Co-creating psychological ownership for family firm change. Applying a relational practice perspective.

Abstract

This paper introduces a relational practice perspective to look at organizational change in family firms. At present there is a scarcity of studies on family firm change. Family firms yet represent the majority of all businesses in countries around the world. We propose that it is mainly the lack of relational quality among the parties involved that causes failures of organizational change, carrying with them enormous social and economic tolls. The value of a relational practice perspective is illustrated using an in-depth comparative case of a successful and unsuccessful organizational change process, both in a non-family business setting. We apply the learnings from these case studies to the research context of changing family businesses. Our main proposition is that if actors are able to engage in high quality relational practices, characterized by constructive interpersonal behavior and positive sense making, they will experience joint psychological ownership and a willingness to invest in continuous improvement and innovation. Applying this to the family firm, we propose that it is necessary to set up high quality relational practices among family members, and between family and non-family actors. By doing so, fruitful quasi-family relationships can be build. These relationships are seen as essential building blocks for family firms that want to excel in continuous renewal.