Negotiating continuity: a case study of transitions and cultural

Transcription

Negotiating
continuity: a case
study of transitions
and cultural
elaboration in family
business
Rocky Adiguna1
1 Center for Research in Economics and
Management, University of Luxembourg.
E-mail: [email protected]
•
This paper is prepared for the 12th EIASM
Workshop on Family Firm Management
Research, Zwolle, The Netherlands, May
13–14, 2016.
This paper explores the cultural dynamics in family business. By
adopting a cultural morphogenetic approach, the paper challenges the common assumptions of culture in family business studies
where culture is predominantly defined as coherent values, as shared
values, and that values are the core of culture. Drawing from an indepth single case study of a fourth-generation Luxembourgish family
business, this paper shows the value of dualistically analyzing culture
in terms of its logical relationship and causal consensus. The case
illustrates how contradictory values are contested and reconciled
while complementary values are stabilized and reinforced. The paper
contributes to highlight the role of history, practice, and power in
family business culture. •
Culture has been of an enduring subject of interest for family business
scholars. The first volume of Family Business Review, for instance, started
off four-square with the issue of culture and family business continuity (see Dyer, 1988). A vast amount of literature have corroborated to
show that culture is an important aspect that drives family business
performance (Dibrell & Moeller, 2011; Klein, Astrachan, & Smyrnios,
2005; Vallejo-Martos, 2011; Zahra, Hayton, Neubaum, Dibrell, &
Craig, 2008) as well as a component that makes family businesses better
than non-family businesses (Carr & Bateman, 2010; Denison, Lief, &
Ward, 2004; Duh, Belak, & Milfelner, 2010; Zahra, Hayton, & Salvato,
2004). A recent development of the field shows the interest on family business culture is often related to ‘nonfinancial goals’ (Zellweger,
Nason, Nordqvist, & Brush, 2013) or ‘family-centered non-economic
goals’ (Chrisman, Chua, Pearson, & Barnett, 2012).
Against this background, the field is criticized as being “dominated
by managerialist or performative interests” (Ainsworth & Cox, 2003,
p. 146) and this is still the case after more than a decade. While performative-oriented research are useful to highlight the distinctiveness
of family business in the society, studies that attempt to relate family
business culture with economic performance necessarily do so with a
risk of simplifying the complex interaction in family business that mold
the notion that scholars call as ‘culture’. For example, studies that tie generic labels such as ‘paternalistic’ culture (Chirico, Nordqvist, Colombo,
& Mollona, 2012; Dyer, 1988) or ‘stewardship-oriented’ culture (Dibrell
& Moeller, 2011; Segaro, Larimo, & Jones, 2014) with business performance often underplay the dynamics that emerge in family business.
As a consequence, managerialistic studies may left an impression that
family business culture is a static, objective, and timeless construct.
To pass through the static view of culture, other studies have explored how cultural patterns in family business change over time (Hall,
Melin, & Nordqvist, 2001) and hinted to the importance of history
in the formation of culture in family business (Chirico & Nordqvist,
2010). Bjursell (2011) extends Hall et al. (2001) by disentangling culture
as different value systems in family business and raises the issue of
tensions in cultural integration process. However, studies that incorporate a processual approach on culture remain scarce. Despite the many
literature that address culture in family business, we still do not know
why certain cultural configurations tend to persist while other cultural
The 12th EIASM Workshop on Family Firm Management Research | 1
configurations tend to change. We are still trying to acknowledge—
beyond the easy labeling of cultural patterns—that family businesses
are rich with dualities instead of binary categorizations (Nordqvist,
Habbershon, & Melin, 2008). And we are still scratching at the surface
to understand culture not only as shared values and norms, but also
as values that are different and ambiguous (Ainsworth & Cox, 2003;
Wigren, 2003).
Studies that step away from the managerial-instrumental interest
are therefore necessary if we are to refuse a broad brush-view of family
business. Learning from the inadequacy of the extant literature, the
pathway to do this is as follows: (1) values cannot be regarded as the sole
source of culture, (2) coherence of values cannot be assumed a priori,
and (3) agreements among actors cannot be assumed a priori. All these
three components are always subject for empirical inquiries in a given
context. To carry out this task, I draw from Archer’s (1996) ‘cultural
morphogenetic approach’ to analyze culture in family business. This
framework stratifies culture into two dimensions: the cultural conditions that are confronted by present actors and the socio-cultural
response to that condition. Accordingly, this paper necessarily addresses the following questions: (1) What are the Cultural Systems that
are pre-existing in the family business? (2) How does the pre-existing
Cultural Systems responded by actors in the face of transitions? And,
(3) why a certain state of cultural configurations persists while the other
changes?
To answer these questions, I conduct an interpretive, longitudinal case study of a fourth-generation Luxembourgish family business.
While the research is still ongoing, the preliminary findings suggest (1)
that family business embraces continuity and discontinuity at the same
time and (2) that it is during transitions that meanings are constructed,
contested, and reinforced. By applying the cultural morphogenetic approach to the case, this paper contributes to highlight the role of history,
practice, and power on cultural elaboration in family business.
This paper starts with a theoretical section that critically re-examine the assumptions underlying the cultural research in family business.
This is followed by a discussion that calls for a de-centering of ‘values’
and re-coupling it with ‘practice’ in cultural analysis. Then I discuss the
cultural morphogenetic approach as based on Archer (1995, 1996) as
a sensitizing framework for the study. The second and third sections
describe the methods and the case vignette. The fourth section analyzes
the cultural elaboration processes. Finally, discussions and conclusion
are provided.
Culture, family business, and cultural morphogenetic
approach
Re-examining the underlying assumptions of culture
In dealing with culture in family business, definitions are borrowed
from the work of organizational culture scholars such as Schein (1983a,
1983b), Dyer (1986), Hofstede (2001), Alvesson (1993), and Barney
(1986). With reference to the scholars above, culture is defined as “the
coherent pattern of beliefs and values” (Zahra et al., 2004, p. 365), “a
shared and learned world of experiences, meanings, values and understandings” (Alvesson, quoted in Chirico & Nordqvist, 2010, p. 490),
2 | The 12th EIASM Workshop on Family Firm Management Research
Culture-related studies in family business
family commitment
national culture
orientations
organizational culture
family culture
values
family influence
Main assumptions
Culture as coherent values
Culture as shared values
Values are the core of culture
Figure 1. Spectrum of studies on family business culture and its main assumptions
“the collective programming of the mind” (Hofstede, quoted in Sharma & Manikutty, 2005, p. 296), “a set of deeply rooted beliefs, values,
assumptions and symbols” (Seah, Hsieh, & Huang, 2014, p. 1411), and
also as “artifacts, values, and assumptions” (Craig, Dibrell, & Garett,
2014; Huybrechts, Voordeckers, Lybaert, & Vandemaele, 2011; Vallejo,
2011). In particular, defining ‘family business culture’ is also a double
task since one needs, firstly, to paint a broad brush to define ‘organizational’ culture and, at the same time, to draw a line on the side of ‘family’
business culture. Vallejo (2011), for instance, argue that family culture
is comprised of artifacts, perspectives, basic values, and assumptions
shared by the members of a particular family. Similarly, Chirico and
Nordqvist (2010, p. 490) specify family business culture as an outcome
of different behavioral patterns that arise from “the history of the family
business, the social relations within it and the beliefs and values embedded in the family.”
However, I found it difficult to restrict my review of family business culture only to those that are explicit in the use of ‘culture’. A closer
examination upon each cultural dimensions reveals a further gradation of yet another concept. ‘Organizational culture’ that was initially
used to capture the intangible properties of an organization (Morrill,
2008) became a conduit—and at the same time a loophole—for a set
of value-related aspects in family business to gain prominence in the
literature. Studies of culture in family business, then, are better pictured
as a spectrum of studies with a range of interrelated concepts. However,
the growing number studies on culture and values in family business are
not accompanied with a similar level of critical examination about what
is considered as culture in the first place. In other words, little attention
has been given to the underlying assumptions that define culture, which
are: (1) culture as coherent values, (2) culture as shared values, and
(3) values as the core of culture. Figure 1 illustrates how concepts that
are used in studies on family business culture are based on common
assumptions. This is an issue that we need to critically address.
