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Journal of Family Business Strategy 1 (2010) 5463

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Contents lists available at ScienceDirect

Journal of Family B

journa l homepage: www.e1. Introduction

Family rms have been established as a unique area of researchthat has experienced exponential growth in recent years (e.g.,Debicki, Matherne, Kellermanns, & Chrisman, 2009; Sharma, Hoy,Astrachan, & Koiranen, 2007). Generally, research has focused ontwo distinct aspects. First, research has tried to explain differencesbetween family rms and non-family rms (e.g., Chrisman, Steier,& Chua, 2008); and second, research has focused on variations inbehaviors among family rms (e.g., Chrisman et al., 2008).However, all these endeavors are guided by one overarchingquestion: How does the family contribute to rm success?

In an attempt to answer the posed question, prior research hasdeveloped the concept of familiness (e.g., Habbershon & Williams,1999; Habbershon, Williams, & MacMillan, 2003). The importanceof this construct has been highlighted by Pearson, Carr and Shaw(2008, p. 949) who state that [the] identication and isolation of aconstruct [familiness] unique to family rms is both groundbreaking

and important for family rm research. Rooted in the Resource-based view (RBV), Habberson and colleagues (1999) denefamiliness as the bundle of idiosyncratic internal resources that

exist due to the involvement of the family in the rm. They suggestthat family involvement leads to familiness which can be viewedas unique, inseparable, and synergistic resource and capabilitiesarising from family involvement and interactions.

While a growing body of research has added to the nomologicalnet of familiness (e.g., Chrisman, Chua, & Sharma, 2005;Habbershon&Williams, 1999;Habbershonetal., 2003;Naldi,Nordqvist, Sjoberg,&Wiklund, 2007; Pearson, Carr, & Shaw, 2008; Rutherford, Kuratko,& Holt, 2008), the concept of familiness still remains somewhatobscure (e.g., Pearson et al., 2008; Rutherford et al., 2008). Indeed,Sharma (2008) suggests that the fundamental task of evaluating theconstruct itself its dimensions, antecedents, and consequences hasbeenneglected, slowingdownthe theory-buildingaspirationsofthe eld (cf., Zahra & Sharma, 2004). Chrisman, Chua and Sharma(2005) called for research that identies family rms uniqueness,focusing on how the familys involvement is a root cause of theirdistinctiveness. These authors offered two dimensions of familyinvolvement that help to explain familiness: the components offamily involvement and the essence of such involvement.While thecomponents of involvement approach focuses on family ownershipand control, setting a minimum threshold of family inuence, theessenceapproachcenters on thebehaviors and synergistic resourcesand capabilities a family contributes to a business. Additionally,recent theory that considers the dynamics of the overlapping familyandbusiness systemsproposes thatorganizational identitymaybeakey source of competitive advantage for family rms since theirfamily identity is unique and therefore impossible to completely copy(Sundaramurthy & Kreiner, 2008: 416). Indeed, adding organiza-tional identity to the components of involvement and essence

* Corresponding author. Tel.: +41 71 224 71 00.

E-mail addresses:

thomas.zellweger@unisg.ch (T.M. Zellweger), k.eddleston@neu.edu

(K.A. Eddleston), fkellermanns@cobilan.msstate.edu (F.W. Kellermanns).1 Tel.: +1 617 373 4014; fax: +1 617 373 8628.2 Tel.: +1 662 325 2613; fax: +1 662 325 8651.

1877-8585/$ see front matter 2009 Elsevier Ltd. All rights reserved.doi:10.1016/j.jfbs.2009.12.003Exploring the concept of familiness: Intr

Thomas M. Zellweger a,*, Kimberly A. Eddleston b,1,a Center for Family Business, University of St. Gallen, Dufourstrasse 40a, CH-9000 St. GalbCollege of Business Administration, Northeastern University, 218 Hayden Hall, Boston,cDepartment of Management and Information Systems, Mississippi State University, Misd INTES Center for Family Enterprises, WHU (Otto Beisheim School of Management), Ger

A R T I C L E I N F O

Article history:

Available online 6 February 2010

Keywords:

Familiness

Organizational Identity

Family Firm Image

A B S T R A C T

Our paper contributes to th

add to the nomological n

involvement and the essenc

of familiness. As such, we in

organizational identity dim

which can facilitate perfo

externally. Lastly, we discus

dimensions of familiness in

rms while others add littlducing family rm identity

ranz W. Kellermanns c,d,2

, Switzerland

02115-5000, United States

sippi State, MS 39762-9581, United States

ny

verarching question: How does the family contribute to rm success? We

of the familiness construct, by reaching beyond the components of

approach and by introducing organizational identity as a third dimension

stigate which families are most likely to build familiness. Specically, the

nsion of familiness reects how the family denes and views the rm,

ance advantages through leveraging familiness both internally and

ow the combinations of components of involvement, essence and identity

ract and explain why and how some families are a key resource to their

value to their organizations.

2009 Elsevier Ltd. All rights reserved.

usiness Strategy

l sev ier .com/ locate / j fbs

451). Chrisman, Chua, and Litz (2003) later described the conceptas . . .resources and capabilities related to family involvement andinteractions (p. 468). These authors argued that a positive

T.M. Zellweger et al. / Journal of Family Business Strategy 1 (2010) 5463 55approaches to explain family rm performance seems warrantedgiven preliminary research by Zellweger and Kellermanns (2008)which shows that identity concerns in family rms explain asignicant portion of performance variance in these rms.Moreover, departing from the components of involvement andessence approaches, Eddleston (2009) argued that a familysconguration based on these three dimensions of family involve-ment explains how some family rms are particularly procient atcreating a competitive advantage.

