Family Owned Business Institute

Research Scholar's Abstracts 2008 - W. Gibb Dyer, Jr., William Justin Dyer

The Impact of Family Business Ownership and Management on Families
W. Gibb Dyer, Jr., William Justin Dyer
2008

Those who are interested in starting a family business often ask the question: Will our business succeed and will our family continue to be healthy if we, as family members, go into business together? This is a difficult question to answer since little research has been done that compares the family dynamics of those in family firms with those families who are not in business together.

Given the dearth of such research, the study that we are proposing breaks new ground in the family business field. Using the Panel Study of Income Dynamics (PSID) conducted by the University of Michigan we propose to answer the following questions:

Do healthy family relationships lead to more successful businesses (and vice versa)
Do husbands and wives who work together in a business have better relationships with each other and with their children than those who don't work together?
Are children of family business owners more healthy psychologically than those parents who dont own and manage their own business?

We propose to create an index of family health for all families surveyed. The dimensions in this index include:

Parenting attitudes
Gender roles
Parental disagreement
Joint goals
Family Conflict

The items used for each of these dimensions have been used previously and deemed reliable and valid. These independent variables will be analyzed using regression analysis (and simultaneous equation modeling) to see how they influence (or are influenced by) the performance of a firm that is owned and managed by a husband and wife. The dependent variables for the first research question thus will be: 1) income from the primary business (controlled by industry); 2) whether the business made a profit, loss, or broke even, and 3) economic strain on the family. In our model we will be able to determine whether there are differences in family health between: 1) owner-managed firms; 2) husband and wife owned and managed firms; and 3) families where neither the husband nor the wife own or manage a business or work together.