The sustainable family Business (SFB) Model

According to Danes et al.'s Model (2007), a family business is defined as sustainable only when the family and the business itself interact with each other trying to reach a mutual state of sustainability without harming each other.

Figure 1 (Danes et al., 2007)

Five are the key principles of the model shown above:

1.       Both the business and the family are considered to be rational social systems whose sustainability and success depends on the behavior of individuals;

2.       The two different systems cooperate by exchanging resources;

3.       Owning families must be able to handle both the family and the business without regarding these two systems as divided one from the other;

4.       Although the two systems must cooperate with each other, this does not mean that the boundaries between the two should be confused;

5.       The conflicts begin to arise when there is a discrepancy between the requests / demands of the family or the business and the available resources.

During periods of stability in the family business both the family and the business are managed within their own borders, but when things start to go wrong (which seems to be almost an inevitable phase in the life cycle of a family business), in times of disruption, systems begin to use each other’s' resources.