Women Entrepreneurship in Family Business

Vanessa Ratten, Leo-Paul Dana, Veland Ramadani

• Publisher: Taylor & Francis
• Year: 2017
• Print ISBN: 9781138298613
• eBook ISBN: 9781351580397
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The purpose of this book is to promote discussion about educational objectives generally and objectives in the teaching of educational psychology in particular. To this end, Part 1 contains a review of the literature concerned with these two subjects, and also reports on investigations into the views of British students, teachers, college staffs and educational psychologists on the question of the objectives of educational psychology in teacher preparation. A comprehensive bibliography is provided. A further important section of Part 1 proposes a method of systematizing teaching objectives, and suggests a heuristic device for the generation of objectives at different levels of conceptual generality and complexity of learning. An example of this model in the field of educational psychology is presented, which illustrates the general approach to the generation of teaching objectives and proposes a specific approach to the production of teaching objectives in educational psychology. In Part 2 a selection of readings in the fields of objectives and educational psychology provides the reader with some of the key source material referred to in Part 1. As well as being a valuable and stimulating addition to the current debate on the specifying of educational objectives, the arguments in this book about the role of educational psychology in teacher preparation raise some fundamental questions for those concerned with teacher education.

1 Women entrepreneurship in family business

An overview

Vanessa Ratten, Leo-Paul Dana and Veland Ramadani

Introduction

To advance economically and be more independent, women entrepreneurs often start their own businesses (Malach-Pines and Schwartz, 2008). This has influenced the growth of women entrepreneurs in family businesses, which are one of the largest types of overall businesses in the global economy. Women are at the forefront of global economic growth but much of the existing research on entrepreneurship has studied male entrepreneurs with less focus on women (Brush, 1992). This is largely due to the social constructions of women entrepreneurs in society. Mirchandani (1999:228) states that there is “recognition that sexual difference (that is, the difference between males and females) is socially constructed”. This has led to feminist theories of entrepreneurship suggesting that the focus of research needs to be on the way work is considered gendered (Mirchandani, 1999).

Much of the research on women’s entrepreneurship in family business has followed two major paths. The first is that women entrepreneurs face constraints in family businesses because of their gender. This means that there are gender-based characteristics that affect the way a woman behaves in a family business. Despite these differences women entrepreneurship can enhance the diversity of entrepreneurship in the global economy (Jamali, 2009). The second is that women create different types of family businesses that are based on relationships and trust rather than the more economic reasons favoured by men. Typically, men entrepreneurs have had more education, work experience and social networks than women entrepreneurs but this is changing (Carter and Brush, 2005). Women entrepreneurs express themselves differently than do males, which influences their conduct in family business (Chant, 2014). In addition, women usually have different motivations for becoming an entrepreneur including as a way of balancing work and family life (Petridou et al., 2009). Therefore, more recent research about women entrepreneurs in family businesses has focused on the service type of businesses they create in the global economy. For example, Greene et al. (2003) suggests that women-owned businesses typically are smaller, more service-based and grow more slowly than male-owned businesses.

The objective of this chapter is to set the stage for more research into women’s entrepreneurship in family business. This will help motivate readers to appraise the role that women in family businesses play in society. This chapter will suggest important contributions towards the study of women’s entrepreneurship in family business and how it can inform future research. This will help to build the research about women’s entrepreneurship in family businesses by strengthening its role in the overall entrepreneurship literature.

Women’s entrepreneurship

Despite the increased number of women starting businesses they generally have a lower level of entrepreneurial activity than males (Langowitz and Minniti, 2007). Despite this there are a variety of opportunities women have when they become entrepreneurs including challenges, independence and initiative (Jamali, 2009). Women entrepreneurs often start businesses to foster social relationships in the community through economic means and family involvement (Galloway et al., 2015). In addition, women entrepreneurs have tended to tap into family support as a way to help develop their businesses. Therefore, critical factors for women entrepreneurs is their self belief and confidence in realizing their business potential through family businesses (Glover, 2014).

There has been a tendency in entrepreneurship research to undervalue the contextual elements and applicability to women (Bruin et al., 2007). This is due to there being both similarities and differences between women and male entrepreneurs in family business. Women are normally considered to focus more on personal enjoyment as part of their reason for being an entrepreneur. Robichaud et al. (2005) supports this view by suggesting that women focus more on intrinsic factors such as self-actualization rather than the male goal of economic performance. Moreover, there is a traditional male stereotype of entrepreneurs that is influenced by societal attitudes towards males in family business.

