Understanding the inter-relationship between governance and organisational culture in South African family owned businesses

Abstract

Family owned businesses play a significant role in the global economy and can thus not be neglected. The contribution of family businesses to the South African economy is growing yearly. Despite their significant contribution, over generations, family owned businesses inevitably face greater complexities. These complex business dynamics can have serious repercussions for the family and the sustainability of the business. A positive correlation has been found between governance and family business continuity. Organisational culture was also found to play a critical role within family businesses. This study therefore focuses on understanding the inter-relationship between governance and organisational culture within family businesses. A total of eleven South African family businesses were selected for the study. The sample population was targeted at owners and family members involved in management within the family business. A phenomenological qualitative research methodology was adopted for the study. The findings of the study revealed that family culture is intrinsically intertwined with organisational culture. The identified dominant cultural dimensions thereof were found to be influential in the development of governance structures across different generations.