This article shows the key role of the ownership system in the healthy development of the family business. Specifically, the analysis focuses on a case in which the ownership of a family business is held in trust. The paralyzing impact of this ownership arrangement on the business and family systems is described, revealing dysfunction in authority relations in general and succession processes in particular. An interpretation is offered to suggest that the trust has allowed the founder, long dead, to effectively retain control. The resulting diagnosis yields several implications for the development of family business theory and practice.
Get full access to this article
View all access options for this article.
References
1.
Belin, D. W.Leaving Money Wisely: Creative Estate Planning for Middle- and Upper-Income Americans for the 1990's. New York: Charles Scribner's Sons, 1990.
2.
Bork, D.Family Business, Risky Business. New York: American Management Association, 1986.
3.
Cohn, M.Passing the Torch: Transfer Strategies for Your Family Business. Blue Ridge Summit, Pa.: Liberty Hall Press, 1990.
4.
Danco, L.Beyond Survival. Cleveland: University Press, 1982.
5.
Davis, J., and Tagiuri, R.“Bivalent Attributes of the Family Firm.” Unpublished manuscript, University of Southern California, 1986.
6.
Dyer, W. G.Cultural Change in Family Firms: Anticipating and Managing Business and Family Transitions. San Francisco: Jossey-Bass, 1986.
7.
Geertz, C.The Interpretation of Cultures. New York: Basic Books, 1973.
8.
Hall, P. D.“A Historical Overview of Family Firms in the United States.”Family Business Review, 1988, 1 (1), 51–68.
9.
Handler, W.“Succession in Family Firms: A Mutual Role Adjustment Between Entrepreneur and Next-Generation Family Members.”Entrepreneurship Theory and Practice, Fall 1990, pp. 37–51.
10.
Handler, W, and Kram, K.“Succession in Family Firms: The Problem of Resistance.”Family Business Review, 1988, 1 (4), 361–382.
11.
Hollander, B.“Family-Owned Business as a System: A Case Study of the Interaction of Family, Task, and Marketplace Components.” Unpublished dissertation, University of Pittsburgh, 1983.
12.
Jaffe, D.Working With the Ones You Love. Berkeley, Calif.: Conari Press, 1990.
13.
Kepner, E.“The Family and the Firm: A Coevolutionary Perspective.”Organizational Dynamics, 1983, 12 (1), 57–70.
14.
Kets de Vries, M.“The Dark Side of Entrepreneurship.”Harvard Business Review, 1985, 63 (6), 160–167.
15.
Lansberg, I.“Managing Human Resources in Family Firms: The Problem of Institutional Overlap.”Organizational Dynamics, 1983, 12 (1), 39–46.
16.
Lansberg, I.. “The Succession Conspiracy.”Family Business Review, 1988, 1 (1), 119–144.
17.
Levinson, H.“Conflicts That Plague Family Businesses.”Harvard Business Review, Mar.-Apr. 1971, pp. 90–98.
18.
McCollom, M.“Integration in the Family Firm: When the Family System Replaces Controls and Culture.”Family Business Review, 1988, 1 (4), 399–417.
19.
Ward, J.Keeping the Family Business Healthy: How to Plan for Continuing Growth, Profitability, and Family Leadership. San Francisco: Jossey-Bass, 1988.
