A Life Course Approach to the Entrepreneurial Family (Part I)

A Life Course Approach Cornell University
to the Entrepreneurial Family (Part I)

by Phyllis Moen
Cornell University

Introduction

This paper describes the utility of applying a life course approach to analysis of theentrepreneurial family. A life course viewhighlights the dynamic processes of development and change over the life span,as well as the importance ofthe social contexts of families, businesses, and lives. Both the life course (Elder, 1992, 1995) and ecology of human development (Bronfenbrenner, 1979; Moen et al., 1995) paradigms underscore the social forces that shape employment–such as starting, stopping, or expanding a business–and their economic, social, and psychological consequences.

A life course perspective challenges traditional ways of investigating the interplay between work and family.For example, instead of considering snap-shots of family businesses at any one point in time, a life course approach focuses on pathways, considering roletransitions, trajectories, and turning points in lives–and family businesses–over time. The life course reflects the interweave ofwork, family, and community roletrajectories that change in conjunction with age,as well as with changing circumstances and options. Thus, an individual life can be characterized as a series of interrelated trajectories through both occupational and family “careers.”In fact, one useful way of depicting the life course is as a series of movements in and out of various roles (Elder, 1992, 1995).

This paper introduces important life course themes and discusses the need to conceptualize pathways of entrepreneurship.It then describes a life course approach to stressful events and circumstances, concluding by outlining a research agenda for greater insights into the entrepreneurial family.

Life Course Themes

Three life course themes are crucial in seeking to understand the interplay between the lives of family members, the life course of a family business, and the links between the two: timing, process, and context.

Timing relates to the incidence, duration and sequence of roles throughout the life course (Elder, 1985, 1995).An important theoretical and practical implication of this approach is the insight that occupying particular roles at any one point in time may matter less, in terms of health, economic,and psychological well-being, than the number and predictability of role entries and exits (and their durations) and their timing in relation to age as well as to other potentially competing roles.

For example,knowing whether or not a family business is in existenceat any one point in time may be less useful than knowing the duration and patterning of this entrepreneurial activity in relationship to the ages and stages of family members.The literature on aging and the life course (Elder, 1975, 1992; Hagestad & Neugarten, 1984; Moen, 1995; Riley, 1987; Riley et al., 1988) has sensitized researchers to the multiple meanings of age.First, age is an indicator of typical changes in biological and psychological functioning that set limits on social behavior. Changes in workers’ health, for example, can affect their decision-making regarding, and the timing oftheir launching a family business.

The timing of entrepreneurship in men’s and women’s lives cannot be separated from intentions about and control over other work and family decisions. Planned or expected changes in roles and resources may be more easily adapted to than unanticipated crisis events.

Second, age is an important determinant of people’s social roles, independent of their capacities and preferences, and is reflected in what Riley (1987) refers to as the age stratification system. Thus culturally groundednorms and frames shape individual expectations and beliefs about the “right” time to begin or leave a family business (Hagestad & Neugarten, 1984; Neugarten, Moore, & Lowe, 1965; Rook, Catalano, & Dooley, 1989).

Third, age at a given point in time is an indicator of birth-cohort membership and, thus, of life experiences shared with other members of that cohort (Ryder, 1965). The experience of one generation are always unique, leading to different perceptions between parents, children, and grandchildren, regarding goals, means, and strategies.

Process focuses on life experiences as a series of role transitions, rather than single events.Some roles are left, as in retirement from employment, while others, such as “entrepreneur,” are entered. Process, like timing, also draws attention to role trajectories, the way roles are played out over the life course. For example, growing older is a blend of continuity and change in roles, resources, relationships and relevant identities, a blend frequently different for men and women.

An important proposition of life course analysis is that an understanding of one life phase requires it to be placed in the larger context of life pathways. Thus being male or female shapes the nature, organization, and patterning of roles throughout life.How men’s and women’s role biographies affect the likelihood of their becoming entrepreneurs has not been fully examined by researchers.

A life course formulation (Elder 1992, 1995; Moen, Elder, & Luscher,1995) suggests that early experiences matter, that to understand behavior at any one life stage requires knowledge of prior transitions and trajectories.Does knowing their prior occupational career pathways help in estimating the likelihood of either starting or remaining in an entrepreneurial endeavor?Or are current circumstances and situational imperatives, such as age, health, savings, marital status, presence of children at home, and home ownership, sufficient to explain the starting, or stopping, of a family business?

