The Involvement of Families in Doing Businesses - Research Proposal Example

The Relationship between Family and Capitalism in Europe The Relationship between Family and Capitalism in Europe, 1850–2000 Presentation Capitalism is defined as a particular form of appropriation of surplus labour by a class of people who possess economic power and privilege.1 It works this way: the capitalists, commonly referred to as the bourgeoisie, possess the means of production.2 The working class of people is then forced to sell its labour to the bourgeoisie so as to support itself since it does not possess the means of production or means of subsistence.3 The capitalists exploit the providers of labour through economic forces that make it a necessity for the latter to work for the former. In Europe, both in the past and now, capitalism has been practiced to a large extent. The family has played an important role in the existence of capitalism in the European continent. Evidence of this lies in the point that today, there are family-owed business across several continents, Europe included.4 This in itself is an epitome of family capitalism.5 Ideally, families that had resources to invest involved themselves in doing businesses such as farming, establishing firms of different kinds and so on, and in doing so, they also employed other people to provide the labour that they required. Many authors have explored the relationship between family and capitalism in Europe. For instance, James posits that the family has played and still plays a decisive role in the form of economic organisation exemplified by the legal transfer of rights of ownership, or the type of organisation that is best described by the term capitalism.6 James argues further that the family moulds capitalism because of the ties that exist in a family setting. For instance, there is a tendency by older members of families (for instance older parents) to bequeath their assets to their children when they grow old. This in turn ensures that family businesses continue to be passed from one generation to another. Family businesses in Europe were significant in that they provided capital required for owners and managers to continue with their capitalistic pursuits.7 Whereas families can be said to have stimulated the growth of capitalism in Europe, it can also be argued that the importance of families and the ties associated with family members could also have stifled the growth of capitalism. For example, based on Weber’s philosophy, it can be said that family ownership and management brought about non-rational loyalties as well as emotions that could compromise rational application of capitalistic principles. An example is where household expenditure may impede proper investment or where it could be difficult to remove an incompetent member of the family from a capitalistic venture.8 Also, many family firms were small and remained so as demonstrated in Italy where modernisation remained incomplete and polarised between large state-owned enterprises and many small-scale producers.9 Therefore, the involvement of families in doing businesses can be viewed in terms of both the successes caused by family capitalism and the challenges resulting from the involvement of the family as a unit in capitalistic enterprises.   The research question is, “Was the family a boon or curse to the development of capitalism in Europe?” Research Plan The proposed research will focus on the relationship between family and capitalism in different countries in Europe. It will be argued that families that had capital to invest did so by establishing different types of firms and in the process exhibited capitalism by exploiting labour services from other people. This is shown by the existence of many family firms on the continent. It is particularly notable that the establishment of new family businesses in Europe contributed a great deal to capitalism and formed the foundation of contemporary industrialisation in several nations.10 In particular, the role of the family in ensuring that that family capitalism was sustained will be explored based on the point that the family acted as a mould for capitalism due to the ties that existed in the family as a unit. For instance, because of the family ties, most business owners tried to bequeath their wealth to future generations argued by Kornai,11 and because of this, established firms survived and expanded as they were transferred from one generation to another. The research will also look into the issue of how family connections could have affected proper