Values of Priority in Family Business: A Comprehensive Analysis
B. Indira Priyadharshini
Assistant Professor, Department of Commerce (E-Commerce), Nallamuthu Gounder Mahalingam College, Pollachi
*Corresponding Author E-mail:
ABSTRACT:
Family businesses are fundamental to the global economy, contributing significantly to employment and innovation. This research examines the values that family business entrepreneurs prioritize, exploring how these values influence their operations, decision-making, and long-term sustainability. Utilizing a survey-based approach and the Friedman test, the study identifies fourteen key values, ranking them based on their perceived importance among family business owners. The findings reveal that educational values rank highest, underscoring the commitment to continuous learning, followed by economic and business values. This paper discusses the implications of these findings for family business practices and offers recommendations for fostering a values-driven culture. Ultimately, it highlights the integral role of values in shaping the identity and legacy of family businesses.
KEYWORDS: Family Business, Values, Educational Values, Economic Values, Business Values, Sustainability
INTRODUCTION:
Family businesses are often viewed as the backbone of the economy, representing a substantial portion of enterprises globally. These businesses are characterized by a unique blend of family involvement and entrepreneurial spirit, which shapes their strategic direction, culture, and values. Values serve as the connective tissue within family businesses, influencing not only the internal dynamics of the family but also the operational decisions that affect the broader community.
In today's competitive landscape, understanding the values that family business entrepreneurs prioritize is critical for ensuring their sustainability and success.
Values such as trust, loyalty, and ethical behavior often dictate the way businesses operate and interact with stakeholders, including employees, customers, and the community. Moreover, these values are frequently passed down through generations, contributing to the legacy and identity of the business.
This study aims to explore the values of priority in family businesses, focusing on the results of a survey conducted among family business entrepreneurs. By applying the Friedman test, the research identifies and ranks 14 different values based on their perceived importance. Understanding these values can provide insights into how family businesses can enhance their operations, promote cohesion, and ensure long-term viability.
OBJECTIVES OF THE STUDY:
The primary objectives of this study are:
1. To identify and rank the core values prioritized by family business entrepreneurs.
2. To analyze the implications of these values on business practices and family dynamics.
3. To contribute to the existing literature on family business management by providing empirical data on the importance of values.
SIGNIFICANCE OF THE STUDY:
This study contributes to the understanding of family businesses by highlighting the values that drive their success. As family businesses face unique challenges, including generational transitions and market competition, the insights derived from this research can inform strategies that promote resilience and adaptability. Furthermore, by emphasizing the importance of values, this study encourages family businesses to cultivate a values-driven culture that sustains their legacy and community impact.
LITERATURE REVIEW:
The role of values in family businesses has been a subject of extensive research. Scholars have identified various dimensions of values that contribute to the success and longevity of family enterprises.
The Importance of Values in Family Businesses
Values are central to the identity of family businesses, influencing decision-making processes and shaping organizational culture. According to Chrisman, Chua, and Sharma (2005), values serve as a guiding framework for family businesses, impacting everything from governance structures to strategic choices. The alignment of family values with business objectives enhances cohesiveness and commitment among family members (Dyer, 2006).
Types of Values in Family Businesses
Research categorizes values into several types, including personal, ethical, economic, and philanthropic values. Personal values, such as loyalty and trust, foster strong relationships among family members and employees (Gersick et al., 1997). Ethical values, encompassing honesty and fairness, are critical for establishing credibility and trust with external stakeholders (Miller and Le Breton-Miller, 2006).
Economic values, which relate to financial responsibility and stewardship, are paramount for ensuring the sustainability of family businesses (Zellweger et al., 2012). Philanthropic values, such as community involvement and social responsibility, reflect the commitment of family businesses to give back to society (Baker and Nelson, 2005).
Challenges Faced by Family Businesses
While family businesses often benefit from a strong values-driven culture, they also face unique challenges. Issues such as succession planning, family conflicts, and the need for professionalization can threaten the sustainability of these enterprises (Sharma, Chrisman, and Chua, 2003). Understanding the values that family business entrepreneurs prioritize can help address these challenges by fostering a cohesive and supportive environment.
