When Family Members Are Also Business Owners: Is Entrepreneurship Good for Families?

Transcription

1 JENNIFER E. JENNINGS RHONDA S. BREITKREUZ University of Alberta University of Alberta ALBERT E. JAMES University of Alberta When Family Members Are Also Business Owners: Is Entrepreneurship Good for Families? This article represents a call to family scholars for help in examining the effects of business ownership on families. To demonstrate the importance of this call, we illustrate the extent to which new venture creation is encouraged by policymakers and estimate the number of families engaged in entrepreneurial activity around the globe. We then summarize emergent critiques questioning the glorification of entrepreneurship in general and review the limited body of scholarly work examining the effects on families in particular. We conclude by outlining potential research agendas for several domains of family scholarship, providing examples of the provocative questions that arise when business ownership is explicitly acknowledged as a factor likely to impact family dynamics and well-being. This article has a lofty aim. We hope to entice family scholars to join us in an important and timely quest enhancing Department of Strategic Management & Organization, University of Alberta School of Business, Edmonton, AB T6G 2R6, Canada (jennifer.jennings@ualberta.ca). Department of Human Ecology, University of Alberta, Edmonton, AB T6G 2R6, Canada. Now at Williams School of Business, Bishop s University, Sherbrooke, QC, J1M1Z7, Canada. Key Words: business ownership, entrepreneurship, family business, family well-being. knowledge about the implications of entrepreneurship for family well-being. By entrepreneurship, we follow Shane (2008) in referring simply to the activity of organizing, managing, and assuming the risks of a business or enterprise (p. 2). (Accordingly, family businesses would be subsumed under this broad definition. By family businesses, we are referring to firms controlled primarily by a family and in which at least two family members work. By family, we are referring to two or more individuals related by blood, adoption, or marriage or a marital-like relationship.) Although the term entrepreneurship continues to be vigorously debated by entrepreneurship scholars, one observation is far less contended the rhetoric regarding the benefits of fostering entrepreneurial activity. Indeed, a commonly heard refrain is that new business creation is not only a key driver of economic growth and development (if not the key driver), but also a potential solution to many of the world s social and environmental problems. Entrepreneurship, in other words, is often viewed and portrayed as a socioeconomic panacea, thereby attracting considerable policy attention and funding. Although critiques of this glamorization of entrepreneurship are starting to emerge, to date there has been very little questioning of whether new venture creation and business ownership are inevitably beneficial for families; that is, whether business ownership contributes to the social and emotional well-being of family members, family 472 Family Relations 62 (July 2013): DOI: /fare.12013

2 When Family Members Are Also Business Owners 473 cohesion (togetherness), marital quality, workfamily integration, and the ability of family members to achieve their individual and family goals. As a result, the following comment by Baines and Wheelock (1998) is as valid today as it was 15 years ago: The effects of... policy interventions on the lives and livelihoods of families dependent, often newly dependent, on small business activity have been alarmingly overlooked (p. 16). This article represents a call to family scholars for assistance in addressing this important gap. By studying whether business ownership is good for families, collectively we will be able to provide policymakers with a more reflective and comprehensive understanding of the benefits and costs associated with promoting entrepreneurship so fervently as the world s next Holy Grail. This article offers three foundational elements on which to build a programmatic line of research capable of achieving such a goal. First, we provide illustrative data to document the extensive policy interest in entrepreneurship and the prevalence of businessowning families in various countries around the world. Second, we review emergent work questioning the predominantly uncritical stance toward entrepreneurship and the limited set of existing studies that have examined how business ownership affects family dynamics and well-being. Third, we develop an agenda for extending such research by demonstrating the types of questions that could be addressed within five prominent domains of current family scholarship. THE PROMOTION AND PREVALENCE OF ENTREPRENEURSHIP Extensive Promotion Within the Policy Realm Governmental support for entrepreneurship reflects Giddens s (1998) influential ideas regarding the social investment state. According to this conceptualization, the new welfare state needs to be proactive rather than reactive, focused on the development of human capital so as to mollify individual risk within a globalized, competitive market. The corollary of this approach is that individuals are no longer protected from the market but through the market (Jenson & Saint-Martin, 2003). Although most of the literature that discusses the social investment state focuses on Giddens ideas for investments in social policy (Perkins, Helms, & Smyth, 2004), he also argued that governments should provide support for entrepreneurship and public-private partnerships. Our ensuing analysis illustrates how extensively governments the world over have been promoting entrepreneurial activity. Consider this quote by eminent entrepreneurship scholar Scott Shane (2008) regarding the policy interest in stimulating new venture creation within the United States in particular: The myths about entrepreneurship are so strong that, as citizens, we have fashioned our public policies around them. Much of American society believes that start-ups are a magic bullet that will transform depressed economic regions, create a lot of jobs, generate innovation, and conduct all sorts of other economic wizardry. As so, as a society, we encourage these activities through policies that provid[e] transfer payments, loans, subsidies, regulatory exemptions, and tax benefits to people who start businesses. Any businesses. (pp. 5 6) Tellingly, just 2 years later, the Wall Street Journal reported that the U.S. administration introduced a $30 billion small business lending program to help bolster the country s weak economy (Williamson, 2010). This program and others listed in Table 1, which provides examples of recent and current federal government programs supporting entrepreneurship in this country, offer ample support for Shane s contention. The United States is not alone, however, in funneling a vast amount of public funds to encourage and support entrepreneurship. Evidence of this claim is provided by the illustrative initiatives listed in Table 2 for other countries around the globe. (The entries reported in Tables 1 and 2 do not represent an exhaustive list of governmental initiatives dedicated to entrepreneurship but rather a set of illustrative examples. We identified these initiatives by searching the following websites: governmental agencies, departments, and stateowned or operated corporations; public policy research centers; and major newspapers.) Since 1961, for instance, the Canadian government has invested over $50 billion in its Small Business Financing Program alone. Billions have also been funneled into entrepreneurshiprelated initiatives across European countries, just a handful of which are featured in Table 2

