Introduction
Family Social Capital Research in Family Business
Research Question: How do family business owners strengthen family social capital?
Method
Exploratory Research
Qualitative Research
Adams | Miller | Brown | Smith | |
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Business founder | Founder(s): Father and son | Founder(s): Siblings | Founder(s): Sole founder | Founder(s): Sole founder |
Founding context | Edward Adams founded a trucking business in the 1920s when he built his first semi-trailer. In the 1950s a father and son team founded Adams Trucking Services. Since then, the business has expanded nationally. Today, 3rd and 4th generation brothers/cousins work in the business | In the 1930s two brothers started a farming business. In the 1940s they started a plywood business. Since then, the family has successfully started a portfolio of cooperating products/services all held under the Miller Group. Today, 2nd and 3rd generations work together across the growing family corporate holdings | Mary Brown started her commercial and building management business in the 1980s when she hired her first “employee-family” as labor for a commercial contract. Since then, her son joined her and continues to innovate and grow the business nationally | In the early 1990s, William Smith started a home-based business in seed distribution. Other relatives joined him, and he obtained large-scale distribution contracts. Today, 1st and 2nd generation family members work in the business, while the family prepares for leadership and ownership succession |
Current owners | 3rd to 4th Generation (Sibling/cousin partnership) | 2nd to 3rd Generation (Sibling partnerships/cousin-consortium) | 1st to 2nd Generation (Mother–son partnership, sibling partnership) | 1st to 2nd Generation (Multi-generational family partnership) |
Number of owners working in business | 4 family owners/managers in original family business (in succession process) | 20 family owners/managers working across cooperating corporate family holdings (7 service/product lines) | 2 full-time owners/managers currently active in original business (founder and next generation) and 2 part-time 3rd-generation family members having worked in business | 8 full-time family employees across the corporate family holdings (3 cooperating businesses) |
Next-Gen education | MBA | MBA | MBA | MBA |
Industry | Transport/Logistics | Manufacturing/Construction | Commercial Property Management | Commodities |
Size | 350 full-time and over 1500 contract employees | 175 full-time employees in all businesses | 250–500 full-time employees | 40 full-time employees |
Faith | Evangelical Free Church | First Evangelical Lutheran | Restored Church of Jesus Christ | Roman Catholic |
Community care (illustrative listing) | Employees Provided employee families emergency funds. Attended employee funerals Local community Built churches. Served on/supported community boards Extended communities Built regional management education center. Provided business education in other countries | Employees Engaged employees in identifying and filling local humanitarian needs. Made available marriage counseling for managers Local community Donated funds to local charities. Engaged employees in community development projects Extended communities Provided humanitarian aid. Extended business education to leaders in other countries | Employees Recruited immigrant families for employment. Provided financial and educational guidance to help immigrants adjust to this country Local community Donated funds to support immigration, homeless shelters, local emergencies, and hospitals Extended communities Supported foundations of affiliated corporations. Contributed funds to support immigration and to respond to emergencies in various communities | Employees Provide employees free hot lunches. Built recreation center for employees their families Local community. Provided immigrants cultural foods and ingredients. Donated food to homeless shelters Extended communities Provide holiday foods for employees of customers. Provide food support during emergencies |
Description of data source | Analytic methods | Key findings | |
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Early | Family Business of the Year Award applications, Minnesota U.S. (reference to faith in applications) | Textual analysis, review of application materials including organization mission, vision, and values statements | Over 50% of applicants mentioned faith beliefs in reference to their mission, values, or practices |
Structured interview transcripts (approximately 550 pages of interview transcripts) | Open coding using descriptive and in vivo coding to identify faith beliefs and practices across each case | Identified faith-based beliefs, values and practices across the family and business system | |
Family histories and founder memoirs (3 out of the 4 families) | Narrative re-storying to create in-depth case portraitures | Identified transgenerational value narratives (related to core faith-based beliefs, practices, and values) | |
Middle | Follow-up interviews (13 additional interviews) produced approximately 1200 pages of interview transcripts | Values coding focused on values and context and used to create values tables | Found a common set of faith-based values embedded in owning family practices across all four cases |