Empirical Studies on Family Business Values
Several empirical studies have examined the values of family businesses. For instance, a study by Miller and Le Breton-Miller (2006) found that family-owned firms tend to prioritize long-term success over short-term gains, reflecting a commitment to sustainability and legacy. Similarly, a survey conducted by the Family Business Institute (2018) revealed that family businesses place a high value on integrity and ethical practices.
RESEARCH METHODOLOGY:
Data Collection:
The study utilized a quantitative approach to assess the values of family business entrepreneurs. A survey was designed to measure the importance of 14 different values, which were rated on a five-point scale ranging from 1 (very less important) to 5 (very high important). The survey was distributed to a sample of family business owners across various industries.
Statistical Analysis:
The Friedman test was employed to analyze the data and rank the values based on their mean scores. This non-parametric test is suitable for comparing multiple related samples, making it an appropriate choice for this study.
RESULTS:
The results of the Friedman test revealed the following rankings of values based on their mean scores:
Interpretation of Results:
The findings indicate that educational values are paramount among family business entrepreneurs, reflecting a strong commitment to continuous learning and self-improvement. This prioritization of education may stem from the belief that knowledge and skills are essential for sustaining business success and adapting to changing market conditions.
Economic values also ranked highly, underscoring the importance of financial responsibility and stewardship in family businesses. Entrepreneurs recognize that sound financial practices are crucial for long-term viability and growth.
Business values, which encompass profit and effective management, were similarly prioritized, highlighting the need for strong leadership and strategic decision-making in family enterprises. Personal values, such as loyalty and modesty, further emphasize the familial aspect of these businesses, suggesting that personal relationships and integrity play a significant role in their operations.
Table 1 Values of Priority in Family Business
|
Values |
VHI |
HI |
I |
LI |
VLI |
Total |
Mean Score |
Rank |
|
Ethical Values |
329 |
208 |
84 |
77 |
52 |
750 |
7.82 |
7 |
|
(43.90) |
(27.70) |
(11.20) |
(10.30) |
(6.90) |
(100.0) |
|||
|
Personal Values |
340 |
190 |
114 |
79 |
27 |
750 |
8.20 |
4 |
|
(45.30) |
(25.30) |
(15.20) |
(10.50) |
(3.60) |
(100.0) |
|||
|
Emotional Values |
196 |
220 |
170 |
102 |
62 |
750 |
6.36 |
13 |
|
(26.10) |
(24.9.2.0) |
(22.70) |
(13.60) |
(8.30) |
(100.0) |
|||
|
Economic Values |
347 |
202 |
127 |
49 |
25 |
750 |
8.45 |
2 |
|
(46.30) |
(26.90) |
(16.90) |
(6.50) |
(3.30) |
(100.0) |
|||
|
Financial Values |
345 |
196 |
99 |
70 |
40 |
750 |
8.04 |
5 |
|
(46.00) |
(26.10) |
(13.20) |
(4.9.2.0) |
(5.30) |
(100.0) |
|||
|
Spiritual Values |
197 |
209 |
198 |
82 |
64 |
750 |
6.54 |
12 |
|
(26.30) |
(27.90) |
(26.40) |
(10.90) |
(8.50) |
(100.0) |
|||
|
Work Values |
329 |
172 |
117 |
88 |
44 |
750 |
7.68 |
8 |
|
(43.90) |
(22.90) |
(15.60) |
(11.70) |
(5.90) |
(100.0) |
|||
|
Physical Values |
333 |
181 |
147 |
60 |
29 |
750 |
8.00 |
6 |
|
(44.40) |
(24.10) |
(19.60) |
(8.00) |
(3.90) |
(100.0) |
|||
|
Cultural Values |
189 |
193 |
157 |
140 |
71 |
750 |
6.18 |
14 |
|
(25.20) |
(25.70) |
(20.90) |
(18.70) |
(9.50) |
(100.0) |
|||
|
Relational Values |
224 |
243 |
176 |
79 |
28 |
750 |
7.33 |
9 |
|
(29.90) |
(32.40) |
(23.50) |
(10.50) |
(3.70) |
(100.0) |
|||
|
Business Values |
376 |
175 |
109 |
63 |
27 |
750 |
8.39 |
3 |
|
(50.10) |
(23.30) |
(14.50) |
(8.40) |
(3.60) |
(100.0) |
|||
|
Philanthropic Values |
188 |
215 |
196 |
103 |
48 |
750 |
6.61 |
11 |
|
(25.10) |
(28.70) |
(26.10) |
(13.70) |