3 474 Family Relations Table 1. Illustrative Policy Initiatives in the United States Related to Entrepreneurship Program Initial Year Value Description (and Source) Summer Jobs $1.5 billion Summer Jobs+, a new call to action for businesses, nonprofits, and government to work together to provide pathways to employment for low-income and disconnected youth in the summer of The president proposed $1.5 billion for high-impact summer jobs and year-round employment for low-income youth ages in the American Jobs Act as part of the Pathways Back to Work fund (White House Press Releases and Documents, We Can t Wait: The White House Announces Federal and Private Sector Commitments to Provide Employment Opportunities for Nearly 180,000 Youth, January 5, 2012). The Small Business Lending Fund (part of the Troubled 2010 $30 billion A small business lending program that is part of a government initiative to create jobs and to bolster the weak economy (Small business lending fund, Asset Relief Program) Temporary Increase in Limitations of Expensing of Certain Depreciable Business Assets 5-Year Carryback of Operating Losses of Small Businesses Small Business Administration Microloan Program Small Business Innovation Research (SBIR) Program and the Small Business Technology Transfer (STTR) Program $40 million Allows small businesses to expense up to $250,000 of the cost of the qualifying property (Internal Revenue Service, Bonus Depreciation and Increased Section 179 Deduction under the American Recovery and Reinvestment Act, 00.html) $947 million Allows eligible small businesses to elect a 3-, 4-, or 5-year net operating loss carryback for a taxable year after 2007 (Track the Money, Tax Benefits Under The Recovery Act, $112 million The Microloan Program provides small, short-term loans to small business concerns and certain types of not-for-profit childcare centers. The SBA makes funds available to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries make loans to eligible borrowers. The maximum loan amount is $50,000, and the average microloan is about $13,000 (U.S. Government Info, The SBA Small Business Microloan Program, U.S. Small Business Administration, Microloan Program, $2 billion The SBIR Program and the STTR Program ensure that the nation s small, high-tech, innovative businesses are a significant part of the federal government s research and development efforts. Eleven federal departments participate in the SBIR program; five departments participate in the STTR program, awarding $2 billion to small high-tech businesses (U.S. Small Business Administration, Technology (SBIR/STTR),

4 When Family Members Are Also Business Owners 475 (for additional examples, see Lundström, 2008). Within other geopolitical regions such initiatives tend to be smaller or narrower in scope, or both, yet still reflective of considerable policy interest and investment. The Australian government, for instance, set aside $2.4 million in 2009 to support small businesses that implement family-friendly work arrangements. And Chile and China both have programs in place to entice foreign entrepreneurs, in particular, to establish ventures in these countries. Even a nation like Kazakhstan has established a $100 million program aimed at promoting entrepreneurial initiatives, albeit targeted at those within the agricultural sector. In the following subsection we provide illustrative data estimating the number of families now engaged in entrepreneurial activity in various countries around the globe. Estimated Prevalence of Families Engaged in Entrepreneurial Activity To the best of our knowledge, no one, as yet, has compiled comparative cross-national data on the prevalence of families engaged in entrepreneurship. Table 3 summarizes our estimates for selected countries within each of the world s geopolitical regions. Although these are likely to be conservative because of the methodology that we adopted (see the Appendix for details), they nevertheless suggest that vast numbers of families the world over are engaged in some form of entrepreneurial activity (i.e., new venture creation or young or established business ownership). Our figures for the focal nations in North America, Western Europe, and Eastern Europe, for example, total over 8.9 million, 1.4 million, and 2.3 million families, respectively. And although those for the selected countries in Africa and Oceania respectively amount to 2.4 million and 0.8 million, those for the focal three countries in Asia total a whopping 98.5 million. Across the nations indicated in Table 3, then, approximately 115 million families around the globe are engaged in the process of either starting new businesses or operating young or more established firms. And this is the estimate for these 13 illustrative countries alone. Although we cannot claim that our estimates are accurate within a specified confidence interval, a check against the figures reported by other scholars provides reassurance that they are reasonable. Heck and Trent (1999), for instance, estimated that 10.0% of families in the United States in 1997 owned at least one business that was more than 1 year old and in which the owner-manager worked at least 312 hours per annum. Given that the business age and work intensity restrictions imposed by these scholars deliberately excluded start-ups, when we similarly exclude those involved in nascent entrepreneurial activity from our estimate, our figure represents 10.5% of U.S. families in 2010 as we have defined them a percentage very close to that reported by Heck and Trent (1999). This percentage is also highly similar to the 11.5% figure reported by Shane (2008) for the proportion of American households owning a business in EMERGENT CRITIQUE AND EXISTING RESEARCH Emergent Critique Within the Entrepreneurship Literature The illustrative estimates presented in Tables 1 through 3 are huge. The monetary values reported in the first two tables are especially staggering, offering clear testament to the public policy arena s dedication to fostering and supporting entrepreneurial activity the world over. But is this money well spent? Although many entrepreneurship scholars certainly believe so, some feel differently (or are not quite so certain). Shane (2008) offered one of the most pointed critiques. The title of his book, The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policymakers Live By, is telling. So, too, is the conclusion that he drew from his comprehensive analysis of data collected via numerous, large-scale, representative samples: We need to change the way we think about entrepreneurship. Our collective belief that the typical entrepreneur is a hero with special powers that lead him to build a great company, which innovates, creates jobs, makes markets more competitive, and enhances economic growth, is a myth. And our sense that the typical new business provides a great deal of benefit for its founder, his employees and customers, and society at large is also wrong. Our myths about entrepreneurship, and the policies we have developed in response to them, are leading too many people to become entrepreneurs, causing financial hardship for many, and hindering our economic well-being. (p. 160)

