A Future for the Family Business Field

A Future for the
Family Business Field
Ken Moores AM
and
Peter Taylor
© 2012
family business domain
Family
Owners
© 2012
Managers
presentation outline
1.
Introduction
2.
A Profession
i.
Hallmarks and Branches
ii.
Stakeholder Salience
3.
Assessing a Family Business Profession
i.
Research in Family Business
ii.
Education in Family Business
iii.
Practice in Family Business
4.
Case Studies
i.
A National Case: Australia
ii.
A firm level Case: T&T Corporation Pty. Ltd.
5.
© 2012
The Future: professionalising the community
a profession
 Professions are characterised by professional associations that
generally stipulate codes of ethics and in some cases the state
further reinforces the exclusivity of the profession through
licensing requirements
 The hallmarks of professions are importantly associated with:
1. The production of knowledge (research)
2. The production of practitioners (education)
3. The production of goods and/or services (practice)
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4
research, education, and practice
The chain common in most professional disciplines is:
R(x)
E(x)
P(x)
If researchers find x, students are taught x, an upon
graduation implement x
Although it was not always the case:
P(x)
E(x)
P(x)
If x is practised then students are taught x and then
upon graduation they implement x
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Research
Education
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Practice
research, education, and practice
When the links between these profession
constituent elements/branches become
broken schisms can occur
These typically arise out of a lack of
communication that contributes to the
absence of any mutual reinforcement in the
practice, education, and research agendas
Without mutual reinforcement professions
lose salience as stakeholders in society
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stakeholder theory
Power
Urgency
Legitimacy
Mitchell, R. K., Agle, B. R., and Wood , D. J.,(1997). Toward a theory of stakeholder
identification and salience: defining the principle of who and what really counts
© 2012
Academy of Management Review 22(4): 853-886.
stakeholder theory: attributes
Power
 is a relationship in which one social actor can get another social actor to
do something that the organization or government would not have
otherwise done
 The bases can be coercive, utilitarian or normative
Legitimacy
 is a generalized perception or assumption that the actions of entity are
desirable, proper, or appropriate within some socially constructed system
of norms, values, beliefs and definitions.
 The bases are individual, organizational, and societal
Urgency
 is the degree to which stakeholder claims call for immediate action
 The bases are time sensitivity and criticality
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stakeholder theory: salience
Salience = degree policy makers give priority to competing stakeholder claims
Types
Attributes
SALIENCE
POWER
Dormant
*
URGENCY
*
Discretionary
*
Demanding
Dominant
*
Dangerous
*
Dependent
Definitive
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LEGITIMACY
*
*
*
*
*
*
*
Craig, J. B., and Moores, K., (2010). Championing Family Business Issues to Influence
Public Policy: Evidence from Australia Family
10Business Review 23: 170-180.
Research
Education
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Practice
research in family business
 Significant progress has been made
 Trends (= familiar story re development of any research field)
– Considerable diversity in approach and form
• (i.e. heterogeneity in outlets and theories 25 years ago)
– Unstated theory/case studies = acceptable when little is known about field
– Pioneering scholars - practical orientation; behavioural science
– As fields mature - push towards homogenization
 From descriptive works to conventional quantitative studies
– Expanded the variety of theoretical foundations considered
– Re-examined theories from sister disciplines
– Integrated thinking across multiple domains
 An increased dominance of business emphasis (publication outlets and
theoretical perspectives (Agency, RBV)
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research in family business
Why this increased business dominance?
1. Family businesses dominate while business
families are in minority
2. Educational backgrounds of pioneers/scholars
3. FBR editors all associated with business schools
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family business research salience
 Past 25 years has established the domain’s academic legitimacy
 Community of scholars now have a much stronger collective understanding of key important
topics
 From no definitive paradigm (Dyer & Sanchez, 1998) to limited paradigm (Moores, 2009)
 To help establish the legitimacy of their work (in business schools) “academic entrepreneurs”
used preferred symbols of powerful resource holders (reviewers, editors, faculty evaluation
committee members)
 Important insights have also enhanced the field’s legitimacy
 Indicators of increasing fb legitimacy:
– Stature of fb journals (also measures progress of the field (e.g. Impact factors)
– Special Issues of journals based on fb research
– Key opinions leaders from other disciplines as mavens (Craig et al, 2009)
– Established scholars becoming advocates for the field
 Shared perception of the urgency of a topical area
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family business research salience
“Despite the interest shown by the public and
practitioners, this interest in and of itself does not
translate directly into its inclusion in the enduring
structure of research universities. Success as a topic
for the business press, policy discussions, practitioneroriented commentary or even total research volume
does not in itself lead to the organization and
recognition of a well-regarded academic field.”
