Dark side of the family business: an exploratory perspective

Abstract

PurposeThe paper aims to relate the potential elements identified as the dark side of the family business (DSFB), where these elements can be productive or destructive. The “dark side” comprises an important contribution for entrepreneurship and family business (FB) studies, a novel perspective.Design/methodology/approachThe relevant literature on entrepreneurship and FB was selected and analyzed according to the “dark side” framework.FindingsThe results suggest that many perspectives remain for research, starting with a clarification and a more precise definition, not only of the construct itself but also of the factors or forces that drive this dark side, from the entrepreneur/founder, the FB itself and the context. This approach considers a systemic position in which the context plays a significant and decisive role.Practical implicationsThe paper has implications for the development of public policies. Business incubation entities, federal, state and local entrepreneurship/small- and medium-sized enterprise (SME) programs, educational institutions and entrepreneurial families and their founders can become more aware and establish courses of action.Originality/valueThis paper makes a call to propose an initial point for conceptualizing the logic behind the DSFB for obtaining a deeper understanding with regard to future research. Researchers are encouraged to test the conceptual model further.

The variation of family business branding across stakeholders: a social identity perspective

“…As such, by explicitly communicating the family presence in the firm, a family business brand helps leverage family-associated idiosyncratic resources . On the other side, however, the family may adversely impact stakeholders' impression of the firm in terms of its dark side (Mendez and Maciel, 2021). The family is often thought of as being inflexible and resistant to change (Hauswald et al, 2016), full of conflict between family members (Motoc, 2019;Zheng, 2009) and self-interested (Carrigan and Buckley, 2008).…”

“…, 2018). On the other side, however, the family may adversely impact stakeholders' impression of the firm in terms of its dark side (Mendez and Maciel, 2021). The family is often thought of as being inflexible and resistant to change (Hauswald et al.…”

“…As such, the communication of the family firm status can bring the firm competitive advantages associated with the family (Astrachan et al, , 2019Botero et al, 2018;Chrisman et al, 2003). At the same time, however, a dark side of the family within the business (Mendez and Maciel, 2021), such as selfinterested behavior (Carrigan and Buckley, 2008), conflicts between family members (Motoc, 2019;Zheng, 2009), nepotism and a lack of professionalism (Astrachan and Astrachan, 2015), adversely impacts stakeholders' perception of the family firm and therefore discourages a family firm from promoting itself as a family business (Astrachan and Astrachan, 2015). Overall, a firm's decision on family business branding depends on the influence of the family on its stakeholders, and communication of the family business brand varies across family firms, with some actively engaging in it because of the family's positive effect while others trying to conceal their family background for fear of the family's adverse impacts on stakeholders' perception of the firm (Astrachan and Astrachan, 2015;Botero et al, 2013).…”

Bankruptcy at family and non-family firms: do they fail differently?

“…Consequently, social ties, emotions and sentiments impact decision-making and are often regarded as equally important as economic considerations (Berrone et al , 2012). This can severely impair the economic development of the business (Montiel Mendez and Soto Maciel, 2021).…”

“…Thus, we highlight the specifics of bankruptcy at smaller family firms, which are both more prone to crises and more strongly represented among family firms. By exploring distinct characteristics of family firms that impact the organizational development negatively and lead to bankruptcy, we complement and extend the scarce research on the dark side of family firms (Kellermans et al , 2012; Montiel Mendez and Soto Maciel, 2021). Furthermore, since our study facilitates a better understanding of crisis and bankruptcy at family firms, it may help family firm owners, managers and consultants to develop effective strategies to prevent bankruptcy.…”