Family business Family business

Families are the cornerstone of societies and more so for entrepreneurial families. Family dynamics are represented by the relationships, interactions, and interdependencies among family members in a family business. These tend to be complex, ever evolving and driven by emotions. When family dynamics are healthy, they can lead to trust, cooperation, and commitment among family members. This proves as a strong foundation for the business. However, when family dynamics are unhealthy, they can be a source of disagreements and instability in the business.

Numerous factors influence the family dynamics like socio economic factors, geographic origins, size of the family, unique situations faced by a family (sudden growth in business, natural calamities, medical conditions of family members, financial stress, sudden passing away of a member etc.)

Culture and Family Dynamics

Family business
Family business
Family business

Culture plays a significant role in shaping family dynamics. Different cultures have distinct values, norms, and expectations that influence how family members interact. In some cultures, collectivism is vital, emphasizing close-knit relationships and communal support. For example, the collectivist culture in Asia.

Family business

In some families there are individualistic cultures that prioritize personal independence and autonomy. These cultural nuances influence communication patterns, decision-making processes, and the roles family members play within the unit.

Family business

Joint families have been more conventional in Indian family businesses. They serve as a strong foundation of trust and loyalty, thus being an advantage. However, they have their own set of challenges to manage. Over time, however, nuclear families are becoming increasingly common in the Indian family business ethos.

Family Values

  • Values are the fundamental beliefs and principles that guide the behaviour, decisions, and actions of individuals and the family system as a whole.
  • They form the moral compass and ethical foundation of a family business.
  • Values and family culture are deeply interrelated.
  • Values are often inherited and reinforced to the next generations as part of the legacy.

The collective experiences, traditions, and beliefs of the family members influence the discovery of shared values.

History & Legacy

The values and principles practised by the founding generation through narratives and experiences serve as a guide for next generations.

Norms and traditions

Family traditions, rituals, and customs are repositories of shared values.

Communication and interaction

The way family members communicate and interact with each other shapes their understanding of the family's core values.

Role models and leadership

Family leaders who embody the values and exhibit the relevant behaviour serves as role models for the younger generation. Their actions greatly influence how values are perceived and embraced within the family business.


  • In New Zealand, Barfoot & Thompson, a real estate business for nearly 100 years, now led by the third generation, upholds values of family, community, diversity, and people.
  • Brazil's Energisa Group, celebrating its 115th anniversary, is the country's fifth-largest energy distributor, demonstrate the founders' values of safety, innovation, commitment, results, and customer focus.
  • In Finland, the family promoters of Aho Group (travel and health care business), emphasize "brave and joyful entrepreneurship, long-term thinking, and sustainability."
  • Dutch manufacturing business VDL Groep's core value is "strength through cooperation."
  • Source: EY-Eight lessons from the most successful family enterprises of 2019-20

In a family business survey conducted by PWC (2019), Maltese family businesses reported that the values and purpose have framed their company’s vision and are communicated on an ongoing basis to employees.

The values and purpose stemmed from those running or owning the business and have become stronger over the years.

"The Maltese people are characterized by their use of the Maltese language and adherence to Roman Catholicism, they trace their origins to a diverse mix of colonists from Sicily and Calabria who repopulated the Maltese islands."

Mr. Luiz Alexandre Garcia, the third-generation Chairman of Brazil’s Algar Group described it in this way:

“Algar Group has operated for 90 years in many different fields and the business has changed a great deal in that time. But the principles, purpose and values of the company have never changed. That’s our primary legacy. It is what has brought the company to its position today and what will carry us into the future.”

Source: KPMG- The enduring legacy of business families 2021

Transferring values to next generation

  • Education and storytelling: The Senior generation in family share stories and experiences that highlight the values.
  • Lead by example: The values demonstrated through consistent behaviour of the family leader(s) sets the tone for the organization and influences how others embrace these values.
  • Integration into business practices: The formal integration of values into the company and its decision-making ensures that values are not merely aspirational but are lived in the practical realities.
  • Mentoring: Next generation family members working in the business greatly value the mentorship ad guidance from their senior generation. When the values are integrated within the daily mentoring sessions, values are understood and imbibed.
  • Continuous communication: Regular family meetings and discussions about the family business's direction and values foster an environment of open communication. This ongoing dialogue ensures that values remain central to decision-making and problem-solving processes.