Drawing on the components of involvement and essenceapproaches (Chrisman, Chua, Pearson, & Barnett, 2009b; Chrismanet al., 2005; Chua, Chrisman, & Sharma, 1999) and organizationalidentity theory (e,g., Ashforth & Mael, 1996; Whetten & Mackey,2002), this paper takes a closer look at how familiness can varyamong families. However, we need to stress that our discussionabout familiness is not intended to dene family rms in moredetail. Instead, we argue that familiness is a multi-dimensionalconstruct that needs to be better understood, as it can affect thecompetitive advantage of family rms (see also Habbershon &Williams, 1999; Habbershon et al., 2003). Accordingly, we viewfamily rms as heterogeneous and acknowledge that while somefamilies can be assets to their rms and build familiness, otherfamilies could be characterized more as liabilities. This supportsrecent research that has shown that family inuences can haveboth positive and negative effects on the family rm (e.g.,Kellermanns, Eddleston, Sarathy, & Murphy, in press). While weacknowledge the potential for detrimental consequences of familyinvolvement, in the present paper we specically focus on thepositive contributions a family can make to an organization. Ourmulti-dimensional view of family inuence is aimed at explainingdifferences among families and why some families are more of aresource to their rms than others. While previous research hasfocused on the how (Arregle, Hitt, Sirmon, & Very, 2007) andwhat (Pearson et al., 2008) of familiness, we therefore focus onthe whothat is, who are the families that are most likely tobuild familiness?

Our paper proceeds as follows. First, we briey review the initialconceptualization of familiness and recent research exploring theconcept. To make the case for a third dimension of the familyaspect of familiness, we then discuss the strengths andweaknessesof the components of involvement and the essence approaches.Second, we describe our multi-dimensional view of the familyaspect of familiness. In the subsequent discussion, we outline ourtheoretical contributions, mention limitations, and point topossible avenues for future research.

2. Theoretical background and hypothesis development

According to the RBV, resources are at the heart of competitiveadvantage and, therefore, business success. Despite recent criti-cism of the RBV, for example limitations regarding empiricaltesting, the assumptions of its central precepts and the role ofstakeholders in appropriating residual claims (Arend, 2006; e.g.,Coff, 1999; Priem & Butler, 2001), the RBV remains one of the mostprominent theoretical foundations of todays management re-search (e.g., Newbert, 2007). The RBV describes how resources cancontribute to the competitive advantage of organizations (e.g.,Barney, 1991; Dierickx & Cool, 1989; Grant, 1991; Peteraf, 1993).

Scholars have also applied the RBV to the eld of entrepreneur-ship (e.g., Alvarez & Barney, 2004), and to the study of family rms(e.g., Chrisman, Chua, & Kellermanns, 2009a; Eddleston, Keller-manns, & Sarathy, 2008; Habbershon & Williams, 1999). Withinthis theoretical lens, Habbershon and Williams (1999) rstintroduced the term familiness, describing it as the idiosyncraticbundle of resources and capabilities resulting from the interactionof the family and business systems (Habbershon et al., 2003: p.contribution by the family leads to distinctive familiness3 whichcan serve as a source of competitive advantage for the family rm.Thus, familiness is often used as a unique element that candifferentiate family and non-family rms and also discriminateperforming from underperforming family rms (Pearson et al.,2008).

In order to understand the familys role in supporting thecompetitiveness of the family rm, it is key to develop anunderstanding about different family-based attributes of familyrms that can create familiness. Such an approach needs to reachbeyond the anecdotal description about strengths and weaknessesof family rms and provide answers to the question:which types offamilies contribute to their family rms; that is, who are thefamilies that are best able to create familiness?

Much research has examined the link between a family rmsresources/capabilities and its competitive advantage/performance.For example, previous research has explored how human capital,social capital, patient nancial capital, and governance structurecontribute to family rm performance (i.e., Danes, Stafford,Haynes, & Amarapurkar, 2009; Sirmon & Hitt, 2003). Otherresearch has focused on how the familys aspirations, visionsand values impact their strategic choices (Carney, 2005; Chrisman,Chua, & Zahra, 2003; Naldi et al., 2007). In contrast, our paperfocuses on the different ways a family can be involved in the familyrm. As such, we hope to answer the call for research by Pearsonet al. (2008) to consider the various dimensions of family-relatedsocial factors that create familiness.

Building on past research (e.g., Ben-Porath, 1980; Eddlestonet al., 2008; Naldi et al., 2007; Sirmon & Hitt, 2003; Zellweger,2007; Zellweger & Astrachan, 2008; Zellweger & Nason, 2008) andacknowledging that other theoretical lenses may also providefruitful and complementary avenues for investigating sources andconsequences of familiness (Pearson et al., 2008; Sharma, 2008),we focus on the family aspect of familiness to explore ways inwhich a family can inuence the family rm. Thereby we reachbeyond the component of involvement and the essence approaches(e.g., Chrisman et al., 2009b, 2005), and introduce organizationalidentity as a third element. In the next sections we discuss thesethree dimensions in detail.

2.1. The family aspect of familiness

Chrisman et al. (2005) introduced the components of involve-ment and essence approaches to the family rm literature todistinguish family from non-family rms and to unearth thelinkage between family involvement and competitiveness offamily rms.

The components of involvement approach consider the familysinvolvement in ownership, management or control (Chrismanet al., 2005). It is the basic necessary condition for a family toexercise inuence on the family rm and sets the minimumthreshold for considering a rm a family rm. This approachcontends that family involvement in ownership, management orcontrol is sufcient to classify a rm a family business (Pearsonet al., 2008). Many other research studies require even fewerattributes to consider the existence of a base level of familiness (foran overview see Rutherford et al., 2008, p. 10941095). Proponentsof this view believe that the mere existence of family in a businesscan create familiness. Indeed, Steier (2003) argues that familys

3 In the remainder of the paper we use the term familiness as a substitute for

distinctive familiness.

T.M. Zellweger et al. / Journal of Family Business Strategy 1 (2010) 546356involvement in management can offer much in the way ofexplaining family rm behaviors.

