Governing by managing identity boundaries: the case of family businesses.

In short, the inherent tensions in family business suggests that rather than simply advocating or discouraging the family or the business identity, in order to leverage the positive potential while curtailing the negative, it is important to manage this tension. We posit that "boundary work" is the ideal mechanism by which to manage this tension.

The term "boundary work" was invoked by Nippert-Eng (1996) in her groundbreaking research on work-family relations and refers to the actions taken by individuals to create, maintain, reduce, or change a boundary between two entities. Other research from a variety of disciplines such as anthropology, work-family relations, and social psychology (e.g., Ashforth et al., 2000; Clark, 2000) have used the principles of boundary work to demonstrate how individuals or collectives can actively manage the interface of two cultures or identities. Hence, boundary work can move a family business toward more or less integration. And it can do this either universally (for all aspects of the identity) or particularly (for specific dimensions).

Several specific strategies for doing boundary work have been documented in previous research, and many of these strategies are directly applicable to boundary work in the family firm. To illustrate, we discuss several tactics and how they might apply to the family business context. One tactic, called "sorting and owning," involves deciding to which domain (e.g., family or business) any given behavior, idea, policy, or attitude belongs and categorizing it accordingly (Whitfield, 1993). By consciously sorting and owning, leaders in family businesses can more easily decide which facets of life should belong in each domain and endeavor to reinforce these decisions both individually and collectively. Another tactic addresses the monitoring of boundary violations, which involves either (1) keeping track and fixing intrusions of one domain into the other or (2) addressing the neglect of one domain at the expense of the other (Katherine, 1991). Research in work-family balance has advocated using "border-crossers," a tactic in which the people who coexist in both domains are utilized to interpret the boundary for others and to bring elements of one domain into the other (Clark, 2000). In the family business context, these border-crossers are typically family members who are also employees or managers of the business. Management can consciously leverage such cross-realm knowledge to educate members of each domain, which can potentially reduce conflict and increase collaboration. Also from the work-family research area, qualitative research has shown how manipulating physical space and boundaries can be a useful boundary work technique (Kreiner et al., 2006). This tactic involves erecting or dismantling physical borders (e.g., walls) or creating or reducing physical space (e.g., commutes) between domains. These tactics may be particularly valuable to young family businesses, where it is more common to share home and work space. Controlling time in each domain is another tactic, which involves behaviors that manipulate temporal aspects of life such as keeping separate or same calendars, blocking off time for each domain, etc. (Nippert-Eng, 1996). Finally, using "markers" involves manipulating cultural manifestations to be the same or different in each domain (Nippert-Eng, 1996). For example, management can chose whether or not to display clear symbols of the family (e.g., photos) as part of the workplace decor.

In addition, any aspect on the segmentation--integration continuum (Figure 1) can be used as a boundary work tactic by consciously managing it. For example, aspects of culture, image, personnel, governance or contractual relations with the family (see Figure 1) can be consciously altered to increase or reduce the level of integration. Or creating and reinforcing mechanisms for clarifying roles may be useful to nudge a certain dimension of the integrated identity toward segmentation. For example, clear guidelines and policies regarding family entry into the business, compensation, and promotion within the business can reduce role ambiguity.

Furthermore, reconceptualizing traditional family business structures, processes, and practices from a boundary management perspective can be useful. For instance, traditional structures such as family meetings, councils, and assemblies can play varying roles based on the level of family-business integration (Dyer, 1986; Habbershon & Astrachan, 1997). When there is minimum overlap between the family and business identities, these structures can be vital in nudging the firm toward more integration. Family forums can help nourish nonemployee stakeholders' financial and emotional stake in the family firm and at the same time enable family employees intimately involved in the business to connect with the business family. These structures can serve as additional bridges between the two identities, offering means of fostering identification and tapping the "familiness" of the firm. When there is significant family--business integration, family councils can serve a boundary-clarifying role or can serve as "border keepers" (Clark, 2000, p. 761) by drafting family mission statements and family constitutions. Such formal documents can serve to clarify the rights and responsibilities of family members and develop a shared set of norms and expectations for the entire family, particularly with respect to potential conflict areas, thereby minimizing the potential for conflict. The topics covered and the level of detail may consequently depend on the nature and degree of overlap between the two systems.

The family firm's board of directors can also play a significant role in managing the boundary between the family and the business. When there is a significant overlap between the family and the business, the inclusion of outsiders on the board can be significant. While the family business literature recommends the recruitment of outsiders on the board in order to access critical external resources, from a boundary theory perspective, outsiders' ability to help with boundary work can be an important additional criterion for inclusion on the board. In this regard, a member who is known and trusted by several family members can be significant in lessening the potential for family conflict (Ward & Aronoff, 1991). On the other hand, where there is minimum overlap, the inclusion of family members, particularly those not employed within the firm, can serve to nudge a firm toward integration. The primary consideration in moving toward more or less integration is for the boundary work to be selective, not arbitrary. That is, the most successful mechanisms would be those that strategically capitalize on the strengths of the identity without compromising important distinctions between family and business roles. The contingencies discussed earlier will also influence the mechanisms used and their effectiveness.

Discussion

In this paper we demonstrate how boundary theory can be a powerful theoretical lens through which to view family business dynamics and make four major contributions. First, we build on family business systems theory and draw on the identity and work--family literatures to provide a boundary framework within the family business context. The boundary framework we present illustrates how family firms can be arrayed on a continuum anchored by high or low levels of integration between family and business identities. Whereas traditional family business systems theories treat the issue of integration/segmentation as binary--an "either/or" approach that principally focuses on the need to acknowledge family and business systems as coexisting--our framework goes beyond a binary approach to examine the degree of integration or segmentation. It highlights several dimensions in addition to ownership and personnel for understanding the overlap between family and business identities. Second, we discussed the individual and contextual factors that determine this overlap. Third, we outlined the specific advantages and disadvantages of various states. Finally, we have demonstrated practical implications of this approach by examining the mechanisms that enable firms to strategically choose and negotiate the level of integration between business and family identities. This perspective raises additional avenues for research on family business dynamics.

Directions for Future Research

Three avenues for future research are particularly noteworthy: qualitative research on family businesses to understand unique boundary work within family firms, differential permeability and performance, and how multiple family identities may evolve and interact with the business identity. We discuss each of these avenues in the succeeding sections.