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

Qualitative Research to Uncover Unique Boundary Work within Family Firms. We have drawn from work/family boundary theory and the family business literature to describe varying boundaries between family and business domains across family firms and individual-level and organizational-level strategies of managing work-family domains. However, qualitative research can be powerful in understanding how boundaries evolve within family firms and for uncovering additional cognitive and behavioral processes used specifically by family business participants to manage the boundaries between the family and the business. For instance, what are the specific individual-level strategies used by family business employees to negotiate between the two worlds? Do these strategies vary based on their relationship to the business family (e.g., related by birth or marriage, level in the organization)? Similarly, what are the organizational boundary management strategies? For instance, do family firms have specific rituals or routines in place to help individuals negotiate boundaries? Qualitative studies of family businesses of varying sizes can be helpful in discovering additional means through which family firms create, change, and manage boundaries between domains. Future research examining the effectiveness of these boundary mechanisms and those outlined in this paper will be fruitful.

Differential Permeability and Performance. Given that extreme integration or segmentation can disadvantage a family firm, differential permeability offers a way to leverage the benefits of both worlds; a central issue is, what combination of dimensions add most value? In other words, if a firm is highly integrated with regard to personnel but segmented in terms of image or ownership, what are the consequences for performance? In addition to the individual and situational contingency factors discussed earlier, the nature of the family business needs to be considered. For example, in a dynamic fast-paced market, a firm may have to seek financial integration (source of patient capital) but may need to balance this integration with more segmenting policy with respect to personnel hires from outside. In service sectors, the integration of personnel may be central, underscoring the need for segmenting policies. Clearly, individual family circumstances (e.g., number of individuals interested in participating in the family business, the family heritage, etc.) will moderate this relationship.

Multiple Family Identities and Managing Boundaries. While we have discussed the case of dual identities the family and business--as firms grow and as multiple generations enter the family firm, the issue of multiple family identities intersecting with the business identity may occur. Considerable theorizing is needed to understand how multiple family identities may form and the implications of such plurality. The identity boundary perspective can provide a significant insight on these issues (Pratt & Foreman, 2000). For instance, in addition to the individual and contextual boundary determinants discussed in this paper, the plurality of family identities may depend on the social, political, and economic strength of the families that get involved with a family business. Key events within the organizations (such loss of the founder or succession of the firm to a family member through marriage) can trigger the birth of multiple family identities (Albert & Whetten, 1985). The existence of multiple identities may help the family firm respond more effectively to a broad range of stakeholders and enhance its capacity for creativity and learning. On the other hand, the presence of multiple identities may exacerbate conflict, causing the family firm to expend valuable resources resolving these conflicts, or cause ambivalence, leading to paralysis (Pratt & Foreman, 2000). Managing the boundaries among these identities can have a wide-ranging impact on the survival of the family firm. Over time, a family firm may choose to delete certain identities, compartmentalize these multiple identities through physical, special, and symbolic boundaries or integrate them into a distinct new family identity. Yet others may choose to aggregate some family identities by forging links between them. The potential for the presence of these responses and their implications is an additional avenue of research from a boundary perspective.

In sum, our boundary framework enriches extant understanding of family firms by highlighting the degree of overlap between the family and the business identity. We also provide an understanding of the determinants and consequences of the various levels of overlap and offer ways of managing this overlap. In addition, the boundary perspective we use opens several avenues of research that can provide additional insight on managing the complex dynamics of family businesses as they evolve.

REFERENCES

Albert, S. & Whetten, D.A. (1985). Organizational identity. In B.W. Staw & L.L. Cummings (Eds.), Research on organizational behavior (Vol. 7, pp. 263-295). Greenwich, CT: JAI Press.

Aldrich, H.E. & Cliff, J.E. (2003). The pervasive effects of family on entrepreneurship: Toward a family embeddedness perspective. Journal of Business Venturing, 18, 573-596.

Aronson, R.L. (1991). Self-employment: A labor perspective. Ithaca, NY: ILR Press.

Ashforth, B.E. (1998). Becoming: How does the process of identification unfold? In D.A. Whetten & P.C. Godfrey (Eds.), Identity in organizations: Building theory through conversations (pp. 213-222). Thousand Oaks, CA: Sage Publications.