However, criticism has arisen regarding the component ofinvolvements ability to explain performance differences in familyrms. Such criticism partly relates to the underlying assumptionsanddenitionof a familyrm. Inparticular, adenitionthatcapturescombinations of levels of family involvement in ownership andmanagement may be prone to misclassications. For example, suchan approach may overlook rms that are owned by a controllingfamily that dictates the rms decisions, yet the family is not directlyinvolved in the rms management. Applying only a component ofinvolvement perspective would erroneously classify these rms asnon-familyrms,andhenceoverlooka large fractionofrmsthatarestrongly inuenced by a controlling family. Similarly, such aperspective canmistakenly classify businesses as family rmswhenthe rm is controlled by a family but there is little familyinvolvement, i.e., passive holding company (Chua et al., 1999).

Furthermore, while the components of involvement approachholds the promise of being operational and measurable, it seemsunderspecied in terms explaining how and why family involve-ment impacts strategic processes that lead to competitiveadvantages, limiting the practical applicability of the approach.While the theoretical roots of the components of involvementapproach, focusing on combinations of management and owner-ship control, can be found in agency theory, this approach is unableto capture altruistic and stewardship-based behaviors that appearto be critical factors in explaining performance differences amongfamily rms (e.g., Corbetta & Salvato, 2004; Eddleston &Kellermanns, 2007; Schulze, Lubatkin, & Dino, 2003). Similarly,the components of involvement approach does not account for theunique resources the family is able to contribute to the rm due tothe systemic interaction between family and business (Habber-shon et al., 2003). Thus, it appears that the components ofinvolvement approach to dening family rms are often a matterof convenience for researchers.

For these reasons it is argued that family involvement in termsof ownership, management and control may not be sufcient inexplaining how the family contributes to the business. Familyownership, management and control may only depict a familyspotential to inuence a family rm. Chrisman and colleagues(Chrisman et al., 2005) argued that family members mustpurposely inuence the family rm in order to make a sustainabledifference in the resource endowment of the rm. Therefore, thecomponents of involvement approach characterizes the simplestform of family involvement in the family rm and represents therst step in distinguishing family businesses, albeit a necessarycondition in creating the potential for familiness.

In contrast to the components of involvement approach, theessence approach argues that family involvement must befocused and directed toward behaviors that produce distinc-tiveness before the rm can be classied a family rm (Pearsonet al., 2008: 966). While most research assumes that familyinvolvement will translate into family inuence that shapes theorganization (Chua et al., 1999; Gomez-Meja, Hynes, Nunez-Nickel, & Moyano-Fuentes, 2007), such inuence is not automatic(Chrisman et al., 2009b, 2005). Thus the essence approach is amatter of behavior of the people who control the rm. Suchbehavior is determined by the unique processes and synergisticresources and capabilities contributed to the business by thefamily and the transgenerational vision that may perpetuate thesevalues (Habbershon & Williams, 1999).

The essence approach suggests that when the family displays atransgenerational vision for the business and the family controlsthe rm, feelings of personal and social fulllment arise that causefamily members to guard the well-being of the business (Arregle,Hitt, Sirmon, & Very, 2007), to place the rms objectives ahead oftheir own (Zahra, Hayton, Neubaum, Dibrell, & Craig, 2008) and toprovide human, social and nancial capital to the rm (Danes et al.,2009). For example, as a consequence of family involvement,family members may provide nancial support through outsidesources of income, emotional support through encouragement,and instrumental support through knowledge and human capitalto the family rm (Danes et al., 2009; Van Auken &Werbel, 2006).In this way, the essence approach is able to describe different typesof family rms and behaviors, thereby capturing the heterogeneityof family rms (Westhead & Howorth, 2007). It portrays theprocesses and behaviors transcending ownership and manage-ment through which competitive advantage is created andintroduces transgenerational vision as an essential part of whatfamily rms exemplify.

While considering both the components of involvement andessence approach has contributed to theoretical and empiricalinsights on family rms, why family members engage themselvesin the business or invest in the rm remains largely unknown. Thatis, why do some familymembers contribute to the rm beyond thelevels of normal managers or owners? While the RBV holdspromise regarding the conceptual link between internal aspects ofthe rm and the rms competitiveness (Barney, 1991), theunderlying processes that lead to competitive advantages areparticularly difcult to uncover in family rms. This difculty isnot only tied to the multitude of resources at play and thedistinctiveness of their usage, but also to the idiosyncrasy offamilies and the resulting uniqueness of a familys inuence on arms resource base. Furthermore, since transgenerational vision isan essential part of the essence approach, it is unclear whetherfamily-based resources (e.g., knowledge, social capital) can betransferred across generations. Finally, given its roots in the RBV,the measurement and operationalization of family-basedresources, beyond the measurement of sheer resource stocks, ischallenging. In summary, while the components of involvementapproach provides an objective assessment of the family rm,setting a minimum threshold in dening a business as a familyrm, the essence approach to family inuence reects thebehaviors that can embody the family rm.

However, the ability to assess a rms familiness based on thecomponents of involvement and essence approach seems limitedin light of the advances in entrepreneurship literature. Theentrepreneurship literature has recognized that an entrepreneursfamily often provides assistance to a new venture, both within andoutside the boundaries of the existing family business (group) (e.g.,Goffe & Scasse, 1985; Nordqvist & Zellweger, 2010). Family is a keycontributor and source of labor (often intermittent unpaid labor)during the start-up and expansion phases of a business (Chang,Memili, Chrisman, Kellermanns, & Chua, 2009; Fock, 1998).Therefore, given recent advances in the entrepreneurship litera-ture that has acknowledged a familys inuence on any business family and non-family rms alike an additional dimension tofamily inuence, beyond the components of involvement andessence approaches, seems necessary.

