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Factors Associated with Business and Family Success:

A Comparison of Single Manager and Dual Manager Family Business Households

Diane Masuo*, Grace Fong, John Yanagida, and Carol Cabal

University of Hawai >i at Mnoa

Diane Masuo is an Associate Professor in the Department of Family and Consumer

Sciences, University of Hawai > i at Mnoa, 2515 Campus Road, Honolulu, HI, 96822. Her

research interests are in issues related to the viability of home-based and family-owned

businesses. She received her Ph.D. from Oregon State University. E-mail address:

masuo@hawaii.edu.

Grace Fong is an Associate Professor in the Department of Family and Consumer

Sciences, University of Hawai > i at Mnoa, 2515 Campus Road, Honolulu, HI, 96822. Her

research interests are family management practices in family owned business households and in

limited resource families. She received her Ed.D. from the University of Hawai> i at Mnoa. E-

mail address: gfong@hawaii.edu.

John Yanagida is a Professor and in the Department of Natural Resources and

Environmental Management, University of Hawai > i at Mnoa, 3050 Maile Way, Honolulu, HI,

96822. His research interests are production economics and price analysis. He received his Ph.

D. from the University of Illinois at Champaign-Urbana. E-mail address: jyanagid@hawaii.edu

Carol Cabal is a Graduate Research Assistant and Ph. D. candidate in the Department of

Natural Resources and Environmental Management, University of Hawai> i at Mnoa, 3050

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Maile Way, Honolulu, HI, 96822. Her dissertation research is on the impact of female-headed

households on food and nutrition consumption. E-mail: ccabal@hawaii.edu.

This paper reports results from the Cooperative Regional Research Project, NE-167R,

A Family Businesses: Interaction in Work and Family Spheres. @ The project was partially

supported by the Cooperative States Research, Education, and Extension Service, U.S.

Department of Agriculture, the Experiment Stations at the University of Hawai > i, University of

Illinois, Purdue University (Indiana), Iowa State University, Michigan State University,

University of Minnesota, Montana State University, University of Nebraska, Cornell University

(New York), North Dakota State University, The Ohio State University, The Pennsylvania State

University, Texas A & M University, Utah State University, The University of Vermont,

University of Wisconsin, and the Social Sciences and Humanities Council of Canada (for the

University of Manitoba).

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Abstract

The purposes of this paper are: (1) to identify internal/micro-level factors associated with

perception of family and business success, and (2) to compare single manager and dual manager

family business households with respect to factors that contribute to their perceptions of business

and family success. The data are from a nationally representative sample of 673 family business

households. Using a two-stage least squares regression procedure, the results show a unique

relationship between family success and business success. Family success positively impacts

business success, but not vice versa, and predictors of family and business success vary widely

between household types.

Keywords: business success, family business, family success

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Factors Associated with Business and Family Success:

A Comparison of

Single Manager and Dual Manager Family Business Households

Studies of family owned businesses frequently conceptualize the family and the business

as two or three separate systems that interact (Lansberg, 1988), but assume that the family and

business operate independently of each other. In reality, business decisions are often made in the

context of the owner-manager= s family; strategies for the firm= s activities are defined by both

business and family considerations; and business resources are used to achieve family as well as

business goals (Riordan & Riordan, 1993).

Previous studies of family businesses have been limited by their use of the business

rather than the household as the unit of analysis, and their reliance on a single respondent,

usually the owner/manager of the business, to report information about both the business and the

family (Winter, Fitzgerald, Heck, Haynes, & Danes, 1998). This methodological approach may

result in a distorted report of the interaction between the family and the business and a failure to

examine the family's perspective of the business, the role that family plays in the success of a

family owned business venture, and the impact of the business on family success. In contrast,

household-based samples of family owned businesses provide greater detail of and insights into

the interrelated nature of the family and the business (Winter, et. al, 1998).

There has been a tremendous growth in the study of work/family linkages, however,

limited empirical data on the interface between family and work in family business households

exists. While the interrelatedness of the family and the business is not clearly understood

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(Keough & Forbes, 1991), it is known that the family can impact the business in positive as well

as negative ways (Green & Pryde, 1989; Hoy & Verser, 1994). A study of a specific type of

family owned business, home-based workers, revealed that work life is influenced by family

structure, gender of the home-based worker, and life stage. It also showed that the work of both

female and male workers, especially those with dependent family members, is impacted by their

family= s needs (Rowe & Bentley, 1992). A majority of family business households have

separate household and business managers, but it is inappropriate to assume that the business

manager and household manager are different individuals. Given the diversity of family

structures that exist in modern society, e.g., single parent and two-parent families, and the

increased sharing of work and family responsibilities among family members, it is not surprising

that about one third of family business households are ones in which the business manager and

the household manager are the same person (Winter, et. al, 1998).