Ashforth, B.E., Kreiner, G.E., & Fugate, M. (2000). All in a day's work: Boundaries and micro role transitions. Academy of Management Review, 25, 472-491.

Ashforth, B.E. (2001). Role transitions in organizational life: An identity-based perspective. Mahwah, NJ: Erlbaum.

Astrachan, J.H. (1988). Family firm and community culture. Family Business Review, 1, 165-189.

Astrachan, J.H., Klein, S.B., & Smyrnios, K.X. (2002). The F-PEC scale of family influence: A proposal for solving the family business definition problem. Family Business Review, 15, 45-58.

Bertrand, A.L. (1972). Social organization: A general systems and role theory perspective. Philadelphia: EA. Davis Co.

Brokow, L. (1996). Why family businesses are best. In C.E. Aronoff, J. Astrachan, & J.L. Ward (Eds.), Family business sourcebook II (pp. 19-23). Marietta, GA: Business Owner Resources.

Buttner, H. & Rosen, B. (1989). Funding new business ventures: Are decision makers biased against women entrepreneurs? Journal of Business Venturing, 4, 249-261.

Cameron, K.S. & Whetten, D.A. (1981). Perceptions of organization effectiveness across organizational life cycles. Administrative Science Quarterly, 26, 525-544.

Carney, M. (2005). Corporate governance and competitive advantage in family-controlled firms. Entrepreneurship Theory and Practice, 29, 249-265.

Chaganti, R., DeCarolis, D., & Deeds, D. (1996). Predictors of capital structure in small ventures. Entrepreneurship Theory and Practice, 20, 7-18.

Cheney, G. (1991). Rhetoric in an organizational society: Managing multiple identities. Columbia, SC: University of South Carolina Press.

Chrisman, J.J., Chua, J.H., & Litz, R.A. (2004). Comparing the agency costs of family and non-family firms: Conceptual issues and exploratory evidence. Entrepreneurship Theory and Practice, 28, 335-354.

Chrisman, J.J., Chua, J.H., & Steier, L. (2005). Sources and consequences of distinctive familiness: An introduction. Entrepreneurship Theory and Practice, 29(3), 237-247.

Chua, J.H., Chrisman, J.J., & Sharma, P. (1999). Defining the family business by behavior. Entrepreneurship Theory and Practice, 23, 19-39.

Clark, S.C. (2000). Work/family border theory: A new theory of work/family balance. Human Relations, 53, 747-770.

Corbetta, G. & Salvato, C. (2004). Self-serving or self-actualizing? Models of man and agency costs in different types of family firms: A commentary on "Comparing the agency costs of family and non-family firms: Conceptual issues and exploratory evidence." Entrepreneurship Theory and Practice, 28, 355-362.

Donnelley, R.G. (1988). The family business. Family Business Review, 1,427-445.

Dutton, J.E., Durkerich, J.M., & Harquail, C.V. (1994). Organizational images and member identification. Administrative Science Quarterly, 39, 239-263.

Dyer, G.W. (1986). Culture change in family firms: Anticipating and managing business and family transitions. San Francisco: Jossey-Bass.

Eby, L.T., Casper, W.J., Lockwood, A., Bordeaux, C., & Brinley, A. (2005). Work and family research in IO/OB: Content analysis and review of the literature (1980-2002). Journal of Vocational Behavior, 66, 124-197.

Ensley, M.D. & Pearson, A.W. (2005). An exploratory comparison of the behavioral dynamics of top management teams in family and nonfamily new ventures: Cohesion, conflict, potency, and consensus. Entrepreneurship Theory and Practice, 29(3), 267-278.

Erez, M. & Earley, P.C. (1993). Culture, self-identity, and work. New York: Oxford University Press.

Eys, M.A. & Carron, A.V. (2001). Role ambiguity, task cohesion, and task self-efficacy. Small Group Research, 32(3), 356-373.

Fay, M. & Williams, L. (1993). Gender bias and the availability of business loans. Journal of Business Venturing, 8, 363-376.

Fiol, C.M. (2001). Revisiting an identity-based view of sustainable competitive advantage. Journal of Management, 27, 691-599.

Foreman, P.O. & Whetten, D.A. (2002). Members' identification with multiple-identity organizations. Organization Science, 13, 618-635.