Personal networking in family businesses

21 Sep 2009 | Posted By: Maria Markenroth

By: Erhan Trsani

On Wednesday September 16 CeFEO (Centre for Family Enterprise and Ownership), Gärde Wesslau Advokatbyrå and the Henry and Sylvia Toft Foundation hosted a lunch seminar with Professor Bengt Johannisson at Science Park, Jönköping.

CeFEO is a research and learning centre at Jönköping International Business School, with research devoted to family enterprising and ownership.  With its 28 researchers, large international research network and twelve years of research on family businesses, CeFEO is one of the leading knowledge centres in the world for research and education around family business and ownership.

Bengt Johannisson was one of those who established entrepreneur and small business research in Sweden and received the 2008 FSF-NUTEK Award for his research in this field. Bengt Johannisson is active at Linnaeus University and Jönköping University.

At the seminar, Bengt Johannisson spoke about personal networking in family businesses and how it works. His research shows that in a family business, the trust in a handshake is greater than that in a contract, and that entrepreneurs avoid dependence of banks but accept dependence of personal relations. Owners of family businesses like to be in a network of personal relations which is built on feelings an common values rather than on calculations. They enjoy making business with each other because they also enjoy the people they do business with.

In a family business there is often a reluctance to become dependent on others, but when that happens, the criteria is that those others have the right experience, are capable to do things useful to the company and have good references. Sometimes new contacts are also made because of necessity. It might be that they have many useful contacts or that there isn’t any other choice. In a family business people are not exchangeable.

Bengt Johannisson also pointed out that by networking you make yourself visible and you create legitimacy which can create a lot of influence, both politically and in the business world.

The small businesses get their main strength from their local network to become internationally competitive.

Some of his research is focused around the businesses of the Gnosjö region, where it was shown that the companies had their significant partners within one-hour drive. There is a myth that Gnosjö is the region with the most newly established companies in Sweden, and that shows that Gnosjö has a good entrepreneurial reputation.

In conclusion, Professor Johannisson said that being in a family business means that you have to be interactive- not just active and that the personal network is the most important asset of the entrepreneur.

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