Because of limited empirical work on the interrelationship between families and

businesses, it is not clear as to what constitutes or promotes family success and business success

in family owned businesses. Neither is it clear whether there are variations in perception of

success when the household and business manager is the same or two different individuals. The

purposes of this paper are: (a) to identify internal/micro-level factors associated with perception

of business and family success and (b) to compare single manager and dual manager family

business households with respect to factors that contribute to their perceptions of business

success and family success. A single manager household is one in which one individual

performs the roles of both the business and the household manager. In a dual manager

household, two different individuals perform these roles. While the family-business system is

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affected by internal and external factors, this study is limited to an examination of

internal/micro-level factors, including demographic characteristics of the business and household

managers, the household, and the business.

Business Success

Literature Review

Commonly used economic or financial measures of success include return on assets,

growth in sales, annual sales, profits, number of employees and survival rates (Dess & Robinson,

Jr., 1984; Kalleberg & Leicht, 1991; Miner, 1997). Success in business can also be assessed

using non-pecuniary measures which take into account customer satisfaction, personal

development and a sense of personal achievement (Rosenblatt, de Mik, Anderson, & Johnson,

1985). The latter measures, however, are outside the scope of this paper.

Studies focusing on determinants of business income and profitability have established

that certain owner and business characteristics, such as gender, education, age, and goal conflict

are linked to increased business income. Findings regarding the association of gender with

business income and profit have been mixed. They include observations of higher income and

profit among male workers and owners, lower incomes associated with female owned businesses

(Rowe, Haynes, & Bentley, 1993), and no gender differences in income earned by owner-

operators (Kalleberg & Leicht, 1991).

Business owners= human capital investments and income have been found to be

positively correlated; education, managerial skills and experience all contribute positively to

higher earnings (Kalleberg & Leicht, 1991; Rowe, Haynes, & Bentley, 1993). Business success

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also increases when family members help in the business and provide emotional support to the

owner (Green & Pryde, 1989). In contrast, variables such as owner's age, goal conflict between

active and non active family members, and heavy family demands negatively influence

economic success of businesses (Hoy & Verser, 1994; Kalleberg & Leicht, 1991; Konijn &

Plantenga, 1988; Loscocco, Robinson, Hall, & Allen, 1991).

Business characteristics that influence profitability, income, growth, and survival rates

are age and size of the firm, and location of the business. New and small firms, and those that

are home-based earned less income than firms that are older, larger and were physically located

outside of the home (Kalleberg & Leicht, 1991; Kraut & Grambsch, 1987).

In summary, economic success of businesses is impacted by both owner and business

characteristics. The observation that family members can also impact income positively and

negatively is support for recognizing and further examining the interrelatedness of activities in

the family and business spheres in family owned business.

Family Success

Family success can be conceptualized as family quality of life or family well being.

According to Rettig and Leichtentritt (1999), quality of family life is an important indicator of

overall quality of life. Measures of quality of life tend to examine particular domains, e. g.,

satisfaction with marriage and family life, friends, health, home, education, religion,

employment, financial well being, neighborhood, and community. They can be objective, e. g.,

income or level of education attained, or subjective (perceptual) e. g., a person =s perceptions of

his/her objective reality. Subjective perceptions are considered to be more relevant in assessing

individual quality of life because they tend to reveal more about a person= s satisfaction with

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his/her life (Olson, et al., 1983). They measure an individual = s experience of life and his/her

perception of the degree to which his/her emotional and material needs are satisfied in the family

system rather than the conditions of life in general and the environment in which an individual

functions (Rettig & Leichtentritt, 1999).

Satisfaction is reflected in the differences between objective attributes and one= s

expectations and aspirations with respect to important aspects of one =s life (Campbell, Converse

& Rodgers, 1976). Campbell, et al. (1976) have noted that A there is a highly characteristic

tendency for satisfaction with most domains to increase at a roughly equivalent pace with

advancing age @ (p. 151) and that there is a positive linear association between life satisfaction

and education, employment status, job satisfaction, and health. Satisfaction with life quality has

been found to generally follow the same pattern as marital and family satisfaction, both of which

are outcome variables typically used to reflect happiness with the overall functioning of the

family (Olson, et al., 1983). Changes in an individual = s roles, responsibilities, and financial

welfare can explain overall improvement in life satisfaction and well being (Orbuch, House,

Mero, & Webster, 1996).

