Operationally defining family SMEs: a critical review

Purpose In this study, we investigated the dilemma of devising an operational family business definition in the SME context. The existing family business literature mostly agrees with the validity of a theoretical model called F-PEC, which identifies family businesses by evaluating three dimensions: power, experience, and culture. Nonetheless, empirical studies on family SMEs still use just one or a few elements with many different thresholds to operationally define family SMEs, highlighting an unsolved definitional divergence among scholars, which limits the possibility of investigating the potential effects of family attributes on firms' goals, structures, processes, and performance. Design/methodology/approach Employing ancestry searching, online databases, and issue-by-issue searches from two decades (1990-2019), we analyzed 255 empirical studies that specified a family business's operational definition (despite posing different research questions) and used a sample of small-sized and medium-sized enterprises (SMEs). Findings Results showed ownership and governance/management are the most used elements in the operational definitions provided in the literature to date, but that there still is not a universally adopted operational definition of family SMEs in use today. Originality/value This paper is one of the first to comprehensively analyze and review the operationalized use of family SME definitions in the literature.

Automated summary

This study investigates the challenges of defining family businesses in the SME context, finding a lack of consensus among scholars and thus limiting the possibility of investigating the impact of family attributes on firms. Empirical studies mainly use ownership and governance/management elements, but there is still no universally adopted operational definition of family SMEs.