We suggest that when family businesses practice a culture of collaboration, they will operate more efficiently. In this article, we describe what is meant by collaboration and encourage family businesses to create a culture of collaboration within their firm. In addition, we summarize former research and report on our own research that helps identify what aspects of collaboration are related to high business performance.

What is collaboration? Collaboration allows the concerns of individuals or of groups in a firm to be considered (Thomas and Kilmann, 2010). The goal of collaboration is to find solutions that satisfy the concerns of these individuals or groups. Collaboration encourages an integrative approach to find solutions to problems, but also creates opportunities to explore new growth. Merging insights from different individuals or groups is another benefit that can be realized from collaboration. “Collaborators are helpful in reaching win-win solutions that provide a long-term resolution to a conflict issue.”

The culture of collaboration is driven by five main forces: (1) fairness, (2) goals, (3) family business functionality, (4) tension, and (5) creating an environment of openness to differences.

1. Fairness. Fairness in the family business is related to equality of treatment of family members as well as non-family employees. Samara and Arenas (2017) explored how businesses practice fairness in both the workplace and the household, and how those practices influenced the family business success. They concluded that when fairness is practiced in the family business, those firms receive returns in the form of positive business reputation, increased profitability, and sustainability over time.
2. Goals. Lee and Mar shall (2013) found that profit growth was influenced by firms having a goal orientation. Family businesses with a goal of growth, or a goal to have a positive reputation also had stronger profits. They concluded that having a goal orientation in family businesses is related to strong financial performance. Basco (2017) observed that family business goals can be both economic and non- economic in nature. He divided goals into family- oriented or business oriented goals, then into economic or non-economic.
3. Family business functionality. Neff (2015) found that traits related to high financial performance included: confidence in management, developing a shared vision, professional networking, and promoting organizational development. In our recent research, we explored how satisfied people were in feeling they could turn to people at home and work with problems; were satisfied that others in the family and business accept and support their ideas; were satisfied with how family and business individuals share time together; and if they were satisfied with the outcome when a decision had to be made in favor of what is best for the family versus the family business.
4. Tension. Tension and conflict in family businesses can stem from the family, the business, or a combination of both. Ultimately, this competition for resources between the family and the business can lead to conflict. Pieper et al. (2013) found three common conflicts that exist in family businesses: (1) using “the business as a family pawn” or bringing business issues up as a means to create family conflicts; (2)“retarding maturation” or keeping young members of the family from pursuing options other than the family business; and (3) “stagnation” or a resistance to change in the family business
5. Creating an environment of openness to differences. Culture is very important and influential in how family businesses operate and succeed (Fletcher et al., 2012). We suggest that creating a culture that is open to differences will allow a freer flow of ideas and innovation. In turn, the openness to new ideas and innovation will tend to result in improved business and family outcomes.

Model and Results

In our research, we had data on 601 family businesses and explored which of these five unique forces of collaboration contributed to success. Two models were constructed to measure which were statistically related to success within the family business. One model was designed to look for the traits that were related to the actual incomes of the 601 businesses and the second looked for traits that influenced the perception of success within the family business.

What We Found

The results for the two models revealed that there are varying motivations for the drivers of family business success. Income of the 601 businesses was positively affected by defining fairness according to the contribution each person makes; by fostering a culture that values differences of opinions; in businesses that have lasted for multiple-generations; and by businesses with more employees (larger).

The perception of success among the 601 owners was statistically and positively affected by defining fairness as treating each person according to their contribution or by treating everyone the same; having higher family functionality, and not having tension over the distribution of family and business resources.

Overall, having components of a culture of collaboration within a family business leads to higher levels of success. Family businesses that define fairness ac- cording to contribution of family members and foster a culture of openness to opinions tend to receive higher returns. Family businesses should strive to create a culture of collaboration in order to be more productive and have a healthy work environment for family members and non-family employees.

References

Basco, R. (2017). “’Where Do You Want to Take Your Family Firm?’ A Theoretical and Empirical Ex- ploratory Study of Family Business Goals”. Business Research Quarterly: 20, 28-44.

Fletcher, D., Melin, L., and Gimeno, A. (2012). “Culture and Values in Family Business – A Review and Suggestions for Future Research”. Journal of Family Business Strategy: 3, 127-131.

Lee, Y.G. and Marshall, M.I. (2013). “Goal Orienta- tion and Performance of Family Businesses”. Journal of Family and Economics Issues: 34, 265-274.

Neff, J.E. (2015). “Shared Vision Promotes Family Firm Performance”. Frontiers in Psychology: 6(646), 1-16.

Pieper, T.M., Astrachan, J.H., and Manners, G.E. (2013). “Conflict in Family Business: Common Met- aphors and Suggestions for Intervention”. Family Re- lations: 62, 490-500.

Samara, G. and Arenas, D. (2017). “Practicing Fair- ness in the Family Business Workplace”. Business Horizons: 60, 647-655.

Thomas, K.W. and Kilmann, R.H. (2010). Thomas- Kilmann Conflict Mode Instrument: Profile and In- terpretive Report. Available at: https://www.skillsone.com/Pdfs/smp248248.pdf

Wiatt, R. and Marshall, M.I. (2017). “Introducing a New Functioning Assessment for Family Businesses: The FB-BRAG”. Purdue Extension EC-813-W. Available at: https://www.extension.purdue.edu/extmedia/EC/EC-813-W.pdf