What is needed is a complementary extension to thecomponents of involvement and essence approaches that distin-guishes when the family is a substantive part of the rm, versusmerely a symbolic or supportive element that is not integrated intorm behavior or the organizations culture. An approach thatbuilds on the organizations identity seems warranted given thathow a rm denes itself should discriminate family from non-family rms. Indeed, Westhead and Cowling (1998) showed that17% of the rm leaders in their sample did not perceive themselvesto be a part of a family rm despite the fact that the rm wasmajority controlled by a family. Additionally, these authorsshowed that 15% of the rm leaders in the sample perceivedtheir rm to be a family rm, despite a low level of family control.

sions of familiness.

ce approach Organizational identity

on behaviors and synergistic resources

ibuted to the business by the family.

res how family members behave in

rm.

Focus on family rm identity

which is unique given the

idiosyncrasy of the family.

Captures how the family

ique

rces

usin

gene

valu

ive

y of

tigat

rship

com

nize

ily

es t

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diosy

ms

gene

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assi

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T.M. Zellweger et al. / Journal of Family Business Strategy 1 (2010) 5463 57Table 1Comparing components of involvement, essence and organizational identity dimen

Components of involvement Essen

Denitional focus Focus on degrees of family management,

ownership and control.

Captures the presence of the family

in the rm.

Focus

contr

Captu

the

Familiness/competitive

advantage emanates

from. . .

. . .familys involvement in management

and/or ownership.

. . .un

resou

the b

trans

these

Strengths Operational denition used in many

studies to distinguish family from

non-family rms.

Easy to measure.

Suitable for studies comparing family

and non-family rms (e.g., stock market).

Sets the boundary condition for family

involvement.

Inclus

variet

Inves

owne

which

Recog

of fam

Includ

as a d

Challenges Explains only the familys potential

to inuence a rm.

Is unable to capture how family

involvement impacts strategic processes

that lead to competitive advantages,

and thus limits the approaches

theoretical validity.

Misclassications: classies rms as

family (non-family) rms being

controlled by a family but where otherwise

family involvement is weak (strong).

Proce

difcu

resou

and i

on r

Trans

about

acros

Meas

famil

Miscl

famil

ventuAs such, applying an identity-based rationale uncovers atheoretically and practically relevant facet of what family rmsrepresent. We introduce organizational identity as an overlookedsource of familiness by providing a vision for the rm and directingfamily and non-family members to consider who they are as anorganization when making decisions pertaining to the organiza-tion. The organizational identity approach, with its emphasis onfamily rm identity, captures the familys perception of thebusiness Are we a family rm? and directly recognizes thosefamilies who are likely to create familiness. In the next section, wediscuss organizational identity theory in more detail, and then linkthis theoretical perspective as a third dimension of familyinuence to the competitive advantage of these rms. BelowTable 1 provides an overview on the three dimensions of familinessdiscussed in our paper.

2.2. Organizational identity theory

Features of an organization that are considered to be the mostcentral, distinctive and enduring are captured through organiza-tional identity theory (Albert & Whetten, 1985). Organizationalidentity provides a sense of continuity and distinctiveness to theorganization, as it describes the collective behavior and identity ofthe organization that is rooted in the organizations history andvalues (Ashforth & Mael, 1996; Gioia, Schultz, & Corley, 2000; Nag,Corley, & Gioia, 2007). The values and beliefs residing in theorganization are continuously expressed through interactionsbetween organizational members. In turn, these interactionsprovide organizationalmemberswith an interpretive belief systemthat provides meaning to the organization and its members (Gioia,1998).denes and views the rm.

processes and synergistic

and capabilities that contribute to

ess by the family and the

rational vision that may perpetuate

es.

. . . projecting a family rm image

towards internal and external

stakeholders of the rm.

denition, which covers a wide

family rms.

es the processes transcending

and management through

petitive advantage is created.

s the inherent heterogeneity

rms.

he transgenerational vision

ing characteristic.

Captures the idiosyncrasy of

family rms through exploring

identity of the family.

Captures family identity beyond

boundaries of components of

involvement and essence approaches.

Solid theoretical foundation,

with well dened ways through

which FB identity impacts

performance (see Table 2).

leading to competitive advantages

o uncover given multitude of

, distinctiveness of their usage,

ncrasy of familys inuence

resource base.

rational vision raises questions

sferability of resources

erations.

ent and operationalization of

uenced resources poses challenges.

cations: a rm may benet from

uenced resources (e.g., start-up

ut still not see itself as a family rm.

Narrow theoretical focus and

prediction about the sources

of familiness.

Typologies of different family

rm identities missing.Organizational identity describes how organizational membersdevelop a shared understanding of the inner processes, workingsand culture of the organization and how this understanding affectsthe behavior of these individuals, the organizational strategy andchange (Ravasi & Schultz, 2006). Accordingly, organizationalidentity can be regarded as a sense-making tool (Fiol, 1991;Weick, 1995) that, provides the context within which membersinterpret and assign profound meaning to surface-level behavior(Ravasi & Schultz, 2006: 437). In addition to sense making,organizational identity has a sense-giving function that guideshow members of an organization should behave and how otherorganizations should relate to them (Ravasi & Schultz, 2006: p. 435).Accordingly, organizational identity can be seen as a mechanismthat both inuence the behavior of organizational members andgive them an interpretative framework within which behaviorsoccur (Whetten & Mackey, 2002)4. Through identication, theorganization becomes an extension of the employees self andembodies the perception of oneness an employee feels with anorganization (Ashforth & Mael, 1996).

A recent study by Nag, Corly and Gioia (2007) showed thatwhile organizational identity imparts a cognitive frame andmeaning for the work practices of organizational members, italso inheres in work practices, particularly in the way that

4 Due to the proximity of the terms, it seems important to dene the terms

organizational identity and organizational image, as used in the present paper.

