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RESEARCH
FAMILY VALUES
Family businesses may form the backbone of the world’s economy, but there is little understanding of how
the entrepreneurial mindset is handed down through generations. Eric Clinton hopes to address this deficit
AMILIES play a vital role in commercial activities early stages as a standalone field of research. Moreover, it is only in
F
throughout the world. In many of the most dynamic the past few years that significant attention has been afforded to
economies – including Germany, Spain, the US, India family business research by academics, researchers, practitioners,
and Brazil – up to 90% of businesses are family consultants and professional services.
controlled. Within these countries, family-run enter- To date, the vast majority of research into family-owned
prises contribute over 50% of GDP and account for businesses has examined how companies survive across generations
more than half of all employment. and has focused primarily on succession issues and the preservation
Globally, families make up the largest pool of entrepreneurial of wealth. It is generally acknowledged, however, that real long-
capital through personal wealth, private equity and business invest- term growth and prosperity is the result of ongoing entrepreneur-
ment. Their impact on social issues is also vast; in the US, for ship – in other words, anticipating and embracing new ideas,
example, family-controlled businesses are the highest contributors processes, products, markets and strategies through innovation and
to philanthropy and philanthropic causes. calculated risk-taking.
Furthermore, internationally recognised authority on global, eco- The objective of the research I am currently carrying out at UCD
nomic, political and social trends, Joel Kotkin, argues that “the family School of Business is to build up a profile of common practices in
is the firm” in India, Japan and China. A similar situation exists in successful family businesses that manage to flourish across genera-
Ireland with numerous studies identifying the family business as the tions. Essentially, I am seeking to address how business families
dominant form of business since the formation of the State. generate and ultimately sustain entrepreneurial performance across
Many of the world’s most successful businesses were established by generations.
and continue to be managed by families: LG, Fiat, Ikea, L’Oreal, Using the resource-based view of the company, my research
Beretta, BMW, Chanel, Wal-Mart, Ford, Aldi, Sainsbury and addresses the systematic interaction of the family unit, the business
Carrefour are notable examples. The same is true in Ireland, where entity, and the individual family members, which collectively
family-run companies like Sisk, O’Callaghan Hotels, Lagan create what has been termed the ‘familiness’ of the firm. The
Construction, Taggart, Smurfit Kappa, Quinn Group, Fyffes and familiness construct incorporates the resources and capabilities of
NTR are among the most successful in the country. the interacting influences within the system.
Given their importance in so many mature economies, it is widely The outcome variable being investigated is transgenerational
recognised that families also offer huge potential for the develop- potential. As this is a theoretical construct that can only be
ment of new businesses and for long-term wealth in emerging examined through generations, the intervening variable is entrepre-
economies. However, developing a real understanding of what neurial performance. To assess the origins of entrepreneurial
makes a family business successful across generations is critical to performance, the study is using the theoretical frames of
unlocking that potential. Entrepreneurial Orientation (EO) and Familiness Resource Pools.
This is because, despite notable successes, research indicates that External mediating factors such as environment, family involve-
survival rates in family business are relatively low; less than 30% of ment, industry, family life stage and culture are also being explored.
family-controlled firms are passed on to the second generation and, The research strategy is incorporating both in-depth qualitative
of these, only 10% make it to the third. Such statistics are evident in case analysis and extensive quantitative survey analysis of firms’
the expression ‘rags to riches and back to rags in three generations’. owners, managers and family members. A strong emphasis is placed
upon ensuring that research is relationship-based to enable a good
Untapped area of research understanding of the interaction between family ownership goals,
In comparison to more established research disciplines like finance, the individual careers of individual family members and business
economics and accounting, the family business area is in its very competitiveness concerns.
UCD BUSINESS CONNECTIONS 37
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