deployment of capitalistic principles, especially because of the argument that due to the ties in the family, it could be difficult to eject an incompetent family member from the running of a business enterprise.12 In sum, the paper will dwell on the family’s relationship with capitalism from both perspectives of the family’s contribution to the growth of the phenomenon in Europe and how the family unit could have hampered the development of capitalism in some cases on the continent. Annotated Bibliography Adams, Julia, The Familial State: Ruling Families and Merchant Capitalism in Early Modern Europe. Cornell University Press: Ithaca, NY, 2005. This book focuses on the Dutch Golden Age and explains how the tiny United Provinces of Holland conquered Spanish reign and became Europe’s leading power. The book further describes how Holland’s great families shaped capitalism in Europe. The book will provide an insight on how historical developments shaped capitalism in Europe. Brazzale, Claudia, Family Firms and the Making of Cosmopolitanism: The Effacement of Gender in the Global Capitalism of the Italian Nordest. Ann Arbor, MI: Proquest, 2008. This book traces how the traditional family in Europe family patriarch transformed itself into the modern manager, who apparently did away with old gender biases only to re-enact them. The book also gives an account of how family firms grew into global firms and this will be helpful in discussing the role of family in the growth of capitalistic firms. Bruland, Kristine, “Introduction”, in From Family Firms to Corporate Capitalism: Essays in Business and Industrial History in Honour of Peter Mathias, edited by Kristine Bruland and Patrick Karl O'Brien, 1-20. New York: Oxford University Press, 1998. Kristine Bruland argues in this chapter that corporate capitalism grew from atomised, competitive, regional, family-oriented types of business. The chapter focuses on a review of literature about the circumstances surrounding firms in some countries including Britain, Germany and the United States. This is source will provide an incentive for comparing different countries, even those outside Europe. Colli, Andrea, The History of Family Business, 1850-2000. Cambridge, UK: Cambridge University Press, 2003. This book offers a historical and comparative analysis of family business. The book will offer good background information for the selected topic. Corbetta, Guido and Salvato, Carlo, Strategies for Longevity in Family Firms: A European Perspective. London: Palgrave Macmillan, 2012. This book offers information about the strategic challenges encountered by family firms within a European setting, as well as the managerial strategies that were used to tackle them. The book is important as a source because it will provide an insight on the challenges faced by families in business and how they shaped capitalism. Headlee, Sue Eleanor, The Political Economy of the Family Farm: The Agrarian Roots of American Capitalism. New York: Greenwood Publishing Group, 1991. Although this book is mainly about the transition to capitalism in the US in the mid-nineteenth century, the author states that the rise of capitalism in the United States has it roots in capitalism in Europe. The book mainly focuses on the activities of Agrarian capitalist families in Europe and the United States and will therefore provide information on happenings in the agrarian field as regards capitalism. Ingham, Geoffrey, Capitalism: With a New Postscript on the Financial Crisis and Its Aftermath. Cambridge, UK: Polity Press, 2008. This book offers a basic understanding of the concept of capitalism. It draws on the classic accounts of Karl Marx, Adam Smith, John Maynard, Max Weber and Joseph Schumpeter and addresses developments in family capitalism in Europe. These theories will be used to explain the relationship between family life and capitalism. James, Harold, Family Capitalism: Wendels, Haniels, Falcks, and the Continental European Model. Cambridge, MA: Harvard College, 2006. This book gives the history of three influential family businesses located in various countries in Europe for a period spanning over 200 years. The source will provide useful information for comparing family capitalism in various countries in Europe. Jones, Geoffrey and Rose, Mary B., “Family Capitalism,” In Family Capitalism, edited by Geoffrey Jones and Mary B. Rose., 1-16. London: Routledge, 1994. This book chapter gives an overview of various family-owned business enterprises over a period of three centuries in three continents. The authors