For this week’s assignment, I found an academic article
titled Field Theory: An Alternative to Systems Theories in Understanding the
Small Family Business. As the article began with the sentence,
“Environmental changes have increased our sensitivity to family business
users,” I thought that I had found an article in which I could discuss
Contingency Theory. As I read on,
I learned that this article allowed for me to do somewhat of a case study on
small family businesses in reference to the Star Model as proposed by Galbraith
(2011).
The article discussed how the small business owner of a
family business feels the draw from both family and business in regard to
priority (Riordan & Riordan, 1993).
While the family business owner, like any business owner, attempts to
create the most successful and profitable business, that owner may not hire the
most qualified candidates due to familial restraints (Riordan & Riordan,
1993). In the same mindset, that
business owner may also not be impartial when assessing salary and pay
incentives (Riordan & Riordan, 1993).
The lack of a fair and consistent hiring process, as well as the regard
for family over the business priority is a major fail in the Star Model’s People
concept (Galbraith, 2011). Also,
the favoritism among family members result in higher pay and better monetary
incentives conflicts with the Star Model concept of rewards (Galbraith,
2011). According the Galbraith
(2011), “The purpose of the reward system is to align the goals of the employee
with the goals of the organization” (p. 4). By rewarding family for just being family, the reward loses
its purpose and no longer motivates those workers not in the family.
At the top of the Star Model lies Strategy (Galbraith,
2011). According to Galbraith (2011), “Strategy is the company’s formula for
winning. The company’s strategy
specifies the goals and objectives to be achieved as well as the values and
missions to be pursued; it sets out the basic direction of the company” (p.
2). With the pull between family
and business needs, the small family business lacks strategy (Riordan &
Riordan, 1993). In many ways, this
article argues against the success of small family businesses, which becomes an
even stronger argument when you analyze it via Galbraith’s Star Model (2011).
Galbraith., J.R.. (2011) The Star Model, pp. 1-6.
Riordan, Diane A, & Riordan, Michael P. (1993). Field theory: An
alternative to systems theories in understanding the small family
business. Journal of Small Business Management, 31(2), 66. Retrieved February 4, 2012, from ABI/INFORM Global.
(Document ID: 591156).
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ReplyDeleteCathryn, it's very interesting to explore these ideas in the context of small businesses, as most of the examples from the readings deal with large corporations. It seems you are arguing that family businesses have a challenge separating "work" from "home"? Do you think this is always this case? You note that "with the pull between family and business needs, the small family business lacks strategy." Can you elaborate on this point? Why do you think this is the case? How do you think the other dimensions of the STAR model might play out differently in the context of family businesses?
ReplyDeleteCathryn,
ReplyDeleteYou bring up a very interesting point - with regard to small businesses, how important is the star model for success? Whereas you make an interesting point that family interests may cloud sound business judgments, do you believe small family-owned businesses have no strategy at all, based on your last paragraph?
Comparing this to my dad's small business, I think strategy is a huge part of the successes he found. Although hiring based on needs, whether family, friends or otherwise, he always held his strategy to the highest standards. Strategy was never put on the back burner for my dad.
This is a very interesting argument, as you tie many ideas together. Great insights.
Cathryn, I also agree that you brought an interesting aspect to this theory. My mother and I had a discussion about how the STAR model could be applied to her (very) small business, so I could relate to this article and your discussion of it. My mother finds it hard to hard to apply such principles to her business even though her employees are not family. It’s a very small company and they have been working together for over twenty years. I agree with you that strategy is the key and that it should be the priority. I personally think that if my mom aligned the other dimensions with the overall direction of the company then she would have more success at the management of her employees. Nevertheless, I appreciate you bringing to light the possible implications that a small and/or family business may face in implementing the STAR model effectively.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteIn response to your comments, I do feel that it is hard to run a "purely business" organization when it is small, and especially, when it involves family. No matter what, we are all human and have tendencies to overlook issues and concerns when it affects the ones we love.
ReplyDeleteIn my personal experience, my grandfather started his own law firm late in his law career (he was a lawyer, a judge, and then a lawyer again). When my mother graduated from law school, she immediately joined his firm. My mother is intelligent and graduated at the top of her class (she is now a judge herself), but it was her relation to my grandfather that earned her position. Lucky for him, she ended up being a great lawyer! In the firm, my grandmother acted as legal assistant. While she is an intelligent and hardworking woman, I know that she would leave early on some days for personal appointments (hair, nails, etc.), which is something that I am sure they let slide due to their personal relationship. The other legal assistant would do similar things (long lunches on occasion, leave early for her kids' sports games, etc.), but they felt as if she were family and let those things slide too. The law firm was successful and highly profitable, but I truly believe that things would have been run differently if it were not a small family firm.
I currently work for Macys.com. We are a division of Macy's Inc., which is a very large company. In this setting, we are held much more accountable for our actions at work. When I need to leave early, I come in early and when I take a long lunch, I stay longer to make up for the time. There is slightly more accountability in this type of an organization.