ISBE Director’s July Blog

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Researching at the Family/Business Interface

Family Business research is a relatively young field of research in the UK, although it has links to many other areas including wealth management, small business, minority ethnic business and indeed just ‘business’.  Perhaps the most surprising thing about family businesses however is their heterogeneity. Family businesses include businesses of different types, sizes, philosophies and cultures. Similarly, the term ‘family business’ does not just imply those wealthy, next generation kids spotted on social media or indeed corner shops, worthy though these undoubtedly are. Family businesses include businesses of all sizes, operating across almost all sectors of business and indeed across countries, continents and geo-political divides. This heterogeneity poses something of a dilemma for family business researchers. Whilst there is much to learn from the literature on family business, linking this to the policy environment is more challenging as for policy makers it is helpful to have a clear picture of who the family businesses within a region or a country actually are. Where patterns of family ownership are not captured in official statistics, therefore, further work is needed and this in part is what lead to the development of a ‘Family Business Top 100’ for Scotland. On a more general level there is consensus that somewhere between 60-85% of businesses in most economies have some degree of family involvement, albeit that this stands in the context of a long-standing definitional debate.

In addition, however, research at the interface of families and business incorporates several distinct areas. One approach is encapsulated by ‘one family, one business’ and takes as the unit of analysis the business itself. An alternative view takes the unit of analysis as the family, whether that family runs one or many businesses. This approach also links well to the idea that business start-ups are influenced by family, for good or ill, and we ignore that influence at our peril. The narrative of the entrepreneur as a lone entity is strong but not universal in entrepreneurship research and research at the family business start up interface has a contribution to make. The reasons why research at the family/business interface has taken time to establish in the UK are less clear. To some extent, this may be because of the way we collect office statistics; we tend in the UK to look at businesses in terms of their size, legal status or sector of operation and this has contributed to the relative invisibility of family owned business in official thinking. This situation is improving, slowly, but including awareness of family owned and managed business in the design of official statistics would allow this group of businesses the profile they deserve in economic and social terms. The impact of the family on the values of the business tends to develop where ownership and/or management are concentrated in the hands of a relatively small group who share a similar outlook. This does not mean that being a family business means simply a ‘better business’ or a ‘more ethical’ business. Rather, it means that the family influence the business, irrespective of business size, sector of operation or indeed location.

Professor Claire Seaman
ISBE Director &
Professor in Enterprise and Family Business
Queen Margaret University

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