The Use of Owner Resources in Small and Family Owned Businesses: Literature Review and Future Research Directions

This paper integrates relevant literature and the Sustainable Family Business Model regarding interchange of financial resources between family and business. Two distinct literatures on the use of owner resources in small businesses are examined: the intermingling of business and household resources from the family firm literature and financial bootstrapping studies from the small business finance literature. What has not been addressed in both literatures about the use of owner resources is discussed and the risks that owner resource bootstrapping and intermingling may place on the household and the business are considered. Recommendations and propositions for future research are suggested. To fully understand the makeup and success of household financial portfolios and family businesses, it is important to understand the use of owner resources in a holistic manner.     

Goal Orientation and Performance of Family Businesses

Family businesses consist of family members pooling their resources together to achieve a particular goal for the family business. The objectives of this study were to profile the characteristics of the family businesses and business owners by owners’ goal orientation and to examine the influence of goal orientation on family business performance. The mean differences in values of business size, business age, and business liabilities were statistically significant by owners’ goal orientation. The major findings of this study suggest that owner goal orientation had a statistically significant effect on business performance. Specifically, setting a business goal such as growth or a positive reputation with customers had a significant and positive impact on family business performance.     

Adjustment Strategies in the Family Business: Implications of Gender and Management Role

Four gender/role categories are compared to ascertain the influence that gender and management roles and related characteristics have on adjustment strategies selected during hectic times in the family or the family business. The five adjustment strategies involve reallocation of family or business tasks, intertwining tasks, using volunteer help and hiring outside help. Data are from the 1997 National Family Business Study (n = 673). Findings from multiple regression analysis indicate that, with the exception of intertwining tasks, there are not significant differences between men and women on adjustment strategies when controlling for family and business demands and human resources. Single-role managers are more likely to reallocate family resources to the business than are two-role managers, regardless of gender.     

Family Structure,Policy Shocks,and Family Business Adjustment Choices

This research used survey data collected between 2005 and 2006 in rural Kentucky to empirically investigate how different types of rural households in Kentucky cope with the changes in economic environment during the post-tobacco buyout by employing two different family business models, the Agricultural Household Model and the Sustainable Family Business Model. Data were analyzed using a multinomial probit model. The results indicate that multi-generational households were more likely to invest in low risk investments and less likely to employ a family member off-farm than couples with young children. Therefore, family structure plays an important part in the types of adjustment strategies chosen by farm families. The results also indicate that the Sustainable Family Business Model is a better predictor of the observed correlation between family structure and family farms’ choices of adaptation strategies.     

Women in Business-owning Families: a Comparison of Roles,Responsibilities and Predictors of Family Functionality

The purpose of this study is to compare groups of women associated with family businesses and ascertain predictors of functionality. The sample consisted of 589 women divided into five groups based on their roles in the business. Of interest were various combinations of work at home, in the family business, and outside the business and how multiple roles affect the family. The women varied on several characteristics with female business managers less likely to be married than other women and generally operating smaller businesses. The women were not significantly different on levels of family functioning. Family goal success, satisfaction with business role, and being married were positive significant predictors of family functionality. Higher levels of household tension were negatively associated with family functionality. Family therapists and family business consultants must be cognizant of the multiple role responsibilities of women associated with a family firm.     

Third Shift Women in Business-Owning Families

Using data from the 1997 National Family Business Survey (NFBS), this study identifies factors associated with married women’s employment involvement in business-owning families. While focusing on married women in a third shift situation—working for the family business, for the marketplace, and for managing the household—this study compares business and family characteristics by women’s employment status. The results of multinomial logit regression analysis indicated that family cash flow problems, presence of children age under 6, age of women, business assets, age of business, home-based family business, establishment of business, and industry type were significant predictors of women’s employment decision. The results of the study have further implications for women in a third shift situation among business-owning families.Yoon G. Lee, Utah State University, 2905 Old Main Hill, Logan, UT 84322-2905, USA; e-mail: yoonlee@cc.usu.edu.Gong-Soog Hong, The Ohio State University, 1787 Neil Avenue, Columbus, OH 43210-1295, USA; e-mail: ghong@hec.ohio-state.edu.Barbara R. Rowe, Utah State University, 2949 Old Main Hill, Logan, UT 84322-2949, USA; e-mail: browe@ext.usu.edu.     

The Role of Values and Unity in Family Businesses

This study tests the application of an ecosystems perspective on family businesses. Specific focuses are given to values, resources and unity within family businesses. Two separate samples are examined, the American Family Business Survey and a multilevel sample. Results from this study support the ecosystems perspective. Family businesses are shown to vary by their value for family growth in comparison to business growth. This value variation across family businesses was shown to predict internal goals and resource transfers within family businesses. This study also shows the benefit to family businesses in unifying values across individuals, as unity of values is a stronger predictor of satisfaction even when controlling for the family business’ tendency to privilege the family or business growth.     

