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Introduction
Most turns in the United Statesare family businesses-organizations where
two or more ertended familv membersinflueoce the direction ofthe business
drough the exerciseof kinship ties, managementroles, or osnership rights.
While most family companiesrre small, some are relatir,ely lrge and ser.eral
are giantsin their respectiveindustries. Tiken together, rhey contribute about
40 percent ofthe grossnational product and over half of ou national employment (BeckhardaJIdDyer, 1983).It is vitr , given t}le prevalenceand importanceof firmily-conEolled organizationsin our society,tlat we understandthe
charactedsticbehevior of tle fanily rnemberswho influence thesefirms.
Most writings on these organizations appear in the businessend trade
press,and generally focus either on a prrticular farnily or on a specific issue,
such asthe sont enuy into tlle company or the rivrlry betweenrelativeswho
work together (Altnran, 197l; Buti els Week,1966, 196?:Loing,197 5; Martin, 1975).As it standstoday, the family businesshasnot been extensivelyre
studyhasbeendone,however,on the
searched
or described.Somes'.stemaoc
social structure ;rad the particular strengths and weaknesses
of family conpa
nies (Barry,1975jDrvis, P and Stern, 1980;Miller and tuce, 1973),on the
psychologyofthe ou.ner-managerpay 1980;Schein,1983;Zaleznik and Kes
deVries, 1975),on nepotism(Crmbreleng,1969;Ewing, 1965;Gffey, 1966),
and on managementsuccessionin these turns (Bsmes end Hershon, 1968;
Beckhardand Dyer, 1983;Davis,S., 1968;Hershon,1975).
This paper builds upon insights found in the abovewritings, md it also
199
'ragiari, Da1)i
240
incoryorates obsenations ftom our ongoing study of family firms. In this dis
cussionwe derl only with those frmily-controlled companieswhere two or
more individuals are simuttaneouslymembers of the owning family owners,
and managerc.More specifically,this includes any comprny tlat is a) owner
ship controlled by one family, b) includes at l*st t'arofamily members in its
maragernent, and c) also hasnonfamily employees.For most smaller companies, ownership control meanshrving at le3st a 6fty percent omership, but
for larger companies,it is possibleto om lessthan a majority ofthe sharesand
elect r board of directon that will support the controlling farnily'sgoals.While
the tums discussedhere are a subset of all companieswhich are omershio
controlledby one family.mosrwritjng on familJ bu.ine\ derl\ wiLnL]'ery?e
of situation we are describing.
The grrphic representationofthis setofrelationshipsis displayedin Figure 1.
Cr--.-
/r
'E
n.
\vo
Our purpose in this paper is to show that the f:mily compaay hrs
severalunique, inherent zttibttes, ard.emhoftheseke1attributu is a :ourceof
beneftsand di:adtnntagesfor owning families, nonfamily employees,and farnily employees.As aresult of their latent negativeand positive potential, we call
theseinherent fertures Bi lent Attibutes. \Vhen one conside$ that only 30%
of family firms survive to the second generation (Poe, 1980), ard that their
averagelife span is only 24 years (Danco, 1977), the concept of Bivalent Attributes is a reminder that tle successor failure of any family 6rm will depend
on how well these inherent features ,re mrnaEed. Their successtulmanaee-
241
ment will also affect the well being of the frmily and the family's relationship
with employees
andwith the greatercommuniry
We propose a theory here which will conceptually account for many
important behavioral characteristics of the family company, and which will
incorporate and build upon previous descriptive and conceptual work done
on frmilv businesses.
Hence. our maior contribution in tlis work is a conThe Bivrlent Amibutes of the family company are the unique, inherent
featuresof thesefirms and are the sourceof advantagesand disadvantagesof
this q'pe of organiation. Bivalent Attributes derive direcdy fom the overlap
of family, ownership and managementmemberships.Figue I displays this
overlap. It shows,for example,that father and son are both members ofthe
samefamily, are both membersofthe owning group, and are both membersof
the managernentgroup. The overlap ofthese membership groups generates
the rnany distinguishing features of family companies.In what follows, we
describethe most important Bivalent Attributes of dre family firm and discuss
their hiralent quatities.
