthe shape of its family governance.

Keywords

Family business, family governance, family identity theory

Discipline

Entrepreneurial and Small Business Operations

Research Areas

Strategy and Organisation

Publication

International Conference on Advances in Management

Publisher

LexisNexis

City or Country

Jacksonville, Florida

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