Case portraitures, transcripts, and family histories and business documents and tables generated in prior analysis | Longitudinal analysis to examine consistency and change in faith beliefs and practices and values across generations | Found transgenerational beliefs, practices, and values connected to faith across multiple generations. Also found family businesses defined values through practices | |
Final | Within-case transgenerational coding tables | Longitudinal analysis (cross-case) to examine the consistency and change across all four cases | A common set of transgenerational faith practices, beliefs, and values-based practices across all four business families |
All data and prior coding tables including memos and research notes | Theoretical coding mapping known variables to salient categories to inform theoretical model | When faith is the source of values in business families, it results in a type of relational capital that can be applied by the owning family to the business and greater community |
Findings
Family Faith Practices
Use of Prayer and the Bible for Guidance
Family Faith Beliefs
Faith-based values |
Three analysts agreed on content and labels for faith-based values and they were categorized as stewardship and relationship values. This table provides descriptive summaries of values. Appendix C2 summarizes coding detail for each of the four owning families that participated in the study |
Stewardship values |
Creativity was often described as innovation. One owner explained, “We [all people] were made in the image of God the Creator, and all have the capacity for great creativity. As entrepreneurs, we’ve seen this creativity take shape in our business, …Because we were created by God, we have the capacity for innovation within us” |
Generosity was expressed in a variety of ways including tithing, volunteering, and giving back to the community. One owner said, “God has blessed us and in turn we should be a blessing to others (2 Cor. 9:6–15) … giving … our time, talents, treasure and influence.” All four families were generous with their employees and communities |
Integrity was described by one owner’s narrative as “living your values” … “doing the right thing at all times and in all circumstances … [and] conducting ourselves in an upright, honest manner” |
Perseverance referred to determination and overcoming challenges. One owner’s narrative indicated, “Do hard things.” Another owner’s narrative referred to the creation: “God didn’t start something and not finish it” |
Serve others is represented by this narrative statement: “We’re a service-oriented culture, serving one another, members of our faith and … within the community” |
Stewardship represented felt responsibility. Here are excerpts from one narrative, “Like Adam and Eve we are responsible for preserving and improving a possession [given to them by God] … delayed gratification … and limiting our lifestyle to less than our income… saving, investing, and sharing with generosity” (Ephesians 4:17–29)” |
Relationship values |
Forgiveness was associated with mercy and grace. For example, one owner indicated, “Grace and mercy are two sides of the same coin, … Recognizing that we are all sinners/human, we should strive to show and receive grace and mercy when mistakes are made.” Other owners recognized that none of us are perfect. We all make mistakes that require help from one another |
Gratitude was described as thankfulness and appreciation. One owner said about employees, “You probably hear me say every day, ‘I can't do it without you. Thanks for being here.’” Another owner thanked God for employees and prayed for them; she promised God she would be “fair, kind and appreciative” to employees God brought to her |
Humility was described by one owner as “modesty, selflessness, and love.” Other owners indicated that humility means admitting you are wrong and thanking God and others for success |
Honesty/Trust was characterized as being truthful, trusting, and trustworthy. One owner described his trust in God: “I am not afraid. The Lord will take care of me.” Another owner trusted God to navigate business decisions: “[Trust is] easier when you have a higher purpose and a higher power [God] that can help” |
Love was associated with being caring, selfless, and kind. One owner said, “It’s my faith. I love them [my employees] and I need them, and they need me, and when we have problems, we just say, ‘Okay, we love you.’… It's a healthier way of dealing with life” |
Respect was described by one owner heuristically: “It’s the Golden Rule. Treat people, no matter who they are, the way you want to be treated.” Another owner said, “We always try to be respectful, humble and kind” |
Normative Values: Close Business Family, Learning and Innovation, and Collaboration |
Three analysts agreed on the labels and categories for normative values. These values included no reference to family faith and were subcategorized as “close business family,” “learn and innovate,” and “collaborate” |
Close Business Family. This normative value refers to relationships among owners and their employees, who were considered part of the “business family” |
