AccessMyLibrary provides FREE access to over 30 million articles from top publications available through your library.

The Contribution of Leadership Style and Practices to Family and Business Success.(contains bibliography)(Industry Overview)

Family Business Review

| September 01, 2000 | Sorenson, Ritch L. | COPYRIGHT 2000 Family Firm Institute, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Based on Dyer's (1986) study of family business cultures, this study derives five approaches to leadership: participative, autocratic, laissez-faire/mission, expert, and referent. It argues that participative, expert, and referent leadership should produce positive outcomes for the business and the family, and high levels of employee satisfaction and commitment. It also argues that autocratic and laissez-faire/mission leadership should be associated with relatively negative outcomes for the business and the family and produce low levels of employee satisfaction and commitment. A study of 59 small family businesses produced the following significant results: participative leadership is positively related to both family and business outcomes as well as to employee satisfaction and commitment; referent leadership is positively related to family outcomes and employee satisfaction; and, unexpectedly, laissez-faire/mission leadership is positively related to employee commitment. Using correlational data as the basi s, the paper discusses practices that might promote participative, referent, and laissez-faire/mission leadership.

Introduction

This paper assumes that applying the terms family and business to an organization implies that the purpose of the organization is to provide positive outcomes for both the family and the business. Producing positive outcomes for both, however, seems somewhat at odds. The processes necessary to produce a successful business may disrupt a family, and the processes necessary to promote harmonious family interactions may interfere with a thriving business.

For example, consider the differences between a bureaucracy and a family. According to Weber's bureaucratic model of business, the purpose of business organizations is to maximize productivity (Henderson & Parsons, 1947). Thus, a business should eliminate anything that diminishes productivity, including hiring and promoting based on family relationships. Weber argues that the reason German organizations did not perform to potential was that people were hired because of social standing or "privileged status" rather than job-related qualifications. He argues that organizations should be rational and efficient and be founded on principles of logic, order, and legitimate authority. A major role of managers is to control and regulate activities carefully.

From this bureaucratic perspective, family businesses should include only family members who help maximize organizational performance. Moreover, business and family should be kept separate, and the treatment of family members working in the business and other employees should be identical. Family members should be hired, promoted, and rewarded based on qualifications. They should be monitored, and if they do not perform to set standards, then they should, like other employees, be reprimanded or fired.

On the other hand, the purpose of a family is to support, develop, and nurture family members. From this perspective, family comes first, business second. Family members are "insiders," others are "outsiders." Family provides a place of refuge and safety for family members. Emotions and family values such as patience, kindness, and love are prominent factors in making family decisions. Family resources are devoted to family members. And even less talented and ambitious family members are favored over outsiders when distributing family resources.

In combining families and businesses, compatibility problems thus arise (Hollander & Elman, 1988; Lansberg, 1983). How does a family business maintain a standard that yields maximum performance and, at the same time, accommodate the interests of the family? It seems that one or the other will have to adapt. The family can bend to the interests of the business, or the business can yield to the interests of the family. Ideally, the means and structure can be found to optimize the interests of both the family and the business (Whiteside & Brown, 1991).

Related articles from newspapers, magazines, journals, and more
Negotiating Nepotism: A written employment policy statement for your client's...
Magazine article from: Financial Planning February 1, 2002 700+ words
...family-business consulting...many family businesses: "We are committed to family members being responsible...believe that family members employed...related to the business's owners...Successful family businesses take the...the family business is a ...
All in the family: bringing family members into your business can reap rewards,...
Magazine article from: Landscape Management McConnell, Greg November 1, 2004 700+ words
...your wife." But having family members in your business isn't always a laughing...potential pitfalls deep. If family members in the business have different goals or...in jeopardy. Even family businesses that are profitable can...
CREW Releases New Report Detailing Senators' Use of Positions to Benefit Family...
Press release article from: Business Wire February 25, 2008 700+ words
...enrich their family members, in June, 2007...have one or more family members registered to...contributions to family businesses or employers...fees directly to family members. Melanie Sloan...fees to a family business, paying her...
'I love you Dad, but you're driving me crazy'! Business owners offer tips on...
Magazine article from: Bellingham Business Journal Gallagher, Dave April 1, 2003 700+ words
...department. "Having family members on staff is one...to have a family business. I know for some...number. of small businesses have succeeded because other family members have pitched in...retires. As a small business gets too busy for...
Third generation Vermeer family members join company.(Business: THE LATEST...
Magazine article from: Underground Construction December 1, 2007 700+ words
...and a master's of business administration from...with a master's in business administration with...emphasis. Vermeer family members must follow a rigorous...advancement, recommending family members obtain a master degree...
Share and share alike: a stock redemption plan lets family members sell shares...
Magazine article from: Entrepreneur Estess, Patricia Schiff June 1, 1996 700+ words
...control about the business's philosophy...direction--some family members may want out...owns stock in the business. In addition to...never know what family members' needs will be...in most family businesses, the largest percentage...involved in the business, three not, ...
PICOTTE FAMILY MEMBERS BUY 6.6% OF NATIONAL SAVINGS CHAMBER OF COMMERCE OFFICER...
Newspaper article from: Albany Times Union (Albany, NY) January 20, 1989 700+ words
...along with a retained income trust have paid $1.6 million for 76,250 shares of stock in National Savings Bank. Picotte family members, known for their development of Corporate Woods, an office park in Albany and Colonie, could not be reached for comment...
FAMILY MEMBERS SHOULD STUDY OPTIONS IN JOINING FAMILY BUSINESS
Newspaper article from: The Journal Record JOY REED BELT July 8, 1986 700+ words
...into a family business an opportunity? - When the business is well run. Some family businesses are extremely...jobs in family businesses are real jobs...his level. Family members should get...in a family business a temptation...
For more facts and information, see all results
©2009 Gale, a part of Cengage Learning. All rights reserved.
About us | FAQs | Contact us | Privacy policy | Terms and conditions
Other Gale sites: Encyclopedia.com | HighBeam Research | Acquire Content | Books & Authors | Goliath | MovieRetriever | Smart QandA