On The Purpose of Family Wealth
Adapted from el Sehity and Liechtenstein (in preparation)
Defining the purpose of family wealth is recognized by many family business scholars and consultants as one of the fundamentals for families’ strategic long-term planning. The very definition and theory of the concept itself has remained a blind spot in the scientific business- and family firm literature. In the absence of conceptual criteria, however, methods and techniques for the development of purpose may not be subjected to falsification procedures so that just any result or statement may be presented as a purpose. In this article, we provide an interdisciplinary review on purpose definitions and discuss short comings and strengths of the different approaches to the concepts of purpose.
We strongly recommend to reconsider the purpose of family wealth in terms of a shared common ground for families so that their members may obtain the necessary autonomy to psychologically own and use the family resources in a shared as well as autonomous manner. We conclude with a call for research on this fundamental issue for family firms, proposing a number of empirical as well as theoretical questions to be resolved.