Business family relationships. The business family included family members and employees. For example, teenage family members learned about the business and employees through entry level jobs such as cleaning offices or doing secretarial tasks. And non-family employees became members of the “business family” by participating in picnics, potlucks, or parties. For example, because they were members of the business family, one owning family sent owners to represent the family at employee funerals and held appreciation receptions for retiring employees In addition, owners extended support to employees often reserved for one’s own family. One owning family established emergency funds for employees, another established a college savings program for children of employees, and a third made free counseling available for employees. Still another owner provided temporary housing for employed immigrant families. This owner spent thousands of dollars onboarding these immigrant families, saying, “I am committed to them [employees] and love them We help them with apartments … and financial planning. I have seen their struggles and pray for them” |
Community care includes caring for employees beyond their work role. For example, owners found ways to be supportive of spousal relationships, including providing couple counseling. In addition, company socials included families. And they built relationships by working together as community volunteers. Finally, the family values on which businesses were built created a feeling of “familiness” in the business |
Learning and Innovation. The following normative values were associated with business growth and success |
Learning together began as children became integrated into faith-based values at home. Family faith discussions at home helped set the stage for similar learning discussions a work, particularly as children learned about faith-based values. In the business, employed children joined the business family (owners and employees) at business seminars and lectures where they obtained “a common frame of reference … terminology … and flow of knowledge.” One owner said, “If you want to be creative, you have to learn to be a learner, not a knower … Open your mind to new ideas” |
Creating opportunity for self and others promoted individual growth. “We have an obligation to provide opportunities to everybody … So, they can rise up as far as they want to go.” One owner expressed the norm this way: “Okay, I’m going to learn and to try. I am going to take this opportunity.” Another owner connected innovation with creativity: “We've come up with new technologies that did not exist before … We have 21 patents … Creativity is a core principle. It doesn't sound spiritual to be creative, but it really is” |
Collaboration provided bases for creativity in solving problems in a manner that strengthened relationships |
Developing values-based partnerships indicates that agreements were based on compatible values that helped develop trusting relationships. The four families formalized values to guide them in hiring and retaining employees. One owner said, “One thing about these values … they keep our drivers. The retention of truck drivers [in the industry] is very low … but we have a reputation with drivers [causes] them to stay.” Another owner replaced employees in a firm he purchased with employees who had compatible values with his business family. “They [former employees] were all for one and none for all. All for themselves…. It didn't matter to help. It didn't matter to serve the customer … Now we have a new crew” |
Working together to solve problems was expressed by an owner this way: “Our M.O. is, let’s talk about it, figure it out. Let’s work it through.” Another owner described the importance of open communication: “It’s hard [having open dialogue] but it’s a heck [of] a lot harder not having those conversations because that leads to fractures that can be splintering and cratering and dividing relationships.” Still another owner described this norm as a “win–win” mentality for developing “collaborative partnerships with stakeholders” |
Faith-Based Values
Normative Values
Research question: To what extent does collaborative dialogue and family faith promote similar moral values in business families?
Theory of Faith-Based Family Business
Research Implications and Conclusion
Conclusion
Appendix A: Structured Interview Protocol
Interview Schedule for Faith-Based Values in Family Business
Family
Business
Appendix B: Data Sources
Adams Case
Primary Data
Secondary Data
Smith Case
Primary Data
Secondary Data
Brown Case
Primary Data
Secondary Data
Miller Case
Primary Data
Secondary Data
Appendix C1: Cross-Case Transgenerational Table—Family Faith
Categories | First-order codes | Smith transgenerational codes | Brown transgenerational codes | Adams transgenerational codes | Miller transgenerational codes |
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Faith beliefs | Personal relationship with God and Jesus Christ | • We are invited to have a personal relationship with Jesus Christ • See Christ as a model for how to treat others | • Have and develop a personal relationship with God and Jesus Christ • See Jesus Christ as a model for how to treat others • Trust in God (everything works out in the end according to God’s plan) | • Accountable, responsible to God • Personal responsibility to develop relationship with God and Jesus Christ—each person makes an individual “decision for Christ” • Trust in God—God is a real and present force. Strength comes from this belief which is key to success | • Faith leads to success (in family and business) • Personal responsibility to develop a relationship with God and Christ • Trust in God—God is a real and present influence, things work out in the end when we trust God |