There are both micro- and macro-level factors affecting women’s entrepreneurship in family business. The micro-level factors include opportunity identification, motivation, financing and performance (Jamali, 2009). Opportunity identification for women entrepreneurs includes examining ways they can succeed in involvement in a family business. This may include succession planning or international expansion, depending on the nature of the family business. A motivation might be for women to continue being part of a family through their businesses. Thus, motivations can include maintaining social relationships as well as financial independence (Harrison and Mason, 2007). Financing for women entrepreneurs involves owning part of a family business. This means that women entrepreneurs might have financial considerations as part of their reasons for being involved in a family business. Performance refers to the potential of the family business to grow (Shaw et al., 2009). For many women entrepreneurs the success of a family business is linked to personal goals (Marlow et al., 2009). Macro-level factors include the legal, normative and economic environment (Jamali, 2009). The legal environment in some countries may favour men as business owners due to financial restrictions. The normative environment includes more cultural elements such as ways women are supposed to behave in family businesses. The economic environment refers to the stage of development of a country in terms of productivity and investment with some more developed countries better able to support women entrepreneurs (Sinar, 1975).

There have been social changes over the past decade that have affected traditional sex roles and gender-based vocations (Mueller and Dato-on, 2008). These changes have been linked to the conventional sex roles applied to the involvement of women in business and types of conduct. Feminine behaviours in business include dependency, interpersonal warmth, nurturing and passivity (Sinar, 1975). In comparison, masculine behaviours include aggression, assertiveness and independence. Mueller and Dato-on (2008) refer to masculinity as “instrumentality” in terms of getting the work done whilst femininity is called “expressiveness” as it concerns the harmony of others. These gender stereotypes have been developed through cultural conditioning and socialization (Mueller and Dato-on, 2008). In addition, female behaviour is considered linked to their family in terms of the occupational roles they undertake.

Gender attitudes whilst being a form of stereotype continue to persist in business despite changing social conditions. Increasingly there has been more emphasis on people who possess both feminine and masculine traits called “androgyny”. Mueller and Dato-on (2008:10) state “androgynous people have the ability to effectively utilize behaviour that is both instrumental and expressive, both assertive and yielding, and both feminine and masculine”. There are less-well-understood explanations for the role of women entrepreneurs in family businesses. Social feminist theory suggests that the differences between males and females are due to socialization processes evident at an early age (Harrison and Mason, 2007). This is evident with males seen as being socialized and educated about entrepreneurship more than are women (Scherer et al., 1990). Women are seen as having lower levels of human, financial and social capital compared to men when engaging in entrepreneurship, which affects their involvement in family businesses.

Family businesses

Family businesses engage in strategic entrepreneurship whilst continuing their pursuit of profit maximization. Increased performance for family businesses results when they focus on strategic entrepreneurship. More literature has stressed the interlinkage between the family business and strategic entrepreneurship literature but there is still a need for further understanding. This chapter seeks to fill the gap by suggesting a theory of women’s entrepreneurship in family business that emphasizes its strategic nature. This helps to create new research avenues and opportunities for further research.

The composition of a family depends on the time period. Families can take the form of clan, endogamous, polygamous and tribal (Bettinelli et al., 2014). Moreover, families have been referred to as “organizations” due to their ability to work together for a common goal. The definition of family is open to interpretation based on individual preconceptions. The role of non-blood relations such as husband/wives in family businesses determines their involvement in managerial decisions. Some definitions of family businesses work on the basis that a person will determine its meaning based on their own values. Family businesses can be classified on a continuum from little family involvement to complete family and business linkage (Bettinelli et al., 2014). A commonly applied definition of family businesses is

a business governed and/or managed with the intention to shape and/or pursue the vision of the business held by a dominate coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families.

(Chua et al., 1999: 25)

A family is defined by its commitment to a shared future and the well-being of a group of people. Bettinelli et al. (2014) further explains how most definitions of a family focus on the interdependence of a group of people that is strengthened by network ties. The difference between a family and a group of people is the long-term nature of their involvement with each other. Long-term Furthermore, Hoy and Verser (1994) suggests that the source of family values is the ethnic backgrounds of family members. This is due to culture being a component of ethnicity, which affects organizational commitment. Hoy and Verser (1994:21) state that “although family businesses are prehistoric in origin, families (and therefore family businesses) are threatened today”. Families are changing with different forms of domestic partnerships existing. This is in conjunction with families tending to be more of a hybrid nature combining both biological and emotional bonds. In addition, marriage rates have decreased so there is a changing composition of families over a time period.

Family businesses are an important contribution to society due to their influence in economic growth. Part of the crucial role that families play in the community comes from the way family involvement influences entrepreneurship. Family involvement affects the level of innovation, risk taking and competitiveness in business. Family businesses are complicated by the dynamics existing within the family. Non-economic goals such as family harmony and emotional well-being are important for family business. This means that success in family business is measured by business performance and functionality of the family. The family sometimes is considered an impediment to the success of a business. The problematic aspect of a family business includes children and sibling rivalry. There is also gender dynamics in families with individuals contributing both to the family and business. In addition, the interpersonal dynamics in families means that communication can depend on relationship status within the family.

The anticipation of change is important to family businesses as they transition into new markets. These changes can be in terms of building family security in a business and meeting challenges. In difficult times family businesses survive because of the family rather than because of the business. The functionality integrity of a family is affected by tensions about business issues. Families that manage home-based businesses effectively tend to have an increased business net income. This has resulted in sustainable family business models which are defined as “a model that gives equal recognition to the family and the business and the interplay between the two in achieving sustainability for both” (Olson et al., 2003: 642).

