Corporate culture in the 21st century is increasingly being influenced by the values of family businesses, says one of America’s most respected consultants and academics in the field.
Dennis Jaffe, a family business scholar at Cornell University and one of the founding members of the Boston-based Family Firm Institute, says family businesses are at last being recognized as powerful and meaningful organisations.
The rational corporation is beset by corporate raiders and people who just want short term results, milking the future value of the business
“I hypothesize that family businesses in the 21st century are now getting the respect they deserve,” he says. “They are coming out of the shadow.”
Jaffe says in the past there was a culture centred on the so-called rational corporation. “I think the late 20th century was all about the rational corporation and the top business schools really neglected, or dismissed family businesses. Back then many felt you can’t have emotions and family feelings in business.”
But in this century attitudes are changing, says Jaffe. People are waking up to the short-termism of many publicly listed corporations. “It looks like the rational corporation isn’t so rational after all, but rather driven by short-termism and greed,” he says.
“The rational corporation is beset by corporate raiders and people who just want short term results, milking the future value of the business.”
To get this point across and much more about the growing role family businesses are playing in today’s thinking on corporate culture, Jaffe has just published a book about the resilience of family businesses. Entitled Borrowed From Your Grandchildren: Evolution of 100 Year Family Enterprise, the book is based on Jaffe’s interviews with 100 global families running businesses who have moved beyond the third generation.
“That’s the theme of my book – the 21st century is going to be about family businesses as much as it is going to be about the rational public corporation,” says Jaffe.