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Historical Developments of Corporate Governance in German and American Family Firms, 1945-2000

Dr. Christina Lubinski

Family firms are a hot topic of business and economic History. The majority of businesses around the world must be considered family firms. Moreover, during the last decades many theoretical debates have implicitly or explicitly related to family business (such as Alfred D. Chandler’s work or the “varieties of capitalism” debate).
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Contemporary advertisement by a German family business (founded in 1801) showing the founder and his great-great-great-grandson.
Despite this wave of attention, empirical research about the family firm is still mainly restricted to pre-industrial and early industrial times. It is also misleadingly trapped within the polarity of the family firm on the one hand and the so-called “modern” managerial enterprise on the other. Whereas Chandler’s business development model was trend-setting in many respects, it is also teleological and lopsidedly focused on the United States.

Building on her earlier research on multi-generational family firms in Germany Christina Lubinski strives for an international comparison of family firms in Germany and the United States (1945-2005). She defines a business as a family firm if the family maintains a considerable influence on the business. Rather than statically opposing family and non-family firms, her interest focuses on the family influence itself, which she evaluates gradually and including its changes over time. Comparing Germany and the United States, she performs an analysis of the legal and economic context for family firms in both countries: Which opportunities did the different legal forms provide for family firms? Which impact did the political and economic context have, e.g. the German and American equity market, the German concept of the Social Market Economy, or the postwar economic boom and its fading in the following decades? Building on the results of selected qualitative case studies, Lubinski compares family-influenced ownership, management and control structures in American and German family firms. Finally, she attaches special attention to the globalization of family firms during the 20th century. Given that the demands of global markets were an important trigger factor for changes to corporate governance, she analyses the interrelatedness of internationalization strategies and family firm development (e.g. of global niche producers also known as “pocket multinationals”).