Scholars need to look at ways in whichroles and lives interact across the life course, at the interdependency between work and family obligations for example, as well as the interdependency between the lives of different family members.Thus, individuals in the entrepreneurial family have lives that are, more often than not, linked lives,linked across time and across generations (Elder, 1995; Moen & Erickson, 1995).Family life and occupational careers are both typically examined exclusive of other social roles and of each other. What we don’t know is how work and familyrole transitions relate to choices regarding entrepreneurship.

Context can be seen on two levels:personal and historical.The personal circumstances of families and family members–educational level, marital status, and family size, as well asage, may have important repercussions for their success as entrepreneurs and their own health and well-being.But historical shifts may matter as well.Women and men from different cohorts were born into vastly different worlds, with different expectations and possibilities regarding entrepreneurship.Moreover, family members from different generations view the present and the future from different vantage points. This contextual focus draws attention to potential differences by age and generation, as well as differences by household composition and location in the social structure.

Gender also sets the context of lives, reflecting not only physiological differences but also unique historical circumstances (Moen, 1995, 1996). Traditional gender roles, which allocate to women as wives, mothers, and daughters the informal caregiving of our society, mean that because women take time out for family responsibility, they are less advantaged than men in terms of pensions, social security and other financial resources in their later years. How this affects their roles and relationships in family businesses is a key research issue. One would anticipatemarkedly different expectations regarding roles at home and at work by gender.

Another key contextual component concerns the situational imperatives(Elder, 1995) that shape family and business resources and choices. Unanticipated and crisis events may render family businesses particularly vulnerable, but even planned events,such as parenthood or retirement, can have wide-ranging and unexpected impacts.

Conceptualizing Pathways

A life course approach to family business requires a dynamic focus on the entrepreneurial career.This, in turn,requires the fleshing out, both conceptually and operationally, the various dimensions embodied in the notion of “career.”Career “pathways,” whether in or out of family business, can be conceptualized and operationalized in a variety of ways (Barley, 1989; Pavalko, Elder, & Clipp, 1993).One is in terms of a series of positions,an orderly and hierarchical progression. Individuals experiencing uneven or downward pathways as employees in large organizations may be less committed to their jobs as employees and more apt to consider launching their own business.

A second way of viewing career trajectories is in terms of their relative continuity.Thus, family members may movein and out of the labor force, in and out of family-based employment.

A third career dimension has to do with the objective conditions of work. Those who work in family business may see their jobs as offering a great deal of intrinsic satisfaction (in the form of autonomy, for example).At the same time family businesses are frequently enterprises offering little long termeconomic security.Research has shown that the opportunities for challenging work, as well as occupational uncertainty,affect values, abilities, and outlook (Kohn, 1995).

Yet a fourth dimension involves subjective expectations,for example the implicit contractsbetween employer and employeeand between family members regarding division of labor (at home and at work), job security and job progression.These “contracts” colors individuals’ views of their experiences and transitions both at home and at work.Scholars need to attend to both the objective and subjective aspects of entrepreneurship.

The direct effects of these four (interrelated) dimensions of careers on individuals’ occupational choices and their quality of life may be contingent on the particular context in which a family business operates. One key consideration is the larger opportunity structure.For example, in an environment of broad-scale downsizing there may be few employment possibilities, especially for workers in their 50’s.On the other hand, starting one’s own business may be a way of responding to layoffs and downsizing;lump sum severance pay incentives can begin to provide some of the needed capital.

A second consideration is the role of education,as opposed to career pathways and achievements.Educational credentials are central components of cultural capital, but so too is status in the occupational hierarchy.Both affect habits, choices, preferences, and strategies of action (Bourdieu, 1984; Breiger, 1995; Swidler, 1986), and both are clearly related.For example, how does education translate into skills and choices regarding the launching of a family business?

Adapting to Family and Business Crisis

A crisishas been defined as a sudden and frequently unexpected gap between claims(or needs) and resources(Elder, 1964; Moen, Kain, & Elder, 1983 ).The discrepancy between what is required, expected or counted on, on the one hand, and the reality of situational and structural exigencies, on the other, can produce a stressful environment fostering emotional tensions and strain (see Figures 1 and 2).This stress can be reduced either by reducing claims and/or changing the available options and resources. What is key, from a life course perspective, is both the objective resources and the subjective sense of control (see Figure 3).

The notion of family economy is key to understanding decision-making regarding the entrepreneurial family (Moen & Wethington, 1992);choices are made in light of resources and subjective assessments.And families adoptfamily strategiesin coping with financial stress, interpersonal strains, or time overloads.