argue that the establishment of new family businesses contributed an important dynamism over the course of the initial stages of modern industrialisation in many countries. The chapter will be useful for explaining trends in family capitalism in Europe and other continents. Kornai, János, From Socialism to Capitalism: Eight Essays. Budapest: Central European University Press, 2008. This book explores the relationship between privately owned business, capitalism and socialism. The author argues for instance that small production brings about capitalism and also mentions how founders of small businesses try to bestow their assets to future generations, hence propagating capitalism. The book will provide vital information on how family relations affected capitalism. References Adams, Julia, The Familial State: Ruling Families and Merchant Capitalism in Early Modern Europe. Cornell University Press: Ithaca, NY, 2005. http://books.google.co.ke/books?id=e-qd05sHxVsC&printsec=frontcover&dq=The+Familial+State:+Ruling+Families+and+Merchant+Capitalism+in+Early+Modern+Europe&hl=en&sa=X&ei=ZvovU42MMsXY7AaAooHABg&ved=0CCwQ6AEwAA#v=onepage&q=The%20Familial%20State%3A%20Ruling%20Families%20and%20Merchant%20Capitalism%20in%20Early%20Modern%20Europe&f=false Brazzale, Claudia, Family Firms and the Making of Cosmopolitanism: The Effacement of Gender in the Global Capitalism of the Italian Nordest. Ann Arbor, MI: Proquest, 2008. http://books.google.co.ke/books?id=Oi3k1uQr6u4C&pg=PA141&dq=family+firms+and+capitalism+in+europe&hl=en&sa=X&ei=tv8vU5OtOOSv7Abf84EQ&ved=0CEgQ6AEwBQ#v=onepage&q=family%20firms%20and%20capitalism%20in%20europe&f=false Bruland, Kristine, “introduction”, in From Family Firms to Corporate Capitalism: Essays in Business and Industrial History in Honour of Peter Mathias, edited by edited by Kristine Bruland and Patrick Karl O'Brien, 1-20. New York: Oxford University Press, 1998. http://books.google.co.ke/books?id=ixUq4nl7oBEC&pg=PA8&dq=family+firms+and+capitalism+in+europe&hl=en&sa=X&ei=tv8vU5OtOOSv7Abf84EQ&ved=0CEQQ6AEwBA#v=onepage&q=family%20firms%20and%20capitalism%20in%20europe&f=false Colli, Andrea, The History of Family Business, 1850-2000. Cambridge, UK: Cambridge University Press, 2003. http://books.google.co.ke/books?id=Xr84zoXsCiEC&printsec=frontcover&dq=family+firms+and+capitalism+in+europe&hl=en&sa=X&ei=SAswU5_9FsiJ7AbC7IHoDw&ved=0CFgQ6AEwCA#v=onepage&q=za&f=false Corbetta, Guido and Salvato, Carlo, Strategies for Longevity in Family Firms: A European Perspective. London: Palgrave Macmillan, 2012. http://books.google.co.ke/books?id=XCXlsNrT5mQC&pg=PA11&dq=family+firms+and+capitalism+in+europe&hl=en&sa=X&ei=tv8vU5OtOOSv7Abf84EQ&ved=0CD0Q6AEwAw#v=onepage&q=family%20firms%20and%20capitalism%20in%20europe&f=false Headlee, Sue Eleanor, The Political Economy of the Family Farm: The Agrarian Roots of American Capitalism. New York: Greenwood Publishing Group, 1991. http://books.google.co.ke/books?id=mF-w67F9dzcC&pg=PA15&dq=family+and+growth+of+capitalism+in+europe&hl=en&sa=X&ei=imMtU6WxBMzy7AbAgYGQAg&ved=0CDQQ6AEwAg#v=onepage&q=family%20and%20growth%20of%20capitalism%20in%20europe&f=false Ingham, Geoffrey, Capitalism: With a New Postscript on the Financial Crisis and Its Aftermath. Cambridge, UK: Polity Press, 2008. http://books.google.co.ke/books?id=qMr_VCJdXvEC&pg=PT95&dq=family+firms+and+capitalism+in+europe&hl=en&sa=X&ei=2_YuU_7iOaLW7QbQloGwBg&redir_esc=y#v=snippet&q=incompetent&f=false James, Harold, Family Capitalism: Wendels, Haniels, Falcks, and the Continental European Model. Cambridge, MA: Harvard College, 2006. http://books.google.co.ke/books?id=cufa55NuBoAC&printsec=frontcover&dq=Family+and+capitalism+in+Europe&hl=en&sa=X&ei=NFUtU9z0BsSJ7Aagq4CgBg&ved=0CCwQ6AEwAA#v=onepage&q=Family%20and%20capitalism%20in%20Europe&f=false Jones, Geoffrey and Rose, Mary B., “Family Capitalism,” In Family Capitalism, edited by Geoffrey Jones and Mary B. Rose, 1-16. London: Routledge, 1994. http://books.google.co.ke/books?id=ES6AAAAAQBAJ&pg=PP5&dq=Jones,+Geoffrey+and+Rose,+Mary+B.,+%E2%80%9CFamily+Capitalism,%E2%80%9D&hl=en&sa=X&ei=Ev0vU9XlGMGJ7Abl3IDoBg&ved=0CCwQ6AEwAA#v=onepage&q=Jones%2C%20Geoffrey%20and%20Rose%2C%20Mary%20B.%2C%20%E2%80%9CFamily%20Capitalism%2C%E2%80%9D&f=false Kornai, János, From Socialism to Capitalism: Eight Essays. Budapest: Central European University Press, 2008. http://books.google.co.ke/books?id=5hYngdvFrM4C&pg=PA33&dq=family+business+and+capitalism+in+europe&hl=en&sa=X&ei=lh0wU4PhNMb07Aa2nYCwBg&ved=0CGwQ6AEwCTgK#v=onepage&q=family%20business%20and%20capitalism%20in%20europe&f=false Read More