Stewart, A., and Miner, A. S., (2011). The prospects for family business in research
universities. Journal of Family Business Strategy 2: 3-14.
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education in family business
 Post WWII business education has focused on large
corporations with a separation of ownership and management
 Here the demand for fb education laid dormant
 Educational needs of fb stakeholders were left unaddressed
 Instead family business centres and professional associations
played critical roles in the growth and evolution of the fb field
 Only late 70s before university began focusing on fb education
and largely through outreach programs
 Academic success lay with conservative strategies of advancing
the dominant paradigm (i.e. not fb education)
Sharma, P., Hoy, F., Astrachan, J.& Koiranen, M., (2007). The practice-driven evolution of family business education. Journal of Business Research 60, 10121021
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education in family business
Over time centres enabled development of:
1. Community of scholars and research
2. Curriculum development and education
3. Interested practitioners
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family business education salience
 Prevailing business school worldview is that family businesses are
irrelevant or misguided residuals of the past
 Business students don’t see family businesses as crucial options in their
career paths
 Family businesses don’t recruit students with training specifically geared
to family business context
 The fact that many of our students will in due course join family firms will
not help us if they fail to foresee this while still in school – legitimacy but
no urgency
 Family business practitioners currently do not see the potential for, or
value of institutional support for research and education on family
business (e.g. endowed chairs). No stakeholder power
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family business education: salience
“unless endowed with significant resources of ability, time, and
money, difficult choices of focus will have to be made to
enjoy sustainable growth into the future.”
Sharma, et. al., (2007)
 Their reference to careerism and orthodoxy possibly stunting
creativity suggest that the power and urgency are yet to be
achieved by family business stakeholders
Sharma, P., Hoy, F., Astrachan, J.& Koiranen, M., (2007). The practice-driven evolution of family business education. Journal of Business Research 60, 1012-1021
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practice in family business
 Various authors have sought to distil the lessons learned from
successful long-lasting family businesses e.g. Ward (2004) Poza
(2007) Schwass (2005) and others
 Lessons have been labelled “best practices” for family businesses
 Summarized in Dana and Smyrnios (2010) as 26 principal best
practice dimensions
 They question the label “best” on various grounds not least of
which is the evidence base that would justify “best”.
Dana, L. E., and and Smyrnios, K. X., (2010). Family business best practice: Where from where to? Journal of Family Business Strategy 1, 40-53
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family business practice salience
 An assessment of practice in stakeholder salience terms is
different
 The status of both research and education impact upon
the form and stakeholder salience of practice
 The view of policy makers also affects the perceived
legitimacy, power and urgency of family business practice
issues
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policy in family business
Please indicate how well you feel the following groups understand the needs and issues
of family-owned businesses.
Don't understand at
all
Understand
adequately
Completely
understand
Family business owners
themselves
10%
54%
36%
Educators (universities,
business schools, etc)
45%
54%
1%
The general public
60%
40%
0%
Policy Makers
76%
24%
0%
Groups
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policy in family business
Which of these groups needs to be more aware of the positive contributions made
by family businesses to their communities and the economy? (Check all that apply)
Groups
%
Policy makers
93%
The general public
81%
The media
79%
Educators (universities, business schools, etc)
66%
Family business owners themselves
43%
Other
9%
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case studies
1. National Case of Australia
i. Early research-based beginnings
ii. Family Business Australia (FBA)
iii. Stakeholder salience
2. Firm-level Case: T&T Corporation Pty. Ltd.
i. History and development
ii. Research, education, and practice
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Australia: the tyranny of distance
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Australia and Europe
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Europe Population: Estimate 740 million (UN – 2012)
Australian Population: 22.7 million (ABS – Sep 2012)
Australian family business sector
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Sources : 1. Australian Bureau of Statistics (ABS), Cat nos. 8165.0 & 7106.0
2. Australian Security Exchange (AXE)
3. Australian Centre for Family Businesses (ACFB)
rise of the Australian profession
RESEARCH
1992:
1994:
First major Australian study into Family Business by Bond University - Professor Ken Moores lead
researcher
Australian Centre for Family Business (ACFB) Bond University established.
EDUCATION
1995:
1996:
1997:
National Forum hosted
First National Family Business Conference (AFBN) at Bond University
Undergraduate major approved School of Business, Bond University
PRACTICE
1995:
1996:
1998-9:
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Newsletter published as part of the development of a national Network
Chapters progressively established in Gold Coast, Brisbane, Sydney, Tasmania and Adelaide.
