Blackwell Reference Online

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Defining the family firm is not straightforward, though the general consensus is that they are businesses where families have a controlling interest, which may be quite a modest ownership share in a large publicly quoted business. Family firms, according to how one defines them, account for a substantial proportion of all businesses and the GDP of most economies ( Shanker and Astrachan, 1999 ). In many parts of the world they are among the largest, most long‐lived and most successful firms. They differ greatly in form, with distinctive issues absorbing them at their various stages of development ( Gersick et al. 1997 ): the controlling owner phase, the sibling partnership, the cousin consortium, and the open family firm, where ownership is highly diffused. Research into family firms has tended to be specialized rather than integrated into the mainstream of organizational and management science. Even in the field of entrepreneurship there is little mention of them. A recent exception to this neglect has been the attention of economists interested in agency problems in business, who assert that while family firms have the advantage of unifying ownership and control, they are vulnerable to a range of unique fresh hazards essentially to do with a malign influence on decision‐making of sentiment, family favor, and other biases ( Schulze et al., 2001 ). It is certainly the case ... log in or subscribe to read full text