5 476 Family Relations Table 2. Illustrative Policy Initiatives Related to Entrepreneurship in Other Countries Programs by Geopolitical Region and Country Initial Year Value Description (and Source) North America: Canada Canadian Innovation Commercialization Program (CICP) 2011 $40 million The CICP is a new program that was created by the Government of Canada in response to the needs of Canadian industry in order to help businesses get their innovative products and services from late-stage research and development into commercialization (Marketwire, Federal Government Helps to Kickstart Canadian Entrepreneurial Businesses, March 9, 2011; Fonds Capital Anges Québec 2011 $20 million The Quebec provincial government created the Fonds Capital Anges Québec, which will receive $20 million over 3 years from provincial coffers. Private sector and fund investments will bump that amount up to $30 million (Anges Québec, $30 M for Fonds Capital Anges Québec: Good news for angels and entrepreneurs ; Canada s Economic Action Plan: portion to support Canadian Youth Business Foundation (CYBF) Metis Entrepreneurship Fund (MEF) Canadian Small Business Finance Program (CSBFP) Business Development Bank of Canada (BDC) 2011 $20 million In the next phase of Canada s Economic Action Plan, which includes measures to support job creation, an additional $20 million was provided over 2 years to the CYBF. This will enable the organization to continue helping young entrepreneurs access business loans and mentoring services (Leisure & Travel Week, Government; Minister of State Bernier Celebrates Global Entrepreneurship Week 2011, December 3, 2011; $3.1 million The MEF, was established to respond to a demand for mid-market loan financing for Metis entrepreneurs and will serve as a financial tool to generate opportunities for Metis businesses in the Prairies (Marketwire, Aboriginal Business Group and Government of Canada Working Together to Promote Aboriginal Entrepreneurship, October 25, 2011; $1 billion each year Since 1961, the CSBFP has sought to increase the availability of loans (up to $500,000) for establishing, expanding, modernizing, and improving small businesses. It does this by encouraging financial institutions to make their financing available to small businesses (Industry Canada, Canada Small Business Financing Program; From over 100 offices across the country, BDC promotes entrepreneurship by providing highly tailored financing, venture capital, and consulting services to entrepreneurs. A financial institution owned by the Government of Canada, BDC has been serving Canadian entrepreneurs for more than 65 years (Business Development Bank of Canada, About BDC;

6 When Family Members Are Also Business Owners 477 Table 2. Continued Programs by Geopolitical Region and Country Initial Year Value Description (and Source) Europe: United Kingdom Capital for Enterprise Limited (CfEL] Seventh Framework Programme (FP7) 2008 over 4 billion CfEL is a fund management company that designs, delivers, and manages venture capital and debt guarantee schemes on behalf of the public and private sectors. CfEL brings together deep knowledge, experience, and expertise in investment management along with a detailed understanding of SME finance markets (debt, equity, and hybrids), public policy objectives, and the interaction between the two. CfEL is the largest single investor in U.K. venture capital, giving it a detailed overview of the U.K. venture market. Taken together, the debt and equity programs mean that CfEL has over 1.2bn of assets and liabilities under its direct management. When all of the private sector money is taken into account, these schemes under CfEL s oversight have created financing schemes which total more than 4bn invested in or available to SMEs (Capital for Enterprise, About Us; billion FP7 plays a crucial role in reaching the goals of growth, competitiveness, and employment and the businesses may be eligible to receive up to 75% reimbursement of research and development costs. The program runs for 7 years from 2007 until 2013 with a total budget of over 50 billion (Scottish Enterprise, Seventh Framework Programme (FP7); Europe: Denmark Action Plan on Venture Capital billion Focuses solely on venture capital from the supply side. The plan formulated a number of suggestions to ensure sufficient availability of venture capital. The suggestions targeted start-ups and early stage entrepreneurs as well as growth enterprises. The Action Plan on Venture Capital proposed a structure for a new private venture fund, with billion and the creation of First North, an alternative marketplace for dealing in shares. First North was designed to meet the needs of companies in the early phases of development (Lundström, A Entrepreneurship Policy in the Nordic Countries: Perspectives of the Development since 2003, Innovative Policy Research for Economic Growth; IDEA million (1.33 million/year 4 years) IDEA was established in 2005 following the decision of the Danish government in 2004 to establish a national entrepreneurship academy to strengthen entrepreneurship education and promote entrepreneurship at 25 educational institutions throughout Denmark, primarily in short-, medium-, and long-cycle higher education provisions. IDEA offers credit awarding courses in entrepreneurship. It covers a wide range of activities including developing internal institutional capacity in innovation and entrepreneurship at higher education institutions and promoting entrepreneurship culture in existing companies (Lundström, A Entrepreneurship Policy in the Nordic Countries: Perspectives of the Development since 2003, Innovative Policy Research for Economic Growth; Europe: Norway Innovation Norway 65 million in 2006 The main actor when it comes to offering financial support to entrepreneurs. Innovation Norway has several policy instruments available, ranging from entrepreneurial training to grants and loans (Lundström, A Entrepreneurship Policy in the Nordic Countries: Perspectives of the Development since 2003, Innovative Policy Research for Economic Growth;

7 478 Family Relations Table 2. Continued Programs by Geopolitical Region and Country Initial Year Value Description (and Source) Europe: Iceland NSA, the New Business Venture Fund 7.7 million invested in 2007 alone The NSA reports to the Ministry of Commerce. It is a venture capital investor financed by the government that focuses on investing in innovative and pioneering firms. The fund has been involved in some of the high profile ventures during the last few years although the investment power of the fund has been limited in recent years. In 2007 the funds owned some EUR 36 million and invested EUR 7.7 million in new projects (Lundström, A Entrepreneurship Policy in the Nordic Countries: Perspectives of the Development since 2003, Innovative Policy Research for Economic Growth, Latin America: Chile Start-Up Chile program 2010 Chile s government supports entrepreneurship through the Start-Up Chile program of the state development agency Corfo, which offers foreign entrepreneurs a 6-month work visa and a US$40,000 grant to come and launch a business in the country (Startup Chile, Movistar extends tech entrepreneur program to Chile; the-program/). Oceania: Australia Fresh Ideas for Work and Family Grants Program Asia: China Beijing Economic-Technological Development Area (BDA) Asia: Kazakhstan Development of Agricultural Entrepreneurship 2009 $2.4 million The Australian government established the Fresh Ideas for Work and Family Grants Program to support Australian small businesses to implement practices that help employees balance their work and family obligations as well as improve employee retention and productivity (Australian Government Department of Education, Employment and Employment Relations, Overview; A triple A-rated industrial park in China, among 11 in this highest ranked category, recently received approval to build a national innovation and entrepreneurship base catering to overseas talents. The innovation and entrepreneurship base for overseas talents program, one of the major platforms of the The 1,000th Plans, is to be set up by qualified enterprises administered by the central government, colleges and universities, scientific research institutions, and national-level high-tech development areas. Under the program, dozens of such innovation and entrepreneurship bases are expected to be established across the country within 5 years (China Knowledge Press, BDA to build innovation base for overseas talents, December 27, 2011; $109 million The government and the local authorities have introduced a program aimed at developing agricultural entrepreneurship until The program includes developing infrastructure in the rural areas, expanding irrigation systems, offering microloans, and organizing training courses. Currently there are 1,200 micro lending organizations that have already given residents over 110,000 loans totaling 16 billion tenge in value (Interfax: Russia & CIS Business and Financial Newswire, Kazakh president orders program to support agricultural entrepreneurship, January 28, 2011;

