Fair Process: Striving for Justice in Family Business

21 Pages Posted: 1 Jun 2005

See all articles by Ludo Van der Heyden

Ludo Van der Heyden

INSEAD - Technology and Operations Management

Christine Blondel

Independent

Randel S. Carlock

INSEAD - Entrepreneurship and Family Enterprise

Multiple version iconThere are 2 versions of this paper

Abstract

The social science and business literatures on procedural justice or fair process attest that improvements in procedural fairness can be expected to improve both a firm's performance and the commitment and trust of the individuals involved with it. This article examines the relevance of procedural justice for family business. When a family is an influential component of a particular business system, the application of justice is typically rendered more complex than might be the case for nonfamily firms. Different criteria (need, merit, and equality) guide the application of distributive justice among families, firms, and shareholders. This divergence in criterion also lies at the heart of many conflicts inside the family business. In this article, we argue that the application of procedural justice reduces occurrences of conflict and, in some cases, may eliminate conflict altogether. We propose a definition of fair process that extends and enriches the one existing in the literature. We offer five fundamental criteria essential to the effectiveness of fair process in family firms. We conclude with a series of case studies that illustrate typical questions faced inside family businesses. We show that a lack of fairness in the decision and managerial processes governing these businesses and their associated families is a source of conflict. We describe how increasing fair process practices improves the performance of these businesses while also increasing the satisfaction of those associated with them.

Suggested Citation

van der Heyden, Ludo and Blondel, Christine and Carlock, Randel S., Fair Process: Striving for Justice in Family Business. Family Business Review, Vol. 18, No. 1, pp. 1-21, March 2005, Available at SSRN: https://ssrn.com/abstract=727284

Ludo Van der Heyden (Contact Author)

INSEAD - Technology and Operations Management ( email )

Boulevard de Constance
77 305 Fontainebleau Cedex
France
+33 0 1 60 72 42 89 (Phone)
+33 0 1 60 74 61 60 (Fax)

Christine Blondel

Independent

Randel S. Carlock

INSEAD - Entrepreneurship and Family Enterprise ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France
+33 0 1 60 72 41 42 (Phone)
+33 0 1 60 72 42 23 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
20
Abstract Views
2,279
PlumX Metrics