Intergenerational entrepreneurial learning embedded in everyday practice of the family and the business Dr Eleanor Hamil

1. Intergenerational entrepreneurial learning embedded in everyday practice of the family and the business Dr Eleanor Hamilton Institute for Entrepreneurship and Enterprise Development Lancaster University Management School e.hamilton@lancaster.ac.uk ESRC Research Seminar Series Bristol Business School 16 June 2010

2. Complex social phenomenon of family business • the scale and scope of family firms worldwide (Howorth, Rose and Hamilton, 2006)described as the ‘dominant form of organisation in the world’ (Miller et al., 2008: 74) • has been argued that more research attention should be paid to family business, and that the family dimension of family firms warrants greater research attention (Steier, Chrisman and Chua, 2004) • existing research has not always acknowledged that the ‘family’ and ‘business’ are inextricably linked, with the family impacting in important ways on the business and vice versa (Aldrich and Cliff, 2003; Rogoff and Heck, 2003; Heck, 2004) • there have been calls for more studies ‘connecting family systems and entrepreneurial phenomena’ (Aldrich and Cliff, 2003: 575).

3. Aim of this paper is to examine intergenerational entrepreneurial learning in family business • draws on an empirical study of two generations in five family businesses • twelve in-depth individual and group interviews were undertaken with the generation that founded a business and those members of the family who had taken over, or were working in, the business in the next generation (16 participants in total) • a conceptual framework is developed derived from a socially situated learning perspective (Lave and Wenger, 1991) • theorising learning as an inherently social as well as an individual phenomenon (Tusting, 2005). In this paper it is argued that entrepreneurial learning is embedded in participation in everyday practice in family businesses

4. Entrepreneurial learning an emerging area 2005 a Special Issue of Entrepreneurship Theory and Practice published what was understood to be the ‘leading edge of research in entrepreneurial learning’ (Harrison and Leitch, 2005: 361) Three of the seven articles cite Lave and Wenger (Cope, 2005: 388; Corbett, 2005: 482; Dutta and Crossan, 2005: 33) but there is no discussion developed, either theoretically or empirically, of the situated learning perspective Corbett (2005) points to large body of research in the field of entrepreneurship led by those taking a cognitive perspective. He underlines its value, but points out that learning in relation to entrepreneurial processes has been neglected and calls for a ‘more fine grained examination of learning’ (p.474).

5. Introducing a situated learning perspective • Communities of Practice • places where we develop, negotiate and share our understanding of the world, ‘an intrinsic condition for the existence of knowledge’ (Lave and Wenger, 1991: 98). • focuses on how participants articulate practice in the context of the family business, particularly in relation to the definition proposed for entrepreneurial learning as the acquisition and development of the propensity, skills and abilities to found, to join or to grow a business. • Legitimate Peripheral Participation • the examination of how members of a community of practice in one generation are joined by the next generation • the process by which newcomers become part of a community of practice through engagement in social practice in which learning is an ‘integral constituent’ (p.35) • Cycles of reproduction and transformation • the family and the business are conceptualised as overlapping communities of practice then they are engaged in a ‘generative process of producing their own future’ (p.57)

6. Communities of practice (1) Founding a business bringing practice to bear ‘And I have to say I didn’t know anything about cheese-making so I got an elderly gentleman who had been a cheese-maker all his life to come in. And he came the first day and showed us exactly what to do and he said ‘‘You do exactly like this tomorrow’’ then he said ‘‘on the third day I’ll come back and show you the next process’’’ The father: ‘I knew how to buy and I knew how to look after subcontractors’ The son: ‘You make your money as much when you buy as when you sell’, and looking after sub-contractors: ‘You support them if they’re worth it to you.’ 6

