Since the 1980’s, scholars and practitioners have made significant strides in their efforts to advance our understanding of family businesses through scientific research, consulting, professional literature, and popular books. These efforts have brought about the awareness that family-owned businesses make significant contributions to the economic climate in most countries and the communities in which they serve. In the United States, family-owned businesses account for approximately 90 percent of incorporated businesses and employ 85 percent of the private sector (Astrachan & Carey, 1994). In addition, they account for 37 percent of the Fortune 500 companies and 60 percent of all publicly held companies (Bristow, 2000), among many other factors. Family-owned businesses can range from small community banks to large retailers and we encounter them in business and as consumers on a daily basis.
While much of what we have learned has been positive, research has also revealed some of the many challenges that are unique to family-owned businesses. For example, despite all the valuable contributions they make, most family-owned businesses do not survive beyond the first generation. Approximately 30 percent survive the first to second generational transition while the third and fourth generations transition at a rate of 12 percent and 4 percent, respectively (Ward, 1987).