Networks: Multi-Rational Routes for Knowledge Acquisition and Dissemination?

Networks:Multi-Rational Routes for Knowledge Acquisition and Dissemination? Claire Seaman

Family Businesses • What do we know? • 60-80% of businesses across the developed World • Mixture of small, medium and larger firms • The family dimension often impacts on the business dimension • What does this mean? • Many – if not most – businesses have some family dimension • The family dimension and the business dimension inter-twine • This may create multiple rationalities which impact on decision making

Focus for Today: • Communication • Local Culture • Generational Knowledge Transfer • Power Balance • Organisational Culture • Leadership Styles • Family Relationships

Inspiration Q. ‘What helped during the succession process? A. ‘Just hearing his friends talking about the same sort of thing, really ……. realising lots of people were thinking about it …..’

Networks • Key to business development at start-up and beyond • Contain knowledge – and facilitate its dissemination • Reflect the culture and dynamics of the business and the family • Theories of mono- and multiple rationalities

Current Research • One case study • Developed as part of a much broader swathe of research • Theories of mono- and multiple rationalities • Network focus • Focus on knowledge acquisition, dissemination and transfer

Husband and Wife in Business Paid Employment in the UK

East Lothian

Reasons and Rationales • Attractive job • Wish to return ‘home’ • Growing family • BUT the company called in the receivers: • Critical Incident 1

Reactions to Critical Incident 1 First reaction was to gamble! Formally employed individual took over the contract from his erstwhile employer Overnight transfer to self-employment – building on the entrepreneurial heritage of the USA UK provided a very different environment

The Result of the Gamble … • Initial success • Business growth • Solid base in East Lothian • BUT ……. • Need for substantial further investment • Search for capital • Investment by a firm of venture capitalists • Critical Incident 2

Venture Capital, Culture and Capitalists • Search for funds was successful – if approached from a mono-rationalist business perspective • Substantial inward investment • But ………. • Different cultures • Different approaches

Quotes ‘Q. So there was this tension between the commercial reality as they saw it and what you and your husband saw ….. and the culture and familieness of the business: was there conflict between those two dimensions? • Yes, and another strange conflict ….. if there isn’t any money, you don’t take any and if there is you look at everything twice …… but when the million pound investment came in, there were all these salesmen on fat salaries …. they just sign an expense receipt …. I resented that….’ Wife And later ….. ‘They [the venture capitalists] seem to think that if you have a paper qualification they can manage, the fact that you have sort of grown into it, I had no management training, you sort of grow into it, that’s how it is in a family business …..’ Wife

From a mono-rational perspective: Yes – sort of ….. Inward investment Fast Business Growth Business sale Loss of business from the local area From a multi-rational perspective No – not really …. Inward investment accompanied by a clash of cultures Loss of business to the local area Did This Create a Sustainable Business?

Culture, Direction and Strategic Development in the Family Businesses • Purchase of one existing business locally • Created 3 ‘shell’ companies • No clear purpose to the companies at first • No ‘real’ borrowing • No bankers! • Sole aim: • A sustainable business portfolio • A sustainable business family

Modelling Multiple Rationalities in Family Business Networking Accepting Different Priorities Accepting the Cultural Dimension

Business Network Rational 1 Entrepreneurial Exchange Local Economic Development Unit Scottish Enterprise Contact in Major Accountancy firm Previous Business Partner 1 Wife/Mother Husband/Father Previous Business Partner 2 Business 1 Business 2 Federation of Small Businesses Venture Capitalists Local Traders Association Business 3

Friendship NetworkRational 2 Friendshipwith Local Business Family USA Contact 1 USA Contact 2 USA Contact 3 Charity 1 USA Contact 4 Charity 2 Charity 3 Local Business Community Charity 4 Husband/Father Wife/Mother Friend 1 Friend 2 Friend 3 Friend 4

Business Network Rational 1 Business 1 Friendship NetworkRational 2 Business 2 USA Contact 1 Business 3 USA Contact 2 USA Contact 3 Scottish Enterprise USA Contact 4 Entrepreneurial Exchange Local Business Family Friends Contact in Major Accountancy Firm Friend 1 Former Business Partner 1 Friend 2 Former Business Partner 2 Friend 3 Friend 4 Local Traders Association Interviewees Charity 1 Charity 2 Local Economic Development Unit Charity 3 Charity 4 Federation of Small Businesses Local Business Community Adult Child 1 Private Client Banking Adult Child 2 Archaeologist Venture Capitalists Adult Child 3 Tourism Family Network Rational 3

The ‘Case’ For Multiple Rationalities • The family network – 2 parents, 3 children • The business network – 4 businesses • The friendship network – the local community, 3 charities [at least!], a group of ‘entrepreneurs’, 3 formal business networks etc etc • BUT • The networks are not distinct • They are almost completely embedded

The Developing Networks • The role of chance • The role of culture – family, community and business • The evolving and revolving nature of networks • The impact on knowledge acquisition, dissemination and transfer • The route forward

Applying a Knowledge Perspective to Network Research • Knowledge Acquisition • Knowledge Dissemination • Knowledge Sharing • Knowledge is not always ‘correct’ • Knowledge is fluid, situational and culturally based • Knowledge lives in networks

Implications for Policy • Where does knowledge reside? • How is knowledge exchanges/shared? • How can the ‘quality’ of information be improved? • Working with networks – a stakeholder approach

Knowledge For Better, For Worse ... For Richer, For Poorer... In Sickness and in Health?

Thank You! Any Questions? Interested to Learn More? http://www.qmu.ac.uk/be/research/sffbr Email cseaman@qmu.ac.uk

Networks: Multi-Rational Routes for Knowledge Acquisition and Dissemination?