The interaction style between family members affects the family business income. This is due to more engaged communication styles including accessibility for all family business members being important. Some communication in families is routinized but others is individualized depending on the style of each family business member (Olson et al., 2003). Moreover, satisfaction with a family business has been shown to correlate with increased income and health of family members. Family businesses with more non-family employees have lower levels of business success. In a family business, there is ongoing competition balancing the needs of the family versus those of the business.

Family businesses have interpersonal social relationships that influence learning processes (Hall and Nordqvist, 2008). Younger generations of family businesses often learn before joining the business. They do this by sharing experiences and discussing issues about the family business. The learning takes the form of etiquettes, norms and practices that distinguish the family business from non-family businesses.

Family businesses need to think beyond current generations to understand succession issues and participation models. This can be accomplished by family members learning from other family businesses in order to build better capabilities. The awareness of innovation scenarios could help encourage family businesses to engage in more creative processes. However, there is more work to be done on understanding the entrepreneurial process in different types of family businesses. Little research has been conducted on family businesses in the gender context and an effort to study new industries would be helpful.

In family businesses there is an organizational authority in the family that affects decisions. This authority figure can exploit opportunities by deciding on entrepreneurial action. Family relationships are important to economic and entrepreneurial development. Gimeno et al. (2010) suggests that the main categories of family businesses are captain, corporation, emperor, family investment group, family team and professional family. The captain form of family business is managed by the founder who makes all decisions (Ramadani and Hoy, 2015). This means that the founder steers the business towards goals that they want to achieve. Depending on the founders’ objectives the goals may relate to business performance or may be non-economic goals like lifestyle decisions. The corporation model has a complex family business structure that is usually older than other family businesses. Often corporation style family businesses develop into new businesses that integrate non-family members. The emperor model links the business and family by a leader who oversees decisions and is the central authority figure. There are normally multiple generations of a family working together in the emperor model as there is a dynastic synergy to business affairs. The family investment group involves family members pooling resources for financial reasons. The distinguishing feature of the family investment model is that usually non-family members manage the financial resources. This enables a separation between the family and business, which helps maintain neutrality. The family team model involves a group of family members working in a business. Most forms of family teams work in small business as they can structure work around a certain activity. The professional family model involves normally service based activities. This means that the level of complexity of the business task is high enabling family members to work together in a professional capacity.

Family business participation can be classified into four main groups: non-family members, inactive family members, the senior generation and the incumbent generation (Venter et al., 2012). Non-family members are those people who assist in the family business but are not part of the family. Examples of non-family members include advisors, and consultants who provide input to the business activities (Ramadani and Hoy, 2015). Inactive family members are individuals who have worked or won part of the business but are not currently involved in the family business. Often inactive family members become active members again when they are needed in the business. The senior generation includes older members of the family business who started the business. They are involved in succession planning for the future of the family business. The senior generations helps to share knowledge about the business in order to achieve sustainable performance. The incumbent generation is comprised of younger family members who are yet to enter the family business. These individuals are still at school or engaged in other professions but might enter the family business.

Family business entrepreneurship

Entrepreneurship involves the discovery of an opportunity and enactment of a resulting entrepreneurial action (Ferreira et al., 2017). There has been overall an increase in entrepreneurship worldwide that has coincided with more people starting their own businesses. The intention and action of entrepreneurial behaviours is important to perceived opportunities (Ferreira, et al., 2016). This change has been the result of organizations downsizing and increased usage of online communication. Entrepreneurship is a product of the environment and can be influenced by different external factors (Ratten, 2011). These include political and technological changes that affect business development. In uncertain economic times entrepreneurship paves the way for more job opportunities to be created. Cardon et al. (2005:24) states “entrepreneurship is often considered mysterious and sometimes even unknowable, the combination of idiosyncrat...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• List of figures
• List of tables
• List of contributors
• 1 Women entrepreneurship in family business: an overview
• 2 The role of gender in family-business research: a systematic review of the literature
• 3 Women-led enterprises in Germany: the more social, ecological, and corporate responsible businesses?
• 4 Family firms and non-family firms: a survey in Italian and Spanish wine sector performance
• 5 The role of women as entrepreneurs in family business: a literature review
• 6 Innocent sampling in research on gender and entrepreneurship
• 7 How does spouse involvement affect business growth? A matter of gender
• 8 Firm performance, corporate governance and gender diversity in top Italian family firms
• 9 When do women make a difference in the family firm?: understanding the Latin American context
• 10 Female entrepreneurship in developing contexts: characteristics, challenges, and dynamics
• 11 Gender entrepreneurial leadership in family businesses: a case study from Bosnia and Herzegovina
• 12 Listed Italian family firms: corporate governance composition and effects on performance
• 13 Future research directions for women entrepreneurship in family business
• Index