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Zach Rubin
November, 13, 2009

Family Business Wiki Posting

The role that spouses play in family businesses is a topic that we have mentioned during our lectures but it has not been explored in depth. After conducting research from several different sources, the information that I gathered was quite interesting when compared to wha was mentioned in class in lectures and from guest speakers.
Most guest speakers that has come into class have said that they try to avoid brining the spouses of family members into the family business. This is also a policy that family business owner that I interviewed for the family business case study administers as well. It seems to me that many businesses try to enforce a no spouse policy in their businesses. In many cases, this rule (written or unwritten) is in place to avoid external emotional issues or quarrels that could potentially complicate internal business operations. For example, a divorce could cripple the internal business operations and communication between two co-owners of a business. Most businesses have enough market issues troubling them already and having to take on a nonmarket issue such as a divorce between the CEO and CFO of a company could be catastrophic. This is one of the main reasons why some family business owners make the decision to exclude their spouses from the business.
However, in strong contrast to what was just stated, various family business text books suggest that it is essential for family members to involve their spouses in the family business. Our textbook says that spouses are, “critical to the business, whether through their financial investment in it or because of their professional, technical, or administrative skills”. From other research I conducted, many experts in family business think that regardless of if the spouse is a formal employee or not, they should be educated in the day-to-day strategies and issues of the business. The spouse should also be treated with respect, communicated with, and given the opportunity to be heard. The overall consensus about why they should be treated in this way was somewhat surprising. In many cases, when the spouse is excluded from the family businesses, risks are run of the spouse not understanding the values that are present in the family business. The values that are entrenched in the family business may not be also entrenched outside of the business. Because of this possible discrepancy between internal values and external expectations, the spouse can cause disruption in the relationships and systems that are created inside the business between family members.
It is clear that there are both pros and cons to involving spouses in the family business. This is definitely a decision that will be subjective to what works best for different business and family members.

Poza, Ernesto J. Family Business: 3E
Mason, OH: South-Western, 2007.

Hess, Edward D. The Successful Family Business: A Proactive Plan for Managing the Family and the Business Praeger Publishers, 2005.