We follow Whetten and Mackey (2002) and dene organizational identity as that

which is most central, enduring and distinctive about organizations. Building on an

organizational identity, organizational image is conceived as identity congruent

messages invoked by members of the organization. The self-dened identity and

self-projected image towards others are distinct from the organizational reputation

concept.

T.M. Zellweger et al. / Journal of Family Business Strategy 1 (2010) 546358members use knowledge to accomplish work. Thus, organizationalidentity is more than a cognitive view of an organization; it alsoembodies the collective practices that characterize how organiza-tional members conduct their daily work (Nag et al., 2007: p. 824).Indeed, through a unique set of beliefs, values and practices,organizational identity differentiates one organization from othersin the eyes of organizational members and stakeholders (Scott &Lane, 2000).

This discussion is particularly applicable to family rms as theycan develop unique identities not only through the overlapping ofthe family and business system (Barnett, Eddleston, & Keller-manns, 2009; Sundaramurthy & Kreiner, 2008; Tagiuri & Davis,1992), but also through the varying degrees of involvement andinuence the family exercises (Chrisman et al., 2009b, 2005). Theintegration of the various beliefs that originate from the family andthe business, often tied to their common history, may thus explainhow the distinctiveness of organizational identity arises. This viewalludes to Klein, Astrachan, and Smyrnios (2005) who suggest thatthe values of key people in an organization their politics,communication style, conict management, and preference forcentralization/decentralization form an essential part of organi-zational culture.

A strong family rm identity can be created in many ways.When family members feel a strong sense of belonging to thefamily rm this feeling is often tied to the family members self-worth and self-esteem and the perception that the family rmrepresents an extension of themselves (Dyer & Whetten, 2006).Because family rm members are likely to view their business asan extension of their family, they often go to great lengths to createand maintain a positive organizational identity (Dyer, 2006). Theyunderstand that they cannot switch families if their family rmsimage is damaged. Sundaramurthy and Kreiner (2008) point outthat kinship, a shared family name, common history, andfamiliarity have the unique potential to develop a strong identityin family rms, inspiring familymembers to uphold the values andgoals of the family rm. Family rm identity can create a sense ofoneness and shared destiny for familymembers, building commonground for them to rally around and leading them to view thefulllment of family rm obligations as a source of pride(Sundaramurthy & Kreiner, 2008). When family members arehighly dedicated to the business and members believe that theyhave a common family responsibility to see the business prosper(Cabrera-Suarez, Saa-Perez, & Garca-Almeida, 2001), they aremotivated to contribute to the rm.

Additionally, as a result of a strong family rm identity, the rmis likely to benet from involved and participative familymanagers. Indeed, active participation and open communicationbuild commitment to an organization and foster a sense ofbelonging (Smidts, Pruyn, & Van Riel, 2001). Firms with higherlevels of family member exchange, characterized as having familyemployees who share ideas, feedback and expectations of one-another, are more successful than those rms where familymembers do not communicate or exchange information (Keller-manns & Eddleston, 2007). Family members who frequentlyinteract and communicate, are more likely to create a commonpoint of view regarding their family business (Sorenson, Good-paster, Hedberg, & Yu, 2009). In turn, the shared values and goalsamong family members may ease discussions, speed-up decision-making, and develop consensus regarding the strategic direction ofthe rm. Indeed, a shared identity and common point of viewenhance the quality of decision-making (Mustakallio, Autio, &Zahra, 2002).

It is noteworthy that the benet of an organizational identitymay extend beyond the family. Indeed, research has suggested thatthe concept of family can be extended to non-family members(Karra, Tracey, & Phillips, 2006). When the entire organizationembraces the values and goals of the family, unique advantagescan be realized. For example, the family rm could benet fromstewardship behavior from family members (e.g., Eddleston &Kellermanns, 2007), as well as fromnon-familymembers. In such ascenario, non-family members would behave as stewards of thefamily rm, engaging in supportive and innovative behaviors thatbenet the entire organization (Corbetta & Salvato, 2004). As sucha family rm identity can extend to employees who are not familymembers.

Likewise, a family rm identity that integrates participativedecision-making may foster a strategy process that buildsfamiliness. A participative strategy process supports familymembers identicationwith the rm, helping them to understandthe challenges facing the rm as well as the rms strengths,weaknesses, resources and capabilities (Eddleston & Kellermanns,2007). Indeed, fast growth, high performing family rms have beenfound to encourage participation in developing long-term goalsand strategies (Ueda, 2004). Additionally, participative strategymaking may also ensure that the ideas, goals and capabilities offamily and non-family employees are combined and aligned. Suchparticipative strategy making helps a family rm to avoid group-think and it also fosters strategic renewal (Sirmon, Arregle, Hitt, &Webb, 2008). For example, Kellermanns, Eddleston and Zellweger(2008) suggest that participative strategy-making distinguishesthe most entrepreneurial family rms since the family is able tocomplement the fresh perspectives of non-family directors. Thissharing of diverse perspectives may thereby enhance a familyrms ability to identify and exploit entrepreneurial opportunities.By combining the tacit knowledge of family members with theunique perspectives of the board of directors, competivenessshould be facilitated.

Whilewe have discussed howorganizational identity can help afamily rm to develop familiness internally, organizationalidentity may also contribute to familiness that extends externallyto the business. Organizations tend to manage internal andexternal relationships according to the same principles, values andgoals (Rousseau & Wade-Benzoni, 1994). As such, rms tend toportray the same identity toward external stakeholders as they dotoward internal stakeholders (Brickson, 2007). Organizationalidentity inuences external audiences interpretation of the rmsimage and branding practices (Karreman & Rylander, 2008)thereby affecting the publics perception of the rms products,strategies and organizational members (Fombrun & Shanley,1990). Since a familys identity is unique, a family rm identitymay be an important source of competitive advantage in themarketplace (Sundaramurthy & Kreiner, 2008). Often, the familybecomes a salient image of the rm in the eyes of the public.Upholding the rms image may become a particularly signicantconcern in the case of eponyms, when the family name is used inthe rms name. Eponymsmay be a uniqueway for a family rm todemonstrate their connection to a family and support of familyvalues. By tying the familys name to the rm, the family rm isable to signal to the public the familys values, beliefs and norms(Craig, Dibbrell, & Davis, 2008). In this way, the family comes topersonify the business, becoming an external resource for thefamily rm.

