This book focuses on a central success factor for family businesses: maintaining the decision-making ability over generations while not jeopardizing the business due to family conflict, inefficient governance structures, or lack of identification. The authors identify that this is not as easy as the endeavor to bring two social systems together with contradicting logic (family and business) leads to many dangerous pitfalls. This book presents outcomes of a unique research project in which family managers of eleven of the oldest and largest German family businesses, at least the fourth generation, met for more than three years on a regular basis and presented the essence of their family governance structures to each other and to the authors. It was a joint “learning journey” that admits identifying twelve core questions that these families had been answering to keep up the relationship between family and business successfully over generations. Obviously, there is no “right” answer to these questions. The key to success is rather engaging the families in a process to find out their own answers and make them aware of the “two sides”: being a family is different from being a business family.
Author(s): Arist von Schlippe, Tom A. Rüsen, Torsten Groth
Series: Management for Professionals
Publisher: Springer
Year: 2021
Language: English
Pages: 259
City: Cham
Foreword: Practitioner´s Perspective
Foreword: Researcher´s Perspective
Preliminary Remarks
References
Acknowledgments
Contents
Part I: Introduction
1: Family Strategy over Generations
1.1 Family Strategy in Fact Has Always Been There
1.2 The Business Family as an Object of Research
1.3 Defining Terms
1.3.1 Family Businesses and Business Families
1.3.2 Family Business Governance and Family Governance
1.3.3 Family Strategy
1.3.4 Family Constitution
1.3.5 Family Management and Family Compliance
1.3.6 Shareholder Competence
1.4 Longevity as a Subject of Research
1.4.1 Previous WIFU Projects
1.4.2 Family Strategy Across the Generations: The FüG Project
References
Part II: Managed by Neglect: Solutions that Create Problems
2: Riding a Ghost Train: ``What Happens If `Nothing´ Happens?´´
2.1 Yesterday´s Solutions: Today´s Problems?
2.2 ``Equal Treatment´´: Equality and Fairness Among Siblings and Their Children
2.3 Destruction of the ``Fictional Consensus´´: Revelation of Differences and Loss of Face
2.4 ``Learning Trap´´: It Had Always Worked Before
2.5 ``Change of Paradigm´´: The Transition from an Operationally Active Family to a Shareholder Family
2.6 ``The Mindset of Family Branches´´: He Who Sows Equality Risks Reaping Inequality
2.7 ``Loss of Purpose´´: A Stock Market Launch and Its Consequences
2.8 ``Post-patriarchal Paralysis´´: Nobody Is Allowed to Take Power
2.9 ``Shareholder Competence´´: Who Has What It Takes to Work on a Committee?
2.10 One of the Most Important Questions: What Happens If ``Nothing´´ Happens?
References
Part III: The Witten Theory of the Business Family
3: Family and Business: The ``Impossible Endeavour´´
3.1 Families and Businesses Don´t Really Go Together
3.2 Three ``Circles´´?
3.2.1 Three Circles and Four Intersections
3.2.2 An Interpretation Based on Role Theory
3.2.3 The Perspective of System Theory: Three Simultaneous Expectational Contexts
3.3 Paradox and Paradox Capability
3.3.1 Logical and Pragmatic Paradoxes
3.3.2 Pragmatic Paradoxes in Family Businesses
3.3.3 Paradox-Friendliness, Paradox Tolerance and Paradox Awareness
References
4: Family and Business Family at the Same Time: The Duplicated Family
4.1 The Theory of the Business Family: A Process-Oriented View
4.2 Unresolvable: Paradoxes and Oscillations in the Business Family
4.3 The Business Family as a ``Duplicated Family´´: A Reversible Figure
4.4 A Different Three-Circle Model
4.5 The Core Paradox of the Business Family
4.6 Family Strategy as a Mission
References
Part IV: Core Issues of Family Strategy
5: Appointment Decisions: A Sense of Belonging and Drawing Limits
5.1 The Paradox of Belonging and Selectivity
5.2 Affiliation Issues in a Business Family
5.2.1 Inclusion/Exclusion as a Critical Distinction
5.2.2 Questions of Belonging as Put to the Family and the Business Family
5.2.3 Answers Provided by the Family as a Business Family
5.3 Structures to Ensure a Sense of Belonging: Contact, Information and Voice
5.3.1 Family Meetings and Family Days
5.3.2 Relations with Parts of the Family That Do Not or No Longer Belong to the Business Family
5.3.3 Specific Groupings in Connection with Family Governance
5.3.4 Committees and Bodies
5.4 Access to Positions and Committees
5.4.1 The Problem
5.4.2 Appointments to Operational Positions
5.4.3 Access to Committees
5.5 Handling the Boundaries of Family Branches
References
6: Legitimation: Decide Without Deciding!
6.1 Fairness: A Core Issue
6.2 From Outcome-Based to Process-Based
6.3 Avoid the Impression of Arbitrariness
6.4 Paradox-Friendly Legitimation Practices
6.4.1 Creating a Sense of Obviousness
6.4.2 Transforming a Decision into Dialogic Processes
6.4.3 Meta-complementarity
6.4.4 Externalisation: Family Does Not Decide on Family
6.5 Vote by Head Count or by Shares?
6.6 Four Generic Legitimation Models
References
7: Being Aware of Mental Models
7.1 Four Ways of Envisaging the Relationship Between Business and Family
7.1.1 Patriarchal Logic
7.1.2 The Logic of the Operational Business Family
7.1.3 The Logic of the Active Owner Family
7.1.4 The Logic of the Investor Family (Fig. 7.4)
7.1.5 At a Glance
7.2 Challenges Involved in Post-patriarchal Structures
7.2.1 The Shadow of the Patriarch
7.2.2 Inverted Power Struggles
7.2.3 The Role of Spouses
7.3 Decision-Making Procedures: From Person-Based to Process-Based Orientation
7.4 Changing a Mental Model
References
8: What´s the Point of It All? Cross-Generational Meaningful Purpose
References
Part V: Developing a Family Strategy
References
9: Reinventing the Wheel! The Witten Model of Family Strategy Development
9.1 Towards a Family Strategy: Twelve Topic Areas
9.1.1 Topic Area 1: Commitment to Family Entrepreneurship
9.1.2 Topic Area 2: Definition of Family
9.1.3 Topic Area 3: Values and Goals for the Business and Family
9.1.4 Topic Area 4: Role and Function of Family Members in the Business
9.1.5 Topic Area 5: Role and Function of Family Members as Shareholders
9.1.6 Topic Area 6: Family and Business Governance
9.1.7 Topic Area 7: Information, Communication and Behaviour
9.1.8 Topic Area 8: Crisis Prevention and Conflict Management
9.1.9 Topic Area 9: Dividend Policy and Asset Management Strategy
9.1.10 Topic Area 10: Existing Family Management System
9.1.11 Topic Area 11: Developing Shareholder Competence
9.1.12 Topic Area 12: Changing of the Rules and Family Compliance
9.2 From a Family Document to a Family Strategy Embraced in Practice
9.3 Family Strategy Development According to Mental Models
9.3.1 Typical Issues Arising in the Mental Model of Patriarchal Logic
9.3.2 Typical Issues Arising in the Mental Model of the Operational Business Family
9.3.3 Typical Issues Arising in the Mental Model of an Active Owner Family
9.3.4 Typical Issues Arising in the Mental Model of an Investor Family
9.4 Family Strategy as an Ongoing Mission
References
