Family Businesses in Uganda: Insights on Family Business Failure and the Role of Organizational Culture

Abstract

Family businesses (FBs) constitute 80% - 98% of all businesses in the world, with GDP of over 75%, employing over 75% of the working population and the highest contributor in economic growth in the world. Although the survival of FBs is associated with better succession, strategic management and planning factors (Chrisman et al, 2003), nepotism, poor communication, inward-looking, conflicts, financial indiscipline, difficult to change and lack of professionalism easily fail FBs. Some researchers believe Organizational Culture (OC) plays an important role in the survival of FBs. This study seeks to investigate the causes for the failures of FBs in Uganda and the role of OC on FB survival. This study uses Gibb Dyer’s dimension (1988:40) which viewed OC in form of paternalistic, laissez-faire, participative and professional cultures. Methodologically, in this study qualitative grounded theory is used as a research method to understand the impact of OC on the survival of FBs beyond first generatıons and data was analyzed through thematic content analysis as an independent qualitative descriptive approach on published works (Braun and Clarke, 2006).  Our findings suggest that start up FBs need to adopt a paternalistic culture, those undergoing through turbulent situations, nepotism to adopt a participative culture, those undergoing growth and expansion to adopt a laissez-faire culture and FBs that lack professionalism and big in size to evolve into professional culture.