Abstract
The importance and nature of the family system relative to the family firm are presented in detail. Family firm definitions highlight the importance of the family system as supported by extant theories. The Sustainable Family Business Theory (SFBT) (Danes et al., Journal of Developmental Entrepreneurship, 13(3), 229–268, 2008) and the Entrepreneurial Value Creation Theory (EVCT) (Mishra & Zachary, The Theory of Entrepreneurship: Creating and Sustaining Entrepreneurial Value. New York: Palgrave Macmillan, 2014) are reviewed. From this conceptual base and known research to date, the family firm’s secrets are explored by delineating and examining the prevailing myths of the family firm along with the apparent and counter dilemmas of such misconceptions. Finally, this chapter suggests possible exemplar nexuses between the family firm and the entrepreneurial firm as well as identifies 13 exemplar secrets or hidden truths of the family firm. The challenge of a paradigm shift is offered along with its implications for researchers, educators, practitioners, owners, and family members.
This chapter builds upon earlier work in Zachary, R. (2011). “The Importance of the Family System in Family Business.” Journal of Family Business Management, 1(1), 26–36.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Aguilera, R. V., & Crespi-Cladera, R. (2012). Firm Family firms: Current Debates of Corporate Governance in Family Firms. Journal of Family Business Strategy, 3(2), 66–69.
Aldrich, H. E., & Cliff, J. E. (2003). The Pervasive Effects of Family on Entrepreneurship: Toward a Family Embeddedness Perspective. Journal of Business Venturing, 18(5), 573–596.
Anderson, R. C., & Reeb, D. M. (2003). Founding‐Family Ownership and Firm Performance: Evidence from the S&P 500. The journal of finance, 58(3), 1301–1328.
Astrachan, J. H. (2003). Commentary on the Special Issue: The Emergence of a Field. Journal of Business Venturing, 18(5), 567–572.
Bowen, M. (1985). Family Therapy in Clinical Practice. New York: Jason Aaronson.
Cardon, M. S., Gregoire, D. A., Stevens, C. E., & Patel, P. C. (2013). Measuring Entrepreneurial Passion: Conceptual Foundations and Scale Validation. Journal of Business Venturing, 28, 373–396.
Cardon, M. S., Wincent, J., Singh, J., & Drnovsek, M. (2009). The Nature and Experience of Entrepreneurial Passion. Academy of Management Review, 34(3), 511–532.
Cramton, C. D. (1993). Is Rugged Individualism the Whole Story? Public and Private Accounts of a Firm’s Founding. Family Business Review, 6(3), 233–261.
Danes, S. M., & Brewton, K. E. (2012). Follow the Capital: Benefits of Tracking Family Capital across Family and Business Systems. (Chapter 14). In A. Carsrud & M. Brannback (Eds.), Understanding Family Businesses: Undiscovered Approaches, Unique Perspectives, and Neglected Topics (pp. 227–250). Springer.
Danes, S. M., Lee, J., Stafford, K., & Heck, R. K. Z. (2008). The Effects of Ethnicity, Families and Culture on Entrepreneurial Experience: An Extension of Sustainable Family Business Theory. Journal of Developmental Entrepreneurship, 13(3), 229–268.
Danes, S. M., Matzek, A. E., & Werbel, J. D. (2010). Spousal Context During the Venture Creation Process. (Chapter 4). In A. Stewart, G. T. Lumpkin, & J. A. Katz (Eds.), Advances in Entrepreneurship, Firm Emergence and Growth: Vol. 12 (Entrepreneurship and Family Business) (pp. 113–162). New Milford, CT: Emerald.
Danes, S. M., Stafford, K., Haynes, G., & Amarapurkar, S. (2009). Family Capital of Family Firms: Bridging human, Social, and Financial Capital. Family Business Review, 22(3), 199–215.
Danes, S. M., Zuiker, V. S., Kean, R., & Arbuthnot, J. (1999). Predictors of Family Business Tensions and Goal Achievements. Family Business Review, 12(3), 241–252.
Dimov, D. (2007). From Opportunity Insight to Opportunity Intention: The Importance of Person–Situation Learning Match. Entrepreneurship Theory and Practice, 31(4), 561–583.
Donnelley, R. G. (1964). The Family Business. Harvard Business Review, 42(4), 93–105.
Dyer, W. G., & Handler, W. (1994). Entrepreneurship and Family Business: Exploring the Connections. Entrepreneurship Theory and Practice, 19(1), 71–83.
Eddleston, K., Kerrermanns, R., Barnett, T., & Pearson, A. (2008). An Exploratory Study of Family Member Characteristics and Involvement: Effects on Entrepreneurial Behavior in the Family Firm. Family Business Review, 21(1), 1–14.
Gartner, W. B. (1985). A Conceptual Framework for Describing the Phenomenon of New Venture Creation. Academy of Management Review, 10(4), 696–706.
Gartner, W. B. (1990). What are We Talking about When We Talk about Entrepreneurship? Journal of Business Venturing, 5(1), 15–19.
Gartner, W. B. (2001). Is there an Elephant in Entrepreneurship? Blind Assumptions in Theory Development. Entrepreneurship Theory and Practice, 25(3), 27–39.