The critique against defining culture on the basis of its sharedness
among people is not new. Previously, it has been raised in the field of
sociology (Archer, 1996; Donati & Archer, 2015) and organization sciences (Martin, 1992; Martin, 2002; Martin, Frost, & O’Neill, 2006). It
is only recently that the sharedness of culture receives critical examinations in the field of family business, quite notably by Ainsworth and Cox
(Ainsworth & Cox, 2003). They contend that family business research
“has largely concentrated on cultural unity, integration, leadership and
the contribution of organizational culture to business performance”
(Ainsworth & Cox, 2003, p. 1463). Nonetheless, after more than a decade, there is still little response on Ainsworth and Cox’s call. The ‘myth
of cultural integration’ (Archer, 1996) is still highly predominant in the
field of family business.
Definitions that assume culture as coherent values that are shared
among people are problematic because they hide two problems: first,
that culture is restricted to aspects that are coherent (thus discounting
the possibility that culture can be contradictory), and second, culture is
assumed to be socially shared (thus neglecting the possibility of discord,
disagreement, and resistance among the organization members who
confront a given culture). Of course, in family business—as it is in society—differences and disagreements exist. But these seemingly obvious
social properties do not seem to be taken into account in the theorizing
of culture in family business. This has a profound impact on the scholarship: our understanding of family business culture is tilted towards
seeing culture as a neat and tidy end-product that is immune from the
influence of social interactions.
In addition, the problems of ‘sharedness’ or ‘sharing’ in defining
culture arise not only because sharedness leaves out anything that is
incoherent and/or conflicting as outside of culture, but also because it is
difficult to maintain its own consistency. Two definitional examples will
illustrate this. In Zahra et al. (2004, p. 365), culture is “the coherent pattern of beliefs and values that represent acceptable solutions to major
organizational problems” and in Denison et al. (2004, p. 63), organizational culture is “values that are shared by people in a group and that
tend to persist over time even when group membership changes.” Taking these definitions together, further questions arise: Does a pattern
of beliefs that is not coherent not part of culture? Are values that are not
shared by people in a group cannot be considered as part of culture? And,
are values that change over time not part of culture? Closure to such
questions are unlikely. As it were, the compound use of ‘organizational
culture’ or ‘family business culture’ may perpetuate our silent assumption of seeing culture as properties that are shared organization-wide
(precisely in the attempt to say that a particular culture is something
organizational). So I agree with Van Maanen and Barley (1983) to endorse the term ‘cultural organization’ to step away from the allusion that
organizations have a culture towards the framing of organizations as
culture and, more precisely, collections of subcultures.
It is clear that cultural classifications rely on a coherent view of
values in organizations. After all, the claim that, for example, ‘stewardship culture’ leads to ‘organizational innovativeness’ (Dibrell & Moeller,
2011) will be difficult to maintain without a coherent view about the
kind of culture that organizations have. But we must also acknowledge that culture is (re)produced through the interactions between the
(ideological) values (can also be called as beliefs, theories, ideologies,
etc.) and the (social) interactions between organization members who
uphold such values or beliefs. For us to deepen our understanding of
culture in family business, we need to face the asynchrony that may arise
from these interactions. That is, in other words, to see not only the kind
of values, beliefs, or ideologies that are held by actors, but also to see how
influences are practiced to perpetuate, curb, or modify certain cultural
ideologies and how cultural ideologies are drawn to legitimize organized
actions. To elaborate on the latter, then, it is time to move and discuss
the position of ‘practice’ in the production of culture.
1 ‘Practice’ in this text is employed loosely to
mean the actual acting out in relation with
other people in the social world.
Re-coupling ‘values’ with ‘practice’
An important caveat in the extant analyses of culture in family business
is in the mixing up of the ideational with the social notion of culture.
Peterson and Distelberg (2011) raise this problem by pointing to the
differences between ‘value orientations’ and ‘unity of values’. Through
the human ecology perspective, they criticize Astrachan, Klien, and
Smyrnios’s (2002) F-PEC (Family Influence on Power, Experience, and
Culture) scale for grouping these two properties together under the
single scale of ‘family’s influence on the family business system through
culture’. In short, it is misleading to assume that ‘value orientations’ is
one and the same as ‘unity of values’.
If ‘value orientations’ are about the kind of values (ideational), then
‘unity of values’ are about how values are practiced and held socially.
This distinction is what most scholars fail to incorporate. A failure to
delineate this difference means our cultural analyses are inaccurate or,
at best, incomplete. Consider Sorenson’s (2014, p. 463) assertion that
“[c]ulture defines how individuals in the family and the business are
expected to behave socially. Values, combined with common beliefs,
meanings, norms, and symbols, make up the culture in the family and
the business. Values are the core elements of culture” (my emphasis). Others
scholars have taken the view to refer to culture exclusively as “values and
commitment” (Klein et al., 2005, p. 323) or “values and norms” (Danes,
Lee, Stafford, & Heck, 2008, p. 260). To these statements I argue that
while I agree that values are a component of culture, there is a problem
in understanding culture solely as values or commitments or norms. I
agree that values are the ‘intangible dimension’ of culture, but the fact
that values are ‘invisible’ does not necessarily make it ‘the core’ elements
of culture. To claim that values are the core of culture is to view culture
as an epiphenomenon of values and may signal that it is unproblematic
to do away with culture in favor of values. In other words, the conflation
of culture with values leads the discussion of family business culture
into a competition of different labels about values and unvoiced assumptions about culture.
It is equally important, in the analysis of culture, to understand
how values are established, shared, and contested. And we will not be
able to incorporate these dynamics if we do not attend to the level of
‘practice’1. A counter-argument might be given that attending to ‘practice’ is unnecessary since practice is rooted in values. However, by giving
primacy to ‘values’ over ‘practice’ we will miss out important dynamics
of culture where (1) different and contradictory values co-exist and (2)
different strategies and social relations are concerted to endorse, resist,
or modify existing values. As I will elaborate in the subsequent section,
we need to rethink these assumptions. Even if, a posteriori, an inference can be made to allude that practice is based on values, we cannot
assume, a priori, that values are always in synchrony with practice. The
relations between the two are always subject for empirical observations.
It is a researcher’s task to explain why such coherence/incoherence
manifests in certain ways and not others.
This is what the literature is lacking. ‘Culture’ is often used as a vehicle to explain the centrality of ‘values’ but ‘culture’ itself is abandoned
once the role of ‘values’ is established in the analysis of family business.
Values, then, are deemed to be sufficient in our understanding of family
business culture. We need to avoid this pitfall. To overcome this, an analytical framework is needed that sensitizes us to the double dimension
of culture (culture as values and practice). Fortunately, such analytical
framework has been advanced in the field of sociology. To this now I will
turn.
Cultural morphogenetic approach
Cultural morphogenesis is an approach for cultural analysis that is
advanced by Archer (1996). Initially coined to address the problem of
structure versus agency, this approach maintains that a realistic depiction of the social world cannot be reduced to either structure or agency
(Archer, 1995). In her view, structure and agency retain their own power
and properties that are irreducible to each. Archer theorizes that a
similar appraoch of analysis can be applied to the cultural domain where
‘culture’ cannot be reduced to ‘actors’ and vice versa.
In the cultural domain, Archer (1995, 1996) advocates ‘analytical
dualism’ of culture that distinguishes culture—analytically, not philosophically—into ‘Cultural System integration’ that refers to the degree
of logical consistency or relations between the components of culture
and ‘Socio-Cultural integration’ that refers to the extent of causal
consensus or relationships between cultural agents. In other words,
this view makes it explicit that culture operates at two levels and that on
each level culture has its own relational properties. First is the ideological realm where its relations are characterized by compatibilities
and contradictions between different ideas or beliefs (as components
of culture). Second is the socio-cultural realm where its relations are
characterized by the use of power and influence to manipulate, endorse,
or counteract particular beliefs (Archer, 1996). This separation between
the logical consistency and the causal consensus of culture permits an
analysis of their interplay in order to explain how the former is innovated and elaborated through the latter. This socio-cultural response to
the pre-existing Cultural System is also called as ‘cultural elaboration’
(Archer, 1996).