Calling to serve God | • See mission of business to serve God through serving others • With power and choice comes responsibility • Accountable/responsible to God | • See business as a higher calling to serve God • Accountable/responsible to God | • Calling to serve God • People are made in God’s image—creative, with free will, and as such should seek ways to serve • Accountable/responsible to God | • See God as partner in the business • People made in God’s image—similar to God, we have unlimited creative potential • Accountable/responsible to God | |
Faith as source for family unity | • Relationships guided by golden rule—treat others as you want to be treated • Shared faith and values are foundations for marriage and family unity | • Shared faith and belief in God as foundation for marriage and family unity • Faith teaches how to love, forgive, and resolve differences • Family relationships are eternal | • Faith teaches how to be in relationships—guides values, model and teach them—“values are more caught than taught” • Shared faith as a foundation for marriage and family unity | • Shared faith as a foundation in marriage and family unity—“The truth is the way things are from God’s perspective” • Eternal life and eternal family relationships | |
Faith practices | Family faith traditions | • Active in church, serve in roles and in church community • Attending, sending children to faith-based schools • Regular church attendance • Uphold, pass on church traditions—sacraments such as first eucharist, Lent, Advent, and special prayers. | • Active in church leadership and fellowship • Regular, weekly, church attendance • Uphold and pass on family faith traditions—marriage, baptism, family home night, training for priesthood etc. | • Active in church community—started churches, active in leadership • Marry partners of same or similar faith • Regular family gatherings for religious holidays • Regular church attendance—reserve Sunday as a day of worship, prayer • Uphold and pass on faith traditions—baptism, marriage, burial rites, etc. | • Active in church • Regular church attendance—keep the Sabbath • Pass on faith values—living/modeling and talking about them regularly • Uphold family faith traditions—regular family prayers, singing special songs and hymns |
Use prayer and Bible for guidance | • Study of family religion and learning about other faiths • Pray together as a family and as individuals | • Pray when making decisions—ask for God’s help and guidance • Study scripture | • Use prayer to guide decision making • Personal prayer and Bible study • Bible as the foundation for family values | • Use prayer when making decisions—invite God’s influence, “prayer walking” • Use Bible as basis for teaching family values Bible study across families, cousins |
Appendix C2: Cross-Case Transgenerational Table—Faith-Based Values
First order codes | Smith Transgenerational codes | Brown Transgenerational codes | Adams Transgenerational codes | Miller Transgenerational codes |
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Creativity | • ***not directly addressed in conversations with owners | • Learn to be different • Be pro-active | • Be innovative and resourceful • Seek new opportunities | • Reflect our creator • Being innovative and open to new things |
Forgiveness | • Show compassion and mercy with others • Help one another overcome mistakes | • Being sensitive to other’s suffering • Have/showing compassion | • Grace and mercy when we/others make mistakes • “We are not perfect.” | • Show compassion /mercy for others • Know we all sin and are redeemed through Christ |
Generosity | • Give to those in need • “Give inconspicuously, because you can and it’s the right thing to do” | • Charitable giving • Go above and beyond what is “expected” | • Give and tithe (at church and in community) | • Being charitable • Live principles of tithing • “Joyful giving” |
Gratitude | • Appreciate others, tell employees “I can’t do it without you” | • Appreciate contribution of others • Be thankful for what you have | • Express appreciation for others | • Be thankful, appreciative of others |
Honesty/ Trust | • Be open and honest in your communication | • Be open and truthful • We depend on each other—when there are problems, we “circle the wagons” | • Be truthful in what you say and do • “Trust has to start somewhere” | • Be open and truthful |
Humility | • Be modest and selfless—think of others | • “If you are humble and grateful, success will follow” | • Being humble, means you admit mistakes | • Give glory to God • Be aware of strengths and weaknesses |
Integrity | • Be fair and lead with values, by example • Hold family and non-family employee to the same standards | • Modeling values • Share stories about what is “right” and important | • Be responsible, hold others to do the right thing • Live your values—“walk the talk” • “Values are more caught than taught” | • Live values • Maintain family name and reputation • Share stories about what is important and how to do the right thing |
Love | • Love like Christ—“love one another as I have loved you” | • Have care and concern for others | • Care for others—care for employees | • Show care for others |
Perseverance | • Overcome challenges by working together • Don’t give up | • Determination to do what is right, even when it’s hard • “Do the hard things now, so you don’t have to do harder things later.” | • Determination, and excellence • Never give up • Take risks • See challenges as opportunities • Responsibility to do the right thing | • Work ethic • Determination • Work through difficulties • Optimism • Stay positive in face of adversity |