Goel, S., Mazzol, P., Phan, P. H., Pieper, T. M., & Zachary, R. K. (2012). Strategy, Ownership, Governance, and Socio-Psychological Perspectives on Family Businesses from around the World. Journal of Family Business Strategy, 3(20), 54–65.
Greenwood, R. (2003). Commentary on: “Toward a Theory of Agency and Altruism in Family Firms”. Journal of Business Venturing, 18(4), 491–494.
Habbershon, T. G., & Williams, M. L. (1999). A Resources-Based Framework for Assessing the Strategic Advantages of Family Firms. Family Business Review, 12, 1–25.
Habbershon, T. G., Williams, M. L., & MacMillan, I. C. (2003). A Unified Systems Perspective of Family Firm Performance. Journal of Business Venturing, 18(4), 451–465.
Handler, W. (1992). The Succession Experience of the Next Generation. Family Business Review, 5(3), 283–307.
Hareven, T. K. (1982). Family Time and Industrial Time: The Relationship between the Family and Work in a New England Industrial Community. New York: Cambridge University Press.
Haynes, G. W., Walker, R., Rowe, B. R., & Hong, G. S. (1999). The Intermingling of Business and Family Finances in Family-Owned Businesses. Family Business Review, 12(3), 225–239.
Heck, R. K. Z. (Ed.). (1998a). The Entrepreneurial Family. Needham, MA: Family Business Resources Publishing.
Heck, R. K. Z. (Ed.). (1998b). The Entrepreneurial Family: Refocusing on the Family in Business (pp. 1–7). Needham, MA: The Entrepreneurial Family/Family Business Resources Publishing.
Heck, R. K. Z., Danes, S. M., Fitzgerald, M. A., Haynes, G. W., Jasper, C. R., Schrank, H. L., et al. (2006). The Family’s Dynamic Role Within Family Business Entrepreneurship. In P. Z. Poutziouris, K. X. Smyrnios, & S. B. Klein (Eds.), Handbook of Research on Family Business (pp. 80–105). Cheltenham, UK: Edward Elgar Publishers.
Heck, R. K. Z., Hoy, F., Poutziouris, P. Z., & Steier, L. P. (2008). Emerging Paths of Family Entrepreneurship Research. Journal of Small Business Management, 46(3), 317–330.
Heck, R. K. Z., Owen, A. J., & Rowe, B. (Eds.). (1995). Home-based Employment and Family Life. Westport, CT: Auburn House.
Heck, R. K. Z., & Trent, E. S. (1999). The Prevalence of Family Business from a Household Sample. Family Business Review, 12(3), 209–224.
Heck, R. K. Z., & Walker, R. (1993). Family-Owned Home Businesses, their Employees, and Unpaid Helpers. Family Business Review, 6, 397–415.
Jaffe, D. T. (2014). Working with Ones You Love: Conflict Resolution and Problem Solving Strategies for Successful Family Businesses. CreateSpace.
Jennings, J. E., & McDougald, M. S. (2007). Work-Family Interface Experiences and Coping Strategies: Implications for Entrepreneurship Research and Practice. Academy of Management Review, 33(3), 747–760.
Kaye, K. (1991). Penetrating the Cycle of Sustained Conflict. Family Business Review, 4(1), 22–44.
Kepner, E. (1983). The Family and the Firm: A Coevolutionary Perspective. Organizational Dynamics, 12(1), 57–70.
Klein, S. B., Astrachan, J. H., & Smyrnios, K. X. (2002). The F-PEC Scale of Family Influence: A Proposal for Solving the Family Business Definition Problem. Family Business Review, 15(1), 45–58.
Labaki, R., Michael-Tsabari, N., & Zachary, R. (2013). Exploring the Emotional Nexus in Cogent Family Business Archetypes. Entrepreneurship Research Journal, 3(3), 130–330.
Litz, R. A. (1995). The Family Business: Toward Definitional Clarity. Family Business Review, 8(2), 71–81.
Matzek, A. E., Gudmunson, C. G., & Danes, S. M. (2010). Spousal Capital as a Resource for Couples Starting a Business. Family Relations, 59, 58–71.
McGoldrick, M., Gerson, R., & Petry, S. (2008). Genograms: Assessment and Intervention. New York: W. W. Norton & Company.
Michael-Tsabari, N., Labaki, R., Aydinliyim, L., & Zachary, R. K. (2020, in revision). How Do Social and Economic Norms Drive Our Behavior and Decision Making Overtime? The Natural Experiment of the Family Business.
Michael-Tsabari, N., Labaki, R., & Zachary, R. (2014). Toward the Cluster Model: The Family Firm’s Entrepreneurial Behavior over Generations. Family Business Review, 27(2), 161–185.
Mishra, C. S., & Zachary, R. (2014). The Theory of Entrepreneurship: Creating and Sustaining Entrepreneurial Value. New York: Palgrave Macmillan.
Morck, R., & Yeung, B. (2004). Family Control and the Rent-Seeking Society. Entrepreneurship Theory and Practice, 28(4), 391–409.
