Academic journal article Entrepreneurship: Theory and Practice

Emerging Business, Emerging Field: Entrepreneurship and the Family Firm

Academic journal article Entrepreneurship: Theory and Practice

Emerging Business, Emerging Field: Entrepreneurship and the Family Firm

Article excerpt

Both entrepreneurship and family business are prehistoric in origin. Archaeologists have discovered evidence worldwide of commerce, venture creation, and the involvement of family members that predates written records. Yet both fields have only recently received attention in academia.

According to Vesper, entrepreneurship courses were offered in no more than six universities in the United States in 1967 (Vesper, 1979, 1982). Twenty years later, that number had reached into the hundreds (Vesper & McMullan, 1988, p. 1). Similarly, a 1987 survey identified only 15 institutions of higher education with any programs focusing on family business; fewer than nine actually offered courses. One year later, there were more than twice that number (Aronoff & Cawley, 1990). Although courses in family business may not proliferate to the extent that has occurred with entrepreneurship, significant growth is expected to continue.

In accordance with the theme of this special issue on family business, this article seeks to identify areas of common ground in the domains of entrepreneurship and family business. The examination is made from the perspective of entrepreneurship scholarship, treating family business as an emerging subject of study. What does the interdisciplinary field of entrepreneurship suggest for theory, research, and practice in family-owned ventures?

Let us first deal with the issue of definition. Definitions in the behavioral sciences are problematic. Because of the complexity, diversity, and evolution of human behavior, there are few terms in the behavioral science literature that have universally accepted definitions. The editorial policy of Entrepreneurship Theory & Practice requires that authors define the way that they are operationalizing terms such as "entrepreneur," rather than imposing or assuming a definition. More and more, the term "entrepreneurship" is becoming a broadly conceived domain within which a variety of subjects may fall.

Similarly, in the inaugural issue of Family Business Review (FBR), the editors asked

What is a family business? People seem to understand what is meant by the term family business, yet when they try to articulate a precise definition they quickly discover that it is a very complicated phenomenon. Consider the following situations: A business is owned by a family but run by non-family managers. A business is owned by a large, multi-national corporation but run by a local family. A business is jointly owned by two unrelated partners, each of whom has a son in the business. Are these all family businesses? (Lansberg, Perrow, & Rogolsky, 1988, p. 1)

The editors chose not to define the term, instead deciding that the dialogue engendered by FBR might help determine the boundaries of the field.

Two compatible approaches are available for the definition dilemma. The first is to operationalize the terms used in research studies. Thus, when an author studies a sample of entrepreneurs, an operational definition of that sample must be provided, such as "founders of ventures that were listed among the Inc. 100 in 1990 who retained at least 40% ownership of their firms." The second approach is to define a term by its domain, as the Entrepreneurship Division of the Academy of Management has in its constitution. According to that statement, family business falls within the entrepreneurship domain.

It would be accurate to describe the fields of family business and entrepreneurship as independent - but overlapping - domains. The examination of domains begins with strategic management paradigms that encompass both entrepreneurship and family business. Although, as mentioned above, entrepreneurship is interdisciplinary, its main origins were in strategic management. Major derivative concepts include opportunity seeking (from environmental scanning) and feasibility and business plans (from strategy implementation). In turn, the current dominant theme of the family business literature is succession, relying in part on both normative and descriptive models from the strategy literature. …

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