• Prof. Dr. Heiko Kleve

Establishing and maintaining the family network.

Witten Familiennetwork

From the research workshop. Entrepreneurial families with more than 50 members are not just families or business-related organisations. They are also a special form of social networks - and thus a case for FON theory.

How do social orders develop in entrepreneurial families? How do they get and change over time?

Sociological research on these questions is particularly interesting for entrepreneurial families with multi-generational family circles. This makes it possible to explore what relationship structures are established between people, mostly unplanned and spontaneous.

Large entrepreneurial families can generally be described as tripled families or as entrepreneurial families 3.0. They combine the three social order structures of the family (F), the organisation (O) and the network (N) and are thus a special example of the FON theory. This expands the family and organization systems known so far in research on entrepreneurial families.

Families are first and foremost social systems that are biologically and emotionally influenced by family lineage and close emotional relationships with regard to their membership. These systems bind their members through the transmission of human life itself. This bond is so strong because there is no equivalent that can be returned to the parents or grandparents to compensate. Life can only be passed on in the direction of the future.

Moreover, families in modern society are the systems of primary socialization, that is, early personality imprints, and the integration of all personality facets into the social system. Both love as a medium in couple- and parent-child relationships and caring for children presuppose that we integrate the whole person into our relationships, with all its bio-psycho-social needs.

Large entrepreneurial families consist of a large number of such small family systems. If they want to deal with company-related issues in an appropriate way, they must therefore do something that is atypical for families in modern society: they must organise themselves formally.

Successful entrepreneurial families are therefore characterized by another organizational structure - the organization. They set up committees and fill them with functionaries who possess certain competencies. They channel necessary company- and family-related or financial decision-making processes, make decisions and ensure that they are implemented. The functionaries in organisations are basically interchangeable. Sie can, for example by means of elections or other procedures, be occupied again and again over the course of time by different persons.

While in families it depends on the concrete and unique persons, organizations are dependent on the fact that they stabilize themselves independently of specific persons.

Organisations are legal, political and economic institutions. They establish formal decision-making procedures in a transparent and rational manner (legal dimension), ensure the collective implementation of projects (political dimension) and also pay their officials for their work (economic dimension).

The problem of large entrepreneurial families is now that the family semantics described above no longer apply to keep the families together, because the many members of these entrepreneurial families are only remotely related to each other.

On the other hand, the form of organization of the entrepreneurial family is rational, effective and efficient in making and enforcing decisions.However,  Sie does not work to create community cohesion, to stimulate meaning and identity and to create loyalty and bonding between the many members or the numerous partners among themselves. And it alone does not establish a lasting relationship with the company.

To achieve all this, entrepreneurial families need a different social formation - the social network.

We can evaluate social networks as non-formally organised, informal and community-based social systems. However, networks are not self-evident. They are not, like families (through close family relationships and corresponding feelings), quasi "natural". And they are also not shaped by formal positions and functional carriers.

Rather, they arise from what we can call a basic economy of action - a reciprocity of give and take. When we take something from a person or a community, a kind of obligation arises. At some point, something must also be returned, such as loyalty or loyalty.

Network relationships therefore do not arise by themselves, but must be re-established, maintained and continually updated. Networks therefore need social opportunities so that they can be created, maintained and carried forward into the future.

These opportunities can be organised formally. Für Entrepreneur families mean to create occasions, spaces and times. In this way, they make it possible for remotely related members of the entrepreneurial families to meet, exchange, and relate to each other. Concrete examples can be network work for children and young people, but also ein Workshop for the acquisition of shareholder competence. Or a regional and real-life meeting of the shareholders. Even the digitalisation of networking, i.e. the use of social Internet media, fulfils this purpose.

However, this network idea is currently still not very present in large entrepreneurial families. There is clearly a backlog here. The better these large family members manage to network their many members through social relationships of giving and taking, both among themselves and with the company, the more feelings of cohesion and community identity are likely to be established.

It is precisely this that ultimately has an influence on ensuring that the principles central to family businesses - the trusteeship of company property and the transgenerational passing on of this property to the next generations - are sustainably safeguarded - and is therefore crucial to the continued existence of the family business. ®

Author:  Prof. Dr. Heiko Kleve,

Witten Institute for

Family business (WIFU)

Illustration: Tom Cool

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