Networks established as Australian Family Business Network (AFBN)
AFBN merged with FBC Victoria to establish national network, Family Business Australia (FBA)
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emergence of FBA
1999:
1999:
2006:
2012:
2012:
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David Smorgon the inaugural chair and Professor Moores as a foundation director along
with other representatives
Maintained the same chapter-based model as the original AFBN.
Inaugural Family Business Australia National Conference held in Coolum Queensland.
Continues to hold an annual National Conference, recording continued year-on-year
growth
ACFB (Bond) granted “preferred education provider” status
Has chapters in each state and territory across the country, total membership now
approaching 2000 including family business owners, advisers, and scholars
Engages in advocacy, support, education, and networking activities
International links with FBN and FFI
Over this relatively short period:
1.Recognised as a sector
2.Vibrant national peak body organization
3.Building affiliations with the academic community to drive its education and
awareness agendas
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the rise of the Australian Profession
Education
2004:
2007:
2008:
2008:
2010:
2011:
2012:
2013:
2013:
Note:
© 2012
Inaugural Executive Education program (Learning to Lead/ACFB) presented in
conjunction with FBA National Conference
Education strategy based on 3 levels of education (1) awareness, (2)
comprehensive programs, and (3) practical workshops using AGES framework
Family Business Awareness Course (half day)
45/1000
Adviser Accreditation Program
84 Advisers Accredited
Family Business Directors Course (2 days)
9/430
Family Business Strategic Planning Course (1 day) 6/160
Family Business Leadership Program (2 days)
3/55
Succession Planning
Under development
Financial Essentials for Families in Business
Under development
All programs have been developed from an evidence-based perspective
integrating the latest research findings
30
ages framework
G
GOVERNANCE
A
ARCHITECTURE
(Systems & Structures)
ENTREPRENEURSHIP
STEWARDSHIP
S
© 2012
E
the rise of the Australian Profession
Research
2005:
2006:
2011:
Annual survey commenced
Supported various research projects over past 6 years; case-by-case approach
Family Business Education and Research Symposium
50 attendees comprising academics, family businesses and advisers
Related
2005-7: Family Business Roundtable Summits (ACFB/Bond)
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the rise of the Australian Profession
Practice
1999:
Forum Group Program
Currently 26 forum groups /220 family business executives
2007:
Adviser Group Program
Monthly/bi-monthly meetings
Collaborative approach emerging
2010-11: FBA partnered with ACFB to offer scholarships for eMBA program in Family
Business at Bond University
2011: Next Generation CEO program
5 programs to date
2012:
Learning Pathways launched
Connect, share and grow
To understand the integration of FBA’s full range of offerings
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our learning journey
a journey by the Taylor family to build
a family business group of companies
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beginnings
1. Why did I buy a business at 58?
– To have a decent retirement income
– Set something up for my family
– To meld best business practice with people centric management
2. Selection - a building business - insurance repairs
3. Family had some building knowledge
4. Why else did I like it?
–
–
–
–
–
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Niche market
Could develop long term relationships with customers
Market not impacted by the economic cycle
Administratively difficult
Limited bad debts
survival
•
•
•
•
•
The first 12 months
The whole family joined the new company
No systems
It took a while to
Limited data
get traction
Family’s strengths
– All 5 members business savvy
– Good communicators
– Clear roles & responsibilities
• Monthly ops meeting
• Setting up a board
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finally…profitability…what a relief
• Growth strategy developed
– Relationships
– Storm chasers
• The new business model
– Project managers vs. Builders
• Result
– Business growing and under control with KPIs
tracking performance
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the business now
T&T Corporation Pty Ltd trading as:
1. Townsend Building Services –
 9 Branches down the Eastern Seaboard
2. Galaxy Shop Fitting
3. Galaxy Projects
• Succession to 2nd generation in leadership
• Winner FBA 2nd Generation Family Business of Year
• Growth 60% per Year for last 9 years
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connecting the dots: business to family
