Family Businesses: Physiognomy of an evolving phenomenon: A review
Louisa Diana Brunner, PhD
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he book Family Businesses: Physiognomy of an evolving phenomenon (Published in Italian as Le imprese familiari. Fisionomia di un fenomeno in evoluzione), by Cinzia Dessì and Michela Floris, Associate Professors in Economy and Management at Cagliari University (Sardinia, Italy), published up to now only in Italian, is an important and innovative academic contribution and for all those who, in different professions, deal with family businesses.

The two authors aim to define family business more clearly and to broaden the knowledge of family business by directly understanding the sense-making process with regard to the experience of the actors involved in this type of company.

The book contains an exhaustive and methodologically rigorous 360°analysis of many of the main concepts, theories, and themes of the family business discipline through an in-depth review of the current international literature on subjects including generational transition, governance, family-business relationship, social capital, innovation orientation, short and long term vision. It is an accurate analysis organized in a systematic and coherent way that makes an important tool for anyone who wants to find a way in this field.

An in-depth qualitative research study in the narrative tradition is presented in the book. The entrepreneurs and their companies, so widespread in the Italian context and the backbone of the Italian economic system, are the main characters.

This work is also an intellectual journey of research and a passionate, even personal journey of Cinzia Dessì and Michela Floris in the world of family businesses, a world that they know, teach in, and live in. They accompany the reader with a language that is academically sophisticated and at the same time describes day-to-day experience in the companies.

Conceptual framework
A new disciplinary approach is presented in the book, which the authors define as strategic-psycho-social. Classic studies of strategy and family business are integrated with psycho-social concepts of Psychological Ownership Theory (Bernhard and O’Driscoll, 2011; Pierce, Kostova, and Dirks, 2001) and Sensemaking (Weick, 1995).

Psychological ownership is a cognitive/affective state of mind in which a person perceives something as hers/his and this influences her/his psychological state (summary and translation from Dessì and Floris 2017, p. 40). It is manifested in three dimensions:

  1. Belonging (‘my’ ‘our’ company);
  2. The firm as an extension of the ‘self’ which often coincides with personal identity;
  3. A strong emotional attachment.

Sensemaking (Weick, 1995) or the process of creating meaning, is the cognitive process through which people assign meaning to their experiences (summary and translation from Dessì and Floris, 2017, p. 94).

It is a cognitive model that goes beyond the disciplinary limits, especially between more rational disciplines such as economics and psycho-social disciplines that also take emotional dimensions into consideration. This is important in understanding family businesses, where a mono-disciplinary approach fails to capture its complexity and dynamism. This is even more pertinent in the context of small- and medium-sized enterprises where the different levels—family, business and ownership—are more entangled than in the large companies.

The field work
The authors present data of their qualitative research where it is possible to directly ‘listen to the voices’ of family business protagonists.

The field work regards 10 companies that are at least at the third generation. The companies are all in a specific region of Italy: the island of Sardinia. They are culturally similar, small- and medium-sized enterprises, many permeated by a crafting culture. They belong to the primary sector (agriculture) and the tertiary (service) sector, since the secondary sector (industry) is not widespread in Sardinia. In the companies taken into consideration, the family has full ownership and leads and manages the company directly.

Outcomes
The overall picture that emerges from the research is:

  1. A great trans-generational passion and attachment to the company;
  2. A strong Psychological Ownership through generations;
  3. The company as an extension of the self—a legacy that cannot be renounced and finally becomes a conscious choice;
  4. This type of intense relationship also reflects the specific territorial culture of Sardinia, where the research was conducted. It is also an insular culture, where the territorial boundaries are clearly marked by the Mediterranean Sea and impact the symbolic and mental fabric of those who live there. It is a High Context culture (Hofstede, 1980) where relations between members of the group are of closeness, and everyone knows what the other knows. Many companies are craftswork-oriented, where most information is acquired implicitly rather than explicitly communicated, since the trade or craft is handed down through lived experience and testimony;
  5. The boundaries between the personal and work dimension are fluid and permeable;
  6. A hierarchical, patriarchal, traditional vision prevails, even in terms of gender.
Contribution
The fundamental dimensions that are emphasized in the book are:

  1. The family and its dynamics as a core and pivotal element that makes the family business unique;
  2. The role of the family and its influence on the business dynamics and performance (nowadays academia is putting always more emphasis on the need of research from this perspective);
  3. The diversity that exists between family businesses;
  4. The environmental context in which the company was established and operates;
  5. The role of family and business history;
  6. The glue for the survival of the company are its values, often the value system of the founder (Aronoff and Ward, 2001), values that are transmitted by the family, its culture, and the trust / reliability of relationships.
For our practice with small- and medium-sized companies
We should be aware of:

  1. Psychological Ownership
  2. The importance of the presence of the family in the governance and the role of the founder in creating the value system;
  3. The influence of the founder, and how the difficulties are coped with both positively or negatively through time;
  4. Imprinting plays an important role in transferring knowledge and competences in the family business from childhood and adolescence, through the commitment to learn from the experience of the predecessors;
  5. There is not only one way to make decisions—decision-making can be inclusive or completely in the hands of one person;
  6. The need of a strong commitment that can be developed also through the encouragement to have good interpersonal relationships in the family and with the employees;
  7. Conflicts in the business inevitably influence the family and vice versa;
  8. A high investment in the company, also due to an emotional attachment or to a deep sense of responsibility and desire to be up to the expectations.
Conclusion
The originality of the book lies in the fact that, even taking into consideration the large family company dynamics taken from the literature, the frame of reference from which the contribution is developed regards small- and medium-sized enterprises an insular context. From my point of view, sufficient research has not been carried out until now that takes into consideration the dimension of family business and the impact of the social context. This probably is due to the complexity of studying and searching an inevitably very fragmented and specific population from which it is difficult to generalize. As the authors say, it is a journey from the macro-dimension through the meso-dimension and into the micro-dimension. Hopefully other scholars will follow this research, which also is an important stimulus for practitioners of small- and medium-sized family businesses.

In conclusion, this is a courageous book, a witness of integrity and intellectual honesty, where some conclusions are given, but further questions open up. For example, as Floris (translation from 2017, p. 129) argues, “a simple formulation of an univocal definition of family business is not possible and, probably instead of enriching the debate, this could impoverish it due to an excessive simplification of the theme’s complexity.” The book is a contribution that manages to recognize and present the complexity, the ambiguity, and the inherent contradictions in family businesses that are a representation of the best and worst qualities of our human species and that make us so alive and real.

Hopefully the book will be translated also in English, but if you read Italian, here is the reference: Le imprese familiari.Fisionomia di un fenomeno in evoluzione (2017) (Franco Angeli, publisher). Cinzia Dessì and Michela Floris contacts are cdessi@unica.it and micfloris@unica.it.

Hofstede, G. (1980) Culture’s Consequences. International Differences in Work Related Values. Adbridge Edition. Newbury Park: SAGE.