A Multi-Level Family Business Choice Model: A Dichotomous Approach

A Multi-Level Family Business Choice Model: A Dichotomous Approach

images (14)Tammy Parker
University of Louisiana at Monroe;tparker@ulm.edu

ABSTRACT
The current paper develops a model to facilitate owners of family businesses in their decision making.The model allows for priorities to be placed on family issues and business issues concurrently,in a dichotomous approach.The research is a complement to existing literature on family business interaction models and could provide a useful model for family business consultants to consider in their work with family-owned businesses.
INTRODUCTION
Family-owned businesses are relatively common; however,the problems that they incur due to the interactions of the family and business entities are unique.Consider Sigmund Freud’s response when he was asked what he considered the secret to a full life.He gave a three-word answer:“Lieben un arbeiten [to love and to work].”Family-owned businesses combine love and work in a unique setting.The process of decision-making within that unique setting determines the outcome of the family and of the business within family businesses.The three-circle model describes the family business system as three independent but overlapping subsystems:business,ownership,and family.Any individual in a family business can be placed in one of the seven sectors that are formed by the overlapping circles of the subsystems.The forces of interpersonal conflicts,role dilemmas, priorities,and boundaries arising from different sectors will interact with each other when making family business decisions such as succession planning or dividend policy.In this model, these three perspectives of subsystems are taken into account to explain how individuals in family business make decisions or develop strategies that fulfill the goals of each subsystem and the whole family business.

A Multi-Level Family Business Choice Model: A Dichotomous Approach

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