business
Lessons learned........as a business
1. Familiar with the rudiments of running a professional
business from experience
2. Knew business processes; 1994 Quality Award Winner
Lessons learned ........as a family business
1. Didn’t know things.......
2. Needed a process of research, education, and practice
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how to get educated
• How we got involved – Ken
• Bond University with Ken Moores as Professor of Family
Business was the obvious choice
• Local
• Prime education resource for FBA courses
• Ken invited my family to lectures to by CEOs to post
grad students on various topics (e.g. Norman
Smorgon, Richard Owens)
• Attended various FBA workshops and seminars
• FBA still developing its own suite of educational
offerings
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family business australia
• FBA conference on Hamilton Island
• Family business presentations and the sharing of
their ups and downs (often quite emotional)
• Presentations by educators (research evidence)
• Presentations by advisors (best practices)
• Networking with other family businesses
• The biggest change happened in my head
WE HAVE A FAMILY BUSINESS
IT’S NOT JUST MY BUSINESS
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conference precipitated major changes
• We now knew some of what we did not
previously know
• From research, education, and best practices
how to minimise the risk of blowing the family
apart
•
•
•
•
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Family Councils
Family Constitutions
Succession Planning
FBA Forum Groups
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what worked well
• Family’s prior business experience
• FBA & Ken Moores’ advice – structure, council,
constitution
• Access to family business focused education
• Professionalising board with external directors
• New business model allowed rapid growth – Project
managers and Storm chasers
• System/s development and implementation
• Employee /employer relationships – family/team
environment
• Strong networking and relationship skills
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what didn’t work so well
• Lack of understanding of what we bought
• Initial business model – trade focus
• Unsuccessful forays into inappropriate markets
• Difficulty in resolving family hiccups which
affected personal relationships and
business performance
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future directions under family umbrella
•
•
•
•
Decision to diversify
Utilising individual skills & passions
Family umbrella – support
Current and future directions
–
–
–
–
–
Insurance repairs
Shopfitting
Property development
Contractors to first tier construction companies
Animal care centres
• Always looking for other opportunities
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In a tight spot, it
always helps to call in
the experts
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the future: professionalising a profession
What is the salience of family business
stakeholders in research, education and practice
arenas?
How do these activities individually and
collectively affect the stakeholder salience of the
family business sector in policy development
terms?
– i.e. have we the power, legitimacy and urgency to establish a
definitive stakeholder status as a profession?
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the future: professionalising a profession
The parallel emergence of rigorous research on
family firms published in mainstream journals
and
The institutionalization of educational
programs have contributed to building some
legitimacy of family business studies in
academia
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the future: professionalising a profession
But can any practitioner/adviser or teacher in
the field of family business assert that there is
congruence between research in the field and
actual education and professional practice?
– Research (= articles)
– Education (= textbooks/course outlines)
– Practice (= advisers recommendations)
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the future: professionalising a profession
Professor Godfrey recently observed
“that often people don’t draw connections
between university research and the role it
plays improving policy and practice in
business and economics.... the Institute’s board
recognised that the profession needed stronger
advocacy of accounting education and
research.”
Power, B., (2011) Forging Links with Business Charter, (July) p42-43
© 2012
the future: professionalising a profession
1. Make the case for solving social issues of the day
2. Offer additions to all modes of scholarship
(discovery, integration, teaching, and application)
Promising Signs:
• Notable business schools have started major
initiatives in recent years; FERC reports
developments in 28 universities
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the future: professionalising a profession
1.
Research: Scholarship of Discovery, Integration
i.
Concepts
(business family domain)
ii. Scales
(e.g. familiness, stewardship)
iii. Data
(access)
iv. Dollars
(donors)
2.
Education: Scholarship of Teaching
i.
Cross-campus initiatives have developed some traction
(fields such as dentistry, law, medicine etc. could be sources of
student demand for knowledge about family business
3.
Practice: Scholarship of Application
i.
Involve practitioners in education and in discussion about
research to sustain the relevance of family business
scholarship
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a policy maker’s view
Whilst we here contend with policy and legislative issues such as
climate change, industrial relations, financial products and services,
access to credit, and, of course, tax in all its forms, why isn’t the term
‘family business’ constantly on our lips:
1. We confuse family business with micro and small business
2. We lack of information about the family business sector
3. We fail to recognise their quietly spectacular success as business
entities.
Family businesses are not just contributors; they should be national role
models. We as policymakers must start listening to family business.
Senator Sue Boyce
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co-operation: within and between
RESEARCH
WITHIN
BETWEEN
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EDUCATION
PRACTICE
E.G.
NETWORKS
E.G.
E.G.
FOUNDATIONS
Family business
Adviser groups
IFERA > <IFERA
FERC> <FERC
FFI> <FFI
FBN> <FBN
FBA> <FBA
e.g. STEP Program
Co-operative Professional Branches
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Research
Co-operative
Professional
Community
Education
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Practice
conclusions
Opportunity to create a truly integrated profession
– By supporting all forms of scholarship from discovery to
application
2. FBA could lead in this regard
– By building a united community - a community of
practice that acknowledges and supports its community
of scholars
3. This will lift stakeholder salience
– By building a powerful, legitimate community whose
issues are recognised as urgent
1.
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THANK YOU
Questions
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