Future family generations as stakeholders in family businesses : a grounded theory approach

• Main Author: Tens, Vera
• Other Authors: Sanders, John W. ; MacIntosh, Robert
• Published: Heriot-Watt University 2017
• Subjects: 300
• Online Access: https://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.762003

This research investigates the meaning that is given to future family generations as stakeholders in their own rights by managers of family businesses. It uses a stakeholder perspective to establish whether stakeholder status is attributed, and if so, whether these stakeholders are regarded as important to the business - or not. The initial review of the academic literature identified that future generations of society have caused an ongoing debate on whether stakeholders have to be human or can in fact also include non-human entities. Future family generations, however, do not fit into this dichotomy as they present a special case: they are non-human initially, but over time become a human entity. Moreover, the initial literature review established a neglect of consideration for future family generations as stakeholders in their own right. In order to identify the (stakeholder) meaning that is given to future family generations, this research employs a constructivist grounded theory research strategy to explore first, the entity in the firm who attributes stakeholder status (with or without importance to the business), and second, whether and under what circumstances future family generations may be considered as such. Data was collected via 31 face-to-face in-depth interviews with interviewees working in family firms that are all based in Scotland. The family businesses ranged in size from one employee to several thousands; and in type anything from local butcher to large scale manufacturing company. The analysis of data was done in parallel with data collection, in line with grounded theory requirements, applying the researcher's interpretivist worldview on coding and all data analysis. The data from this research leads to the conclusion that future family generations require to be regarded as stakeholders in their own right. However, this research finds that the meaning given to future family generations is largely not about attributes, i.e. properties, of the stakeholder, as suggested by several academics, but instead a construct of one or several considerations of the firm's manager(s). The considerations identified in this research are linked with transfer of ownership, temporal dimensions, prioritising and underlying assumptions of traditions and goal-setting. Nevertheless, the research also finds that the existing dualism of family and business in family firms is an underlying theme; specifically, when identifying that it is the family business owner/managers who are acting upon their meaning given to future family generations and not other managers in the firm. Moreover, this research finds that the family business owner/manager may not only take on the role of proxy for the firm in regards to the stakeholder entity future family generations, but may also act as a human proxy for future family generations itself, in connection with the business; that is, creating a dualproxy role for the family business owner/manager. The latter proxy role was identified in this research to be linked with considerations of temporal dimensions of future family generations, leading to the disaggregation of the stakeholder entity future family generations into smaller ones by interviewees. This segregation of future family generations by their temporal dimension creates a conflict with the current academic debate on the dichotomy of human versus nonhuman stakeholders as it goes beyond that by creating additional entities.