Discerning the importance and nature of the family system in relation to the family firm: A paradigm shift

Abstract

The importance and nature of the family system relative to the family firm are presented in detail. Family firm definitions highlight the importance of the family system as supported by extant theories. The Sustainable Family Business Theory (SFBT) (Danes et al., Journal of Developmental Entrepreneurship, 13(3), 229-268, 2008) and the Entrepreneurial Value Creation Theory (EVCT) (Mishra & Zachary, The Theory of Entrepreneurship: Creating and Sustaining Entrepreneurial Value. New York: Palgrave Macmillan, 2014) are reviewed. From this conceptual base and known research to date, the family firm's secrets are explored by delineating and examining the prevailing myths of the family firm along with the apparent and counter dilemmas of such misconceptions. Finally, this chapter suggests possible exemplar nexuses between the family firm and the entrepreneurial firm as well as identifies 13 exemplar secrets or hidden truths of the family firm. The challenge of a paradigm shift is offered along with its implications for researchers, educators, practitioners, owners, and family members.