The Theory of Social Systems as a Framework for Understanding Family Businesses

There is a long tradition of systemic approaches in family business research, but recent developments have been widely ignored. This article gives a brief overview of these approaches and models and then introduces the modern theory of social systems. This theory no longer considers individuals as parts of the system but assumes that the basic elements of a social system are acts of communication. In each system (family, business, ownership), a specific communication pattern evolves and each system operates within a specific functional logic. Families process relationship communication, businesses process decision communication, and ownership operates on the basis of legally secured communication. Each of these three structurally coupled systems provides a specific context. The functional logics are context markers and assign meaning to the communicative acts. To understand how a family business functions, it is important to understand the concrete functional logics and the structural coupling of the three systems.