An empirical investigation into cooperation amongst family businesses in New Zealand

Family business is a fast growing area of research in western countries and is also gaining recognition towards being a distinct discipline. In Germany it was noted that the discipline is gaining ground fast because of the proportion of family owned businesses. It is also common knowledge that issues surrounding the behaviour of such a business and the succession planning required to maintain the family ownership, has much relevance within the business world. It is recognised that 80% of German businesses are indeed family businesses (ebs, 2005). Studies in the United States suggest that 40-60% of their gross national product is from family businesses. Greater recognition is now being given to family businesses as major contributors to job generation and wealth creation and as such they are spawning greater interest about their existence. Klein (2000) states that the percentage of family businesses in the UK ranged from 15% to 78.5% in the year 2000. This depended on the criteria being used for a family business. The Ministry of Economic development in New Zealand does not clearly show what proportions of New Zealand businesses are family-owned, but empirical evidence suggests that a large number of small businesses are centred around the family. New Zealand is however not dissimilar regarding its family business statistics to many other countries in the world. It is also recognised that there is a lack of research in particular industries with regard to family business, notably the wine industry in New Zealand. According to Kets de Vries (1993), about 3 out of 10 family businesses survive past the first generation and only 1 in 10 make it through the third generation. These issues become important when considering recent developments in the New Zealand wine industry. Getz et al. (2004) argue that the only way for family businesses to overcome limitations in size and resource is to engage in cooperative activity of some description, such as 'product clubs' or marketing consortia. Some of the advantages of cooperative marketing include networking; achieving greater economies of scale; obtaining professional advice; access to better technology; support for training and education; and pooling of resources. The research reported in this paper focuses on family businesses in New Zealand in order to determine what problems exist in co-operation between different families and suggestions are then made for solutions via entrepreneurial initiatives.