8 When Family Members Are Also Business Owners 479 Table 3. Illustrative Estimates of the Number of Families Engaged in Entrepreneurial Activity the World Over a Geo-Political Region/ Country GEM Nascent Rate GEM New Firm Rate GEM Est Firm Rate Census Age Group Cens. Data Year Total Population of Age Group # Nascent Ent #New Firm Owners # Est. Firm Owners % # Married b Families c # Families Nascent Ent d # Families with New Firms d # Families with Established Firms d N. America Canada e 6.50% 3.60% 7.40% , 033, 060 1, 692, , 190 1, 926, % 7, 549, , , , 669 United States 4.80% 2.80% 7.70% , 550, 000 9, 146, 400 5, 335, , 672, % 49, 543, 000 2, 378, 064 1, 387, 204 3, 814, 811 W. Europe Finland f 2.40% 3.40% 9.40% , 349, , , , % 770, , , , 426 Spain 2.20% 2.10% 7.70% , 512, , , 760 2, 965, % 10, 976, , , , 155 E. Europe Russia 2.10% 1.90% 2.80% , 719, 553 2, 493, 111 2, 255, 672 3, 324, % 33, 835, , , , 382 Slovenia 2.20% 2.40% 4.90% , 420, , , , % 319, 588 7, 031 7, , 660 Africa Egypt 2.10% 4.90% 4.50% 18+ (M) 16+ (F) , 407, , 566 2, 273, 987 2, 088, % 14, 850, , , , 274 South Africa g 5.10% 3.90% 2.10% , 454, 490 1, 553, 179 1, 187, , % 6, 395, , , , 304 Oceania Australia 3.90% 4.00% 8.50% , 923, , , 958 1, 353, % 3, 980, , , , 384 New Zealand 9.40% 10.00% 10.80% , 439, , , , % 548, , , , 270 Asia China 4.60% 10.00% 13.80% , 785, , 528, , 278, , 584, % 329, 516, , 157, , 951, , 473, 307 Japan 1.50% 1.80% 3.40% , 271, 702 1, 204, 076 1, 444, 891 2, 729, % 24, 482, , , , 418 Pakistan 6.60% 2.70% 4.70% , 111, 201 4, 825, 339 1, 974, 002 3, 436, % 23, 030, 028 1, 519, , 811 1, 082, 411 a 2010 Global Entrepreneurship Monitor (GEM) rates reported for all countries except Canada (2006 rates are reported) and New Zealand (2005 rates are reported). b Refers to the proportion of individuals in age group who are legally married or in a registered relationship (except where indicated). c # families = total population of age group % married 2. d # families nascent ent = # nascent ent % married 2; # families with new firms = # new firm owners % married 2; # families with est firms = # est firm owners % married 2. e The rate for Canada includes individuals in legal marital status as well as those in common-law status. f The rate for Finland includes individuals who are legally married and those who are in a registered partnership. g The rate for South Africa includes individuals in married and in civil, religious, traditional, and customary statuses, as well as those in polygamous marriages and those living together like married partners.

9 480 Family Relations Another eminent scholar, sociologist Howard Aldrich, has also recently voiced his skepticism. Although he did not take his arguments quite as far as Shane, he is arguably just as critical of the overly romantic picture that many policy analysts and academic researchers promulgate of entrepreneurs. More specifically, Aldrich s (2011) opinion is that this tendency has led to a misallocation of analytic resources (p. 2). Perhaps not quite so surprisingly, feminist scholars have also criticized dominant conceptualizations of entrepreneurship and the type of initiatives (academic or policy oriented or both) that such views engender. Calás, Smircich, and Bourne (2009) provocatively asserted: From where we stand, the main contribution [of creating a space for critical entrepreneurship studies] will be developing theory and research open to the possibility that entrepreneurial activities are not necessarily positive and might contribute to the problems they may be trying to eliminate. This will be relevant entrepreneurship research at its most fundamental, which will also encourage some caution in the popular and policy literature freely prescribing entrepreneurship as a must do to the detriment of other possible alternatives. (p. 566) Although not challenging conventional entrepreneurship research quite so directly, Hughes (2005) is similarly critical of the general media s myopic portrayal of entrepreneurs as well as pubic policy s inadequate attention (at least in Canada) to the diverse experiences and needs of self-employed workers and small business owners. While acknowledging that her analysis revealed many successful women in small businesses and solo practices earning good incomes, Hughes noted that it also revealed a significant number who are struggling to make ends meet, and who face significant challenges not only in terms of meeting their immediate needs and securing a good standard of living, but in making adequate preparations for their long-term financial security (p. 145). Later, she points to the contributing role played by public policy, arguing that the Canadian government s increasingly active role in attempting to build an entrepreneurial economy (p. 186) has led to a growing individualization of risk (p. 187). Two commonalities are evident across the above-noted critiques. On the one hand, they are consistent in questioning overly romanticized notions of entrepreneurs and their businesses. On the other hand, they are also consistent in not explicitly questioning whether entrepreneurship is good for families. Despite the prevalence with which families engage in entrepreneurship, surprisingly little research has been conducted to date on business-owning households. Existing Research on Business-Owning Families Within the Family Literature A search of the 2,240 articles on family business that we recently compiled for another project, for instance, revealed that less than 20 were published within family journals between our search period of 1985 to 2010 (for details on our search parameters, see James, Jennings, & Breitkreuz, 2012). Because this original bibliographic analysis was restricted to articles on family firms per se, it is possible that we missed those on entrepreneurship, more broadly, within the family literature. An expanded search in which we relaxed our search terms and time frame, however, resulted in fewer than 10 additional articles, bringing the total number of articles focused on business-owning families within the family literature to fewer than 30. Besides their limited number, these extant studies exhibit two characteristics supporting our call for further research on the impact of business ownership on family well-being. For one, many focus on farming families in particular (Ames, Brosi, & Damiano-Teixeira, 2006; Ballard-Reisch & Weigel, 1991; Beach, 1987; Danes & Lee, 2004; Hughes, 1987; King & Elder, 1995; Marotz-Baden & Mattheis, 1994; Solomon & Markan, 1984). As such, it is difficult to say whether their findings generalize to business-owning families more broadly. Second, the remaining set is rather fragmented, with one or two studies addressing specific topics such as the relationship between business performance and family well-being (Haynes, Onochie, & Musje, 2007; Loscocco & Leicht, 1993) or the consequences of business ownership for child well-being (Song, 1997), with little evidence of attempts to synthesize the disparate findings. As a result, extant family scholarship does not yet offer a definitive answer to the question of whether engaging in entrepreneurial activity is necessarily good for families.

