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Small Business Economics

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01-01-2011

A model to study the organizational culture of the family firm

Author: Manuel Carlos Vallejo

Published in: Small Business Economics | Issue 1/2011

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Abstract

The results of research of the utilitarian type on the culture of the family firm is reported here. A model is built and defined on the basis of the main arguments supporting the following theories: general systems theory, neoinstitutional theory, transformational leadership theory, field theory, learning theory, and group dynamics theory. The resulting model is an instrument that can be used to deepen our understanding of the organizational culture of this type of firm. It should prove to be a powerful tool to exploit the competitive potential of this culture, which has often been noted in the literature.

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According to Schein (1988), the organizational culture consists of three different levels: artifacts (first level), values (second level), and assumptions (third level). A scale of perception exists from the first level to the third level. Thus, artifacts are the most clearly perceptible, while the perception of values and, especially, assumptions is more difficult. For this reason, values and assumptions are known as the two invisible levels of the organizational culture.

In general, family culture refers to the artifacts, perspectives, basic values, and assumptions shared by the members of a particular family (Dyer 1986).

The regulative pillar of institutions provides explicit guidance to organizational members about rules, controls, rewards, and sanctions (Scott, 1995a), so it does not contribute to explaining the flow of values and their cognition from the family to the family business like the other two pillars.

In family firms, this mode of getting the institutional elements is different because their members are exposed to two socialization processes of a family nature—the socialization process of their own families and the socialization process of the owning family of the firm—and also because the literature considers the family to be the most important socialization agent (Macionis and Plumier 1999). From an organizational perspective, the main goal of socialization is just to make the new members understand the organizational culture defined in terms of its shared values (Chatman 1991; Bauer et al. 1998).

Although McGregor (1960) does not speak about trust specifically or directly, he does so indirectly when he notes that the organizational structure must be based on cooperation and mutual support, since trust is the key issue in most of the specialized literature on cooperation in organizational and inter-organizational relationships (see Gambetta 1988; Jung and Avolio 2000; Korsgaard et al. 2002).

Kim (1993) distinguishes between individual mental models and shared mental models. Individual mental models are described as deeply held internal images of how the world works that have a powerful influence on what we do because they also affect what we see. Shared mental models are described as thought constructs that affect the way organizations see how the world works and how they operate in the world.

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Title: A model to study the organizational culture of the family firm
Author: Manuel Carlos Vallejo
Publication date: 01-01-2011
Publisher: Springer US
Published in: Small Business Economics / Issue 1/2011
Print ISSN: 0921-898X
Electronic ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-009-9175-9

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