Family business and social responsibility of the managing director: a French case study Online publication date: Fri, 11-May-2007
by Jean-Pierre Boissin, Jean-Claude Castagnos, Alain Fayolle
International Journal of Entrepreneurship and Small Business (IJESB), Vol. 4, No. 4, 2007
Abstract: The ties of kinship in an unlisted family business raise specific questions in relation to the management and social responsibility of the managing director. The opportunity we have had of studying a holding company close to something like an ideal type (a father and four sons, by the same token managing director and shareholders) gives cause for exploratory research. The operation of a family business is described from a longitudinal analysis of the strategy and organisational structures. This reveals a weakness in the control mechanisms because of the hierarchical 'shareholder-principal agent' relationship. The shared mental models of the family and cooperation present a system of values based on trust and effectiveness. The objective of maximising shareholder value turns out to be a reductionist conception of the business with regard to the practices of family management.
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