10 When Family Members Are Also Business Owners 481 Extant Research Within the Entrepreneurship and Family Business Literatures The same can be said for existing research within the entrepreneurship and family business literatures. A key reason is that much of the extant work on business-owning families within these domains has been conducted by scholars interested in female entrepreneurs and/or copreneurs (i.e., couples in business together) in particular. Perhaps not surprisingly, much of this work has therefore explored the consequences of business ownership for relatively specific topics such as work-family integration, gender roles, and marital relationships. A broader set of issues is starting to be examined by general entrepreneurship and family business scholars. Two prominent comprehensive frameworks, for instance, include Aldrich and Cliff s (2003) family embeddedness perspective on new venture creation and Stafford, Duncan, Danes, and Winter s (1999) Sustainable Family Business Model. As yet, however, very little empirical work exists within the general entrepreneurship and family business literatures on whether business ownership is good for families. It is thus too soon to draw firm conclusions pertinent to the issue of whether policy interventions aimed at stimulating entrepreneurial activity are, on balance, beneficial or detrimental for family dynamics and well-being. In the following section we present an overarching framework for stimulating the type of programmatic research capable of offering an informed and comprehensive response to this timely and important issue. AN AGENDA FOR FUTURE RESEARCH Table 4 contains our guiding framework for extending research on how business ownership affects families. Instead of organizing this framework around predominant family theories, as we have done elsewhere (James et al., 2012; Jennings, Breitkreuz, & James, in press), we focus upon five topic domains that are not only of current interest to family scholars but also of relevance to the overarching question of whether entrepreneurship is good for families. (The second author of this article identified these domains by reviewing abstracts from the Journal of Marriage and Family, Family Relations, and the Journal of Family Issues from the past 2 years, corroborating their centrality in the field through consultation with another family scholar.) This process initially resulted in the identification of a sixth domain research on family income that we unfortunately had to strike from the final version of this article in order to meet the journal s strict page limit. We did so not because research on family income is irrelevant to our overarching topic but because it is arguably the most obvious domain in which to examine the impact of business ownership on family well-being. (For illustrative work see Carter, 2011; Haynes et al., 2007; and Loscocco & Leicht, 1993.) Below we elaborate how work within each domain can be of assistance in and fruitfully extended by considering business ownership as a factor potential contributing to family dynamics and well-being. Directions for Studies of Work-Family Integration Because of the increasing labor-force participation of women (especially in North America), work-family integration has become a key interest for family scholars. A central goal of this literature, in general, is to gain understanding about the within-domain and boundary-spanning demands and resources with which families navigate the challenging realities of balancing work and family (Voydanoff, 2005; for a recent comprehensive review, see Bianchi & Milkie, 2010). As yet, however, few family scholars have explicitly considered the implications of business ownership for work-family integration. Exceptions include Beach s (1987) early investigation of time use in rural home-working families; Ames et al. s (2006) qualitative study of the work-family issues faced by rural women with ties to family businesses; and Gudmunson, Danes, Loy, and Werbel s (2009) analysis of whether the emotional support provided by the spouses of entrepreneurs contributes to their perceived work-family balance during the venture creation process. See also Baines, Wheelock, and Gelder s (2003) discussion of the costs and benefits for work-life balance when self-employment is chosen as a route out of economic disadvantage. This dearth of studies within the family literature is quite surprising in light of evidence indicating that many new businesses are started in the hope that entrepreneurship will facilitate work-family integration (DeMartino & Barbato, 2003). But to what extent is this

11 482 Family Relations Table 4. Domains of Family Scholarship Pertinent to Investigating the Impact of Entrepreneurship on Families a Work-Family Integration Gender Roles Marital Relationships Child Well-being Intergenerational Family Ties Key foci of existing work within the domain Potential extensions that explicitly consider business ownership as a contextual factor Example studies of business-owning families within family scholarship Examples from entrepreneurship and family business research Work-family conflict/balance; linkages between work, family, and health; under- and overemployment; work-family policy. Studies of the extent to which time and energy are allocated to the business vs. family spheres and associated outcomes for the family. Ames et al. (2006); Baines et al. (2003); Beach (1987); Gudmunson et al. (2009) Eddleston & Powell (2012); Foley & Powell (1997); Jennings & McDougald (2007); Olson et al. (2003); Werbel & Danes (2010); Wu et al. (2010) Interconnections between gender ideology, resource dependence, time use, and the division of labor within the home. Studies of the ways in which owning a business attenuates or exacerbates gender inequality between spouses and children. Danes et al. (2005); Marotz-Baden & Mattheis (1994) Curimbaba (2002); Datta & Gailey (2012); Johnstone-Louis et al. (2012); McAdam & Marlow (2012); Sharifian et al. (2011) The impacts of cohabitation, parenthood, and relationship processes on marital quality, satisfaction, and outcomes. Studies of the extent to which business ownership impacts marital stability, well-being, and satisfaction across the firm s life cycle. Cole (2000); Danes & Lee (2004); Danes & Morgan (2004); Matzek et al. (2010) Marshack (1993, 1994); Wicker & Burley (1991) Linkages between child well-being and maternal employment, poverty and socioeconomic status, family fragility, parenting quality, and work-family conflict. Studies of the extent and manner in which business ownership impacts child and adolescent well-being. The support that adult children provide to aging parents; the support provided by grandparents; intergenerational relationships in transnational families. Studies that examine the extent to which business ownership impacts intergenerational relationships. Song (1997) Ballard-Reisch & Weigel (1991); King & Elder (1995); Zhang (2004) Aldrich et al. (1998); Kaye (1992, 1996); McCollom Hampton (1988) Barnes (1988); Davis & Tagiuri (1989); Smith (2009) a Given the permeable boundaries between domains, some of the cited studies can be classified into more than one.