The usefulness of the cultural morphogenetic approach lies in its
incorporation of temporal dimension in the analysis. In this approach,
time is roughly divided into three parts: T¹ where the Cultural System conditions the actions of the actors; T² where the Socio-Cultural
interactions occur as a response to T¹; and T³ where the dynamics at
the Socio-Cultural level act back to the Cultural System in the form of
‘Cultural Elaboration’ (which then becomes the T¹ for another cycle).
Analytically, the Cultural System must be the first to be identified
since it pre-exists the actors and that the logical relations between the
component parts of culture at this level (whether they are contradictory
or complementarity) will imply different ‘situational logics’ that compel the actors who uphold particular beliefs to act in a particular way
(Archer, 1996). Actors are in a situational logic of correction “if and when
they realize, or are made to acknowledge, that the proposition(s) they
endorse is enmeshed in some inconsistency” (Archer, 1996, p. xxii). In
contrast, actors are in a situational logic of reproduction when they face
complementarities that “mould problem-free situations for agents who
can explore their ideational environments without danger or difficulty”
(Archer, 1996, p. xxii).
If the Cultural System concerns entirely about the logical relationships between the components of culture (beliefs, theories, propositions), the reasons of why these are being held by actors are a concern of
causal relations between groups and individuals at the Socio-Cultural
level. The dynamics at this level “make their own contribution to cultural stability or change through the influences they exert upon what actors
do on the spot” (Archer, 1996, p. xxii). It is then at this level where interests and influences gel together to conceal and contain contradictions
and/or to reinforce complementarities (Archer, 1996).
Fundamentally, the dualistic approach to cultural analysis challenges three fundamental assumptions of ‘the Myth of Cultural Integration’,
which are: “that the Cultural System is free from logical contradiction;
that the Socio-Cultural level exists in causal harmony; and that relations between the two are universally integrative” (Archer, 1996, p. 105).
These fallacies—pointed out twenty years ago—are arguably similar to
the current landscape of research in family business culture explained
earlier. As the field is in need for a more diverse theoretical perspectives (Sharma, Melin, & Nordqvist, 2014), the ‘borrowing’ of cultural
morphogenetic approach for cultural research in family business yields
a promising benefit.
Methods
The purpose of this study is to provide an explanation for cultural
change and stability in family business. To approach this, a case study
research is suitable for generating new or extended theory of complex
social phenomena (Yin, 2008). This paper implements a single case
study as part of an ongoing research project for a doctoral dissertation. From the outset, the case itself represents a unique process: a
fourth-generation family business in the process of collaborating with
another family business to continue the tradition of the families. Under
the surface, this case reveals several transition processes: in addition to
the transition of working with another family business, it also involves
an inter-generational transition, a transition of meanings in family
business, and a transition of strategy for the continuation of the family
business.
The empirical material for the paper are comprised of: periodical
in-depth interviews with the owner-manager since March until December 2015 (4 interviews with roughly one hour duration per interview),
online archival documents such as newspaper articles, video documentaries, legal reports, and the hotel’s TripAdvisor web page. The material
derived from the TripAdvisor webpage is of particular interest since it
illustrates the dynamics that occur between the customers and the hotel:
most customer reviews are responsed by the owner-manager. For this,
I collect 100 customer reviews and owner-manager’s responses since
2014 until 2016. All the research material are compiled in a qualitative
data analysis software (NVivo) to assist the coding process.
In executing the data analysis, I follow the tenets of qualitative rigor proposed by Gioia, Corley, and Hamilton (2013) by adhering to the
three-step coding process, which comprises of: (1) the development of
initial data coding or 1st-order codes, (2) the development of 1st-order
codes into 2nd order themes, and possibility for (3) the development
of 2nd-order themes into aggregate dimensions. The first-level coding
categorizes the statements according to the literal content that tries to
“adhere faithfully to informant terms” (Gioia et al., 2013, p. 20). In the
second-level coding, the vast amount of 1st-order codes are abstracted
into preliminary theoretical constructs; this level is “when we are now
firmly in the theoretical realm” (Gioia et al., 2013, p. 20). Thirdly, I
attempt to aggregate the different properties formulated in the second-level coding to form more general themes. It also needs to be mentioned that the initial exploration of themes and theoretical constructs
was not a linear process. In honing the analysis, I iterate between the
empirical material, theoretical framework, and the analysis itself to see
possible refinements in each.
Case vignette
Grand Hotel Cravat is located in the city center of Luxembourg. The
hotel is currently managed by the fourth-generation son, Carlo Cravat. The family business, however, was not started with the hotel; the
family business was founded by his grand grandparents as a restaurant
business in 1895. His grand grandmother was a cook and his grand
grandfather was serving in the restaurant. The couple had only one son,
Paul Cravat, who consequently inherited the business. Then, the grandparents had two children: Fernand Cravat and his sister. Fernand was
involved in the business while his sister was not. As the business went
forward, it was not until 1953 that the family entered into a hotel business by buying the building on the opposite of the restaurant. Later in
1965, in the year when Carlo was born, the family bought another part
of the building in between the restaurant and the hotel. At that time, the
hotel had been in a leading position in Luxembourg and since then the
restaurant had been secondary as a revenue generator.
During the time of Fernand Cravat, the shares of the company
were divided between him, his wife Yvette, and their son Carlo. With
the decease of the father in 2003, the shares were then divided between
the remaining two. Currently, 75% ownership of the company is held by
Yvette while only 15% is held by Carlo himself as an active owner-manager. Carlo has one elder sister, Paule Cravat, who is not involved in the
management. However, he is aware to always involve her in strategic
decisions in order to make her feels that the business is also part of her.
Carlo has three children: two daughters and one son. The daughters
are not showing interest in taking over the business, while his youngest
son—now still completing high school—has shown an interest in cooking, a sign referred by his father that he could be the potential successor.
However, for Carlo, business succession is not a pressing concern in the
next 10 years.
In 2008, the hotel was hit by a severe decline due to financial crisis.
Since the operation of the restaurant has always been supported by the
hotel, the crisis made it more difficult to maintain the sustainability of
the whole business. Several attempts have been tried to reduce the financial burden such as by reducing the number of employees and even closing the operation of the restaurant during the low season. But the latter
turned out to be ineffective and even worse than if the business was to
operate at loss. The idea to shut down the restaurant had appeared since
2008 but it had been a tough negotiation between Carlo and his mother
to come to an agreement on it. This went on until, in October 2014,
Carlo announced two important news during one gala dinner held by
one of the European culinary associations. First, that the restaurant will
cease to operate by the end of the year. Second, that he welcomes any
party that is interested to work together to run the restaurant. Luckily,
shortly after the event, a Luxembourgish family business, the Roder
family, expressed their interest to run the restaurant.
Starting from January 2015, the Roder family officially runs the
restaurant in the former Cravat’s restaurant. The Roder family itself
owns a third-generation hotel and restaurant business located in the
north of Luxembourg. While this is a collaboration of two families,
both parties agree that there must be a separation that is visible to the
customers. One message should be clear: that the Roder family is not
working under the Cravat family, but that the two families have their
own territory and authority. The interiors, for example, are completely
different from the former Cravat’s restaurant. The restaurant is branded
under a different name: ‘Brasserie Roder’ (it was ‘Brasserie La Taverne’
during the Cravat family’s era). The branding of the two families is also
apparent in the media where they send a message that the partnership
is about two Luxembourgish families working together. In Carlo’s
press statement (originally in French, Horesca, 2015, p. 13): “Roder and
Cravat, it is the alliance of two Luxembourg families from the hotelier
to live the traditions — the tradition of brasserie in the hotel and the
tradition of classical brasserie.”
