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ANTONELLA VIOLA
Greek traders’ business activities in the host countries in which they happened to
operate.
Economic literature has too often underrated the contribution of family-run enterprises
to modern economic growth. For a long time the notion of family business had a
negative connotation reminiscent of economic backwardness and commercial weakness.
The prevalent idea among economists was that family business, given its alleged premodern
features, could be only the first stage in the life of the enterprise, following the
start-up period, and preceding the public company phase. This approach assumed a
linear evolution of business organization proceeding from less complex to more sophisticated,
and thus more effective, organizational models. Less complex models, such as
family firms, have been considered less evolved, and thus less successful, and as such
they have usually been portrayed as backward organizational models typical of economies
that are not fully mature and destined sooner or later to extinction. The influential
work of Alfred Chandler, who envisaged the top management methods and procedures
of post-war US firms with their fully–fledged verticalization, allowing transaction costs
and other cost-ineffective processes to be minimized by internalizing them, as the future
of business enterprises, has contributed substantially to such views 31 . Recent research,
however, has put forward the idea that this kind of vertical evolutionary model should
be re-thought in the light of the widespread dissemination and endurance of family
business in myriad economic contexts far removed from each other. The reconceptualization
of the evolution of business organization’s models as resultant from
cultural influences rather than as a predetermined behavioural form to be followed by
all economic actors, has drawn attention to the significance of the cultural context within
which firms are created and evolve. Several scholars have consequently stressed the cultural
sensitivity of forms of business organization, restoring the importance of culture as
one of the main determinants of economic behaviour 32 .
In cultural contexts within which the role of the family is overwhelming, such as
the case of Greek traders, it is more often the case that the organization of economic
activities internally and externally reflects the importance of the family by replicating
some of its structures. Generally speaking, the structure of the family, as developed in
southern European societies, is hierarchical in nature; however when the family is
used as a device to establish cooperative relations with external actors in the shape of
a trading network, it is capable of mitigating such a hierarchy and emphasizing horizontal
rather than vertical ties. As Casson pointed out, ‘the fact that the role of family
is culturally-specific means that it can be utilised to support different forms of net-
Entrepreneurship: theory and Practice, Vol. 27, no. 4, 2003; Stark, O., Altruism and Beyond. An Economic
Analysis of Transfers and Exchange within families and groups, Cambridge, 2005.
31 Chandler, A., The visible hand: the managerial revolution in American business, Cambridge,
MA, 1977.
32 Casson, M., Entrepreneurship and business culture, Brookfield, 1995; Casson, M., ‘Cultural
Determinants of Economic Performance’, in Journal of Comparative Economics, 17, 418-42 (1993);
Casson, M., ‘Entrepreneurial and business culture’, in Brown, J. and Rose, Mary B. (eds), Entrepreneurship,
networks and modern business, Manchester, 1993, pp. 30-54.
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