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Family Businesses Can Be Traced Back To Nearly Every Organisation In The ...

Family businesses can be traced back to nearly every organisation in the world's history. They are found in the majority of industrialised countries in the world, they are valuable to the world's economy.
3.3 Advantages of Family Businesses
It is acknowledged that family run businesses have advantages over their non-family counterparts. The literature discusses several resources that are unique to family businesses. These include a unique work environment that motivates employee care and loyalty, lower recruitment and human resource costs. There is the family language, which lets them communicate more efficiently and with greater privacy, they can exchange more information. The family relationship produces extraordinary motivation, strengthens loyalties, and increases trust (Hoffman, J et al 2006).
Other advantages include the tendency to be more creative and pay more attention to research and development; they have more of a capacity for self-analysis. These businesses tend to have a reputation for their integrity and commitment to relationships. They are less dependant on their environment and therefore they are less vulnerable to negative downturns in the economy (Hoffman, J et al 2006)
The family norms provide social control within family businesses. These norms include internalised sets of accepted behaviour for members, a shared belief system that allows family members to communicate their ideas, and to make sense of common experiences. These norms share strategic visions, systems of meanings, and normative value. These norms then increase effectiveness of action and decrease external unknowns. They then share a common knowledge and history in the organisation. This then represents the accumulated history of the organisation in the form of social structure (Nahapiet, J & Ghoshall, S 1998).
These family norms lead to obligations and expectations, these are the positive interactions that take place between individuals in a network. These interactions can be viewed as positive because of the high levels of trust and reciprocity that they produce. The existence of these obligations and expectations of future benefit are nurtured in a family business environment with strong family ties, although they are at a disadvantage where these do not exist (Lesser, E 2000).
An expression of these obligations and expectations is in the reputation of the business. This is the expectation of others (external to the network) concerning an organisation's future conduct. This occurs from the outcome of the competitive process, when an organisation indicates their key characteristics, to maximize their social status. Then their social status is interpreted as their reputation, this cannot occur in an open structure, there must be closure and supporting social norms. Increased reputation reduces the necessity for continual monitoring; therefore reducing costs.

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