Analysis
Belief correction and social reconfiguration as pathways for cultural
morphogenesis
Drawing from the dualistic approach for cultural analysis, this section
dissects culture into the Cultural System interaction and the Socio-Cultural interaction in order to carve out (1) what are the pre-existing Cultural System that constraint (or buttress) the actions of the actors, (2)
how the actors respond (at the Socio-Cultural level) to the given conditions, and (3) how the Cultural System are elaborated as the result of the
interactions that occur between actors. Throughout the case, I identified
that both cultural morphogenesis (change) and cultural morphostasis
(stability) do emerge. Cultural morphogenesis occurs whenever the interaction between the Cultural System and the Socio-Cultural level produces an innovation to the pre-existing Cultural System (Archer, 1996).
In the case, this revolves around themes that cover the past, present, and
future. Each of these themes is discussed in the following.
Breaking from the past
To deal first with gripping the Cultural
System, the condition where the family restaurant had to be closed
represents a major change in the business to break from its past. Two
contradictory beliefs in order to cope with them are revealed. These are
roughly formulated as: (A) we will not change since this is what we have been
doing for three generations; and (B) we must change since times are changing.
In the Socio-Cultural level, these two beliefs are held by different
generations: belief A by the mother that represents the older generation
and belief B by Carlo Cravat that represents the younger generation.
The pre-existence of belief A poses a constrain for belief B to ensue. Any
Table 1. Data supporting interpretations of breaking from the past
Beliefs, values, rules
Representative quotes
We will not change
[I]n family business very often the sentimental part is the one that is difficult -- we
have been doing like this -- for three generations! Why should I change now?
Power relations
[S]he [Carlo’s mother] said, it has always been like this why should we change. We
Mother
have to work, then, more. We have to change something but I don’t want to get rid of
something.
I have still a typewriter in my office. And he [Carlo’s friend] said, ‘What are you doing
with this typewriter? You have the -- you have your computer. You have not working
with this machine anymore. How often do you switch it on?’ I said, ‘Maybe once or
twice a year.’ ‘Yeah, but why don’t you throw it away?’ I said, ‘Because it has always
been THERE! If I leave it there, it does not hurt you. And [for] me, it comforts me.’
Now, that is a little thing. But that explains that we are sticking to things.
We must change
Times are changing, you must change. And that is the most important. That is one of
the real points where many family business fail. Because they are not reactive enough.
Not reactive enough to the attacks of outside. To the changes. To many different -because we have always been doing like this.
And when 2008 there was a crisis, of course the figures of the hotel dropped. And the Carlo (son) - mother
hotel suddenly we had a hole in the bucket. And -- money was -- flushing out. So we
had to take a decision and uh -- it lasts -- six years before we took the real decision
and that where I am in the point and said, ‘I want to stop now. I want to stop this
hemorrhage. We are killing ourselves!’
And then I always say you must do -- when you want to do something, it must be an
evolution, never a revolution. Revolutions are always too harsh, too aggressive, too
brutal, too direct. It’s better to do evolution. Of course, for the evolution you need
more time. But if you have time to do it, then it’s always better. I always say to the
people, do the evolution. It’s always better.
Mothers as leaders
[M]y grand grandmother, she was a cook. And my grand grandfather, he was actually Grand grandmother –
in the restaurant. That was already very awkward because, normally, the girls are in
grand grandfather
the restaurant and the boy is standing behind the pans and the pots. So that was, for
these days, we must think back one hundred and twenty years back where the women
even not have yet the right to vote. So, the whole idea was kept up by a woman. So,
that was already very -- future vision, let’s call it like this.
So, he [Carlo’s grandfather], again, got married -- and -- um -- with my grandmother.
She was a very strong woman. When I say a strong woman, that means in all the
aspects. So she was also a leader figure. Um - she helped him very much building up
the two new buildings.
Grandmother – grandfather
[W]e are like a little bit the farmers. There is one boss. And he takes the decision. If the Mother
decision is good or bad, he takes the decision. And that has always been like this. And
for the last years, that was my mother.
Dealing with the mother as So, the negotiations [with my mother] -- I tried to do it as -- professional as possible, Mother – Carlo (son)
‘parent-and-child’
because when you talk to that person, it’s not only the owner. But it’s your parent. It’s
your mother. Or your father. And that is double the difficulty. Because when you say
as manager [in a non-family business] to your owner -- ‘Excuse me sir, this is rubbish.
We cannot go on like this.’ You take the decision, that’s it. But I cannot tell that to
my mother. I cannot say to my mother, ‘This is rubbish what you say.’ I mean, then I
must be a little bit more -- politically-wise correct. And then this is difficult, because
you are not on the level where you can -- do a discussion. It’s always one is there and
one is there [hands gesturing a different height]. Different levels. Because of the
education, because of parents -- uh - parents and child. I mean you cannot have a
discussion adult-adult. I mean, if we take psychology now the -- analyse transactionnelle [transactional analysis] if you have adult-adult or child-parent then -- it’s always
child-parent. It’s always child-parent, you can never -- or, the child goes up -- and
says, ‘Now that’s it. Now, you listen!’ And then the parent suddenly becomes the
child. But then again, you are not at the right level. And that is what is very difficult
in -- in privately-owned companies, in family businesses. Not privately-owned, but
family business where they all have been working, or still working in the company. You
never have a real discussion.
change—in particular a radical one—that is proposed by the holder
of belief B will be barred by the holder of belief A since the new belief
contradicts the existing one. For the holder of belief A, the closing of the
restaurant is an attack to her belief since this means a disjunction to the
continuity that has been maintained for over three generations. Whereas for the holder of belief B, it is precisely on the basis of maintaining the
continuity that the closing of the restaurant becomes necessary. Therefore, since between the two beliefs are contradictory, the situational
logic for this type of contradiction dictates that continued adherence to
belief B makes a correction of its relationship with belief A mandatory
(Archer, 1996). But in this situation a direct confrontation to subjugate
belief A will be too costly given the power asymmetry between the two
generations as parent and child. The younger generations realizes that
the family relationship is at stake if a frontal battle is declared. Hence,
an indirect route must be devised for belief B to manifest. An alteration
of its relationship with belief A is developed by building a bridging belief
A¹ with an emphasis that the family will remain what it has been since
the ownership of the family asset will be retained within the family. In
other words, the ending of the restaurant is re-interpreted not as a fundamental contradiction to belief A but as a condition that serves it. If the
proposal of A¹ can be accepted by the holder of belief A, this will make
belief A¹ and belief B to be of a complementarity instead of a contradictory
one.
The refusal from the older generation to renounce belief A has
made the systemic interaction of the two beliefs an inescapably slow
process. The indirect confrontation by the younger generation had
taken six years before a significant action at the Socio-Cultural level was
taken. It was also during these years that belief A had failed to establish
its empirical reality: the two parties witnessed that the business was not
getting any better by clinching to belief A. In turn, this empirical ground
is used for the proponent of belief B to thrust his belief. Of course, even
after belief B prevails, there is no guarantee that belief A is abandoned
by its proponent in favor of belief A¹ or even belief B. Dissents by the
older generation are still present during the post-closing phase. But the
ripples at the Socio-Cultural level had been successfully silenced that
put the contradiction to the background.
The silenced resistance from the older generation to close the
restaurant provides the younger generation with an unconstrained opportunity to explore how the business will be carried forward. However,
the absence of constrain is also an unspoken challenge for belief B to
prove that adherence to it is a correct decision to take. It is at this level
that belief B will establish its empirical ground. Similar to the condition
where belief A fails to establish its empirical truth, any outcome that
arises from the decision to close the restaurant is a potential ground of
appeal for belief A to resurface. In other words, the supremacy of belief
B is at the mercy of an absence of a counter-evidence that disproves it.
Venturing through inter-familial collaboration
The closing
of the restaurant opens the door for the family to enter a new path: a
collaboration with another family business. At the Cultural System
level, the presence of an ally from a similar background reinforces belief
B and simultaneously gives comfort to belief A. For belief B, a positive
relationship and financial outcome from the partnership show that
Table 2. Data supporting interpretations of venturing through inter-familial collaboration
To live the tradition of
« Roder et Cravat, c’est l’alliance de deux familles luxembourgeoises issues de
brasserie in the hotel and the l’hôtellerie pour faire vivre les traditions — la tradition de la brasserie au sein de l’hôtel
tradition of classical brasserie et la tradition de la brasserie classique. » (Carlo Cravat, quoted in Horesca, 2015)
Power relations
Cravat and Roder
I sub-rent the F&B. Yeah. So, again, it’s a Luxembourgish family. So, part I sub-rent -- I
Cravat and Roder
did it with somebody who has the same -- or I hope that has the same approach like our
family. In order to have no conflict on that level. I mean we will have some day conflict, of
course, because something will not be working properly, or they will not pay the rent the
right day, or what -- I don’t know. They must be some day conflicts. But then, if you have
the same -- interest -- you can find solutions.
