Family businesses are in a unique setting, traditionally described as a three-circle model: family, business, and ownership, with overlapping but not identical influences (Davis et al., 1997). The Resource-Based View (RBV) argues that family firms can create a competitive advantage based on unique resources, such as specialized expertise, deep trust and strong brand loyalty, all of which constitute "familiness" (Habbershon & Williams, 1999). This "familiness" can be a very valuable strength, differentiating the company in the market (because FB has capital (intellectual or software) and also labour). These intangible assets often link into long-term continuity, increased adaptability and intergenerational transfer.
These strengths also create paradoxes, most notably in succession planning, where emotional legacies and power struggles ensue.
A real-world example is the Murdoch family, known for their global media empire. Rupert Murdoch's decision to favour his son Lachlan over his other children in succession plans led to legal battles and deep family divisions. This turmoil highlights how succession disputes can destabilize both the family structure and the business itself. As James Murdoch reflected, "He [Rupert] is a misogynist," underscoring personal grievances that can arise in such scenarios.
Sources:
Davis, J.A., Hampton, M.M. and Lansberg, I., 1997. Generation to generation: Life cycles of the family business. Harvard Business Press.
Habbershon, T. G., & Williams, M. L. (1999). A resource-based framework for assessing the strategic advantages of family firms. Family Business Review, 12(1), 1-25.
