Life Course Dynamics in American Entrepreneurial Families and their Effects on Business Development
Final Report Abstract
This research project zooms in on the underlying micro-process of a potential family effect on business development in terms of continuity. Building on previous research work in Germany, this study conceptualizes entrepreneurial families as families that are jointly en gaged in an entrepreneurial project. Their closely linked life courses necessitate entrepreneurial family members to define roles, synchronize life courses, and to transfer business ownership across generations. In the cultural context of an individualized society the configuration of an entrepreneurial family takes the shape of continuous intergenerational negotiations. Every event in the life courses of family members becomes a subject in negotiating the continued engagement of the family in the business. From this perspective, the research project asks: How do life course dynamics in entrepreneurial families affect the continuity of the family business? The methodological design encompasses five extensive case studies of American entrepreneurial families that are currently still involved in the business or have detached from it. The United States of America offer a cultural context, in which independence and individuality in the design of one’s life course are even more pronounced than in Germany. In this comparative setting, the previously developed ideas on life course dynamics in entrepreneurial families are reinforced and refined. The data material consists of 32 semi-structured interviews and rich supplemental materials (industry reports, financial documents, newspaper articles, or Websites). This material has either been conducted in the framework of the Global Successful Transgenerational Entrepreneurial Practice (STEP) Project and is reused, or has been conducted to match these materials specifically for this study. Following a theoretical sampling logic, the five cases were gradually selected and analyzed using Grounded Theory. The coding process involved three stages. First, for each case a detailed chronology of key events helped to identify “decisive moments” in the history of the family’s engagement in the business. Second, for each of these moments, in which the continued engagement was at stake, the constellations and preconditions explaining the reframing of the situation were examined. Third, the identified explanatory factors were scrutinized with regard to their hierarchical importance yielding a three scenario model. The analysis process identifies 14 key factors grouped in four fields that influence a family’s decision to maintain their attachment to the business or to detach from it. Among them are: relative market position, state of the industry, organizational functioning, business phase, generational ambivalence, timing of life courses, emotional attachment to the entrepreneurial project or succession intentions. The findings suggest that in decisive moments individual and family level factors precede or even overrule market and business level factors. Particularly crucial is the level of experienced and assumed free choice in life course decisions. From this, the study describes three scenarios: “Sticky” refers to a situation, in which both individual and family factors are positive. In this scenario the family is willing to maintain their attachment to the business even in economically strenuous times. “Cast off" refers to a situation, in which individual and family factors are negative. In this scenario the family experiences the decisive moment as liberation and seeks to detach from the entrepreneurial project. Finally, “Suspense” refers to a situation in which individual and family factors are ambivalent, which leads to a closer consideration of business and market level factors in the decision making process. The findings point to the relevance of life course dynamics to understand attachment and detachment processes of a family to the business. The derived scenarios imply that the detachment from the business maybe a legitimate result of intergenerational negotiations within the entrepreneurial family at least in the American context. As such, these findings call to critically rethink the key underlying assumption in the socioemotional wealth literature, i.e. that all entrepreneurial families strive for the continuation of their influence on the business. Further, these findings enlighten the micro processes underlying thus far scantly explored movements on the aggregate level of business populations. It suggests to consider individual and family factors as relevant explanatory forces to understand business continuity.
Publications
- (2016): Coordination tasks and modes of linked lives in entrepreneurial families. Journal of Marriage and Family. 78 (4), 939-956
Stamm, Isabell
(See online at https://doi.org/10.1111/jomf.12304) - (2016): Unternehmertum als Familienprojekt heute. In: Phänomen Familienuntemehmen - Überblicke. Draiflessen Collection: Mettingen, 129-13. ISBN 978-3-942359-34-4
Isabell Stamm
