Deepening family businesses

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Family businesses are characterized by a constant interconnection between the family system, the ownership system and the management system (Tagiuri – Davis).

Below are the possible combinations of the 3 systems and the actors involved.

Family Business Systems

Family members not involved in the business
Shareholders of the business who do not belong to the family
Employees who do not belong to the family
Family members who have an ownership stake in the business
Family members who work in the business but who do not have ownership shares
Shareholders of the business who are not family members but who work in the business
Family members, with ownership shares, who work in the company

Types of family businesses

	Ownership model	Presence of the family in the Board of Directors and management bodies	Size of the personal body
Domestic family businesses	One person or a small number of persons	Board and management only family members	Small
Traditional family businesses	One person or a small number of people	Family-only board, family and non-family management	Small Medium/large
Extended family businesses	A wider range of stakeholders	Board and management composed of family members and non-family members	Medium Large
Open family businesses	Family and non-family members	Board and management composed of family members and non-family members	Medium Large

Figure: typology of family firms according to Corbetta’s model (1995).

Main critical issues of a family business

The tendency for the logic of family business to prevail over business first.
Hostility to opening up to outsiders.
The possibility of disputes and family tensions, with repercussions for the company.
Undefined organizational structure: unclear definition of tasks
resistance to change
indulgence of family members: unequal reward system, not able to fill management roles

Lattanzi N., Family business and competitive scenarios.