Family Business Jubiliee: a celebration of global family business

Citation

Collins, L. and O'Regan, N. (2012), "Family Business Jubiliee: a celebration of global family business", Journal of Family Business Management, Vol. 2 No. 2. https://doi.org/10.1108/jfbm.2012.51802baa.001

Family Business Jubiliee: a celebration of global family business

Family Business Jubiliee: a celebration of global family business

Article Type: Editorial From: Journal of Family Business Management, Volume 2, Issue 2.

With The Queen's Diamond Jubilee being a major focus in the UK this year it has been impossible to ignore the events and activities which have been held to celebrate The Queens’ 60 years on the throne. The inescapable fact is that, whichever way you look at it, the Royal Family is a family business; Prince Philip even calls it “The Firm.”

The British Monarchy has vast interests which generate income that contributes and helps to support their work and activities. One of the ways in which the Royal Family has been able to lend its weight to support others is by officially recognizing the many businesses which supply it through the granting of Royal warrants[1].

Royal warrants are granted to people or companies who have regularly supplied goods or services for a minimum of five consecutive years to The Queen, The Duke of Edinburgh or The Prince of Wales. Each of these members of the Royal Family can grant only one warrant to any individual business, but a business may hold warrants from more than one member of the Royal Family.

The warrants are a mark of recognition that tradesmen are regular suppliers of goods and services to the Royal households. Strict regulations govern the warrant, which allows the grantee or company to use the legend “By Appointment” and display the Royal coat of arms on his products, such as stationery, advertisements and other printed material, in his or her premises and on delivery vehicles.

Warrant holders today represent a large cross-section of British trade and industry (there is a small number of foreign businesses), ranging from dry cleaners to fishmongers, and from agricultural machinery to computer software. Some firms have held Royal warrants for over 100 years. Warrant-holding firms do not provide their goods or services free to the Royal households, and all transactions are conducted on a strictly commercial basis. There are currently approximately 800 Royal warrant holders, holding over 1,100 Royal warrants between them (some have more than one Royal warrant).

Looking through the list of Royal warrant holders it is impossible not to notice how many family-owned businesses there are and not just from the UK but from businesses around the world.

Take Steinway & Sons, for instance, who were granted a Royal warrant in 1955 by HM The Queen. Steinway & Sons was founded in 1853 by German immigrant Henry Engelhard Steinway in Manhattan, USA. Over the next 30 years, Henry and his sons, C.F. Theodore, Charles, Henry Jr, William and Albert, developed the modern piano. They built their pianos one at a time, applying skills that were handed down from master to apprentice, generation after generation. So for over 156 years Steinway & Sons hand-crafted pianos have been the choice of the world's finest pianists. And according to their web site, “for several years over 99% of artists, performing with orchestra, and those with discerning tastes have chosen Steinway[2].”

Or what about Linn Products Ltd which received its Royal warrant from HRH The Prince of Wales in 2002. Founded in 1972 by Ivor S. Tiefenbrun MBE, Chairman, Linn is an innovative, independent company specializing in precision engineered sound. Linn make music and movie systems that can be found in the world's finest homes, superyachts and commercial premises. Sold in over 50 countries worldwide through a select network of approved specialists, every component in a Linn system is an original Linn design, built and hand finished in Scotland to guarantee unrivalled performance, quality and value. Ivor's son Gilad is now Managing Director of Linn[3].

Or there is James Baxter and Sons, founded in 1799, which has been potting shrimps for over 200 years. Baxter's original slogan “If it's a fish course, its Baxters of course” still resonates throughout the firm today. Baxters is one of the oldest, if not the oldest family firm in Morecambe. The family arrived in the district in the 1600s and in the early days combined farming with fishing, a way of life that is still found on the north side of the bay. But the fishing side of the business grew with Morecambe, and the farming has long since stopped. They were granted a Royal Warrant in the 1967 by HM The Queen which they retain to this day based on a totally unique recipe which has been handed down through the family for seven generations[4].

Looking at these family businesses, and they are just a few of the many Royal warrant holders, it occurred to me that the characteristic that they all have in common is “quality.” Like Zildjian, these Royal warrant holders epitomize a timeless and essentially unremitting passion for quality. They have uniform high standards which are the foundation of their products. Regardless that some of their products have changed profoundly over the years, their approach has not.

My conclusion is that an unremitting search for and achievement of quality is one of the underestimated characteristics that successful and long-lived family businesses share. It is also true that the quality of their decision making seems superior. Are these decisions “superior” because family members “know how” to make decisions that work for that family-business? Is “quality” a notion that can truly be felt when there is a heartfelt connection to the work at hand? Is “quality” a cultural attribute, a firmly held value and a mind-set which transcends decision-making frameworks? Is “quality” simply about “doing something (like making pianos or potted shrimp) really really well?”

The oldest family business in the USA, Zildjian, was originally founded in Istanbul in 1623 by Avedis Zildjian I (the first). Avedis I was an Armenian alchemist in the city of Constantinople in the early seventeenth century. While attempting to create gold by combining base metals, he discovered an alloy of copper, tin and traces of silver with unique sound qualities. In 1618, Avedis used his secret alloy to create cymbals of spectacular clarity and power. The sound of the instruments was so extraordinary that the Sultan invited Avedis to live at court (Topkapi Palace) to make cymbals for the Sultan's elite Janissary Bands. As Avedis’ reputation grew, the Sultan gave him the name “Zildjian” in Armenian (Zilciyan in Turkish), a word meaning “son of cymbal maker.” In 1623, Avedis was granted permission to leave the palace in order to start his own business[5].

