Family businesses in historic context

This year marks the 100th anniversary of the outbreak of the First World War, the most horrific war in human history up to that time. For four long years combatants dug in for indecisive trench warfare and industrialized slaughter that claimed 17 million lives. The optimism and faith in progress that had energized Western civilization before the war gave way to disillusionment and the “lost generation” afterward. Out of the rubble of World War I followed a second global war and then a third Cold one. To this day historians debate the causes. Yet this destruction was not the result of some iron law of history; it came about because of leaders' flawed planning and decision making.

Although we think of wars in terms of countries, in many ways the First World War was also a story of family business. Great families such as the Cadburys were split in terms of their view of the great war. Other powerful families, such as the Krupps, were very much a part of military history. And a number of the lead combatants were, realistically speaking, family businesses. Although France was a republic and England a constitutional monarchy, Germany, Austria-Hungary and Russia were family enterprises almost indistinguishable from the names Hohenzollern, Hapsburg and Romanov. In each of these countries the monarch held ultimate war powers. In each of the latter three countries, the monarch disdained legislatures—the national board of directors—and operated in an echo chamber of groupthink. As a direct consequence, none of these three great family dynasties survived the war.

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