ABSTRACT
Are family businesses irrational? The literature on family business sometimes gives this impression (Hollander and Elman, 1988). This is not the least the case in relation to strategy processes which is the focus of this chapter. In many respects, strategy processes are the same in all businesses, family dominated or not (Sharma et al., 1997). The key difference is that, in the family business1 all stages of the process are likely to be influenced by family values, goals and relations (Holland and Boulton, 1984). Moreover, the close inter-relationship between family and business often leads to a mix up of issues from the different contexts (Davis and Stern, 1996). Since relatively little research has been conducted on family business strategy (Harris et al., 1994), the understanding of how these influences affect strategy processes in family business is quite limited (Sharma et al., 1997). Even so, the fact that family relations do impact upon strategy processes in family businesses seems to be enough to label them ‘irrational’. The meaning of rationality is, however, seldom discussed. Instead it seems to be implicitly taken for granted.
