Title: Family business in family ownership portfolios

Authors: Marita Rautiainen, Timo Pihkala, Markku Ikavalko

Addresses: Lahti School of Innovation, Lappeenranta University of Technology, Saimaankatu 11, FIN-15140 Lahti, Finland. ' Lahti School of Innovation, Lappeenranta University of Technology, Saimaankatu 11, FIN-15140 Lahti, Finland. ' School of Business, Lappeenranta University of Technology, P.O. Box 20 FIN-53851 Lappeenranta, Finland

Abstract: In this paper, we study family business portfolios and illustrate ownership that connects family and business systems. Traditional family business research has assumed the one family/one business concept to be the main model. This study builds on the ideas of modern portfolio theory and behavioural finance theory and suggests that the portfolio evaluation criteria of risk and return coexist with the basic family-based evaluation criteria of obligation, securing succession, or family unity. This longitudinal case study and case analysis suggest that the family can be seen as a viable governor for the business portfolio and that the family portfolio development can be characterised by the complex set of portfolio evaluation criteria, including the needs of the individual family members to the contingent needs of the distinct businesses. The paper concludes with a redefined collection of portfolio management criteria identified and suggestions for further research on the subject.

Keywords: family members; family business; business portfolio; family firms; firm ownership; portfolio theory; behavioural finance theory; portfolio development; portfolio evaluation criteria.

DOI: 10.1504/IJEV.2010.032540

International Journal of Entrepreneurial Venturing, 2010 Vol.1 No.4, pp.398 - 413

Published online: 06 Apr 2010 *

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