A cultural perspective on the impact of family and society on the competitive advantage of organizations and nations

This dissertation is interested in explaining how and why the culture of family and society impacts the competitive advantage of organizations and nations. Central to such an explanation is the development of a theory of the family firm because that theory is a potential link between the four distinct systems, the family, organization, nation, and society. This dissertation consists of four essays, three theoretical and one empirical. The first essay is theoretical; it argues that the formation of family and nonamily firms depends on the family culture of the firm’s founders. The essay distinguishes between two family cultures: one supports the formation of family firms and another supports the formation of nonamily firms. Accordingly, the essay provides a framework to understand family culture by using family concepts, such as marriage and love. The second essay is theoretical; it uses the developed framework in the first essay to understand the behavior and performance of family and nonamily firms. Specifically, the second essay attempts to answer the questions of why and when a business’s owner maintains the ownership with the family and/or hires family managers rather than nonamily managers, or vise versa. The third essay is theoretical; it argues that the formation of family and nonamily firms depends also on societal culture. Societies who endorse traditional and postmodern cultures support the formation of family firms because non-economic objectives have a higher priority than economic objectives. However, societies who endorse modern cultures support the formation of nonamily firms because economic objectives have first priority rather than non-economic objectives. The fourth essay is empirical; it tests some of the generated research questions in the third essay. The fourth essay argues that nations are exposed to cultural competition where nations of similar cultures compete against each other. This essay finds that the family mode of governance is the most appropriate mode for nations competing in traditional societies, the nonamily mode of governance is the most appropriate mode for nations competing in modern societies, and the state mode of governance is the most appropriate mode for nations competing in postmodern societies