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