family firms and corporations
Brayden
The latest issue of the American Sociological Review has an article by Paul Ingram and Arik Lifschitz that I thought was interesting. The article, "Kinship in the Shadow of the Corporation: The Interbuilder Network in Clyde River Shipbuilding, 1711-1990" is a nice piece of historical sociology exploring the transformation of organizational structure in the Scottish shipbuilding industry and the consequences of those changes on the functioning of interpersonal relationships among organizations. More specifically, the study tracks the change from a family firm-based industry to a corporate form-based industry. Adopting a corporate form, while modernizing, destabilized some of the competencies developed by family firms that had become dependent on kinship networks as a means to transfer knowledge and control market competition. These advantages disappeared once the corporate form became the dominant mode of organizing, even though the networks themselves persisted.
What I liked about the article was that it draws attention to distinctions that we too often ignore as organizational scholars. Family businesses and corporations are clearly different creatures, but we usually just take the word of legal scholars in this matter. What are the operational differences between these kinds of firms? Ingram and Lifschitz began to uncover some of this mystery by examining how personal autonomy and affective relations change in a corporate setting. My take-away is that, besides temporal continuity established through lines of heredity, the distinguishing feature of family firms is that affective relationships serves as the glue holding together various components of the business. This affect, which translates into close identification with the organization, is a distinctive competency of the family firm.
[...] Brayden King at orgtheory.net has a nice post today about family-owned firms. He summarizes a recent sociology paper on the transformation of the Scottish [hooray!] shipbuilding industry from one of mostly family firms to one dominated by corporate firms. Writes Brayden: "Family businesses and corporations are clearly different creatures, but we [organizational scholars] usually just take the word of legal scholars in this matter. . . . My take-away is that, besides temporal continuity established through lines of heredity, the distinguishing feature of family firms is that affective relationships serves as the glue holding together various components of the business. This affect, which translates into close identification with the organization, is a distinctive competency of the family firm." [...]
[...] Personally, the idea that family firms are unique in some way is appealing to me. As someone who believes that our theories have made organizations appear too generic and have tried to erase important distinctions, I think it’s important to look for those core, institutional characteristics that mark the boundaries of various organizational types. But I’m not sure what those characteristics are in family firms. An ASR article by Ingram and Lifschitz takes us in the right direction, I think (see also this post by Teppo and this one by Peter). Still, this seems like a substantive area of organizational research that is still seriously understudied. [...]