This article presents a psychological theory of family business, its conceptual base and its implications. First, it argues that family business research requires a broader theoretical base than is currently used. Second, it argues that a psychological approach is beneficial to understanding family business. Third, it argues that insights gained from family business might inform and advance psychology and mainstream management literatures. Fourth, it uses a selected variety of concepts from individual and social psychology and explains how these concepts can be applied in family business research. Finally, it provides examples for research opportunities and research questions based on these observations.
Family business research has come a long way since its inception in the early 1980s. However, I argue that the progress family business research has made is built on a relatively narrow theoretical base consisting mostly of agency and stewardship theory. To make further advancements, I propose that family business should integrate theories from other disciplines. “Non solus,” not alone – the slogan in the logo of Elsevier, the esteemed publisher of the Journal of Family Business Strategy – reflects this call for more interdisciplinary research. In particular, I argue that the field of psychology can contribute greatly to a better understanding of family business.
The purpose of this article is to stimulate ideas for future research, not to test theoretical predictions. Toward this aim, I survey several research topics from individual and social psychology, highlight their main concepts and contributions, and discuss how these topics could be applied in family business. Each of the topics presented here provides potential material for multiple papers and hopefully will stimulate more psychologically grounded research into family business.
Family businesses are typically characterized by the overlap (Tagiuri & Davis, 1996) or even the fusion (Litz, 2008 and Pieper and Klein, 2007) of family and business systems. There is a broad spectrum of definitions for family business (Astrachan, Klein, & Smyrnios, 2002). A key characteristic all approaches have in common is that virtually all aspects of individual, group, and organizational behavior in family business are affected by familial relationships (Dyer, 2003). Families consist of individuals interested in one another due to dependence, obligation or duty, love, caring or cooperation (Rothausen, 1999). Families are frequently considered systems representing a “complex, integrated whole” (Minuchin, 1988, p. 8), where individual family members are interdependent, exercising a continuous and reciprocal influence on one another (Cox & Paley, 1997). Accordingly, any individual family member is inseparably embedded in the larger family system and can never be fully understood in the absence of the context of the whole system (Kreppner and Lerner, 1989, Minuchin, 1985 and Sameroff, 1994). Given their primary status for the development of individuals, families are also the primary means for transferring beliefs, attitudes and values in a population from one generation to another (Euler, Hoier, & Rohde, 2001).
In business families, the business represents a significant part of the family's context (Lansberg, 1992) and, in turn, the family represents a significant part of the business's context (Klein et al., 2005 and Pieper and Klein, 2007). Family and business can be seen as having permeable boundaries where the business affects the family and the family affects the business. Family and business can also be seen as interpenetrating systems, which can overlap to the point of being considered a single system (Basco & Pérez Rodríguez, 2009). The strong interactions among family and business are innate to family businesses and are the source of the distinctive nature of this type of organization.
For the purpose of this research, a family business is defined as an organization where a family (or several families) has effective control over the strategic direction of the business, and where the business, in turn, makes important contributions to that family's wealth and identity (Astrachan et al., 2002).
In this paper, I addressed the following topics: motivation, power and authority, obedience and groupthink, attachment and loss, group cohesion, socialization/enculturation, relationships, leadership, and conflict. Given the limited space available, I obviously could tap into only a few topics from psychology that might be interesting to apply in family business. Other psychological topics worth further consideration are emotions, altruism and prosocial behavior, as well as anger, aggression, and antisocial behavior.
As I have illustrated here, psychology has a lot to offer to better understand family businesses and their particular behaviors. And family business, in turn, has much to contribute to build richer, more robust psychological and organizational theories. Jointly, “non solus,” both fields will benefit in the long run.