We have not sold anything, we have not got rid of anything. We are still doing F&B, we
Cravat and Roder
have just added one partner in the ship for a certain time. We don’t know how long this
time will be. If the partner is good enough to go on for a certain time, maybe we have to
change in two years. Maybe in ten years the partner will go retirement and my son will
take it over AND the situation outside will be again more positive that he can do again as
we used to do.
Mutual respect
First we make friendship, and then we make business. Everything -- is based on that.
Cravat and Roder
Friendship is not good? Business will MAYBE be okay. But it will never be good. Friendship, mutual respect. Mutual respect is -- even if friendship is not good. Or is less good. If
you have a mutual respect, it can work. If you have friendship and you have less respect,
it can work a certain time because friendship will keep it together, but one day it will -- it
will clash.
No, I said to -- sorry -- but I said to Salvatore [Carlo’s employee], as it’s the first time we
are getting now food from our partner, double check that we don’t need spoons or forks
and everything -- and they had -- already prepared the spoons and everything. So you
see that is what I say with the mutual respect. They did not just do some -- the food and
then [hand gestures] ‘it’s not my problem how you gonna serve it to the guest.’ So that is
important and that is what we are talking. When I will see Mr Roder tomorrow or the day
after tomorrow I will tell him, ‘Hey, it was nice how your people had prepared everything.
Salvatore and Maria [the employees] were okay. They were not -- they had no problem to
serve. Good. Everybody’s happy.’
Avoiding ‘bad vibrations’
I am not so afraid of both of us having one day a problem. I am more -- um -- stressed
that somebody outside will try to put some bad -- um -- vibrations, let call it like this
-- into our mutual respect. And to avoid this, we have to talk and we must know that if
we see you, if we feel that somebody start to try to split us, we must be honest enough
to say, ‘Listen. Your mother had said something, or your father had said something, or
your -- I don’t know -- who had said something, your wife. I don’t like it. Can you please
double check that?’ So we have no problem and we don’t want to have problem. And if
we have this mutual respect, you can solve this problem very quickly. If you don’t have
that respect? Ck! It can become very, very bad situation.
change was the right decision to make and, for belief A, it shows that
even when there was a change, the tradition of the family for the last
three generations is still maintained—the business is still preserved by
Luxembourgish families. The similarity of nationality, industry, and the
fact that both are a family business provide basic complementarities for
the two parties to work together. In turn, these become “the source of
ideational bonuses like psychological reassurance, technical back-up,
corroboration of theories and confirmation of beliefs” (Archer, 1996, p.
157). In the process, then, the two families develop a common value for
their partnership, which is (C) to live the tradition of brasserie in the hotel
and the tradition of classical brasserie.
At the Cultural System level, belief C serves as a common value of
reference between the two families as well as a support for the re-interpretation of belief A (in the form of belief A¹). The collaboration of the
Cravat and the Roder family supplies a new meaning to belief A, which
is that ‘to continue what has been done by the earlier generations’ is to
Cravat and Roder
‘maintain its operation within Luxembourgish families’.
As a family business, the two families are faced with a pre-existent
belief held by the older generation. The partnership is a major change by
both families and while the response to this change by the older generation from the Roder family is still unexplored in the case, a negative
response by the older generation is present from the side of the Cravat
family. Laurent and Carlo realize that, apart from the two of them, there
is low social integration about their partnership. In other words, the
integration that occurs at the Cultural System level is not followed by a
similar degree of orderliness at the Socio-Cultural level. It is then this
instability at the Socio-Cultural level that is responded by the reconfiguration of alliance. The older generation is kept at a distance (by avoiding
direct interaction between the other Cravats and the other Roders)
while simultaneously strengthening the social integration at the organizational level (with his employees) and inter-organizational level (with
Laurent Roder by agreeing on how to deal with the older generations).
Power are used in both instances to manipulate the tensions and relaxations of the family relationship.
It must be noted that a common reference to belief C does not
guarantee a risk-free enterprise at the Socio-Cultural level. Despite the
apparent compatibility of beliefs held by Laurent and Carlo that “fosters
no limitation whatsoever on that part of B which is accessible to partisans of A” (Archer, 1996, p. 157), the two families still proceed to explore
each other’s beliefs very carefully. On the one hand, Carlo stresses that
the respect that he pays to the other party is based on a genuine interest
for building a lasting relationship—through the prudence and patience
that are invested on each encounter. It was also emphasized that the
Roder family is not working for the Cravat, but that both are working
together in their own territory and authority. On the other hand, this
sincerity does not dispose the transactional nature of their landlord/
tenant relationship where they can continue their relationship as long
as the other party ‘pays the bill’. With the asymmetry of power in favor
to the Cravat family, the presence of the Roder family is inescapably
dispensable. In other words, it can also be a possibility that the two families are willing to work together not only because the common values
that they espouse, but also because of the practical condition where the
collaboration will be instrumental for the continuity of their business.
Negotiating the continuity of ownership
The instrumentality
of the partnership for the business reveals a bigger issue of business
succession in the family. For three generations, the business has been
passed over to the sons but, interestingly, this recurrent historical practice is never registered to the Cultural System level: there is no rule or
belief that the son must continue the business. Another rule, however, is
at play here that stems from the Luxembourgish civil law with regard to
how inheritance must be passed over to the next generation, where (D)
inheritance must be shared equally among the first degree descendants.
Of course, the law in itself is not necessarily harmful to the continuity of the family business if the siblings are interested to continue the
business. But when there is more than one child and the siblings are not
interested in maintaining the continuity of the business (and, instead,
cashing in the share of the business to pursue his or her own interest),
then the exercise of this law will pose a major threat. In the case, this has
Table 3. Data supporting interpretations of negotiating the continuity of ownership
Power relations
Equal share of inheritance
among the direct descendants
Les enfants ou leurs descendants succèdent à leurs parents, aïeuls, aïeules, ou autres
National regulation
ascendants, sans distinction de sexe ni de primogéniture, et encore qu’ils soient issus de
différents mariages. Ils succèdent par égales portions et par tête, quand ils sont tous au
premier degré et appelés de leur chef: ils succèdent par souche lorsqu’ils viennent tous
ou en partie par représentation. (Art. 745, Sect. III, Chap. III, Titre Ier - Des Successions,
Code Civil en vigueur dans le Grand-Duche de Luxembourg, 2015)
My aunt did not [come into the business]. That was not planned, that was not wished,
Carlo - the aunt
I presume. … So of course, then - um - business went on and on and on. Um - until the
year of 19 -- 86, 87, don’t take me exactly on the year where my grandmother died. My
grandfather died already when I was four. Then they had, of course, my aunt -- came to
see my father and she said, ‘I want to have my part of the business.’ So, we had some
very -- as I also said during the presentation, we have some tough years of negotiations
to find a price where we could still pay and she was happy to have enough money to live
like a queen till her end of the life. Of course, so, she was happy, she had a lot of money.
We were happy, we had a company. But also we had a lot of debts.
The business must continue
to be kept within the family
Nowadays, a building like this is worth, said to be worth, fifty million Euros. So, nowaCarlo - the sister
days, I could not anymore, pay off my sister. Because, I mean, my parents also had again
two children, so my sister and myself. So I don’t know how it will work later. I hope that
my sister will intelligent enough to keep in the family and try to get monthly rent or
something. We have not talked about it yet because my mother is still owning the whole
thing.
All in all, I mean, as long as there is only one child, you can hope that that child will take Parents - children
over the business. As soon as you have two or more children -- I have, for example, three
kids. You must see if somebody is interested in taking over the business. That’s the first
point. The second point, the other ‘parties’, let’s call them like this, must be motivated
to participate to go on with this adventure. And that is, a major - um - point that the parents have to try to solve during their lifetime. Because if it is not solved during lifetime,
once they are gone, it’s over.