12 When Family Members Are Also Business Owners 483 dream achieved in reality? On the one hand, the autonomy inherent in starting one s own business seems conducive to enabling workfamily balance. On the other hand, the intense time commitments typically required to launch a business venture would seem to interfere with if not preclude any sense of balance between the two domains. Moreover, those who leave large, established organizations to strike out on their own may lose access to the familyfriendly policies in place within their former places of employment. Family scholarship possesses the potential to offer significant contributions both conceptual and empirical to this timely and important debate. This is especially so considering that relatively limited work on the topic has been conducted to date within the entrepreneurship and family business literatures. Extant conceptual frameworks, for instance, consist of those by Foley and Powell (1997), Jennings and McDougald (2007), and Stafford et al. (1999). And empirical studies are still relatively few in number, illustrative examples being Eddleston and Powell (2012), Olson et al. (2003), Sharifian, Jennings, and Jennings (2011), Werbel and Danes (2010), and Wu, Chang, and Zhuang (2010). There is thus considerable space for family scholars to contribute to our collective understanding of whether and how business ownership facilitates or detracts from workfamily integration. Directions for Work on Gender Roles Another topic of current interest to family scholars and potential relevance to households engaged in entrepreneurial activity is that on the gendered nature of family. Of particular interest is the division of household labor. Earlier findings revealed that women not only performed the lion s share of housework even in dual-earner households but also perceived this division of labor to be equitable (Mikula, 1998). More recent work suggests that this general pattern is moderated by the nature of a woman s labor-force attachment, gender ideology, and resource dependence (Braun, Lewin-Epstein, Stier, & Baumgartner, 2008). But what happens when a family is engaged in entrepreneurial activity? Does owning a business tend to blur gender-role distinctions, or, conversely, does it tend to reify traditional gender-based roles within the family? And what sort of consequences does either outcome have for marital and family well-being? Moreover, do the answers to such questions differ for households in which the family partners are copreneurs, operating the business together, versus those in which only one family partner is the entrepreneur, with the other providing support behind the scenes primarily on an as-needed basis? And in the latter type of entrepreneurial family, are males and females equally likely to provide support to their enterprising partner or does the type of support provided differ in gender-stereotypic ways? The preceding queries are reflective of the types of questions that are starting to be asked and explored by entrepreneurship and family business scholars particularly those studying women s entrepreneurship or copreneurship. The results of some studies, such as those by Baines and Wheelock (1998), McAdam and Marlow (2012), and Sharifian et al. (2011), are more consistent with the reification of gender roles perspective. Others, such as those by Datta and Gailey (2012) and Johnstone-Louis, Scott, Dolan, Sugden, and Wu (2012), offer powerful demonstrations of the emancipatory potential of entrepreneurship to broaden women s roles in society. Interestingly, these two contrasting groups of studies were set in developed versus developing regions, respectively, which adds another important contextual lens for furthering research on gender-role distinctions within families engaged in entrepreneurial activity. Other new directions are suggested by the work of family scholars. For instance, instead of focusing on gender-role distinctions between marital partners, Marotz-Baden and Mattheis (1994) explored the consequences for daughtersin-law within family firms (in this case, family farms) undergoing succession. Their emphasis on the children rather than the marital partners involved in business ventures connects with existing, yet limited, work on the gendered roles and experiences of male versus female next-generation members within the family business literature (see, for example, Curimbaba, 2002). More recent family scholarship, by Danes, Haberman, and McTavish (2005), draws attention to how the discourse about rather than the roles within family-owned businesses might differ along gender lines. Their analysis thus raises further questions to be explored

