Family Council From A Cultural Approach: the case of eastern european countries


The family council is a formal mechanism of the family governance in family businesses that aims to give a voice to all members of the family, and to unify the interests of all members. These interests are identified with the purpose of the family, necessary to achieve a long-term legacy, and the sustainability of the company. However, the establishment of the family council is a topic that is still at an incipient stage, both in the literature and for practitioners, so our contribution advances the understanding of family governance within the sphere of family businesses culture and context. For that purpose, we rely on two cultural indexes widely accepted in the literature. We have taken Hofstede’s dimensions and CAGE Distance Framework to explain the establishment of a family council in family businesses settled on the Eastern European countries. The prevailing culture in these countries defines the values and behaviors of their social organizations, namely, the family. The joint study of Hofstede’s dimensions and of the cultural, administrative, and economic differences in the Eastern European countries (CAGE framework) sheds light on how, when and why to establish a family council. This research opens a new field in the intersectional study of culture as an element of sociology and family business in the field of family governance. In advancing this line of research, multilevel analysis through case studies would confirm the coincidence of national values, with individual characteristics.

Keywords: Family business, family council, organizational culture, eastern countries

[1] Tobak J, Nábrádi A. The TONA model: A New methodology for assessing the development and maturity life cycles of family owned enterprises. Journal of Innovation & Knowledge. (2020):5(4):236-243.

[2] Gnan, Luca, Daniela Montemerlo, and Morten Huse. “Governance systems in family SMEs: The substitution effects between family councils and corporate governance mechanisms.” Journal of Small Business Management 53.2 (2015): 355-381.

[3] Arteaga R, Escribá-Esteve A. Heterogeneity in family firms: contextualising the adoption of family. governance mechanisms. Journal of Family Business Management. (2020):11(2):200-222

[4] Mustakallio, Mikko, Erkko Autio, & Shaker A. Zahra. “Relational and contractual governance in family firms: Effects on strategic decision making.” Family Business Review 15.3 (2002): 205-222.

[5] Instituto de la Empresa Familiar. IV Barómetro Europeo de la Empresa Familiar. Retrieved from: http: // Accessed 01/04/2021 (2021).

[6] Migliori, S., De Massis, A., Maturo, F., Paolone, F. “How does family management affect innovation investment propensity? The key role of innovation impulses.” Journal of Business Research 113 (2020): 243-256.

[7] Porfírio J, Felício J, Carrilho T. Family business succession: Analysis of the drivers of success based on entrepreneurship theory. Journal of Business Research. (2020):115:250-257.

[8] Wang Y, Lo F, Weng S. Family businesses successors knowledge and willingness on sustainable innovation: The moderating role of leader’s approval. Journal of Innovation & Knowledge. (2019):4(3):188-195.

[9] Nazer, J. R., & Llorca-Jaña, M. (2020). Succession in large nineteenth-century Chilean family businesses. Business History, 1–26.

[10] Memili, Esra, et al. “Role conflicts of family members in family firms.” European Journal of Work and Organizational Psychology 24.1 (2015): 143-151.

[11] Xu F, Kellermanns F, Jin L, Xi J. Family support as social exchange in entrepreneurship: Its moderating impact on entrepreneurial stressors-well-being relationships. Journal of Business Research. (2020): 120:59-73

[12] Chrisman, James J., Jess H. Chua, and Pramodita Sharma. “Trends and directions in the development of a strategic management theory of the family firm.” Entrepreneurship Theory and Practice 29.5 (2005): 555-575.

[13] Madison, K., Holt, D. T., Kellermanns, F. W., & Ranft, A. L “Viewing family firm behavior and governance through the lens of agency and stewardship theories.” Family Business Review 29.1 (2016): 65-93.

[14] Schulze W, Lubatkin M, Dino R, Buchholtz A. Agency Relationships in Family Firms: Theory and Evidence. Organization Science. (2001):12(2):99-116

[15] Gorodnichenko, Yuriy, and Gerard Roland. “Culture, institutions, and the wealth of nations.” Review of Economics and Statistics 99.3 (2017): 402-416.

