In this issue
"Shirtsleeves to shirtsleeves in three generations." So goes the popular adage about family businesses, bolstered by oft-cited statistics that only 20% of family businesses make it to the third generation and just 13% last through that generation (from a 1987 study published in J.L. Ward, Keeping the Family Business Healthy, Family Enterprise Publishing). Nonetheless, a growing body of academic research worldwide documents family firms' superior performance.
What do Wal-Mart, S.C. Johnson, Hallmark Cards, Grupos Femsa, Bimbo and Cemex (Mexico), Herms (France), Salvatore Ferragamo (Italy), Bacardi (Puerto Rico), BMW (Germany), LG Electronics (Korea) and Zara (Spain) have in common? For one thing, they are all family-owned or family-controlled businesses. All of them have proud entrepreneurial traditions, and many of them confound management experts by continuing to enjoy success after several generations of ownership by the founding entrepreneurial family.
In the late 1960s, John Petersen (a pseudonym) and his brothers inherited a modest pharmaceutical business from their father. Today, it is a multibillion-dollar global company, in great measure thanks to John's relentless entrepreneurial drive. Although he is the middle brother, John emerged as the lead partner after demonstrating time and again that they would all be better off financially letting him drive the strategy and implementation of the fundamental decisions.
In 2007, researchers Pramodita Sharma, Frank Hoy, Joseph H. Astrachan and Matti Koiranen published an article in the Journal of Business Research that included a chronology of key events in the history of family business education and study (P. Sharma, F. Hoy, J.H. Astrachan and M. Koiranen, “The practice driven evolution of family business education,” Journal of Business Research, 60:1012-21, 2007). Following are excerpts from the chronology, reprinted here with the permission of Elsevier, the journal’s publisher. We have included a few additional entries.