Olson, P. D., Zuiker, V. S., Danes, S. M., Stafford, K., Heck, R. K. Z., & Duncan, K. A. (2003). Impact of Family and Business on Family Business Sustainability. Journal of Business Venturing, 18(5), 639–666.
Pearson, A. W., Carr, J. C., & Shaw, J. C. (2008). Toward a Theory of Familiness: A Social Capital Perspective. Entrepreneurship Theory and Practice, 32(6), 949–969.
Pieper, T., & Klein, S. B. (2007). The Bulleye: A Systems Approach to Modeling Family Firms. Family Business Review, 20(4), 301–319.
Ponzetti, J. J. (2003). International Encyclopedia of Marriage and Family (2nd ed.). New York, NY: Macmillan.
Rogoff, E. G., & Heck, R. K. Z. (2003). Evolving Research in Entrepreneurship and Family Business: Recognizing Family as the Oxygen that Feeds the Fire of Entrepreneurship. Journal of Business Venturing, 18(5), 559–566.
Rosenblatt, P. C., de Mik, L., Anderson, R. M., & Johnson, P. A. (1985). The Family in Business: Understanding and Dealing with the Challenges Entrepreneurial Families Face. San Francisco: Jossey-Bass Publishers.
Rutherford, M. W., Kuratko, D. F., & Holt, D. T. (2008). Examining the Link Between “Familiness” and Performance: Can the F-PEC Untangle the Family Business Theory Jungle? Entrepreneurship: Theory and Practice, 32(6), 1089–1109.
Schulze, W. S., Lubatkin, M. H., & Dino, R. N. (2003). Toward a Theory of Agency and Altruism in Family Firms. Journal of Business Venturing, 18(4), 473–490.
Stafford, K., Duncan, K. A., Danes, S. M., & Winter, M. (1999). A Research Model of Sustainable Family Businesses. Family Business Review, 12(3), 197–208.
Trent, E. S., & Astrachan, J. H. (Eds.). (1999). Editors’ Notes: Family Businesses from the Household Perspective. Family Business Review, 12, v–vi.
Upton, N. B., & Heck, R. K. Z. (1997). The Family Business Dimension of Entrepreneurship. In D. L. Sexton & R. W. Smilor (Eds.), Entrepreneurship: 2000 (pp. 243–266). Chicago, IL: Upstart Publishing Company.
Winter, M., Danes, S. M., Koh, S., Fredericks, K., & Paul, J. J. (2004). Tracking Family Businesses and their Owners over Time: Panel Attrition, Manager Departure, and Business Demise. Journal of Business Venturing, 19, 535–559.
Winter, M., Fitzgerald, M. A., Heck, R. K. Z., Haynes, G. W., & Danes, S. M. (1998). Revisiting the Study of Family Businesses: Methodological Challenges, Dilemmas, and Alternative Approaches. Family Business Review, 11(3), 239–252.
Winter, M., Puspitawati, H., Heck, R. K. Z., & Stafford, K. (1993). Time Management Strategies Used by Households with Home-Based Work. Journal of Family and Economic Issues, 14, 69–92.
Zachary, R. (2011). The Importance of the Family System in Family Business. Journal of Family Business Management, 1(1), 26–36.
Zachary, R. (2015). The Entrepreneurial Family, Revisited. In R. L. Narva (Ed.), Family Enterprises: How to Build Growth, Family Control and Family Harmony (pp. 27–37). London: Globe Law and Business.
Zachary, R., Danes, S. M., & Stafford, K. (2013). Extensions of the Sustainable Family Business Theory (SFBT): Operationalization and Application. In K. Smyrnios, P. Z. Poutziouris, & S. Goel (Eds.), Handbook of Research on Family Business (2nd ed., pp. 507–553). Cheltenham, UK: Edward Elgar Publishing in Association with International Family Enterprise Research Academy (IFERA).
Zachary, R., & Mishra, C. S. (2008). Family Entrepreneurship. Journal of Small Business Management, 46(3), 313–316.
Zachary, R. K., & Mishra, C. S. (2010). Entrepreneurship Research Today and beyond: Hidden in Plain Sight! Journal of Small Business Management, 48(4), 471–474.
Zachary, R. K., & Mishra, C. S. (2011). The Future of Entrepreneurship Research: Calling all Researchers. Entrepreneurship Research Journal, 1(1) https://doi.org/10.2202/2157-5665.1016.
Acknowledgments
I am indebted to my colleagues Elisa Balabram for her multiple reads and Lauren Aydinliyim both at Baruch College for their respective friendly reviews of this book chapter.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Additional information
This book chapter is dedicated to my brother Melvin Archie Zachary.
Rights and permissions
Copyright information
© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Zachary, R.K. (2021). Discerning the Importance and Nature of the Family System in Relation to the Family Firm: A Paradigm Shift. In: Allen, M.R., Gartner, W.B. (eds) Family Entrepreneurship. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-66846-4_5
Download citation
DOI: https://doi.org/10.1007/978-3-030-66846-4_5
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-66845-7
Online ISBN: 978-3-030-66846-4
eBook Packages: Business and ManagementBusiness and Management (R0)