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A Study of Three-Generational Italian-Australian Family Businesses in Victoria

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A Study of Three-Generational Italian-Australian Family Businesses in Victoria The Value of Values: A study of three-generational Italian-Australian family businesses in Victoria Laura A. Hougaz MA DipEd (University of Melbourne) Thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy Faculty of Business and Enterprise Swinburne University of Technology Victoria, Australia 2012 ABSTRACT ___________________________________________________________ Around the world, it is estimated that over two-thirds of businesses are family businesses. Well established research in family business reveals that only 30 per cent of all family businesses survive into the second generation, with most intergenerational transitions failing after the second generation (only 10-15 per cent continue into the third generation, and 3-4 per cent into the fourth generation). This thesis elaborates on how family businesses emerge, how they consolidate and expand, and finally how they continue to survive into the third generation. This research studies seven Australian family businesses with an Italian background, starting with the founding generation which, through the process of migration to Australia in the first half of the 20th century, set a long-lasting culture for the following generations. It is a three-generational study that stretches over a period of almost one hundred years, starting with the founding generation, aiming to identify possible elements (values) that bridge the generations, thus building the conditions for the continuity of a successful family business. The thesis elaborates on how the values of the first generation (the entrepreneurial generation) made the creation and development of these family businesses possible. The issue of values in family business has recently received increasing attention within the literature particularly as a number of scholars insist on a more sustained analysis of the role of the family within a family business. The thesis, however, takes this discussion a step further by explaining why and how values become so important, and have acted as the glue between generations by bridging the first and the second generations, and then the second and third, thus building the conditions for the continuity of a successful family and business succession. The values that have been identified through the narrative of three-generational family members in this thesis are: personal values - trust, respect, responsibility, honesty and loyalty; family values - family unity, succession, membership and humility; and business values - work ethic, loyalty, professionalization and risk-taking. i This thesis further brings some new powerful insights into the practice and theory of family business through its proposition that family and business need to be considered as equal domains and that the individual needs to be seen as the bridging force linking family and business productively together. Entrepreneurship is understood as the condition sine qua non for family business inasmuch as the first generation is the entrepreneurial one. However, the very notion of a family business weakens the idea of entrepreneurship in the subsequent generations insofar as the second and third generation understand themselves in terms of continuity, and their narratives are linked to the accomplishments of the first generation. The second and third generations are willing to follow in the steps of the first generation revealing, by so doing, a wish to maintain continuity, also in terms of the type of business. This continuity is represented by a discourse about the values set by the first generation that are transmitted across to the next generations. Values are identified as the linking element between the three generations, which keeps competition between (and within) the generations to a minimum for the sake of the family and business. A blend of qualitative methodologies based on life history/oral history and phenomenography has been used to elaborate on the participants' self-understanding and perception of reality. In-depth interviews have been used to gather data in the form of the narratives of the three generations. Theoretically, the notion of discourse has been applied to reconstruct the creation of a generational discourse in the narratives and oral histories of the participants inasmuch as it is their talk about their personal values and the values of their family businesses that is captured in this thesis. This thesis contributes significantly to knowledge about entrepreneurial activity in family business and contributes to an understanding of how values in family business support its continuity. ii ACKNOWLEDGEMENTS ___________________________________________________________ This thesis has been a long-term life project that has been my companion every day over the last few years. I am deeply and forever grateful to my first supervisor, Dr Michela Betta, for her constant encouragement, commitment and insightful and dedicated supervision. Her inspirational and constructive comments and significant knowledge have not only been invaluable, but have also challenged me in all phases of the thesis. Thank you Michela for your friendship, and for inspiring me with your wisdom. I wish to also thank my second supervisor, Prof Robert Pascoe, who consistently and eagerly followed my progress and gave me practical encouragement and helpful advice at every stage. I wish to acknowledge my deep gratitude to the members of the Italian-Australian family businesses in Victoria who comprise the case studies for this research, whose generosity and trust in participating and sharing their family and personal stories underpinned the richness of the data and hence the success of the study. Sharing conversations with these special families about their lives, experiences and values, often in their own homes, was a great privilege for me as researcher. I sincerely hope that this research, and anything stemming from it, does justice to their stories, views and voices. On a more personal note, this important body of work would never have been undertaken without the understanding, love and unwavering support of my husband, friend and partner Louis and my two wonderful and caring children, John-Paul and Maxine, who have shared their lives, over the last few years, with this thesis. Your love is very precious in my life, and your exceptional patience and constant encouragement have been pivotal to the success of this work. iii My sincere gratitude also to my brothers, Skender and Allan Bregu, and my extended family: I thank you all for your ongoing love and support. I also thank my close friend Eileen Scott Stokes for her contribution as editor of this thesis. This thesis is dedicated to the memory of my late parents, Manilia Gavazzeni and Bahri Bregu. My mother in particular, has always been my wonderful mentor and close friend, whose inspiration and encouragement have brought me so far. I am and will always be extremely grateful to her for instilling in me the sense that I can achieve anything that I set my mind to. To all my special friends, near and far, who have travelled this journey with me, thank you for your care, support and belief in me. I love you all and thank you. iv DECLARATION ___________________________________________________________ I, Laura Hougaz, declare that this thesis is original and contains no material which has been accepted for the award of any other university degree or diploma, except where due reference is made in the text of the thesis. To the best of my knowledge, this thesis contains no material previously published or written by another person except where due reference is made in the text of the thesis. In relation to articles where I was a joint author, this has been clearly indicated in the citation and only the material for which I was personally and directly responsible has been included in this thesis. Signed: Laura Hougaz v TABLE OF CONTENTS ABSTRACT ................................................................................................... i ACKNOWLEDGEMENTS ............................................................................. iii DECLARATION ............................................................................................ v TABLE OF CONTENTS ................................................................................. vi LIST OF TABLES ....................................................................................... xiv LIST OF FIGURES ....................................................................................... xv LIST OF QUOTE BOXES ............................................................................. xvi Chapter 1: Purpose, Significance and Context of the Study .......................... 1 Purpose and scope of the thesis .........................................................................................1 Personal, family and business values ..................................................................................3 Two interconnected areas of research ...............................................................................8 The genealogy of family business..................................................................................... 10 An enmeshed reality ........................................................................................................ 11 Three interlinked generations .......................................................................................... 12 Migration as a starting event ..........................................................................................
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