Ongoing Roles, Resources and Relationships

For those operating a family business, acute or chronic economic pressures often provide strong incentives to start, stop or radically shift the enterprise.For example, one response to a family business crisis can be “right-sizing,”reducing both commitments and expectations.Another response is to have at least one family member get a “safe” job (with benefits and security).In both cases, perceived assessment of current circumstances set the stage for subsequent adaptive strategies. Such shifts can produce a crisis for those highly committed to their careers or to their identities as entrepreneurs, as well as for those who feel they can’t afford to leave the work force.

An important consideration in shaping one’s tool kit of roles, resources, and relationships is gender.Given their historically more tangential and interrupted ties to the workforce (Brinton, 1988; Moen, 1992; Tomaskovic-Devey, 1993; Wolf & Fligstein, 1979), women may be both less likely to have experienced “orderly” career progression (along the four dimensions described above) andmore likely to become entrepreneurs in the face of few employment options.

Health and age are other key considerations, affecting both the timing of leaving employment through retirement (Burkhauser & Quinn, 1989, 1990; Chirikos & Nestel, 1989; Deviney & O’Rand, 1988; Palmore, Burchett, Filenbaum, George, & Wallman, 1985) and the likelihood of beginning, or maintaining, a family business.Older individuals in poor health may be less apt to launch or continue their own business.Caregiving for an ill or infirm spouse or other relative may similarly dampen the rate of entrepreneurial activity, with still having young children to support fostering the possibility of two (other) jobs, one as a paid employee and one on the side, as an entrepreneur.

Regaining Equilibrium: Financial Capital

While economic loss and job loss frequently occur in tandem (Moen, Kain, & Elder, 1983), restructuring of a family business offers the possibility that reducing the number ofjobs can be isomorphic with continuity or even gain in economic resources.The separate and relative impacts of job changes and economic setbacks are important arenas for futureresearch.

Adequate income may both facilitate the launching of a family business and the sense of control over the business decisions. Expectations of adequate and secure future income may be key in easing the transition into a family business.

Regaining Equilibrium: Redefining Self and Situation

How family members conceptualize both themselves and their business are key considerations in their response to stress.Family changes, such as divorce or moving, or business changes, such as expanding or contracting, offer opportunities as well as challenges. Commitment both to one’s business and to family may be reinforced in times of economic downturns.

Strategies of Adaptation

Families in business adopt a range of strategies in response to a crisis situation.These can be categorized as changes in the family economy, alterations in roles and relationships, and effortsto cope with tensions and strains.

Changes in the Family Economy

Individual entrepreneurs may engage in various financial transactions, change theirresidences, seek subsequent employment.Their spouses may also change the amount of hours they put in on the job or move in or out of the workforce. Note that these changes may be triggered by financial gain as well as lossconcomitant with early and unexpected retirement. In either case, adaptations to the changing circumstance most likely reflect a series of strategies, a process unfolding over time, rather than a single event (Moen, Kain, and Elder, 1983).Whether changes in roles or relationships are stressful depends on their centrality and meaning (Thoits, 1995; Wheaton, 1990).

Alterations in Roles and Relationships

Economic crises have been shown to alter decision-making power and patterns of family interaction (Moen, Kain, &Elder, 1983), so it is logical to assume that transitions in family businesses would similarly alter relationships among family members.One possibility is that family members change their roles, with, for example, housewives moving into the workforce or spouses spending more (or less) time in the business.Where one works is also important for family relationships.

Working at home may affect relationships with children, with parents and other relatives requiring care, and with the spouse.But there is also the issue of continuity and change in relations with friends and former coworkers.Family members and coworkers have been described as “a convoy of social support” (Antonucci, 1994 ); it is not clear how this changes when family members are coworkers as well.

Coping with Tensions and Strains

The existing research literature has shown that economic downturns have adverse emotional and psychological impacts (see summary in Moen, Kain, & Elder, 1983).Whether the dislocations accompanying operating a family business take their toll on feelings of self-worth and personal efficacy may well depend on the degree of planning regarding transitions and their timing.

Resilience and recovery or, conversely, vulnerabilitymay be associated with the social and psychological resources that individuals bring to this important life transition (Moen, 1996). One could expect an increase in ambiguity and apprehension concerning the future accompanying major economic shifts that, in turn, affect self concept and sense of control. A logical adaptive response for some might be to disengage from the work role, placing greater emphasis on other sources of emotional support.

Others may “cope” with strain by seeking relief in alcohol or exercise.We knowlittle about the styles of coping of the entrepreneurial family.