Being known as a family rm may be perceived as a positiveand distinct attribute in the minds of consumers thus contributingto rm performance. Many family rms also realize thatcapitalizing on their family rm status may be a way to build adistinct corporate brand. Promoting a business as a family businessto customers, suppliers and nanciers capitalizes on the publicsperception of family rm as trustworthy, customer-focused andquality-driven (Craig et al., 2008; Ward & Aronoff, 1995). Indeed,developing a family-based brand identity has been shown topositively contribute to rm growth and protability through its

s to create and maintain a positive organizational identity, since self-, family- and

ing. These intertwined identities create common rallying ground and nonmonetary

nd to assure the performance of the rm.

anagers develop a shared point of view leading to higher cohesion, shared

quality of decision-making.

and integrating family specic aspects into the business identity, the rm is able

on. In turn, family managers are able to develop family rm specic resources

apital) and competitive strategies (entrepreneurial investment portfolios).

the values and goals of the family, unique advantages could be realized

eneurial behavior).

managers to contribute to the rm as they buy into the organizational

pation in the decision-making process, and reduce group-think within

tity by employees assures that ideas, goals and capabilities of family

ined and aligned.

family rm identity may be an important source of competitive advantage

que branding practices.

ecoming an external resource for the family rm that is easily recognized

f stakeholders (e.g., suppliers, clients) who support the principles of the

ess a

a f

tal (

T.M. Zellweger et al. / Journal of Family Business Strategy 1 (2010) 5463 59inuence on customer-centered values (Craig et al., 2008).Similarly, a recent study by Memili, Eddleston, Zellweger,Kellermanns and Barnett (in press) demonstrated that rms thatcommunicate their family rm identity to external stakeholdersreap performance benets. In this way the family rm canestablish an extended family of stakeholders who support theprinciples of the family business such as loyalty, fairness andrespect (Sorenson et al., 2009) thereby enabling the rm to build acompetitive advantage that improves performance.

Another way a family rm identity can lead to externallygenerated benets is through community-level social capital.Community-level social capital embodies the information, con-

Table 2The link between family rm identity and competitiveness.

Internal benets generated

through a family rm identity

Behavior of family managers

Family managers go to great length

organizational identity are overlapp

incentive to perform individually a

Involved and participative family m

strategic consensus and enhanced

By nurturing a family rm identity

to capitalize on its family connecti

(e.g., patient capital, survivability c

Behavior of non-family managers:

If the wider organization embraces

(e.g., stewardship behavior, entrepr

The willingness of non-family rm

identity may lead to greater partici

the organization.

An adoption of the family rm iden

and non-family managers are comb

External benets generated

through a family rm identity

Since a familys identity is unique, a

in the marketplace and allow for uni

The family personies the business, b

in the public and inimitable.

Can establish an extended family o

family business such as loyalty, fairn

Close association of the business with

and to gain and retain customers.

Allows the exploitation of social capitacts and reciprocity that family businesses often share through acommunity of family-controlled organizations (Lester & Cannella,2006). Family businesses seem to possess a sense of communitythat provides social support and information to each other (Lester& Cannella, 2006). This type of social capital creates value for afamily rm because it reduces transaction costs related to thesearch and screening of information and also aids in contractenforcement (Arregle et al., 2007; Carney, 2005). For instance,family rms often help one-another navigate uncertainty in theirenvironments by providing business tips and access to newmarkets (Lester & Cannella, 2006). Research on internationaliza-tion also supports this view of family rms as being supportive ofone-another. Gallo and Vilaseca (1996) showed that family rmsuse alliances and cooperative arrangements most effectively whenventuring abroad. Therefore, rms that nurture their family rmidentitymay be able to gain access to a unique type of community-level social capital that assists with their operations andperformance.

Table 2 summarizes the ways in which a family rm identitymay create familiness and hence contribute to the competitivenessof family rms.

While we have discussed how organizational identity reects afamilys inuence on a family rm and can be an internal andexternal resource to a family rm, it should also bementioned thatnot all family rms choose to foster a family rm identity. Recentresearch drawing from organizational identity theory acknowl-edges that family rms have two relevant identities the familyand the business that can be segmented or integrated to variousdegrees (Sundaramurthy & Kreiner, 2008). As mentioned earlier,rms that are controlled by families do not always see themselvesas family rms, and sometimes rms that are not controlled byfamilies dene themselves as family rms (Westhead & Cowling,1998). Sorenson and colleagues (2009: p. 250) note that thecreation of a family business does not guarantee the development of a

family point of view. Such a scenario reects Pearson andcolleagues (2009) contention that family rms with weak familyrelationships may closely resemble non-family rms. Therefore,just as there is variability in the degree of family involvement andfamily essence in family rms, there is also variability in the degree

nd respect.

amily helps the rm to raise money, to attract targets for acquisitions

both domestic and internationally).to which a family rm chooses to integrate their family into theirorganizational identity. Some family rmsmay choose to ignore ordownplay their family rm status, resembling non-family rms tostakeholders.

Fig. 1. Dimensions of familiness. Adapted from Eddleston (2009).

or have family ownership, the entrepreneurs still see their rm as afamily rm and make decision accordingly. However, the ability

T.M. Zellweger et al. / Journal of Family Business Strategy 1 (2010) 5463602.3. Integrating the dimensions

Aswe outlined earlier, all three dimensions havemerit in tryingto discern why some family rms are more likely to createfamiliness than others. Accordingly, all three dimensions should beconsidered when trying to assess the competitiveness of familyrms and their family rm specic resources. Fig. 1 portrays theintegration of organizational identity with the components ofinvolvement and essence approaches, offering a three-dimensionalconceptualization of a family rms potential to develop famili-ness.

