The F Word

University of Auckland Business Review, Spring 2013
Graphics: Andrew Caldwell


Family businesses are critical to the economic health of most developed countries, and New Zealand is no exception; they comprise some 75 per cent of all our businesses and make significant contributions to employment, output and GDP. Yet, despite this, researchers in the field of organisational studies have been slow to pay attention to them. In this issue of the University of Auckland Business Review we address the neglect with a series of articles aimed at deepening our understanding of the dynamics, challenges, and future direction of the family firm.

Michelle Kilkolly-Proffit investigates how, at an early age, daughters become socialised toward taking part in their mother’s business and eventually assuming an ownership role. One of her conclusions: the rise of women-owned businesses worldwide may represent a significant shift in the way family and business interact.

Henry Shi analyses the dynamic relationship between family business and entrepreneurship in post-reform China, whose transitional economy is characterised by weak capital structures, inadequate protection of property rights, and high institutional uncertainty. Xi reports that Chinese family businesses have become a major entrepreneurial cluster in the country’s private economy and that understanding the way they operate will help New Zealand companies collaborate or compete with them.

Researchers Josie Taylor and John Tucker turn their attention to failure in family firms, arguing that it can often be traced to friction between family members. Taylor and Tucker concentrate on three sources of such conflict: ownership, control, and envy, noting that the organisational structure of family businesses reduces the likelihood that they will seek outside assistance in resolving the issues that threaten their survival. And when consultants are engaged, they say, success depends on the process being both confidential and transparent.

Paul Woodfield examines how successful family businesses are sustained across generations, using as his research focus New Zealand’s wine industry. One of the more enduring traits of family businesses is their long-term focus, says Woodfield, and the next generation in such enterprises often has a vital role in advancing innovation that underpins their entrepreneurial orientation. The task for the senior generation is to create an environment that encourages them to be open with that knowledge and to engage in innovation within the family, he says.

Finally, Deborah Shepherd, Christine Woods, and Gaia Marchisio discuss how a tool derived from the study of aerial combat can be used to help family businesses engage in entrepreneurial strategy. They caution that acting entrepreneurially is not about intermittent engagement; it must be a regular, systematic part of a firm’s behaviour.

Collectively, these articles underscore the point that, given an open and enquiring mind, useful lessons for business can be found in the most unlikely places: from the invective-laden heat of a commercial kitchen to the hostile skies of a combat zone.

Vaughan Yarwood


Vaughan Yarwood

Vaughan Yarwood is the editor of the University of Auckland Business Review.

in this issue


Socialisation of daughters in women-led family businesses

The global rise of women-owned businesses may be altering the way family and business interacts.



Rethinking entrepreneurship in family business

Understanding how Chinese family business operates will help New Zealand companies to collaborate or compete.



Conflict in a family business

Failures in family-owned businesses can often be traced to friction between family members.



Intergenerational family business

To build sustainable businesses, families must understand how entrepreneurial orientation and heritage interact



Combat hardened strategy

The military can teach family firms a thing or two about survival