Although it has been long asserted that family businesses hold advantages over nonfamily businesses, to date, there have been very few theories developed as to exactly why family businesses hold competitive advantages over nonfamily businesses. This article introduces the concept of family capital and proposes that family capital has potential impact on business performance. Specifically, this article suggests that family businesses with high levels of family capital possibly do hold a sustained competitive advantage over family businesses with low levels of family capital and/or nonfamily businesses.

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Based on the social capital, conflict, and ethics literatures, this study introduces a new concept, the family point of view, and provides theoretical arguments resulting in the following hypotheses: (a) The family point of view emerges from collaborative dialogue, which helps develop agreement to ethical norms; (b) the presence of ethical norms further helps cultivate family social capital; and (c) as a resource in a family business, family social capital is positively related to family firm performance. Using structural equation modeling, an exploratory test of 405 small family firms found support for all three hypotheses. The findings indicate a fully mediated relationship among collaborative dialogue, ethical norms, family social capital, and firm performance. The study not only highlights the importance of moral infrastructure in family firms but also helps clarify components of family social capital.

Based on Dyer's (1986) study of family business cultures, this study derives five approaches to leadership: participative, autocratic, laissez‐faire/mission, expert, and referent. It argues that participative, expert, and referent leadership should produce positive outcomes for the business and the family, and high levels of employee satisfaction and commitment. It also argues that autocratic and laissez‐faire/mission leadership should be associated with relatively negative outcomes for the business and the family and produce low levels of employee satisfaction and commitment. A study of 59 small family businesses produced the following significant results: participative leadership is positively related to both family and business outcomes as well as to employee satisfaction and commitment; referent leadership is positively related to family outcomes and employee satisfaction; and, unexpectedly, laissez‐faire/mission leadership is positively related to employee commitment. Using correlational data as the basis, the paper discusses practices that might promote participative, referent, and laissez‐faire/mission leadership.

This paper analyzes a survey of 59 family businesses. Findings indicate that in comparison to nonfamily businesses, family businesses have a more complex set of issues to consider when managing conflict. The integrative conflict strategies of collaboration, accommodation, and compromise produce relatively better outcomes for both family and business. Competitive and avoidance strategies can result in relatively negative outcomes for both business and family. High levels of collaboration contribute to positive outcomes for both family and business, and high levels of compromise and accommodation contribute to positive family outcomes. Based on a comparison of means, this paper identifies conflict management profiles for achieving positive outcomes for both business and family.

This paper reports the analyses of a survey of59 family businesses. Findings indicate that in comparison to nonfamily businesses, family businesses have a more complex set of issues to consider when managing conflict. Collaboration, accommodation, and compromise strategies produce relatively better outcomes for both family and business. A competitive strategy results in relatively negative outcomes for both business and family. High levels of collaboration contribute to positive outcomes for both family and business, and high levels of compromise and accommodation contribute to positive family outcomes. Based on a comparison of means, this paper identifies conflict management profiles for achieving positive outcomes for both business and family.

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