A proposed conceptual familiness transmission of capital model

Abstract

Notwithstanding family businesses being a prevalent phenomenon in the economies of most countries, insight into this form of enterprise is still limited and it has been largely ignored as a study field. Interest has now grown in identifying and understanding those facets of business that support the superior performance of family firms. As interest in the field of family business has expanded, so have the theories that support these views. Theory therefore provides a guideline to investigate causalities and link information. It indicate that presently there is no single, generally accepted theory defining the family-firm concept and that rigorous work on such theory is only just starting. The purpose of this article is to review the different theories underlying family businesses. It is concluded that the orthodox theories, that regard the business and the family as separate units, do not acknowledge the complexity of the different relationships that exist in family businesses. A Conceptual Familiness* Transmission of Capital Model is suggested in the current study as representative of the functioning of family businesses as an interactive system. It embraces the heterodox views that the family and the business cannot be separated, but are rather seen as an interactive system with unique, collectable resources. It fulfils the need of the main deficiency in the family organisation literature, namely a theory that explains the developmental stages of each generation succession. *Used in the context of Habbershon and Williams (1999:1)