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.