7. Communities of practice (2): Childhood and the business – immersed in practice Brokers daughter recalls the shed in the garden where her parents first ran the business and swivelling on an office chair. She articulates the early days of the practice of being in the office: ‘Answer the phones, draw pictures, tidy up, go for coffee, go for the cake.’ Grocers son remembers being in the shop as soon as he could walk, following his mother and father around. His mother articulates the participation of her children in the day-to-day running of the shop as learning: ‘Yes, I mean we have never taught them anything, they have just watched how we do things.’ The son of the Large Group describes how he worked from an early age in the hardware shop that they lived above: ‘I used to stand on a box behind the counter, I don’t know I was tiny. ‘I had a classic above-the-shop upbringing’ 7

8. Communities of practice (3): Introducing new practice As well as participation within the family business, participation in business or educative contexts can impact on the practice of the family business, concept of transferable learning through participating in inter-related communities Examples: The daughter of the Cheese Makers went on to further education studying food technology and then worked for a large food and drink company, she then instigated practices which allowed the business to supply the big supermarket chains. The son of the Large Group introduced corporate practice he had learned as a European sales director of a large company to grow the family business he joined. The son of the Grocers introduced computing systems into the shops, and helped his father introduce new retail technologies having undertaken a computer studies course. 8

9. Legitimate Peripheral Participation: coming and going in the family business Conditions of legitimacy— joining (and leaving) the activity of the business, the nature of participation, how and when it occurs and under what conditions. Examples: articulating legitimacy ‘they say Mum “you made a mistake there you shouldn't do that” and I say “I've been doing this all the time” and they say “no Mum you must do it this way, it's amazing what bright ideas you get from the young generation”.’ ‘tremendous learning curve for me’ ‘small self-employed business, one man band would be a good term, to this conglomerate we’ve got now.’ ‘It’s a different ball game. And I tell you when, since legislation came in, directorates, they lost touch. I think shortly after Peter came in, they stopped doing Saturday mornings straight away.’ ‘ So you’re less involved so you have less knowledge.’ 9

10. Cycles of reproduction and transformation: Some things change and some things stay the same ‘Very much an art in the early days, now it has become very technical, a different set of rules, and all the various inspections that one gets now you just couldn’t do what you did.’ ‘I hated the first day we sold to a supermarket, I just hated it, I hated it even more when they put it in plastic bags, I couldn’t bear the thought.’ ‘I could never run the business the way he ran it. No chance. Because one is, I’d forget. Secondly, it would bore me out of my brain. Thirdly, I wouldn’t do it because I’m lazy and it’s just not my attitude. I’ve got to rely on people…I’ve got to give people freedom and then let them develop and let them go and come.’ ‘He’d be absolutely horrified.’ 10

11. INTERGENERATIONAL ENTREPRENEURIAL LEARNING IN FAMILY SYSTEMS: A SITUATED LEARNING PERSPECTIVE FIRST GENERATION SECOND GENERATION FAMILY BUSINESS AS COMMUNITY OF PRACTICE START UP ENTRY 2ND GENERATION POST ENTRY SUCCESSION EXIT CHILDHOOD EARLY WORK EXPERIENCE IN THE FAMILY BUSINESS OTHER EARLY WORK EXPERIENCE OTHER ADULT WORK EXPERIENCE FORMAL TRAINING/EDUCATION ENTRY POST ENTRY TAKE OVER NEXT STAGE LEGITIMATE PERIPHERAL PARTICIPATION CYCLES OF RERODUCTION AND TRANSFORMATION

12. So how might this study contribute to our understanding of family business? • Succession has been proposed as the ‘fundamental question’ for the study of family business (Fletcher, 2000; Steier et al., 2004) BUT a long term and complex process (Shepherd and Zacharakis, 2000; Westhead et al., 2002; Breton-Miller et al., 2004) • No single theoretical perspective will unravel that complexity, but this study demonstrates that applying a learning lens brings theoretical insights to the study of family business. In particular an examination of entrepreneurial learning as socially situated phenomenon sheds light on the complex processes of transition in family business. • Specifically, the study suggests intergenerational entrepreneurial learning in family systems relies on the ability to replicate, but also to transform practice and that this plays an important role in the generative capacity of a family business.