13 484 Family Relations at the intersection of gendered ideologies regarding entrepreneurship, business ownership, and family membership. Directions for Research on Marital Relationships Marital relationships constitute a related and long-standing interest of family scholars. Within family scholarship, the extent to which a marriage is considered good is measured primarily by indicators of marital satisfaction and marital quality (Carroll, Knapp, & Holman, 2005). A key objective of work within this domain is to uncover the factors that contribute to these outcomes. Recent illustrative examples in this regard include studies examining the effects of transitions to parenthood on marital satisfaction (e.g., Dew & Wilcox, 2011), the impact of cohabitation on marital quality (e.g., Jose, O Leary, & Moyer, 2010), and the couple-level processes that lead to relationship flourishing (Fincham & Beach, 2010) versus dissolution (Gottman, 1994). One potential determinant warranting further research attention is business ownership. More specifically, we encourage family scholars interested in marital relationships to posit and explore such questions as the following: How does engaging in entrepreneurial activity impact marital dynamics, quality, and satisfaction? Do couples who own businesses have stronger marital relationships than those with other forms of labor market participation (or nonparticipation)? How do such relationships evolve over the course of the business life cycle? Are there particular points during a firm s evolution that are especially impactful for marriages (in either a detrimental or beneficial sense)? Given the centrality of disruptions within Stafford et al. s (1999) model, we would expect marital relationships to be particularly susceptible to influence from the firm during key transitions in the business life cycle such as during the start-up phase, any significant expansionary periods, or when the marital partner(s) is (are) exiting the business via succession, closure, sale, or merger or acquisition. Existing studies within the family literature exploring such topics offer a promising foundation for continued programmatic research. Some of these, such as those by Danes and Lee (2004) and Danes and Morgan (2004), paint a somewhat negative picture, documenting the marital tensions and conflict that business ownership can engender. Others convey a more optimistic outlook, revealing rewarding connections (Cole, 2000) and higher couple relationship quality (Matzek, Gudmunson, & Danes, 2010) for marital partners engaged in entrepreneurial activity. Once again, though, the mixed findings from these studies, combined with their limited number, suggests that it is too soon to draw firm conclusions as to whether engaging in entrepreneurial activity is beneficial or detrimental for marital relationships, in general, or the conditions under which it contributes to either outcome more specifically. Directions for Work on Child Well-being Child and youth well-being are also longstanding interests of family scholars, particularly with respect to uncovering the key factors that contribute positively or negatively to such outcomes. A wide range of potential determinants have been investigated. Recent work, for instance, has examined the effects of maternal employment (Waldfogel, Han, & Brooks-Gunn, 2002), poverty and socioeconomic status (Pickett & Wilkinson, 2007), family structure and stability or fragility (Waldfogel, Craigie, & Brooks-Gunn, 2010), parenting quality (Hillaker, Brophy-Herb, Villarruel, & Haas, 2008), and work-family conflict (Bass, Butler, Grzywasa, & Linney, 2009). Even more so than in the preceding domain, however, business ownership has been overlooked as a potential contributing factor. Our prior bibliographic analysis, for instance, revealed only one such study within the family literature: Song s (1997) analysis focused on the labor provided by children within ethnic family businesses and, sadly, the racial abuse that they encountered as a result of often being the primary point of contact with the firm s customers. Other negative outcomes have been documented by family business researchers. Kaye (1992), for instance, described what he considered to be a fairly common pattern, labeled the kid brother syndrome, in which one sibling within a business-owning family, usually the youngest son, encounters dysfunctional family environments and dynamics that thwart his or her development. In a subsequent article, Kaye (1996) described other cases of family firms, which he claimed to be far from rare, wherein the owners use their business to retard the

14 When Family Members Are Also Business Owners 485 normal development of their children (p. 348; italics in original). He concluded that family business ownership and healthy child individuation, in particular, are often fundamentally at odds (p. 355). As a direct and notable counterpoint, however, McCollom Hampton (1988) concluded from her research that business ownership can sometimes provide children with a means of individuation missing within the family sphere. One could also argue that the children of entrepreneurs are likely to benefit in ways that others do not especially in terms of early opportunities to develop work-related skills, values, experience, and connections (see, e.g., Aldrich, Renzulli, & Langton, 1998). As in the case of work on marital relationships, the research in this domain is far too sparse to offer a rigorously supported response to the issue of whether business ownership is good for child well-being. Indeed, we can envision a plethora of research questions deserving of enquiry, the systematic exploration of which will provide much-needed empirical evidence to inform future public policy initiatives related to entrepreneurship. Such questions include even fundamental queries like, When a couple owns a business, who really takes care of the kids? Observations of preschool and school-aged children occupying themselves via handheld video devices in the eating areas of several fast food restaurants on our campus (along with numerous similar examples) suggest that, in many cases, the answer might be a sobering, no one. What are the short-term and long-term effects of these and other practices on the children of business owners? Are such children more likely to experience absentee parents and with what consequences for their individual and interpersonal development? Do they tend to form especially strong sibling bonds as a result? And what happens in the reverse situation, when children especially youths are expected to help out at the family business (often for below market wages), thus spending significantly more time with their parents than their peers? We can imagine a family scholar building an entire research line, if not career, dedicated to answering questions with such import for societal well-being at large. Directions for Studies of Intergenerational Relationships A final topic area of interest to family scholars and of relevance to enterprising families is that on intergenerational relationships. Recent work within the family literature has examined the support provided by adult children to their aging parents (e.g., Henz, 2010), and, conversely, the support provided by grandparents to their adult children and grandchildren (e.g., Sarkisian & Gerstel, 2008). Other recent work has focused on intergenerational relationships in transnational families in particular (e.g., Senyurekli & Detzner, 2008). Some family scholars have also focused explicitly on the nature of such relationships within business-owning families. In an early conceptual piece, for instance, Ballard-Reisch and Weigel (1991) developed an exchangebased model of interactions between older and younger-generation members within farming families. Soon thereafter, King and Elder (1995) compared the relationships between grandparents and teens for farming and rural nonfarming families, finding the former to be of better quality because of the greater interdependence between the generations. Most recently, Zhang (2004) investigated the implications of China s economic transition for intergenerational coresidence patterns, finding that the resultant class of private entrepreneurs exhibited higher co-residence rates between parents and their children than those of nonentrepreneurs. Although the latter two family studies, in particular, seem to suggest that intergenerational ties might be stronger in families that own businesses, a different picture emerges from studies published within the family business literature. Barnes (1988), for instance, described the (inter- and intragenerational) discomfort and tension that can arise between family members when daughters and sons, especially, are appointed successors of the family firm. In a similar vein, Davis and Tagiuri (1989) examined the quality of father-son relationships in business-owning families, focusing specifically on particular combinations of life stages likely to exacerbate or attenuate the inherent conflict in such relationships. Further anecdotal evidence of the strained if not severed intergenerational ties within business-owning families can be found within the media as well as books written primarily for practitioner and general audiences (e.g., Fleming, 2000; Gersick, Davis,