[16] Jones, M.L. “Hofstede - Culturally questionable? Oxford Business & Economics Conference”, Oxford, UK, 24-26 June, (2007): 1-9.

[17] Beugelsdijk, Sjoerd, Björn Ambos, and Phillip C. Nell. “Conceptualizing and measuring distance in international business research: Recurring questions and best practice guidelines.” Research methods in international business. Palgrave Macmillan, Cham, (2020): 449-498.

[18] House, Robert J., et al. Strategic leadership across cultures: GLOBE study of CEO leadership behavior and effectiveness in 24 countries. Sage Publications, 2013.

[19] Carney, Michael. “Corporate governance and competitive advantage in family–controlled firms.” Entrepreneurship Theory and Practice 29.3 (2005): 249-265.

[20] Nordqvist M, Sharma P, Chirico F. Family Firm Heterogeneity and Governance: A Configuration Approach. Journal of Small Business Management. (2014):52(2):192-209.

[21] Chua, Jess H., James J. Chrisman, and Pramodita Sharma. “Defining the family business by behavior.” Entrepreneurship Theory and Practice 23.4 (1999): 19-39.

[22] Hernández-Perlines, Felipe, Antonio Ariza-Montes, and Luis Araya-Castillo. “Socioemotional wealth, entrepreneurial orientation and international performance of family firms.” Economic ResearchEkonomska Istraživanja 33.1 (2020): 3125-3145.

[23] Suess J. Family governance – Literature review and the development of a conceptual model. Journal of Family Business Strategy. (2014):5(2):138-155.

[24] the Literature and Agenda for Future Research. Family Business Review, 33(2), 194–227. Kubíček, Aleš, and Ondřej Machek. “Intrafamily conflicts in Family businesses: a systematic review of the literature and agenda for future research.” Family Business Review 33.2 (2020): 194-227.

[25] Koeberle-Schmid, Alexander, Denise Kenyon-Rouvinez, and Ernesto J. Poza. “Family Councils and Chief Family Officers.” Governance in Family Enterprises. Palgrave Macmillan, London, (2014): 143-160.

[26] Matias C, Franco M. The role of the family council and protocol in planning the succession process in family firms. Journal of Family Business Management. (2020):11(4):440-461.

[27] González-Cruz, Tomás, José Antonio Clemente-Almendros, and Alba Puig-Denia. “Family governance systems: the complementary role of constitutions and councils.” Economic Research-Ekonomska Istraživanja (2020): 1-25.

[28] Mahto, Raj, William C. McDowell, and Peter Davis. “Influence and values: The connection between participation and commitment in family firms.” Journal of Business Research 112 (2020): 354-362.

[29] Melin, Leif, and Mattias Nordqvist. “The reflexive dynamics of institutionalization: The case of the family business.” Strategic Organization 5.3 (2007): 321-333.

[30] Dimitrov, Kiril. “Geert Hofstede et al’s set of national cultural dimensions-popularity and criticisms.” arXiv preprint arXiv:1810.02621 (2018).

[31] Williamson D. Forward from a Critique of Hofstede’s Model of National Culture. Human Relations. (2002):55(11):1373-1395.

[32] Ghemawat, Pankaj. “Distance still matters.” Harvard business review 79.8 (2001): 137-147.

[33] Miloloža, Helena. “Differences between Croatia and EU candidate countries: the CAGE distance framework.” Business Systems Research: International journal of the Society for Advancing Innovation and Research in Economy 6.2 (2015): 52-62.

[34] McSweeney, Brendan. “Hall, hofstede, huntington, trompenaars, GLOBE: Common foundations, common flaws.” Transculturalism and Business in the BRIC States. Routledge, (2016): 39-84.

[35] Saunila M. Innovation capability in SMEs: A systematic review of the literature. Journal of Innovation & Knowledge. (2020):5(4):260-265.