Much of America's wealth lies with family-owned businesses, which make up 80 percent to 90 percent of all business enterprises in North America. (Credit: Generic Brand Productions/Flickr)

Why family ties still matter in today’s economy

A new book challenges the idea that kinship has little or no role in the modern workplace.

“How does kinship work in modern society? The question is worth asking, given the high number of family firms that are so much a part of modern society,” says Susan McKinnon, who chairs the anthropology department at the University of Virginia and co-edited the collection of essays in Vital Relations: Modernity and the Persistent Life of Kinship.

Much of America’s wealth lies with family-owned businesses, which make up 80 percent to 90 percent of all business enterprises in North America, according to the Family Firm Institute Inc. And we’re not just talking about mom-and-pop retail stores here; Wal-Mart, Koch Industries, and Mars are all family-owned, for example.

Anthropologists, sociologists, historians, and others have long worked from the idea that so-called traditional societies were structured around relations of kinship, McKinnon says. As modern societies have developed, the theory goes, kinship has lost that importance, replaced by nationality, the market, and law.

She and the book’s other authors don’t deny kinship’s continued importance in the domestic domain. But since kinship and modern organizations have been considered mutually exclusive, it has been almost impossible to analyze how family relations operate in the economic and political domains, McKinnon says.

Italy’s clothing industry

The book describes a variety of cases around the world that show how kinship ties still play an influential role in business and other areas, such as religion, nationality, and politics.

For example, in one essay, Sylvia J. Yanagisako analyzes family firms in the textile and clothing industry in Como, Italy. Some Italian companies have formed joint ventures with Chinese firms and outsourced production to cheaper Chinese labor markets.

In Italy, family members run the company and work in the top positions. Non-family Italians can work in managerial positions at the Chinese locations, but Chinese employees do not get hired into top positions.

“These Italian managers and their allied Chinese entrepreneurs (all of whom have been trained in business schools to take the separation of kinship and economy as a normative ideal) find themselves confronted with what Yanagisako calls a ‘kinship glass ceiling,’” write McKinnon and co-editor Fenella Cannell of the London School of Economics.

“In what might be read as an ironic turn, Chinese entrepreneurs are surprised to find themselves in business with Western firms that are organized by the communal sentiments of kinship and family rather than the supposedly ‘modern,’ rationalistic, managerial logic they learned about in business school.”

Source: University of Virigina

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