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address this theory in the context of listed
quoted enterprise and unquoted family
owned enterprise.
Family enterprise
There is a shortage of scholarly, informed or
academic writing and/or study in the specific
areas of corporate communication, and
governance duty relating to listed or unquoted
family enterprise. In order to better
understand the opportunities of functional
corporate communication at governance in
enterprise (listed or unquoted), it is important
to examine the governance issues in both
types of enterprise, and to appreciate the
historical development of unquoted family
enterprise.
Research literature on family business is
limited. Goffee (1996):
This reflects both a bias towards the study
of large organisations as well as an assumption
that within these ownership is widely
dispersed. Even where it is acknowledged
that ownership (and control – once the
share structure has been analysed) remains
largely concentrated within a single private
family, such information is rarely applied to
explanations of managerial or organisational
behaviour.
Westhead and Cowling (1997) define a
family company as follows:
1 More than 50 per cent of voting shares
are owned by a single family group
related by blood or marriage.
2 More than 50 per cent of voting shares
are owned by a single family group
related by blood or marriage and the
company is perceived by the respondent
to be a family business.
3 More than 50 per cent of voting shares
are owned by a single family group
related by blood or marriage and the
company is perceived by the respondent
to be a family business and one or more
of the management team is drawn from
the largest family group who own the
company.
4 More than 50 per cent of voting shares
are owned by a single family group
related by blood or marriage and the
company is perceived by the respondent
to be a family business and 51 per cent or
more of the management team is drawn
from the largest family group who own
the company
5 More than 50 per cent of voting shares
are owned by a single family group
related by blood or marriage and the
company is perceived by the respondent
to be a family business and one or more
of the management team is drawn from
the largest family group who own the
company, and the company is owned
by second generation or more family
members.
Westhead and Cowling (1997) suggest that
many family businesses begin as entrepreneurial
owners,
exploiting a market opportunity but failing
to develop managerial control systems
which can cope with growth. Most will
fail as a result of these shortcomings, but a
small minority may develop the organisational
mechanisms necessary to make a successful
transition to managerial ownership.
From this position, substantial growth –
often to publicly quoted status – is possible.
© 2004 Sandra Oliver for editorial matter and selection;
individual chapters, the contributors