Work Roles, Management and Perceived Well-being for Married Women within Family Businesses

The study uses the National Family Business Survey and is grounded in the systemic Sustainable Family Business Model. It investigated the relationship between management activity of married women within family businesses and perceived well-being controlling for work roles, family context, personal and financial resources. Statistical analyses indicated that successfully achieving the most important family goal was positively related to management activity. Low-income women performed more management than did those with other income levels. Successfully achieving family goals, having lower education, less competition between family and business resources, no family cash flow problems, and higher management activity contributed to positive perceived well-being. Well-being increased at a decreasing rate as income increased.This study reports results from the Cooperative Regional Research Project, NE-167R, ‘Family Businesses: Interaction in Work and Family Spheres,’ partially supported by the Cooperative States Research, Education and Extension Service, U.S. Department of Agriculture, and the Experiment Stations at University of Hawaii at Manoa, University of Illinois, Purdue University (Indiana), Iowa State University, Michigan State University, University of Minnesota, Montana State University, University of Nebraska, Cornell University (New York), North Dakota State University, The Ohio State University, The Pennsylvania State University, Texas A & M University, Utah State University, The University of Vermont, University of Wisconsin-Madison, and the Social Sciences and Humanities Research Council of Canada (for The University of Manitoba).     

The Differences in Financial Structure Between Women- and Men-Owned Family Businesses

Lenders often are faced with the challenge of evaluating the financial success of a business or a proposed business by examining the financial records of the household, reasoning that an assessment of the household's financial position should be a plausible indicator of the financial status of the business. Utilizing data from the recently released Family Business Survey, this study uses financial information about both the family and the business to examine the relationship between household financial indicators and business financial indicators for women- and men-owned family businesses. The results suggest that, while household financial statements may be good indicators for men-owned businesses, they appear to be much less reliable for women-owned businesses.     

Is What’s Good for the Business,Good for the Family: A Financial Assessment

Small business prosperity doesn’t necessarily translate into family prosperity. This study utilizes the first and second waves of the National Family Business Survey to explore the influence of changes in key business financial measures on objective and subjective measures of family success. Increases in the available cash in the business from higher gross sales or net profits brings more cash into the household, while increases in the market value of the business increases the amount of money spent on other household assets. A more subjective assessment suggests that positive changes in the business financial measures create a more positive perception of the business’ success; however, these positive changes have no influence on a more positive perception of the family’s success.     

Family environment and length of recovery for married male members of Gamblers Anonymous and female members of GamAnon

Family environments of married male members of Gamblers Anonymous (GA) and married female members of GamAnon were measured with the Family Environment Scale (FES), a measure of 10 characteristics of family life. The total sample of 86 included 50 male GA and 36 female GamAnon members. GA and GamAnon groups did not differ from each other. However, the short-term GA group reported greater dissatisfaction than controls on five personal growth dimensions. The long-term GA group reported less Conflict than controls. Both short-term and long-term GamAnon groups reported less satisfaction than normal controls on personal growth dimensions. A composite measure of social support demonstrated improvement with duration of abstinence for gamblers but not for spouses. Results suggest improvement in family environment for male pathological gamblers with length of gambling abstinence but less improvement for wives.The authors wish to thank Mr. Les Franklin for assistance with data coding.     

Gender Differences in Perceived Business Success and Profit Growth Among Family Business Managers

Using data from the 1997–2000 National Family Business Surveys (NFBS), this study investigated the effect of gender on business success and profit growth among family businesses. The Ordinary Least Squares (OLS) results indicate that all else being equal, female managers perceived their businesses as more successful than male managers, and they reported more profit growth between 1996 and 1999 than male managers. The results of the dummy variable interaction approach also show that a differential response existed in profit growth over time between female and male managers in relation to health status, business liabilities, business size, and whether the business was home-based. This study concludes that there are many distinct differences between male and female managers in business performance.     

Too close and too rigid: applying the Circumplex Model of Family Systems to first-generation family firms

Despite growing research interest in family businesses, little is known about the characteristics of the families engaging in them. The present paper uses Olson's (Journal of Psychotherapy & the Family, 1988, 4(12), 7-49; Journal of Family Therapy, 2000, 22, 144-167) Circumplex Model of Marital and Family Systems to look at first-generation family firms. We describe existing typologies of family businesses and discuss similarities between the characteristics of first-generation family firms and the rigidly enmeshed family type described in the Circumplex Model. The Steinberg family business (Gibbon & Hadekel (1990) Steinberg: The breakup of a family empire. ON, Canada: MacMillan) serves to illustrate the difficulties of rigidly enmeshed first-generation family firms. Implications for understanding troubled family businesses are discussed together with guidelines for the assessment of a family business in crisis and for intervention: enhancing open communication; allowing for more flexible leadership style, roles, and rules; and maintaining a balance between togetherness and separateness.     

