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But over time, both entrepreneurial (if they
survive) and managerial owners may slip
into the paternal mode often sacrificing
market opportunities in order to sustain
employment relationships characterised by
loyalty and mutual responsibilities.
The unprecedented contribution throughout
the ages of family enterprise – rather than
non-family enterprise – is well documented
(Goffee, Rose, Payne, Habukkuk, Rudding,
Chandler, Heath, Neubauer and Lank, Scott,
Westhead and Cowling). This chapter briefly
endeavours to understand more about this, by
beginning at the role of the family enterprise
during the development of the industrial era,
examining how the family business enterprise
played a key role in it, and by looking at how
quoted and unquoted enterprises developed
in this environment. It also seeks to examine
briefly if communication played any role.
Family businesses, which were instrumental
in the industrialization of most countries, provide
a continuing important dimension in
modern economies worldwide (Rose, 1995).
Payne (1984) in Rose, (1995) reports that in
the British industrial revolution of the eighteenth
century the power of heredity and the
vitality of the family as an economic group
was quite remarkable. Legal, economic and
cultural forces of the eighteenth and nineteenth
centuries advanced the popularity of
the family enterprise, and with the continuous
threat of bankruptcy, the influence of
common law partnership and unlimited liability
meant that many businesses preferred to
be associated with their family connections
than with outsiders (Rose, 1995). Rose
also suggests that the local community was
the core of the business because business
activity was localized, the causes of action
were local and therefore the boundaries of the
family firm regarding finance, managers and
labourers were based/drawn from the local
community. In explaining the developmental
and change management role of the family
enterprise in the eighteenth century in Britain,
Habukkuk (1955) in Rose (1995) suggests
that during the early period of industrialization
family firms proved the principal agents
of change, their rapid turnover providing the
dynamism which fuelled the growth process.
Family firms account for between 75 per
cent and 99 per cent of all companies in the
European Union, and for 65 per cent of GDP
and employment in Europe (Rose, 1995). In
the United States, one-third of Fortune 500
companies are family owned (FT 93). Beyond
Europe and the United States, the family firm
has been, and continues to be, the norm
(Rose, 1995). Family businesses – mostly
small – are the dynamic in Chinese capitalism
leading to the significant transformation of
Southeast and East Asian economies since the
1970s (Rudding in Rose, 1995). The corporate
communication function, especially as a
management tool, is not referred to nor
specifically mentioned in the literature. Family
enterprise owners and their managerial hierarchies
are discussed by a number of writers
(Chandler, Heath, Neubauer and Lank) in the
context of enterprise development.
Chandler in Rose (1995) says that due to
the arrival of the large industrial family owned
enterprise in the west the ease with which
family management maintained itself in
labour intensive fragmented industries was
highlighted, and that in the capital-intensive,
concentrated industries the recruitment of
managerial hierarchies was necessary for
enterprises to enter markets, survive in them
and extend their market share. Similarly
specific facilities and skills were required in
other operational areas of the enterprise,
e.g. production and distribution. In less complex
production and distribution processes in
© 2004 Sandra Oliver for editorial matter and selection;
individual chapters, the contributors