At the end if you want the money [for the share of the business], I cannot [pay for it].
Maybe I can take a partner or we can -- rent the whole thing to a third party. And then
have a negotiation that somebody of the family can stays in the business. But there are
so many possibilities. But there is always I try not to sell. Selling should always be the
very, very, very last possibility. Because that is one shot. Once you have sold it’s over.
Then the dream is over. The adventure or however you want to call it is over.
When you have been doing for four generations the same. And one day you see it’s
not working anymore. If you are smart enough, you say, okay my destination is there:
keeping up our building. If I have to change the path, I will change the path. And that is
what we have done now is that due to external changes, we have been smart and strong
enough to think of changing the path and finding, normally, a path that is positive for us.
The interest in taking over the I was -- I was not very -- really keen in coming in hotel business. Um, I -- I -- I am very
Carlo (son) and his
business must not be forced, -- strict person with myself and with the others. And I always wanted to join the army.
father
it has to come from within
... I like, cars, guns, I like, all these kind of -- I shoot at -- since the age of 16. So, I’m quite
interested in these things. And that was always my -- my wish to do this. And my father
somehow, he -- succeeded in making me change. Uh, because he said -- ah, you’re gonna
have a nice life, you will see the world, you can travel, you will meet many people, you will
see nice hotels, nice countries, open your -- your, your vision, and so on and so on and so
on.
What I will not do what my father did is to -- to make -- to make this job or this situation Carlo (father) and his
-- to put it on a higher level to say this is wonderful, this is all crystal and all gold, and no children
trouble, and everything.
My children are very close to me. And they see what I work, how I work, how long I work Carlo (father) and his
-- uh - how I feel after the work, that I have positive days, less positive days. Um - and, so children
my two daughters for example, they are definitely not interested. Um - the eldest one
is studying mathematics in Brussels. And the second daughter she would like to go and
study medicine and later become a surgeon. So they are not interested from far or close
to the discussion. The only one who is [interested], for the moment, and that is my son
he is sixteen -- he is interested in cooking.
happened in the previous generation. The aunt had exercised the claim
for her financial ownership that enforced Carlo’s father to pay half of the
value of the business. The continuity of the business was maintained despite the financial damage that is left to the business. Consequently, this
occurrence has made the family to be alert of its potential recurrence.
With Carlo himself has a sister and three children, the potential
for disintegration by an absence of interest to the business is lurking.
At the Socio-Cultural level, the potential harm of law D is responded
not by a direct revision to the law (for an obvious reason that this is
beyond the actor’s scope of control) but by endorsing other values in
order to harmonize the law with the actor’s value with regard to business ownership, which is (E) the business must continue to be kept within the
family. Adherence to belief E explains why the active actor endeavors to
preserve the family relations by involving the sister in strategic decisions
to seed in ‘psychological ownership’ (Pierce, Kostova, & Dirks, 2001;
Zahra, 2003).
With regard to the next generation, Carlo is aware of the value that
he will not pass to his children. If, in the past, his father had persuaded
him to abandon his wish by the promising presentation of living as a
hotelier, he refrains to reproduce such influence to his children. He
believes that (F) an interest in taking over the business cannot be forced, it
must come from within. Therefore, what appears in the case is that, to his
children, Carlo strives to provide a balanced view of living as a family
business owner/manager without explicitly forcing them to be in it.
With no interest is shown by the two daughters, the son becomes the
most potential successor among the siblings. His emerging interest in
preparing and enjoying good food is captured by the older generation as
a sign of interest to the field where the family business is originated.
In the case, though notably negotiated, little dynamics seem to
emerge with regard to succession. Two factors may be account for this:
first, there is a relaxed temporal pressure for succession since Carlo is
still far from retirement age and the son is still far too young to assume
the leadership; second, there is a recognition of alternatives to make the
family members independent from their involvement in the business
while still retaining control over the business (by establishing a family
board or family council, for instance). At the Socio-Cultural level, the
latter provides the family with a closure in case the actor chooses to stick
to both belief E and belief F but no interest is apparent from the younger
generation. Depending on the Socio-Cultural dynamics that will unfold, these ‘ideas’ may or may not find their realization. But an awareness to these serve as an intermediate answer to the question of business
continuity so that the family can spend their focus on other areas that
require more attention, such as stabilizing the day-to-day operation of
the business. This brings us to the second half of the analysis, which is
the cultural morphostasis.
Belief protection and social integration as pathways for cultural morphostasis
In contrast to the processes above where different strategies are directed
to revise pre-existent beliefs and devise new beliefs, cultural morphostasis occurs when the interaction between the Cultural System level and
the Socio-Cultural level resembles the beginning of the morphogenetic
cycle (Archer, 1996). In the case, cultural morphostasis appears when
prevailing beliefs are protected and the organizational routine becomes
a form of (nostalgic) expressivity to preserve the identity of the family
business. During these processes, the coherence at the Cultural System
level and the strong integration at the Socio-Cultural level pave the way
for a particular belief to be protected from contradictions and contained
from social resistance. These centered around two themes that are discussed in the following.
Enacting the values of being a ‘family’ business
To refer to the
pre-existing Cultural System in the case, belief A prescribes that we will
not change since this is what we have been doing for three generations. Interestingly, while belief A is rejected by the owner-manager in the case of the
closing of the historical restaurant, this very belief seems to be embraced
in another aspect of organizational life: the day-to-day operation of the
business. In this sphere, the interchange between the owner-manager
and the employees emerges as an arena where family values are communicated and interpreted. Two values are pronounced: (G) to be flexible to
make the guests happy; and (H) to be a family business is to preserve the sense of
warmth, safety, and comfort.
At the Cultural System level, the logical relationship between belief
G and belief H can be ascribed to possess the property of ‘concomitant
complementarity’ where
invoking A also ineluctably evokes B, but since the B
upon which this A depends is consistent with it, then
B buttresses adherence to A. Consequently A occupies
a congenial environment of ideas, the exploration of
which, far from being fraught with danger, yields a treasure trove of reinforcement, clarification, confirmation
and vindication—because of the logical consistency of
the items involved. (Archer, 1996, p. 153)
In the case, the two beliefs are concomitant since each of them
necessarily invokes each other: the atmosphere that is instilled through
the enactment of belief H (preserving the sense of warmh, safety, and
comfort) is given a specific contour through the enactment of belief G
(being flexible in accommodating guests’ needs) in the day-to-day operation of the business; and the enactment of belief G is construed within
the tone of belief H. In turn, the stable relationship between the two
beliefs permits systematizations that advance their relationship through
the development of specific rules and directions on how to go about in
a given situation (see, for example, the second quote in Table 4). Archer
(1996) refers to this sophistication as ‘cultural embroidery’ where the
dynamics at the Cultural System level concerns more about the embellishment and beautification of the extant beliefs or values rather than a
substantial change of beliefs and values.
With the importance of belief H in supplying general directions to
the family business, it is of a particular interest to explore where does
belief H stem from and whether belief H is a product of interactions
with other beliefs. To trace this, the life history of the actor seems to play
an important role.
Early in the actor’s career, he left Luxembourg for Hong Kong in a
search for a ‘fresh air’. Guided by his belief that ‘the future lies in Asia’,
his experience of living in a foreign culture turned out to be formative
Table 4. Data supporting interpretations of enacting the values of being a ‘family’ business
Power relations
Flexibility to make the guests Here, I said to my staff, ‘If you can do something to please the guest, do it. As long as
happy
you don’t pass a certain limit, and that other guest have too long to get a service, do
it. Somebody asks you something, you can do it. Go.’ And that is important. I give -- in
the family business you have this flexibility. Where in other companies they don’t allow
flexibility because then suddenly you have anarchy. That’s also a problem.
