TY - CHAP
T1 - Lessons in Financial Governance from Bowen's Family Systems Model
AU - Sachs, Paul
AU - Mugova, Shame
N1 - Publisher Copyright:
© 2023, The Author(s), under exclusive license to Springer Nature Switzerland AG.
PY - 2023/4/21
Y1 - 2023/4/21
N2 - All organizations are social systems. The family is the first social system to which each person belongs. A business organization is also such a system. Family theorists describe family relationships and use this understanding to help families to improve their functioning. These insights can also be applied to business organizations and their governance. The present paper uses Bowen's family systems theory to understand financial governance and governance relationships. Bowen's eight concepts of family systems are triangles, differentiation of self, nuclear family emotional process, family projection process, multigenerational transmission process, emotional cutoff, sibling position, and societal-emotional process. These concepts are discussed in light of how financial information is shared in a business, how board composition affects the oversight of financial operations, how leadership balances financial and operational demands, and how the social interactions within the business interplay with the macro social-industrial environment. For example, a well-functioning family helps a family member develop into an independent adult. Likewise, the effective business leader enables the financial department to develop autonomy, allowing that department to provide meaningful, objective information for business decisions. When this does not occur, problems can arise which affects family stability and business efficiency. Suggestions for further research are offered. In particular, the connection between family theories and agency and social models of governance is explored. The models also are relevant to notions of who are the business?s stakeholders. The overlap between business systems and family systems which has become more evident during the COVID-19 pandemic speaks to the relevance of the concepts in this paper to future research and business planning.
AB - All organizations are social systems. The family is the first social system to which each person belongs. A business organization is also such a system. Family theorists describe family relationships and use this understanding to help families to improve their functioning. These insights can also be applied to business organizations and their governance. The present paper uses Bowen's family systems theory to understand financial governance and governance relationships. Bowen's eight concepts of family systems are triangles, differentiation of self, nuclear family emotional process, family projection process, multigenerational transmission process, emotional cutoff, sibling position, and societal-emotional process. These concepts are discussed in light of how financial information is shared in a business, how board composition affects the oversight of financial operations, how leadership balances financial and operational demands, and how the social interactions within the business interplay with the macro social-industrial environment. For example, a well-functioning family helps a family member develop into an independent adult. Likewise, the effective business leader enables the financial department to develop autonomy, allowing that department to provide meaningful, objective information for business decisions. When this does not occur, problems can arise which affects family stability and business efficiency. Suggestions for further research are offered. In particular, the connection between family theories and agency and social models of governance is explored. The models also are relevant to notions of who are the business?s stakeholders. The overlap between business systems and family systems which has become more evident during the COVID-19 pandemic speaks to the relevance of the concepts in this paper to future research and business planning.
KW - Budgeting
KW - Change management
KW - Differentiation
KW - Family systems
KW - Financial governance
KW - Organizational culture
UR - https://www.open-access.bcu.ac.uk/15079/
U2 - 10.1007/978-3-031-24647-0_16
DO - 10.1007/978-3-031-24647-0_16
M3 - Chapter
SN - 978-3-031-24647-0
T3 - CSR, Sustainability, Ethics and Governance
SP - 205
EP - 318
BT - Corporate Social Responsibility in a Dynamic Global Environment
PB - Springer
ER -