The components of involvement approach encompass actualobservable elements that describe the family rm (e.g., ownershipstake, percentage of family managers). The essence approach aimsto address the inuence of the family on the rms resource basewith the family pursuing a transgenerational vision. Organization-al identity adds to these two dimensions by assessing the degree towhich family and non-family members see the rm as a familybusiness. In other words, the components of involvementdimension captures the presence of the family in the rm, theessence approach captures family members behavior in the rm,and the organizational identity dimension reects how the familydenes the rm and how the rm operates as a whole. Where arm is located on the three-dimensional model will have aprofound impact on the rms ability to create familiness.

Family involvement-only rms (sector 1 in Fig. 1): for example, ifwe consider each component separately, the components ofinvolvement approach, with its emphasis on ownership andcontrol, should have the greatest impact on factors related tomonetary incentive systems, risk-taking and prot-sharing. It maybe particularly applicable to the investigation of larger rms,where family rm specic resources beyond nancial capital arelimited. An example of a solely components-oriented rm wouldbe an investment holding vehicle with family ownership but non-family management. The familys behavioral impact is limited andit does not necessarily see the business as a family business. Therm is merely a source of wealth for family members. Here, thecreation of familiness may be limited, since the familys inuenceon the business, beyond nancial capital, is scarce.

Essence-only rms (sector 2 in Fig. 1): in contrast, the essenceapproach, with its emphasis on behavioral aspects, resourceendowment and usage, reects the familys support for thebusiness as well as any conicts that arise between work andfamily. An example of a solely essence-oriented rm would be abusiness owner, say a restaurant owner, who utilizes family labor,perhaps unpaid, yet the owner does not view the business as afamily rm nor do family members share ownership of the rm.Perhaps the business owners wife assists with bookkeeping or hischildren periodically wait tables at his restaurant. But to theowner, it is his business. While the business utilizes somebehavioral advantages of familiness family members contribut-ing to the operations of the business the rm does not capitalizeon sources of familiness that originate from familymanagement orfamily rm identity.

Family rm identity-only rms (sector 3 in Fig. 1): lastly, theorganizational identity approach emphasizes the perception offamily rm identityare we a family rm? As such, organizationalidentity should have a signicant impact on factors at the interfaceof the family and the rm such as issues related to the image of therm, and the shared social identity of employees. An example of asolely identity-oriented rm would be one in which an entrepre-neur starts a business with the goal that her daughters willsomeday join the business. Another example would be a businessowner who takes over her fathers business, yet no other familymembers contribute to or share ownership of the business. Whileboth scenarios describe rms that do not employ family membersto generate familiness is restrained in these scenarios sinceopportunities related to familys contribution to management andcontrol is forgone and the rms lack family support.

As the approaches overlap, one can see how the complexity ofunderstanding and predicting family rm behavior intensies. Itclearly depicts why the goals and values among family rms maydiffer and why the concerns of family rms can be quite differentfrom those of non-family rms. It also depicts how some familyrms may be better able to create familiness than others. Familieswho are most likely to develop familiness would be those whocombine the components of involvement, essence and family rmidentity, creating synergy between the family and the businessthat contributes to family rm performance (sector 7 in Fig. 1).These rms possess family involvement, reect the essence of thefamily and dene themselves as family rms thus extracting themultiple benets of family inuence and capturing the advantageof family involvement in an enterprise. For example, when SCJohnson advertises with the slogan A family company, it can beexpected that the rm is harnessing the positive attributesconsumers associate with family involvement in a rm. In itscommunication with stakeholders, Johnson promotes its strongorganizational culture that embodies a family-spirit with highemployee commitment and loyalty5. Similarly, Pictet, one of thelargest Swiss private banks, presents itself as a family-owned rmwith a family heritage over two hundred years old. At Pictet thefamily supports the rm through involvement inmanagement andownership. Moreover, the seven managing partners stand person-ally behind the banks commitments, building an image of trustand personalized customer service in the marketplace. Theseelements portraywhat is central about the opportunities related tothe combination of the three dimensions of familinessas a meansof differentiating themselves in a crowded and instable market-place where solidity, continuity and reliability are critical inachieving competitiveness.

In comparison, families that combine the components ofinvolvement and organizational identity (sector 4 in Fig. 1) maysee themselves as family rms and possess the family control toimpact decision-making, but without the essence of the family the family-like behaviors and transgenerational vision the rmmay never realize the full benets of family inuence that comefrom altruistic acts and family support.

Another scenario would be a family rm that combine only thecomponents of involvement and essence approaches (sector 5 inFig. 1). Several large family rms such as Wal-Mart and IKEA fallinto this sector: these rms are controlled and supported byfamilies, however, they do not make a conscious effort to link thefamily image with its products. These families may want to avoidmisperceptions of their rms in the public or conceal the familyrm aspect for privacy concerns of the family. Without familyspecic organizational identity, however, these rms may lack thecommon vision necessary to direct and capitalize on familyinuence. In particular, smaller rms that fall into this categorymay not realize the external social capital and consumer goodwillthat can accrue to organizations that label themselves familyrms.

Finally, the combination of essence approach and identityapproach, in absence of components of involvement, reects rmsthat seek to be family-like (sector 6 in Fig. 1). For example,Southwest Airlines often portrays itself as a family of employees.For example, on their website they state, Being a SouthwestEmployee makes you part of the Southwest family! As our Company

5 This information about involvement, essence and identity are taken from

www.scjohnson.com.