Relocating to America in 1929, Avedis III moved the Zildjian factory to Quincy, MA and then to its current location in Norwell, MA for Zildjian's 350th Anniversary[6]. The business passed to Avedis’ son, Armand in 1977 and then to Armand's daughter, Craigie, in 1999. The cymbal-manufacturing company controls 65 percent of the world's cymbal market and is now run by the 14th generation family member Craigie Zildjian who along with her sister Debbie runs a company with more than $50 million turnover[7].

So what are the Zildjians’ secrets to staying in business for nearly four centuries?

Every Zildjian who wants to work in the family business must obtain a university degree, preferably in business. They must also complete an internship in the company while attending high school or university so that they can find out about the company's standards. Even after they have graduated, the next generation cannot expect to get a job with the company right away. Family members who aspire to join the firm must work elsewhere to get experience outside the company. This is so they can appreciate the uniqueness of Zildjian and also so they gain external perspective.

But is it not also possible that at the heart of Zildjian's success is the fact that the principles in the business come from a long line of “cymbal makers.” Isn’t it possible that somewhere in their biological make-up there is an “x-factor” gene that means they just “know how to make cymbals that sound special!”

We are far from understanding everything we need to know about family businesses. I’ve touched on aspects of values by discussing the notion of quality in family businesses. I anecdotally believe there is a link between values and family firm longevity a topic taken up by one of the papers in this issue. The expert nature of family businesses can also be viewed in terms of their ability to innovate and innovation is a recurring theme in the family businesses mentioned and is another theme covered in this issue. Understanding the unique approaches and contributions of male and female family members is likewise an ongoing topic of debate within academic field and it is good to see this highlighted in another one of the papers in this issue. There are excellent contributions in this issue which we hope will enable you to gain a better understanding of key areas of family business scholarship and which shed light on some environments and countries not previously well explored.

The innovativeness of family firms through the economic cycle is explored in a quantitative study written by Professor Sascha Kraus, of Utrecht University and the University of Liechtenstein and colleagues from Universitat de Girona, Spain. The value of this paper is that it allows a comparison of similar types of firms. It provides an insight into how family firms and non-family firms approach product, service, organizational and cooperation innovation. It explores the notion that family firms are risk-averse and primarily concerned with the wealth of their firm for future generations. Innovation is crucial to longevity, as demonstrated by the family firms discussed earlier in this editorial. Understanding how family firms innovate in all cases will enable family firm leaders to build on their strengths and reduce the impact of their weaknesses, as well as providing a useful benchmark for training and consultancy interventions.

Gender in the family firm is the topic of “Gender in family business management: a multinational analysis” by Prof. Matthew Sonfield of Hofstra University, NY and Prof. Robert Lussier, Springfield College, MA. Their paper explores an eight-country study which investigated five well-established issues of gender stereotypes looking at data from 811 family businesses. They sought to test the relationship between male and female owner/managers of these businesses and stereotypes in a managerial context. Their findings are fascinating as only one hypothesis supported a gender stereotype and that was that as the percentage of female managers increases so does the use of group rather than individual decision making. The paper makes a very useful contribution to the body of work on gender differences in managerial and entrepreneurial behavior.

The paper presented by Mohamed Mohd Zain and Norizan Mohd Kassim is, we believe, a first for family business scholarship in that it presents a study of family business in Qatar. The study considers 108 family firms based in the developing economic environs of Qatar and explores how collaborative networks are presenting opportunities for firms to exploit globalization opportunities. It is pleasing to see family firm scholars working to shed light on aspects of family business in emerging economies and heartening to know that the challenges faced by Qatari firms are not dissimilar from those in other economies.

Highlighting the discussion of values in family business is a paper by Maria Fernández Moya and Josep Tápies from IESE Business School, Barcelona, Spain. The paper discusses the nature of values in relation to their influence on family business longevity in the context of family firms from many countries including Spain, Italy and France. Intuitively I feel that strong values contribute to longevity and so it is not surprising to find this notion supported by their findings. In particular that the “lived” aspect of values seems to be a fundamental link in the relationship between values and family firm longevity.

Our final paper is a fascinating case study about the Pierre Part Store, a 100-year-old business based near, but not too near, Baton Rouge, Louisiana, USA. Due to its unique and somewhat isolated location the Pierre Part Store was a “Wal-Mart” before there was “Wal-Mart,” according to Gerald St Germain, the president and fourth generation owner of the store. This intriguing narrative introduces us to the history of one Acadian family and its business which has survived through wise management and intelligent leadership despite its remote location. This case analyses characteristics that lead to long-term survival and examines the process of succession and gives us a unique insight into a small family business.

The international flavor of this issue is pleasing from a scholarly perspective and hopefully encouraging to our followers. We hope you enjoy reading this issue and we sincerely thank our authors for their thoughtful contributions.

Lorna Collins and Nicholas O'Regan

Notes

www.royal.gov.uk/MonarchUK/Symbols/Royalwarrants.aspx (accessed June 11, 2012).

www.royalwarrant.org/rwha-search.html (accessed June 11, 2012).

www.royalwarrant.org/rwha-search.html (accessed June 11, 2012).

www.baxterspottedshrimps.co.uk/our-original-potted-shrimps/date (accessed June 11, 2012).

http://zildjian.com/About/History/Background (accessed June 11, 2012).

http://zildjian.com/About/History/Background (accessed June 11, 2012).

www.bbc.co.uk/news/business-18261045 (accessed June 11, 2012).