Carlo (owner-manager) - the employees
I said to my staff, ‘Late check out? Very easy.’ 12 o’clock is check out time. If somebody
wants to stay at 1 or 2 o’clock? You see what he pays, you can say, ‘Okay, it’s fine.’ If you
are -- if we don’t need the room -- till 6 o’clock, we have time to do it. Somebody asks
until 4 o’clock? You charge 10 Euros an hour. So that makes, 4 hours, 40 Euros. The guest
would be more than happy to pay it because he can stay in his room. So you gave him the
okay. Ah, of course you have guest who want to have everything for free. But then you
can - you can say that - say, ‘Then I have to ask my manager.’ ‘And even if you don’t see
me, you can put in a reduction of 50%,’ and they say, ‘Mr Cravat give you a reduction of
50%, hoping that everything is nice and happy,’ and then, ‘See you next time.’ So he still
will be happy, because he got something but he still has to pay. And next time he know it
is not for granted.
To be a family business is
to preserve the sense of
warmth, safety, and comfort
For example, in this -- bar. The woods, the wallpaper, the chairs, they have been there
since 1953. Okay, these curtains are still the -- the --
Carlo (owner-manager)
Original?
Yes! I mean, you must imagine that. They are still fine. And when you change it. It will be
different. And that is what people are looking for nowadays. To get back to this original,
traditional things. But, of course, if I have changed this bar it will be much more beneficial. I don’t need any rentability of this place. This place is a harbor of tranquility for my
guest. But you must have enough money somewhere else to cover this luxury. To have
in the city center about 80 square meters doing nothing with it. Everybody tells me, ‘Do
something with this! You losing money!’ I said, ‘No, this is comfort. This is luxury.’
To be happy to make other
people happy
So I went to Asia, I went to Hong Kong -- um, because I still believe that -- future lies
in Asia, somehow. Because Luxembourg or the old continent is rotten. We are rotten
through the unions, we are rotten through people that think they are not enough paid
for what they are doing, and that their life is poor, that they are -- they have not enough.
And we are like the old Romans -- we are simply -- we don’t know how good our life is.
Um so, well, that’s the point, and so that’s I wanted to go to Asia to get some fresh air,
to get some -- to get this positive motivations of people working 10–12 hours a day and
STILL be happy -- be happy to have old job. Be happy to make other people happy. And
that is something that is missing a lot in Europe. So, when I came back, I had this positive
feeling of hotel business, in general of hospitality business. And since then I have always
been trying to do this and help people -- make people happy. Enjoy people. When people
have questions, to try to answer them as good as possible. And that is something that is
important.
Family as a nurturer
At the time I was a baggage handler, I went to see Monsieur Paul [Carlo’s grandfather]
The family - the
one day to tell him I wanted to leave. When he asked me why, I couldn’t think of anything employee
else to say than I needed a change of scenery. He was like a grumpy father figure. He
asked me, ‘Do you really think the scenery is better elsewhere?’ and told me that rather
than leave, I should find some English and German evening classes because I’d need it if
I wanted to work in reception. (Tony Buffone, a former employee with 50 years of tenure,
quoted in City Magazine Luxembourg, September 2012)
Nowadays, you must look at your staff not only as somebody who executes a job, but
Carlo - the employalso somebody who can have, in a certain extent, certain -- um -- how do you say that -- ees
the t-the -- responsabilité, to be responsible to a certain extent. For example when, when
I spoke with Salvatore [Carlo’s employee] for the cocktail this afternoon I went through
the memorandum with him, he knows now we have been doing that now for ten years
so I just give him the thing and he knows exactly. But at the beginning it was -- people
come at 11, you first you serve drinks, and then you go and get the snacks, and then you
serve the snacks, and so on, bla bla bla bla bla ... So, and afterwards, I said, ‘Okay, now it’s
your business. Now it’s, it’s -- you are professional you must do that.’ If he has problems
or questions, he comes to see me. I will be along anyway to greet the people. But uh -else, everybody must be -- um -- be also partly responsible.
From the left, clockwise: Figure 2. The placement of General
Omar Bradley’s portrait and signature in the hotel’s lobby.
Figure 3. Interior decorations of the hotel’s bar. Figure 4.
Interior decorations of the hotel’s bar (opposite).
to the underlying value that he holds, which is (I) to be happy to make
other people happy. He found that the ‘Asian values’ are compatible with
his own. In particular, the emphases of Asian values in making human
connections, in being warm, and in the importance of developing a
good relationship (‘first we do friendship and then we do business’) are
congruent to his own values about life and about business. Foreign values are then explored and imported to the Cultural System in the family
business upon his return. This importation of values from outside a
group’s Cultural System is what is termed as ‘contingent complementarity’ where “quite literally they were searching for a ‘foreign’ complement
to a ‘domestic’ item” (Archer, 1996, pp. 219-220).
As part of the cultural embroideries, Figure 2, 3, and 4 show how
the stable (logical) relations of values and beliefs are symbolically expressed through the production and preservation of cultural artifacts
and physical arrangements. Meanings are infused to these objects that
connote to ‘traditions’ such as ‘tranquility’, ‘luxury’, and ‘comfort’ (see
the fourth quote in Table 4). The preservation of these objects, in turn,
becomes a value in itself that encloses a set of emotionally-loaded values
beneath it. A continued enactment of family values throughout generations also allows for the production of stories (see the second last quote
in Table 4) that entrench employee’s loyalty to the family (that ensures
Socio-Cultural integration).
At this point, I discover that the family try to preserve their ‘proprietorial pride’ (Smith, 2015). The family take pride in the possession of
the many physical objects that are filled with rich historical values. It is
also based on this pride that the family dare to ‘fight against big groups’
and not conforming to the mainstream stylistic expectations of how a
hotel should be. For a long-term perspective, the family seems to put an
utmost emphasis to the preservation of the buildings that have been retained for four generations. However, with the possible emergence that
occur at the Socio-Cultural level, it is then the shared upholding of these
values by the family members that are negotiated in the daily life.
Contesting the meaning of ‘traditionality’ In contrast with
the interaction between the family and the employees that appears to be
contained, quiet, and harmonious, a contestation seems to emerge in
the area where the business confronts (or rather, serves) the customers.
It is suggested earlier that preserving the family ‘traditions’ become
a source of pride for the family business. However, the customers do
have different interpretations of it. In this regard, the ‘traditionality’
of the family business can also receive negative connotations such as
being ‘obsolete’ and ‘outdated’ rather than positively associated as being
‘charming’ and ‘elegant’ (and some other customers found the hotel’s
traditionality to be ambiguous or ‘a mixed bag’).
With textual comments and visual documentations, the customer
reviews provide an insight on how the social interaction and physical
representations that are projected by the hotel are received by the customers. Interestingly, these different interpretations from the customers slowly develop into a discourse between the customer reviews and
the owner’s responses to them. Still maintaining the analytical dualism,
this contestation can be seen as part of Socio-Cultural dynamics that
are entertained by the owner-manager to endorse particular meanings
and suppress others. Power asymmetry is present. Different from the
employees, customers do possess power to express their own interpretation that is unbridled from the constrain of power relations within the
organization. But unlike the customers, the owner-manager do have the
power to acknowledge or dismiss customers’ interpretations.
The physical artifacts such as the rooms, the staff ’s attire, the lift,
the curtains, the fireplace, or the placement of General Bradley’s picture
in the lobby are among the tangible points that are addressed by the
customers. The effective containment strategy by the owner-manager
and the back-up from loyal customers who supply bridging interpretations (for example, see the first quote in Table 5) practically tame down
opposing reviews.
The owner-manager’s understanding of the identity of the family business (not only about what the family business is but also what
the family business is not) helps him to decide when to acknowledge
customers’ input. This is also one of the ways for the business to seek
for Socio-Cultural orderliness with the customers by attracting and
retaining customers who are ready to accept the hotel’s Cultural System.
Complaints that revolve around the issue of style and taste, for example, are not a threat to the business. In this respect, the owner-manager
readily refers to hotels with other value systems that presumably may
satisfy their needs. On contrary, complaints that address the technicality of the service are points to be considered: the menu for breakfast,
how requests are handled, room cleanliness, etc. In short, traditionality
continues to be contested in the day-to-day basis. But as long as the
hotel survives, it is a contestation that do little to make an impact on the
Cultural System of the family business.