Work and Family Interface

It has been a long held belief that work and family life are separate spheres of activity

that operate independently of each other. Kantor (1977) challenged this myth of separate worlds

and subsequent studies suggest that there are extensive, positive and negative bi-directional

influences--work conditions and outcomes that affect family life and vice versa (Lambert, 1990,

Voydanoff, 1987). Joint influences include: (a) the type of occupation and the amount of income

associated with the worker = s role in the economy, (b) the combined effects of work-role

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characteristics and the demands associated with being a spouse or parent, and (c) the husband =s

and wife = s combined work role characteristics and how these combined demands are

coordinated. These joint effects reflect the mutual interdependence of aspects of work and

family life, and are thought to influence perception of family quality of life (Voydanoff, 1987).

These influences need to be examined to better understand the work/family interface,

particularly in family business households.

Objective and subjective measures of success have been confirmed in both the family and

business literature. While the majority of business studies utilize objective economic measures

of performance, a growing number incorporate subjective measures that examine the

noneconomic dimensions of business performance to address the measurement problems

associated with the use of financial data (Kotey, 1997). Just as subjective perceptions of quality

of life may reveal more about satisfaction with life and family well being, similarly, subjective

perceptions of business success may provide more insights into satisfaction with a family owned

business.

Procedure

Methods

Data collection was done in conjunction with Cooperative Regional Research Project

NE-167R, A Family Businesses: Interaction in Work and Family Spheres. @ The primary focus of

this regional research project was to analyze the interaction between the family and business

systems in family owned businesses. The sampling frame consisted of listed telephone numbers

for individuals from all 50 states. The sample was limited to families, defined as a group of

people related by blood, marriage, or adoption who shared a common dwelling unit, in which at

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least one person owned or managed a business. To qualify as a family business, the owner-

manager had to have been in business for a least a year, worked at least 6 hours per week year

round or a minimum of 312 hours a year in the business, been involved in its day-to-day

management, and resided with another family member. Separate interview schedules were

developed for and administered to the household manager and business manager in households

in which these managers were two different individuals. A third interview schedule was

developed and used in cases in which a single individual was both the household and the

business manager. See Winter, et al. (1998) for further details on the sample and sampling

procedures used. Data were collected by The Iowa State University Statistical Laboratory.

Participants

Of the 1,116 family business households found to be eligible based on definitions and

work intensity requirements, 794 (71% completion rate) completed either a household or a

business interview. Six hundred seventy three households completed both a business and a

household interview. Of these, 259 were single manager households in which the business

manager and the household manager were the same person. The remaining 414 cases were dual

manager households that had different individuals acting as the business manager and the

household manager.

Theoretical Framework

The notion that the household represents a set of economic activities dates back to at least

the work done by Chayanov on Russian peasants, which was first published in 1926 (Chayanov,

1986). The development of household economic theory and the economics of the family

followed in the mid-1960s. Becker (1965) hypothesized that with a single set of preferences, the

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household could combine goods purchased in the market with time and goods produced at home

to produce commodities which generated satisfaction or utility for the household. This approach

provides a joint model for production and consumption decisions.

A static model of household behavior is proposed for this study. It is assumed that profit

maximization (business motive) and satisfaction or utility maximization (family motive) are

interrelated objectives that affect and are affected by household production and consumption

decisions. The household welfare function i is similar to the Bergson-Samuelson social welfare

function (see Bergson, 1938 and Samuelson, 1947) except that instead of aggregating

satisfaction of individual household members, it measures the perceived satisfaction or welfare

of the household head and/or business manager ii .

Analytical Framework

The proposed model consists of two equations, one describing perceived family success

and the other explaining perceived business success. Perceived family success was selected as a

dependent variable based on the premise that subjective measures more accurately capture the

degree to which an individual = s material and emotional needs are fulfilled (Olson, et al., 1983;

Rettig & Leichtentritt, 1999). To be consistent, perceived business success was used as the

dependent variable to measure business satisfaction.

The equation describing perceived family success, as viewed by the household manager

is shown below as equation (1). It includes selected manager characteristics (age, marital status,

gender, educational attainment iii , health status), household characteristics (number of teenagers

and young children, income, common family goal), and business characteristics (perception of

business success) as explanatory variables thought to affect perception of family success.

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Fam/succ= f(Age, Marital, Gender, EdCC, EdBS, Hlthgd, Hlthex,

(1)

Teens, Kids, Income, Comfam, Bus/succ)

A Family success, @ the dependent variable in this equation, is the household manager =s

perception of the family= s quality of life (well-being). Quality of family life was rated on a 5-

point scale. The independent variable Aincome @ refers to total household income. Missing

values for A income @ were imputed using the A hot-deck@ method (see Montalto & Sung, 1996).

