סמינר בהתנהגות ארגונית

הסמינר ינתן ע"י

Ph.D. Nava Michael-Tsabari

“We are Like Family”: Organizational Culture in Family Firms and

its Influence on Firm Outcomes

The “feeling in the air” of “we are like a family” in organizations is anecdotally described to characterize the organizational culture in family owned firms. This, for example, is how Schein (2004, p. 184-5) describes the conflict between ‘professional’ versus family-owned managerial styles: “an American manager brought up with strong beliefs in achievement as the basis for status could not cope with the fact that Steinbergs, a Canadian family firm into which he had moved as a general manager, was completely dominated by assumptions of ascription, particularism, and emotional diffuseness. Tasks were assigned on the basis of who was who, decisions were made on the basis of who liked whom, and promotions were clearly reserved for family members. After a year or more of turmoil and conflict he left the organization”.

This ‘family-like’ organizational culture in family firms is based on different aspects of the 'family' metaphor; however, the direct measure of these characteristics has only been scarcely empirically studied. The findings during the last decade that family firms financially outperform nonfamily firms have added an unexpected counter-intuitive effectiveness advantage to this yet-undefined familial way of organizing.

I describe the findings from two studies I conducted in Israel trying to define and measure this ‘familial’ organizational culture, claiming that it can be described by four components: three cultural dimensions of paternalism, collectivism and power distance, and an emotional fourth component of sensitivity to emotions. I borrow these dimensions from the literature on differences between country cultures to describe differences between types of organizational cultures. The empirical findings, from a study of 35 family and 12 nonfamily firms in Israel, show that the owning-family positively and significantly influences these dimensions, which significantly influence firm outcomes of profitability, turnover and growth in a myriad of complex and partly nonlinear relationships.