Simultaneous
Roles
202
mgiari, Dari
203
for the same behavior. The same could also be true for Eood. constructive
behrvior.One relrti\ e! behaviorcanirfluencethe reouraci-on
oi orhersin $e
frmil, ,nd the repuririonoFthebu.ine* aswell.
Both on the job and otr, the farnily polices the behavior ofits membersto
irsure that they are acting in an acceptablemamer toward ftiends ofthe fanily, customers, suppliers, and ernployees.This concem with image arrd the
consequentpolicing may do much to increaseawarenessof family standrrds
and a mission around which relatives can rally ard find a reason for mutual
loyalty.
Yet such policing may be stifling to somefamily memben. Even very creative expressionmay be discouragedif it doesnot fit the family mold. Family
membersmay feel that they are being watchedin and out of the companyand
resent their lacL of ieedom. At the same time, family memben who try to
maintain the family image rnay be angeredby relativeswho do not.
The pressureto rct in ways that enhancethe reputation of the business
crn offset the influence of the frmily in the managementofthe company and
restore someobjecovity to decision-making.Still, that reputation may add to
the pressureto conform to roles more tighdy prescribedthan ordinary execu
tive roles, and foster resennnent toward family and busitressauthority.
A Lifelong
Comraon History
204
Tagi i, Da|)b
hvo begin to work together it is easyfor them to locL into their old mutual,
reciplocal wrls. Each acts $ a cue to the other to resume their respective
roles. If the history of the relationship is positive alrd constructive, the ease
and speedwith which the rnutual patterns come into operution is an adlantage,an economy.But ifthe relationship hasbeen difEcult, the rapid lochng is
a disadvantageout ofwhich it seemsdif6cult to escipe.
Emotional
Involvement
and Corirsior.
The Priwte
Language ofRelatives
20t
206
mgitui, D/x)is
Biuknt Attrihii!
207
Heighdrd
fmny
d compmy
Enoda.rl
Inrclvenent md
mlmuncxtion
tle&;gofih8
ilyConpd}
vith gmer
Ihprored conounjcrion dd
busines decisios tl]r srppofr
n\e buine$, owne6, md fmily.
C.npdtsF6olis
d dslop
a stong senseofnhsion fo!
enploye$.
References
Alman, H. (197l). ConinB in with dad.Nrtoar B,]r"d$, Jue.
Bdnes, L. and Hqshon, S. (t 976). 'Ii arufening pows in the fanily busine$. Itud
Bd,rs R@t@,July-Ausut, 105-114.
BarrtaB. (1975). The develophent of org?niation sructure iq t}te hmily firn. J,rrul
of Generil Mdnlgetun| /Nntffi,42-60.
ratr{
Becker,M. and Tillnan, F A- (1978). Tb. fMilr-M.d
Chicagor Connerce
Becrhrd, R. and Dyer, W: G., Ji (1983). Managing contimity in the &nily-owned
htsines. Orgnnizaimal 4wi6,Sunmer,
5-12.
BanneswAk. (r966).when your realjob is ton'. October15,98.
Balines wtk. (1967). Keepins their successin the faniv Dec@ber 9, 96-98.
Canbielen& R.14: (1969).The 6e ofthe netdesone nepot HamanJ Basin$ Rnitu,
March-April, 14-17,22 25,28, J2, 34, 170-17l.
D^n o, L- (1977). Bermd ntuilat: a b si116'odheN' suidar/ sns. Cleveland: The
Univdsitv Press.Inc.
Davis, P. and Srern, D. ( 1980).Adaptation, smiel ud glowth of the fanily btsines:
an intesrative businss pqspecnle. IIutu Reldnaht,3+, (4'),207-224.
208
Tasiun,Di|)i'
Renat,Tagiuri i PnfeisarEmeritusin tbe Grad ete Scha,l|fBuiine's Atubinntatk at Hamaftl. U h)ewit)r.]ohn Dn4 DBA, is Praidnt af the Oaner Managed
B srne$btstituk. SantaBarbara.CA.