Academic journal article Irish Journal of Management

Under the Microscope: A Profile of the Family Business in Ireland

Academic journal article Irish Journal of Management

Under the Microscope: A Profile of the Family Business in Ireland

Article excerpt

ABSTRACT

A review of the entrepreneurship and small business literature indicates that little to no research has examined family businesses in Ireland in terms of their structure and composition, the management of the family business, and the training conducted by family businesses. The purpose of this paper is to examine these dynamics through the findings of primary research, thereby providing a profile of family businesses in Ireland. First, the paper aims to examine the demographics of the family business members and to understand the composition and structure of the family business. Second, the paper aims to understand how the family business is managed, and third, how training is carried out within the family business. The research methodology adopted for this study was that of a postal questionnaire. The questionnaire-based survey was applied to a sample of 500 family businesses in Ireland and a total of 121 valid responses were received, which resulted in a valid response rate of 24.2 per cent. The findings of the study identifies that family businesses are a source of employment for family members and typically the owner/manager is heavily involved in the day-to-day operations of the business. The most prevalent form of ownership is that of a husband and wife team. Results indicate that when the family business is small, the management team is comprised of family members only. However, as the business grows the presence of the family on the management team is reduced considerably. Finally, training in family businesses occurs on an informal, ad-hoc basis.

Key Words: Family Business; Family Business Structure; Management Team; Training in Family Businesses.

INTRODUCTION

With the exception of the ever fewer socialist economies, family businesses are the predominant form of enterprise throughout the world (Lank, 1994). Very few studies on family business have been conducted in Ireland - even though there are approximately 200,000 Irish family businesses and it is estimated that between 40 per cent and 50 per cent of the private sector workforce are employed in family-owned businesses (Hickie, 1995; Smiddy, 2002). The Small Firms Association (2000) stated that the majority of small and medium-sized enterprises (SMEs) in Ireland are comprised of family businesses. Brendan Butler, Director of the Small Firms Association, stated that:

The reality is that the vast majority of small businesses, especially those employing 10 people or less, are family owned, so the family venture is a huge part of the economic fabric of the country. (Butler, 1995: 29)

However, a review of the literature indicates that little to no research has examined family businesses in Ireland in terms of their structure and composition, the management of the family business, and the training conducted by family businesses in Ireland.

The field of family business is a rather young academic field of inquiry, uniting a diverse group of people such as family therapists, psychologists, family business owners, family business members, consultants, solicitors, accountants, academics and researchers. Academics, consultants, professionals and practitioners struggled to define these terms even before the field of study emerged in the 1980s. One indication that a research paradigm's development is still nascent is if it lacks agreement on the basic definitions (Lakatos, 1970). The field of entrepreneurship went through much debate regarding the definition of 'entrepreneur' and 'entrepreneurship' although little agreement was reached. A sort of academic pragmatism now exists with each researcher specifically stating his or her own definition (Katz et al., 1993). Unfortunately this makes any kind of constructive and comparative effort practically impossible. The developments in the family business arena are similarly frustrating. This is evidenced by the numerous definitions outlined in Table 1.

The definitional problem is compounded by a lack of consensus about what constitutes a family: whether it should include only parents and children, or all blood relations and in-laws. …

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