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Deciphering Ownership of Family Business Groups

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The Family Business Group Phenomenon

Abstract

Family business groups are highly complex ownership structures. In this chapter, we suggest that owning a family business group needs to create benefits that overcome the transaction costs and ownership costs emerging from the complexities of ownership. We separate the effects of ownership into two main categories: the legal effects and the emotional effects. In terms of legal ownership, the control over the business and its resources suggests a freedom to operate the businesses and claims on their resources, to append new businesses to the FBG, to organize their relationships between the separate businesses and to exit from the businesses at will. The emotional benefits include the service of the owners’ self-deserving interests, positive effects on the family cohesion and togetherness and growth in social recognition and status. It seems that ownership along with its multiple effects may play a more vital role in explaining the development of family business groups than has been previously thought.

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Authors and Affiliations

  1. School of Engineering Science, Lappeenranta University of Technology, Lahti, Finland

    Timo Pihkala & Marita Rautiainen

  2. Department of Management Studies, University of Minnesota Duluth, Duluth, MN, USA

    Sanjay Goel

  3. Organisation Behavior & Human Resources Management (OB&HRM), Indian Institute of Management Indore, Indore, India

    Kajari Mukherjee

  4. LUT School of Business and Management, Lappeenranta University of Technology, Lahti, Finland

    Markku Ikävalko

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  1. Timo Pihkala
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  2. Sanjay Goel
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  3. Marita Rautiainen
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  4. Kajari Mukherjee
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  5. Markku Ikävalko
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Correspondence to Timo Pihkala .

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Editors and Affiliations

  1. School of Engineering Science Lappeenranta University of Technology, Lahti, Finland

    Marita Rautiainen  & Timo Pihkala  & 

  2. Business School, University of Edinburgh, Edinburgh, UK

    Peter Rosa

  3. Strategy and General Management Department, ESADE Business School, Barcelona, Spain

    Maria José Parada

  4. Department of Entrepreneurship and Strategy, Lancaster University Management School, Lancaster, UK

    Allan Discua Cruz

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Pihkala, T., Goel, S., Rautiainen, M., Mukherjee, K., Ikävalko, M. (2019). Deciphering Ownership of Family Business Groups. In: Rautiainen, M., Rosa, P., Pihkala, T., Parada, M.J., Cruz, A.D. (eds) The Family Business Group Phenomenon. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-98542-8_10

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