Factors Associated with Business and Family Success: A Comparison of Single Manager and Dual Manager Family Business Households

The purposes of this article are: (1) to identify internal/micro-level factors associated with perception of family and business success, and (2) to compare single manager and dual manager family business households with respect to factors that contribute to their perceptions of business and family success. The data are from a nationally representative sample of 673 family business households. Using a two-stage least squares regression procedure, the results show a unique relationship between family success and business success. Family success positively impacts business success, but not vice versa, and predictors of family and business success vary widely between household types.     

Farm Business-Owning Couples: Interrelationships among Business Tensions,Relationship Conflict Quality,and Spousal Satisfaction

The purpose of this study was to investigate the relationships among business tensions, relationship conflict quality, and satisfaction with spouse for 206 farm business-owning couples. The Sustainable Family Business Model and the Family FIRO (Fundamental Interpersonal Relations Orientation) model guided the path analysis. For both husbands and wives, locus of control was negatively related to business tensions; decision involvement discrepancy was positively related to relationship conflict quality; and business tensions were negatively related to relationship conflict quality. For husbands, relationship conflict quality was positively related to satisfaction with spouse; for wives, business tensions were negatively related to satisfaction with business-owning spouse. This material is based on work supported by the Cooperative State Research, Education, and Extension Service, US Department of Agriculture under Agreement No. 95-37401-1820. Any opinion, findings, conclusions, or recommendations expressed in this publication are those of the authors and do not necessarily reflect the view of the US Department of Agriculture.     

Boundaries and the Functioning of Family and Business Systems

The purposes of the present study were to: (1) examine connections between performance success and the boundaries between families and the businesses they own and (2) explore whether boundary-performance links were mediated by satisfaction. Tests of the mediation hypothesis revealed that family satisfaction partially mediated connections between boundaries and family functioning. Business satisfaction fully mediated connections between boundary characteristics and business strengths, but did not mediate the relationship between boundary characteristics and cash flow problems. Although previous literature suggests that permeable boundaries (i.e. enmeshment) are especially problematic for family firms, this appears to be only partially true.     

Technology Adoption in Small Family-Owned Businesses: Accessibility,Perceived Advantage,and Information Technology Literacy

The purpose of the study was to examine the antecedents and impacts of information technology (IT) adoption by small family-owned businesses, using data from the National Family Business Survey. This research tested a model based on the Diffusion of Innovations framework and the Technology Acceptance Model (TAM). Family business managers’ prior knowledge and level of IT use, business location, and community size/type were important antecedents to the decision to adopt IT. Ease of use and decision to adopt IT accounted for over 60% of the variance in usefulness of IT and implementation of internet and IT capabilities. The implementation of IT capabilities accounted for nearly 40% of the variance in actual use of IT and perceived impact of the internet.     

Liability of Newness: Assessing Couple Social Support When Starting A New Business Venture

Study purpose was to investigate adapted social support instruments of nurturance and affiliation with male and female entrepreneurs and spouses starting a new business. Family Fundamental Interpersonal Relationship Orientation theory was the theoretical grounding. Business structure differed by entrepreneur gender in both direct and indirect spousal involvement. Both couple types were highly connected with their firms having high nurturance and affiliation scores. When couple discrepancies were compared, more male entrepreneur couples had shared meaning on business‐oriented nurturance questions compared with female entrepreneur couples. The opposite was true for shared meaning on relationship‐oriented nurturance. For all affiliation questions, more male entrepreneur couples had shared meaning than did female entrepreneur couples. Clinical applications of resulting instruments are discussed.     

Employee work-to-family role boundary management in the family business

Family-owned organizations present a unique opportunity to study work-to-family boundary management. Boundary theory suggests that work-to-family boundary dynamics may be different in family businesses, and that family businesses are not a neutral ground for individual employees’ segmentation preferences. The present study draws on the sociocognitive processes underlying boundary theory to explain how the family business context may affect family and nonfamily employees’ work-to-family role management differently. The study examines the work-to-family role boundary configurations of 149 family and non-family employees in family businesses. Results suggest that family employee status buffers against undesirable effects of segmentation preferences in the family business context. For family employees, segmentation preferences were associated with lower work-to-family conflict and unassociated with turnover intentions. For non-family employees, segmentation preferences were associated with higher work-to-family conflict and turnover intentions. Implications for work–family theory and family business successorship and work–family policy are discussed.     

When Work and Family Merge: Understanding Intragroup Conflict Experiences in Family Farm Businesses

Family farms represent a huge portion of agriculture in the United States today. These family farms may struggle to balance both family relationships and business concerns, which can cause conflict among members. Some of this conflict may be derived from the independent, self-reliant nature of family farmers. These characteristics may influence how family farm members are able to deal with conflict, and how they choose to communicate during conflict interactions. This project used intragroup conflict theory and family communication patterns to explore the impact of everyday conflict on job satisfaction, communication satisfaction, and profitability in family farm businesses. Survey data were collected from family farm members (N = 204). The results of structural equation modeling showed conversation and conformity orientation significantly predicted relational, process, and status conflict in the model, yet only status conflict significantly predicted communication satisfaction. These findings suggested family farm members struggle with communication, which influences status conflict experiences and communication satisfaction.