Commentary on: The Transacting Cognitions of Non-Family Employees in the Family Business Settings

Abstract

The article by Astrachan and Keyt (2003) fills an important gap in the family business literature by bringing a theoretical orientation to an investigation of the level of friction in the family business system. One of the important theoretical approaches used is Transaction Cost Economics. The authors' view of social friction as a process to be managed rather than as something to be reduced is innovative and suggests significant changes in theoretical and practical approaches to the study and management of family enterprises. Other ideas they propose are worth testing, such as that non-family managers and family should have a higher level of interaction around business planning. Their theory could be expanded for example, by investigating what the business should expect from the family and how promise cognitions vary between family and non-family employees. In future research the authors might explore the ownership system as a potential source of friction, as well as the idea that a certain amount of friction may be optimal to family business function.(LMH)

Keywords: Organizational behavior, Transaction cost economics, Employee conflict, Family firms, Firm management