If you’ve ever worked at a family-owned business, what struck you most about the culture? These types of enterprises can have terrific workplace cultures.
Let’s begin with a look at the four unique cultural categories of family-owned firms and explore what cultural benefits employment in a family enterprise can bring.
Four main types of cultures have been observed in family-owned operations. Here they are:
Paternalistic
Companies with a paternalistic culture are all about the founder and their family. This means considerable importance is placed on the viewpoint of the family head. This directs decision-making with little room for disagreement. While the approach offers a degree of certainty and facilitates quick action, it can lead to micromanaging. Handovers to the next generation may not be smooth and offspring can be under tremendous pressure to live up to the founder’s ideals.
Laissez-faire
This is a more accommodating culture in that it’s less hierarchical than a paternalistic type. Not all positions with power are held by family members. Employees with leadership potential are more likely to be promoted to positions with greater responsibility and to work alongside the founder’s relatives. Of course, those individuals moving up the ranks will be expected to demonstrate the family’s values.
Professional
The professional culture emerges when management of a family-owned firm is given over to industry professionals who have no family relationship. This may happen, for instance, if the following generation has less of an interest in the day-to-day operations. With this shift, family values that the company was founded on can have less prominence. Leaders won’t have the history of how the company came to be and what made it novel. In this model, long-term staff with strong ties to the owners may feel they’ve lost something.
Participative
As the name suggests, in this type of culture, collaboration exists across family and non-family lines. Everyone feels they have a stake in the success of the enterprise and a valuable contribution to make. People experience that their work is appreciated, their opinions are listened to, and their input taken into account. Although decision-making may be slower than in other models because there is not a defined leader, morale can be good.
Reasons for a positive working culture
The four prevalent models in family-run operations give some hint as to what assists a positive working culture. And, certainly, there are companies owned and operated by founders where the culture could use improvement.
That said, research shows that owner-operated businesses do generally have an advantage over those that aren’t family-based. Following are the main reasons why these firms can outperform the competition when it comes to working culture.
Family values
Family businesses are typically based on a strong value system that the founder has articulated. When someone is putting their reputation and livelihood on the line by launching their own enterprise, embedding their values is understandable. In this way, entrepreneurs declare how their business will function and set expectations for staff.
Individuals whose values align with what the company stands for will feel comfortable working at the firm. In turn, this clarity and commitment on the part of the CEO and their relations strengthens the workplace culture.
Compelling history
These businesses often have an interesting and compelling story of how they began. It can be the case that the company leader was motivated to start the enterprise by a personal event or adversity. They may have started with an idea of how to make a difference with a new product for the marketplace.
As the legacy of the founder is carried forward by successive generations of the family, the history becomes richer and more captivating. The company’s story serves, in part, to connect employees to a common cause.
Staff loyalty
Family-run firms tend to engender loyalty. Since the CEO and their offspring are so invested in the success of the company, they may foster a family feel amongst staff. These endeavors are usually the owner’s life’s work and they’ll take great pride in introducing their children to the business.
The stability in leadership and continuity through the generations can lead to employees staying with the firm for their entire working career. Staff may consider themselves part of the family, and this is a great basis for a happy working culture.
Close community ties
Companies that are owner-led are normally very involved with their local communities. Where the CEO does business may also be where they raise their family. Their customers are their neighbors and they care about making the community a better place.
Community ties may be expressed in the form of fundraising drives, sponsoring little league teams, hosting neighborhood picnics, or other similar events. This definitely supports a positive working culture.
So, there’s more than meets the eye when it comes to working in a family-owned business.
Bill Malloy 