Family business in tourism: State of the Art

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Abstract

A generic model of family business development provides the framework for examining the nature of such businesses in tourism. These enterprises are often centered on a vision which places personal or family needs and preferences ahead of growth and profit maximization. The tourism industry in particular attracts numerous entrepreneurs with predominantly lifestyle motives, yet challenges them in specific ways. Four major themes identified in the literature are discussed, namely small and family business operations, links to entrepreneurship, roles and responsibilities of family members, and destination or community development. Important research gaps are identified, and future research priorities are suggested. Implications for both family business and tourism theory are discussed.

Résumé

Les entreprises familiales dans le tourisme: dernière mise à jour. Un modèle générique de développement d’une entreprise familiale forme le cadre théorique pour examiner la nature de telles entreprises dans le tourisme. Ces entreprises tournent souvent autour d’une vision qui met les préférences et les besoins familiaux avant la croissance et la maximalisation des bénéfices. L’industrie du tourisme en particulier attire de nombreux entrepreneurs qui sont motivés surtout par des questions de mode de vie tout en leur posant des problèmes spécifiques. On discute de quatre thèmes fondamentaux qui se trouvent dans la littérature, c’est-à-dire les petites entreprises et les entreprises familiales, les liens à l’esprit d’entreprise, les rôles et les responsabilités des membres de la famille et le développement de la communauté ou de la destination. On identifie des lacunes importantes dans la recherche, et on suggère des priorités pour la recherche future. On discute des implications pour les entreprises familiales et pour la théorie du tourisme.

Introduction

Tourism offers many opportunities for family businesses, often embodying direct host-guest interactions in the family home or property. They are often vital to customer experiences and satisfaction, and to destination or community development. But until very recently the nature of family business has not been evaluated as a distinct field, and within tourism it has been treated only incidentally. Research on such businesses has been accelerating rapidly (Sharma et al, 1996, Smyrnios et al, 1997). This attention is long overdue, given its scale and importance in most countries (Lank, 1995, Wortman, 1995). For example, in Australia, about half of all enterprises qualify as family businesses, in which there is more than one proprietor from the same family (Commonwealth of Australia 1997). In the United States, it has been estimated that family firms generate 46–60% of the gross national product (Ward and Aronoff 1990), while Westhead and Cowling (1998) reported that a number of studies have found such firms account for over two-thirds of the total in Western, developed economies.

Unfortunately, there is no commonly accepted definition for family business. Sharma, Chrisman and Chua (1996) comprehensively reviewed the literature and found 34 definitions. At the most basic level it can be defined as an enterprise controlled by members of a single family (Barry 1975). This definition can encompass businesses that involve only one owner (sole proprietors) and those owned by a couple (often called copreneurs). Chua, Chrisman and Sharma believe the theoretical essence of a family business lies in the vision of its dominant family members, and that vision is to use the business for the betterment of the family, potentially across more than one generation.

The three-dimensional developmental model of family business by Gersick, Davis, Hampton and Lansberg (1997) is a useful starting point (Figure 1). This business can develop through start-up and expansion/formalization to maturity. Ownership potentially evolves from the controlling founder through a sibling partnership to a cousin consortium. Along this axis are four stages of development. As noted by Neubauer and Lank (1998), this 4 × 3 × 3 matrix results in numerous possible combinations, and a given family enterprise could be at more than one stage on any of the three axes. Comprehensive application of this generic model to the tourism field has not previously been attempted. The ensuing overview of literature establishes the state of the art and reveals that not all elements in the generic model are equally important. Only a small minority of family businesses in tourism involve children or are inherited, making the study of individual owners and of couples as business partners more important. The fact that so many such enterprises fail, or are sold rather than inherited, is revealed to be a major issue. With regard to the evolution of the business, the literature suggests that the vision and goals of the founders are more important in tourism, as only a few endure through a complete lifecycle.

Section snippets

Family business themes and topics

A simple search for the term “family business” does not begin to reveal the many pertinent references. The term itself has seldom been used in tourism, and so it is necessary to evaluate context. Similarly, while there are books and one research journal devoted to “family business studies”, much of the generic literature is also subsumed under other headings, particularly small business and entrepreneurship. Accordingly, it was necessary to make an a priori determination of keywords (including

Conclusion

Family businesses are important because owners often behave in ways that set them on a different course. When they are founded or purchased with the needs and preferences of the owner or owners’ family being paramount, normal expectations of growth and profit maximization are less likely to apply. Furthermore, tourism presents many opportunities, some rather unique, for business ventures that appeal to farm families or to investors desirous of locating in attractive surroundings and pursuing a

Acknowledgments

The authors are grateful for financial support from the Family Business Research Endowment of the University of Calgary.

Donald Getz is a Professor in the Haskayne School of Business, University of Calgary (Calgary T2N 1N4, Canada. Email <[email protected]>). His research interests include event management and event tourism, and application of management theory and practice to related sectors.

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    Donald Getz is a Professor in the Haskayne School of Business, University of Calgary (Calgary T2N 1N4, Canada. Email <[email protected]>). His research interests include event management and event tourism, and application of management theory and practice to related sectors.

    Jack Carlsen is the Malayan United Industries Chair in Tourism and Hospitality Studies. He facilitates the tourism research program at Curtin, which includes development, planning, and management.

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