Respect | • Live by the Golden Rule—treat others as you want to be treated | • “Take care of the people that take care of you” | • Respect—treat people “right” | • Honor and respect others who like us are made in God’s image |
Serve others | • Serve others is what God wants from us • If you feel the need to serve and act on it, you are living your purpose | • Seek opportunities to serve others • Serve through developing employees and community | • Putting others before yourself | • Serve others • Help others with your time, labor, and talents |
Stewardship | • Be modest • Avoid excess • Preserve working capital | • Provident living • Independence • Freedom • Self-reliance | • Take care of what you have been given | • Thrift • Manage resources for the long term |
Appendix C3: Cross-Case Transgenerational Table—Normative Values
Categories | First order codes | Smith Transgenerational codes | Brown Transgenerational codes | Adams Transgenerational codes | Miller Transgenerational codes |
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Close business family | Business family relationships | • Keep family close, frequent interaction • Involve children in business learning • Dedicate time for “fun” at home and work • Multiple generations work together in business | • Stay together as a family • Hold “fun” gatherings at home and business • Involve children in business learning • Multiple generations work together in business | • Much interaction between family owners and employees • Children involved in business learning • Dedicate time for “fun” • Multiple generations work together in business | • “Choose” to develop family relationships • Children involved in business learning • Dedicate time for “fun” • Multiple generations work in the business |
Community care | • Care for employees beyond work role • Volunteer and serve in community • Supportive spousal relationships | • Care for employees beyond work role • Volunteer and serve in community • Supportive spousal relationships | • Care for employees beyond work role ∘ Use values to drive family business—lead by example ∘ Volunteer and serve in community • Supportive spousal relationships | • Care for employees beyond work role • Use values to drive family business • Volunteer in the community • Supportive spousal relationships | |
Learn & Innovate | Learn together | • Life-long learning (continue to develop and learn) • Learn together (as a family and as a business) • Seek outside expertise and ideas for the business | • Be different—never stop learning • Learn from failure—“know your failure story” • Gain knowledge and inspiration from others (stories of ancestors, other family members, outside experts, peer groups—surround yourself with “smart people” | • Learn together as a family • Open communication about business decisions—solicit employee input opportunities • Seek outside expertise and ideas for the business • Develop new skills • Value education | • Be curious—be a seeker vs a knower • Learn together from mistakes—yours and others • Seek outside expertise and ideas for the business to develop new skills and knowledge |
Create opportunity for self and others | • Grow business both vertically and horizontally • Look for opportunities to add value for customer and for business • “No margin, no mission” • Seek opportunities to develop new products and services | • Grow the business parallel to employee talent—help with education financial planning, make and meet long-term goals, etc. • Seek opportunity for self and others • Take informed risks | • Provide opportunity for employee advancement (e.g., option to lease to own truck) • Seek opportunities to develop new products/services • Transform challenges into opportunity • Take informed risk—“only mistake was doing nothing” | • Provide opportunity for next-generation advancement—innovate, add cooperating product lines/businesses • Seek opportunities to develop new products/services • Transform challenges into opportunities • Take informed risks • Innovate—disrupt the market, don’t be disrupted by it | |
Develop values-based partnerships | • Hire employees whose values fit with core company values—hire on referral only • Develop trust-based partnerships • Be transparent and serve mutual interests • Value employees—“work with me not for me” • Use core family values to drive the business | • Hire employees whose values fit with core company values • Pipeline of “employee families” • Slow to hire, quick to fire • Value employees—“can’t do it without them” • Use core family values to drive the business | • Hire and retain employees based on a values fit • Develop values metric for recruiting and developing employees • Develop trust-based partnerships • Value employee contributions and efforts • Use core family values to drive the business | • Hire and retain employees based on a values fit • Use charter for business deals which is grounded in core values • Develop trust-based partnerships • Value others’ opinions—open to other ways of thinking (intellectual hospitality) • Use core family values to drive the business | |
Work Together to Solve Problems | • Open, honest communication • Work together to solve problems and find mutual solutions | • Open, honest communication • Work together to solve problems • Can’t fix the problem unless we openly communicate about it | • Open, honest communication—work through problems together • Work with others for mutual benefit | • Open, honest communication—work through problems together • Work with others for mutual benefit • Win/win or no deal • Long-term relationships with distributors |