T.M. Zellweger et al. / Journal of Family Business Strategy 1 (2010) 5463 61grows, we know how important it is to keep those family ties. Smallbusinesses often proclaim their family-like culture in advertise-ments and explain how their employees go above and beyond thecall of duty to ensure customer satisfaction. Therefore, thisscenario is quite interesting in that it captures how non-familyrms may be able to harness some of the capabilities of familinessto compete in the marketplace.

In sum, our multi-dimensional view of family aspects offamiliness demonstrates the heterogeneity among families andexplains why some families are a key resource to their rms whileothers add little value to the rm. It also sheds light on how non-family rms may be able to build familiness by imitating some ofthe elements often seen as unique to family rms.

3. Discussion

Supporting research on familiness, in this paper we offer amulti-dimensional model of family inuence in the family rm.While each dimension (components of involvement, essence andfamily rm identity) reects a unique way that families caninuence the family rm, the model also acknowledges that thesedimensions often overlap and intermingle. In building familiness,it can be expected that the dimensions would work in concert andreinforce one-another, creating the rare and inimitable family-based resource that Habbershon and Williams (1999) originallydescribed. When familiness was proposed by Habbershon andWilliams (1999) they aimed to increase our understanding of theorigins of the competitiveness of family rms. While otherresearchers have focused on the consequences of familiness, andspecically, the how (Arregle et al., 2007) and what (Pearsonet al., 2008) of familiness, we chose to focus on the who offamilinessthe family. That is, we attempted to describe thefamilies that are most likely to be able to develop familiness. Thus,we believe that our multi-dimensional model helps to explaindifferences among family rms, as well as differences betweenfamily and non-family rms. Additionally, our multi-dimensionalmodel provides insight into why some family rms may behavemore like non-family rms, and why some non-family rms mayseem family-like.

Our attempt is thus different fromotherwork that has sought toclassify family rms and grasp the essence of family involvement.For example, with their F-PEC model of family involvement,Astrachan, Klein and Smyrnios (2002) have suggested a three-dimensional measure of family involvement (see also Klein et al.,2005). While there is some overlap between our arguments onorganizational identity and the culture dimension of F-PEC (i.e., theextension of values, beliefs and goals from the family to theorganizational level), we see F-PEC as more of an empirical scale tosort out different types of family involvement, whereby eachdimension is seen as independent. Our approach differs from F-PECin two signicant ways: rst, we explore how different dimensionof familiness overlap, and secondly, we add family rm identity asone of the key elements that facilitate the creation of familiness.

4. Limitations and future research

We need to address a few limitations of our work that also offerfuture research opportunities. While we discussed the familyaspect of familiness, we did not investigate family resourcemanagement (Naldi et al., 2007; Sirmon & Hitt, 2003) or processesthatmay help leverage these resources (e.g., Eddleston et al., 2008).Accordingly, future research should investigate mechanisms thatallow family rms to successfully leverage their familiness.Research should also examine how the family aspects of familinessdifferentiate family rms, exploring how the different congura-tions affect the performance of family rms over time.To contrast distinctive familiness, we also need to mention thepossibility that restrictive familiness can also develop in a familyrm. However, in this paper we chose to focus on the advantages offamily inuence. Yet, there should be no question that the familycan also have detrimental inuences that can ultimately destroythe organization and that there is a dark side of strongidentication and high family involvement in the rm (forexamples see Gordon & Nicholson, 2008). For instance, a lack ofbusiness objectivity and discipline can originate from the family,thus compromising control mechanisms and creating resentmentboth within the family and with non-family managers. Suchconicts may eventually negate the benets of stewardship(Eddleston & Kellermanns, 2007; Schulze, Lubatkin, Dino, &Buchholtz, 2001). Also, as Sundaramurthy and Kreiner (2008)suggest, integrated family and business identities may promoterole ambiguity among family members, which can create conicts,reduce interaction and communication. Regarding externalcommunication, projecting a family rm image may create(mis)perceptions that the rm is resistant to change, stagnant,inefcient (Eddleston et al., 2008; Miller, Le Breton-Miller, &Scholnick, 2008) or not professionallymanaged (Chua, Chrisman, &Bergiel, 2009). Certainly more research is needed to explore theseideas.

While we expanded on the original conceptualization of thefamiliness construct (Habbershon & Williams, 1999; Habbershonet al., 2003) by exploring the family aspects of the components ofinvolvement, essence and family rm identity, we need toacknowledge that other theoretical approaches may complementour framework. Most notably Pearson et al. (2008) and Sharma(2008) have discussed social capital as a fruitful avenue in openingthe black box of familiness. In addition, transaction cost theory(e.g., Williamson, 1975) could provide useful insights intofamiliness.

Another area of future research is to explore if non-family rmscan ever successfully mimic familiness through the use ofinstitutionalized practices (see also Arregle et al., 2007; Leana &Van Buren, 1999; Pearson et al., 2008). While, we already knowthat the concept of family can be expanded to non-familymembers(Karra et al., 2006), the application of family-related constructs fornon-family rms remains unclear. However, before such practicesare explored, the problem of appropriability needs to be solved(Coff, 1999). In other words, the imitation of familiness by non-family rms is only useful if it actually leads to performancebenets for the rm.

Our paper focused on the origins of familiness. However, we didnot discuss how family members can benet from the generatedfamiliness. While nancial resources that ow back to the familyare relatively easy to assess, the non-nancial aspects, which havebeen referred to as socio-emotional wealth (Gomez-Meja et al.,2007), pose greater difculties. Indeed, both economic and non-economic benets derived from the rmmay have the potential toinuence subsequent behavior and goals of family members andtheir involvement and inuence within the rm. Accordingly,future research is encouraged to develop a comprehensive modelthat addresses the relationships between each of our dimensions offamily inuence, economic and non-economic goals/performanceand the feedback mechanisms between them.

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Exploring the concept of familiness: Introducing family firm identityIntroductionTheoretical background and hypothesis developmentThe family aspect of familinessOrganizational identity theoryIntegrating the dimensions

DiscussionLimitations and future researchReferences