15 486 Family Relations McCollom Hampton, & Lansberg, 1997; Pitts, 2000). On a more positive note, however, Smith s (2009) recent study suggests that the familial fables told from one generation to the next about the family s entrepreneurial endeavors can help foster positive values and mindsets; that is, a shared sense of stewardship. In sum, though, and as is the case for the other domains of family scholarship reviewed to this point, the contested and limited work conducted thus far suggests that considerable opportunities exist for family scholars to offer significant contributions to our understanding of how business ownership impacts relationships within enterprising families. CONCLUDING REMARKS Is entrepreneurship good for families? Based on the relatively small corpus of work conducted to date across the family, entrepreneurship, and family business literatures, we are not sure. That said, we are much more certain of a different yet related point the importance of even articulating such a query. Conducting rigorous research that addresses this question is particularly important at this juncture for the three reasons documented within this article: (1) the extensive policy programming and funding devoted to stimulating and supporting entrepreneurship, (2) the large number of families engaged in entrepreneurial activity the world over, and (3) the provocative yet limited and mixed findings accumulated thus far on how activities related to owning and operating a business affect family members. We hope that others find these reasons compelling and that they are equally intrigued by the potential research directions envisioned for various domains of family scholarship. We further hope that future researchers will articulate even more specific research questions inspired by our call, addressing them via theories and methods best suited for their particular focus (including those that do a stronger job than we have done here of explicitly incorporating family diversity). Finally, we hope that our reviews of extant work within the family, entrepreneurship, and family business literatures will lay a foundation for future collaborations at the nexus of these disciplines. By approaching such partnerships in the spirit of informed pluralism (Willmott, 2008), collectively, we will have much to offer not only for our respective disciplines but also for the policymakers who design and fund initiatives promoting entrepreneurship as well as for the practitioners who work with business-owning families. NOTE We acknowledge the excellent research assistance provided by Laura Wunderli and Leo Tang as well as the financial support provided by SSHRC Grant No awarded to the first author. REFERENCES Aldrich, H. (2011). Heroes, villains, and fools: Institutional entrepreneurship, not institutional entrepreneurship. Entrepreneurship Research Journal, 1,1 4. Aldrich, H. E., & Cliff, J. E. (2003). The pervasive effects of family on entrepreneurship: Towards a family embeddedness perspective. Journal of Business Venturing, 18, Aldrich, H., Renzulli, L., & Langton, N. (1998). Passing on privilege: Resources provided by selfemployed parents to their self-employed children. In K. Leicht (Ed.), Research in social stratification and mobility (pp ). Greenwich, CT: JAI. Ames, B., Brosi, W., & Damiano-Teixeira, K. (2006). I m just glad my three jobs could be during the day : Women and work in a rural community. Family Relations, 55, Baines, S., & Weelock, J. (1998). Working for each other: Gender, the household and micro-business survival and growth. International Small Business Journal, 17, Baines, S., Wheelock, J., & Gelder, U. (2003). Riding the roller coaster: Family life and selfemployment. Chicago: University of Chicago Press. Ballard-Reisch, D., & Weigel, D. (1991). An interaction-based model of social exchange in the two-generation farm family. Family Relations, 40, Barnes, L. B. (1988). Incongruent hierarchies: Daughter and younger sons as company CEOs. Family Business Review, 1, Bass, B. L., Butler, A. B., Grzywaca, J. G., & Linney, K. D. (2009). Do job demands undermine parenting? A daily analysis of spillover and crossover effects. Family Relations, 58, Beach, B. A. (1987). Time use in rural home-working families, Family Relations, 36, Bianchi, S. M., & Milkie, M. A. (2010). Work and family research in the first decade of the 21st century. Journal of Marriage and Family, 72,

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18 When Family Members Are Also Business Owners 489 Retrieved from SB html?mod=WSJ_article_LatestHeadlines Willmott, H. (2008). For informed pluralism, broad relevance and critical reflexivity. In D. Barry & H. Nansen (Eds.), The Sage handbook of new approaches to management and organization (pp ). London: Sage. Wu, M., Chang, C., & Zhuang, W. (2010). Relationships of work-family conflict with business and marriage outcomes in Tiwanese copreneurial women. The International Journal of Human Resource Management, 21, Zhang, Q. F. (2004). Economic transition and new patterns of parent-adult child co-residence in urban China. Journal of Marriage and Family, 66, APPENDIX: PROCEDURE FOR ESTIMATING THE PREVALENCE OF FAMILIES ENGAGED IN ENTREPRENEURSHIP Step 1: Securing a data source and measures of entrepreneurial activity. The Global Entrepreneurship Monitor (GEM) seemed like a natural data source, as it provides an annual assessment of entrepreneurial activity... across a wide range of countries (see GEM). These annual assessments measure three forms of entrepreneurial activity among adults aged 18 to 64. The nascent entrepreneurship rate refers to the percentage of adults within this age category who are actively involved in starting a business but have not received any payments as owners for more than 3 months. The new business ownership rate corresponds to the proportion that has owned and managed a business that has paid salaries, wages, or other payments for more than 3 months but not more than 42 months. The established business ownership rate refers to the percentage that has owned and managed such a business for more than 42 months. With the exceptions noted at the bottom of Table 3, we used the rates within the 2010 GEM report. Step 2: Selecting and obtaining population data for focal countries. Instead of attempting to locate population-level data for all 59 countries listed within the 2010 GEM report, we decided to focus on only two or three countries for each of the world s geopolitical regions. In the two instances where only one country within a certain geopolitical region was listed in that year s report, we consulted prior issues (i.e., the 2006 and 2005 reports for Canada and New Zealand, respectively). We then scoured government websites for the focal countries, looking for census data (preferably) on the total adult population, ideally within the 18 to 64 age range utilized within the GEM studies (or as close to this range as possible). If such census data were not easily available, we either selected another example country within the geopolitical region or, in the case of South Africa, consulted potentially relevant policy reports. By multiplying the adult population figure by the GEM rates, we were able to approximate the number of adults within the specified age range likely to be engaged in the different forms of entrepreneurial activity. Step 3: Approximating the number of families within each country. Given the wide variation across the different census data sets regarding the availability and composition of data on families, we decided to calculate our own estimates. We did so by first obtaining data on the proportion or number, or both, of adults within each country s specified age range reported to be in a marital-type relationship. In most instances this information was available within the census data. We then multiplied the proportion by the total population within the specified age range and divided by 2, thus providing an estimate of the number of couples as a proxy for the number of families. Although this procedure admittedly underestimates the number of families within each focal country because it excludes those comprised of two or more related individuals who are not in a marital-type relationship (e.g., single-parent households), it possesses the advantage of providing figures that are more comparable across the selected nations. Step 4: Estimating the number of families engaged in entrepreneurial activity. To estimate the number of families likely to contain at least one individual engaged in each form of entrepreneurial activity, we applied the following formula to each of the three GEM rates: number of families engaged in specified GEM activity = number of adults within age range engaged in specified GEM activity % in marital-like relationship 2.