Table 5. Data supporting interpretations of contesting the meaning of ‘traditionality’
Power relations
Traditionality as elegant
and charming
… if your ideal hotel is a boutique styled no character chrome and glass creation then
Customer
the Grand Hotel Cravat is definitely not for you. If however you want a family run warm
friendly hotel oozing with charm and character located slap bang in the centre of Luxembourg. City then read on. … The feel of the hotel is as if walking back in time to the glory
days of the 1950’s with a huge glass chandelier and open real wood burning fireplace in
the lounge/bar. … The bedrooms seem to be the biggest let down and the hotel freely
admit these need updating however not being part of a large chain the ongoing upgrade
works will be carried out over the next few years. … Finally the service: the staff are like
family, they can’t do enough for you and nothing is to much trouble.
[As a response to the above review] I have had many nice feedbacks in the last years but The hotel
never so nicely written like yours. I am sure that thanks to your time you spent in writing
these lines this will really help people to find the right hotel in the city center without
being disappointed. This is our global aim. To please the guests, make them happy in
order to make them come back again and again ... like you.
… For us it added a bit of charm rather than disturbing the experience (working radio
Customer
from the 80’s built into bed tables next to a brand new flat screen). It’s a bit weird because it feels like there is no style (art deco posters, neoclassical desk, arm chair from the
90s). But it feels quite nice with a charm at the same time especially if this is a private
trip and you’re used to the usual business hotels.
We half-way expected a shabby old hotel, but instead found a renovated one, but keep- Customer
ing with its early 20th century roots, when it played an active role in World War II, the
location of General Patton’s headquarters for part of the war. Our room was all in white,
with bits of gold trim, a bit rococo-ish, very sweet and two large bay windows looking out
on the gorge and the lower city beyond. It was a wonderful view with an ever-changing
clouded sky which we reveled in watching. The bathroom was pure white tile with a bit
of royal blue tile trim, and I loved it. … The absolutely delightful concierge spoke seven
languages fluently and was a font of information, including historical. He was worth the
price of the stay himself!
Traditionality as obsolete
and outdated
… Let me start with the front desk staff. We checked in on a Sunday evening. The front Customer
desk guy almost behaved like he was doing us a favor by allowing a room. He gave us
an extremely shabby room which was so tiny that after two of us and our two suitcases, there was barely any room to move around. After a firm insistence from me that he
change our room, he very reluctantly offered another room. The room was now decent
in terms of space. But there are hardly any amenities in the room - forget bathroom slippers, there was not even a shower cap in the bathroom! And the bathroom was a yucky
worn out dark blue one which I immediate put out of sight!
The hotel
[As a response to the above review] I thank you for the time you took to do these comments and I presume you needed more time to write them then the time you spent in
my hotel. Luckily for us we have not many guests like you. We wish you all the best as I
will not argue on your risen topics. I have more then enough positive comments that will
rebalance your personal opinion.
Customer
Well I am a history freak and picked this place because General Bradley used this hotel
as his headquarters during the war. His photo and note hang in the lobby which is really
nice. That’s about it though... I will let my photos do most of the talking about the room.
I don’t think it has been updated since General Bradley checked out. Also, it’s 2015 and
this hotel still charges for Internet!!!!! Almost 8 euros for 2 hours. What the heck is that
about???
I stayed in the grand hotel cravat during the week of February 1st and I was rather disap- Customer
pointed. The pictures in the [web]site are definitely outdated. The room given to me was
small, the mattress of poor quality and the whole room had a carpet of considerable age.
The bathroom had been renovated a number of years ago but did not even have a door
frame and a single open glass door, leaving all noises to go through as well as being able
to see the other person in the toilet. Definitely not good taste.
[As a response to the above review] I am sorry to read that you did not enjoy your stay
at my hotel. Maybe a new style hotel will be more likely the style you will feel at home.
Luckily the city of Luxembourg has many chain hotels that will for sure please you.
The hotel
Discussion and conclusions
This paper shows how family business is rich with values and social
interactions. The identification and the uses of power that germinate between individuals, groups, and organizations are insightful to get a grip
on the relational tensions in family business. By maintaining analytical
dualism, this paper is able to flesh out how values and beliefs in family
business emerge as well as how actors’ continued adherence of values
invoke social dynamics.
The acknowledgment of values, beliefs, and basic assumptions
in understanding culture in family business has appeared since Dyer
(1988). But different from Dyer (1988), this paper does not make a
priori assumptions on the coherence among the components that form
certain cultural patterns. By doing so, this paper is able to capture and
provide an analysis of values that are contradictory and complementary as well as shedding light on how the interplay between the ‘cultural
assumptions’ (to use Dyer’s term) and the social dynamics may affect the
initial state of the ‘cultural assumptions’. This paper also extends Hall et
al.’s (2001) model for change in cultural patterns by arguing for the cyclical and simultaneous possibility of cultural change and stability instead
of change being the end-state of cultural dynamics. Similar to Bjursell
(2011) that argues for the co-existence of ‘cultural value systems’ in
family business, this paper contributes to explain not only the co-existence but also the types of co-existence between different value systems.
It is these types of logical relationship among values that impinge actors
with different ‘situational logics’ to act upon other values in the form of
either correction, elimination, protection, or opportunity (exploration)
(Archer, 1996).
The recognition of values that are fragmented and incoherent highlights the many important cultural aspects that are missed if research on
family business culture are based primarily on a priori assumptions of
culture as shared and coherent values. First, we may fail to incorporate
the diversity of values across the organization. Second, we cannot locate
the different power units that reside in the organization. And third, we
cannot account for the interplay between the different values in the organization and the use or misuse of power to respond to a given practical problem at different times. A more accurate analytical tool-set, then,
needs to be developed that better account for these aspects.
Echoing Archer (1996), the configuration of pre-existing values
and beliefs do condition actors to act in a certain way. And far from
being deterministic, this paper argues that actors may not be consistent
in their adherence to particular beliefs. In other words, despite the situational logics that impose actors to act accordingly, actors still retain the
power to do otherwise or to abandon their beliefs at any point in time.
It is then to understand the social dynamics on why actors choose to
act (or not to act) in accordance to the prevailing situational logic that
requires us to give privilege for “interpretation processes that are central
to meaning-making, sense-making, interactivity, reflexivity, storying,
language, discourse, narration and social reality construction processes” (Fletcher, 2014, p. 151).
It is then becoming more difficult to subscribe to the binary categorization whether cultural change or stability permeates in family
business. It may be the case that a family business appears to be culturally stable from afar but have undergone many transitions, modifica-
tions, revisions, and replacements of beliefs upon closer examinations.
Or it may be otherwise—many cultural changes may be visible but the
underlying values remain intact throughout generations. Within each
transition, change and stability are always negotiated.
Limitations and future research
Several limitations are pertinent to this study and some of them are
directive for guiding future research. First, this study is primarily based
on the owner-manager’s voice. At the moment, access to other family
members (such as the mother and sister), employee(s), and members
from the other family (the Roder family) are still under negotiation.
Arguably, the inclusion of other informants will provide a richer material that allow for deeper analysis. Second, language barrier from the
side of the researcher may impose a great strain for the identification
of subtle relational issues. While the interviews are done in English,
French is the lingua franca in the family business and Luxembourgish
is used when the family members communicate to each other. Perhaps,
it is also due to the inability to speak these languages that bars further
access in the family business. Third, the paper is based on a single case
study that limits its ability to see different processes across family businesses. A comparative study of at least two cases may enable the analysis
to incorporate a variety of cultural dynamics. Lastly, while recognized,
this paper does not penetrate to the multi-level embeddedness of the
family business into the field or institutional level. Some tensions of
values at the institutional level are acknowledged in the case, such as the
refusal of the case family business to join hotel groups and the deficiencies of the national laws in supporting family businesses, but these are
not elaborated further. With a growing interest in multi-level analysis
for management research, future research could go in this direction
and extend the analysis by incorporating the inter-organizational and
environments to address ‘major real-world problems’ (Hitt, Beamish,
Jackson, & Mathieu, 2007). •
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Negotiating continuity: a case study of transitions and cultural

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