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Effective Executive Magazine:
Understanding Characteristics of Long-Term Value Creating Family Businesses
 
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Family businesses are the main form of organization and therefore a major source of value creation around the world. Not all family businesses contribute in the same way, because their approach towards value differs, partly due to their mindsets and to the way they conform their resources. Family businesses that most contribute demonstrate a value creation approach. Based on our research inside the Successful Transgenerational Entrepreneurship Practices (STEP) project, we analyze in-depth several Spanish family businesses. Our findings suggest that transgenerational value creation oriented family businesses rely on a balanced parenting style, where demandingness and nurturing go hand in hand.

 
 
Businesses are the main form of welfare creation around the world, and family businesses are the dominant form of business organizations, ergo family businesses are the principal form of welfare creation around the world. The main factor that explains family business success and dominance has been identified as “familiness”. Familiness is defined as a distinctive bundle of resources that arises from the interaction between the family, its individual members, and the business systems leading to competitive advantage (Habbershon and Williams, 1999; and Habbershon et al., 2003). Welfare in society is created by the combination of the actions of different private and public agents in an institutional framework. Identifying welfare, not to speak about measuring it, is a quite difficult task, because of the fuzziness of the concept.

Therefore, from a macro perspective, economists created the concept of GDP, as a proxy of well-being. Recent studies (e.g., BCG, Goldman Sachs, and Michael Porter) try to match GDP in different economies with well-being in those societies. Equally, at a micro level, wealth has been used as a proxy of contribution to common welfare. Again, in this case, a clear simple concept, wealth, is used as a proxy of a fuzzy concept (welfare).
 
 
Understanding Characteristics, Creating Family Businesses