(6.40) |
(100.0) |
|||
|
Recreational Values |
206 |
242 |
177 |
72 |
53 |
750 |
6.85 |
10 |
|
(27.50) |
(32.30) |
(23.60) |
(9.60) |
(7.10) |
(100.0) |
|||
|
Educational Values |
369 |
171 |
146 |
35 |
29 |
750 |
8.52 |
1 |
|
(49.20) |
(22.80) |
(19.50) |
(4.70) |
(3.90) |
(100.0) |
Ethical Considerations:
Interestingly, ethical values, while ranked seventh, still hold considerable importance, indicating that family business entrepreneurs strive to maintain fairness and justice in their dealings. This alignment with ethical principles may contribute to the reputation and trustworthiness of family businesses in their respective markets.
DISCUSSION:
The findings of this study align with existing literature on family business values. The prioritization of educational values suggests that family businesses recognize the necessity of continuous learning in an ever-evolving business landscape. This commitment to education can enhance the skills of family members and employees, fostering innovation and adaptability.
The emphasis on economic and business values highlights the pragmatic approach taken by family business entrepreneurs. These values are essential for ensuring the sustainability and profitability of the enterprise, which ultimately supports the family’s legacy.
Moreover, the strong presence of personal and ethical values reflects the unique nature of family businesses, where relationships and integrity are critical components of success. The interplay between personal and business values can create a cohesive culture that supports long-term growth and resilience.
CONCLUSION:
This study provides valuable insights into the values prioritized by family business entrepreneurs. The findings indicate that educational values rank highest, followed by economic and business values. These results underscore the importance of a values-driven culture in fostering sustainability and cohesion within family businesses.
By understanding and reinforcing these values, family businesses can enhance their operations, promote positive relationships, and ensure long-term success. Future research should explore the impact of these values on specific business outcomes, as well as the role of values in addressing the challenges faced by family enterprises.
REFERENCES:
1. Baker, T., and Nelson, R. E. Creating Something from Nothing: Resource Construction through Entrepreneurial Bricolage. Administrative Science Quarterly. 2005; 50(3): 329-366.
2. Chrisman, J. J., Chua, J. H., and Sharma, P. Trends and Directions in the Development of a Strategic Management Theory of the Family Firm. Entrepreneurship Theory and Practice. 2005; 29(5): 555-575.
3. Dyer, W. G. Examining the "Family" in Family Business Research: Exploring the Role of Family in Family Business. Family Business Review. 2006; 19(3): 217-219.
4. Gersick, K. E., Davis, J. A., Hampton, M. M., and Lansberg, I. Generation to Generation: Life Cycles of the Family Business. Harvard Business Review Press. 1997
5. Miller, D., and Le Breton-Miller, I. Family Governance and Firm Performance: Agency, Stewardship, and Capabilities. Family Business Review. 2006; 19(1): 73-87.
6. Sharma, P., Chrisman, J. J., and Chua, J. H. Predictors of Satisfaction with the Succession Process in Family Firms. Journal of Business Venturing. 200; 318(5): 575-595.
7. Zellweger, T. M., Nason, R. S., and Nordqvist, M. From Longevity of Firms to Transgenerational Entrepreneurship: Exploring the Unexplored. Entrepreneurship Theory and Practice. 2012; 36(6): 1145-1159.
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Received on 19.02.2025 Revised on 17.03.2025 Accepted on 01.04.2025 Published on 02.06.2025 Available online from June 05, 2025 Res. J. of Humanities and Social Sciences. 2025;16(2):95-98. DOI: 10.52711/2321-5828.2025.00015 ©AandV Publications All right reserved
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