The A common family goal @ variable is a dummy coded variable designating whether or not

there was agreement between the household manager and the business manager on the family= s

most important goal. The family life literature has reported decreases in satisfaction with family

life when preschoolers and teenagers are present in the home (Lavee, Sharling, & Katz, 1996;

Olson, et. al, 1983). For this reason, number of children under five and number of teenagers

were included in the family success equation.

The second equation describes perceived business success. Variables included in this

equation are inputs used in the production process, e.g., labor and financial variables. This

equation includes business manager characteristics (age, marital status, gender, educational

attainment, health status, experience in the business), household characteristics (home

ownership, area of residence, perception of family success), and business characteristics (an

office away from the home, profit, number of full-time employees, and common business goal)

thought to affect perception of business success.

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Bus/succ = g(Age, Marital, Gender, EdCC, EdBS, Hlthgd, Hlthex,

(2)

Exper, Home, Urban, Fam/succ , Office, Profit, Full-time, Combus)

A Business success,@ the dependent variable in the second equation, represents the business

manager = s perception of how successful the business is. Business success was rated on a 5-

point scale. Missing values for A profit@ (business profit for 1996) were imputed using the A hot-

deck@ method (see Montalto & Sung, 1996). ACommon business goal @ is a dummy variable

that refers to whether or not the business manager and the household manager agreed on the

business = s most important goal.

The sample consisted of two subgroups Bsingle manager households and dual manager

households. Analysis of single manager households by definition excluded the variables

A common family goal @ and A common business goal.@ See table 1 for a description of the

variables. This system of equations is estimated simultaneously and household/business

objectives are compared in terms of profit maximization and utility satisficing motives. Factors

affecting these objectives are compared in terms of direction of effects and extent of

contributions.

[Insert table 1 here]

Table 2 provides a demographic profile of the single manager and dual manager

households in this study.

[Insert table 2 here]

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Findings

Table 3 compares single manager and dual manager households in terms of manager,

household and business characteristics.

[Insert table 3 here]

Manager characteristics which were significantly different include age of the business

manager, marital status of both the household manager and the business manager, gender of both

the household and the business manager, and experience of the business manager. More

business managers in dual manager households were male, older, married, more experienced in

the business, and had a female counterpart as the household manager. Household managers in

this type of household were more likely to be female and married than those in single manager

households. In single manager households, the business manager was more likely to be female,

single, younger, and less experienced in the business than business managers in dual manager

households.

In terms of household characteristics, only the perceived level of family success and

location of the home were statistically different between the single and dual manager

households. Dual manager households reported higher levels of family success. Single manager

households were more likely to be located in an urban environment.

The two types of households differed significantly with respect to the following business

characteristics: presence of business office outside the home, business profit, and number of

full-time employees. Dual manager households were more likely to have an office outside of the

home, higher profits, and more full-time employees.

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Table 4 presents the estimated two-stage least squares regression results iv for single

manager households.

Positive and significant contributors to perception of family success

included being married, having good or excellent health and having more household income.

Number of teens had a negative effect, implying that as the number of teenagers in the household

increases, family success as judged by the household manager decreases.

Table 4 also shows the estimated results for business success for the single manager

households. Statistically significant variables include perception of family success, age, gender ,

educational attainment at the bachelor= s level or higher, business experience, and having an

office outside of the home. The results suggest that a higher level of perceived family success,

being female, having a bachelor = s degree or higher, having more years of experience in the

business, and having an office away from home contribute to an increased perception of business

success, while increasing age diminishes it.

[Insert table 4 here]

The results for the dual manager households are shown in table 5. Statistically

significant variables contributing to increased perception of family success included age,

educational attainment that includes some college, and health of the household manager. Older

household managers and those in excellent health tended to report higher levels of family

success. Household managers who had some college education but no degree reported lower

levels of family success.

Table 5 also presents the results explaining business success in dual manager households.

Family success, health of the business manager, years in the business, having an office outside

of the home, and having a common business goal between business and household managers

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were statistically significant. Perception of business success in dual manager households is

positively influenced by perception of family success, health of the manager, experience in the

business, and having an office outside of the home. Contrary to expectations, having a common

business goal between the business manager and the household manager was associated with a

decreased perception of business success.

[Insert table 5 here]

Conclusion and Implications

The contributions of this study can be categorized in the following ways: (a) empirically

testing the relationship between family success and business success, and (b) identifying distinct

differences between single manager and dual manager households with respect to factors

influencing perceptions of family and business success. Their implications are discussed below.

Relationship between family success and business success

There is a unique relationship between family success and business success, namely,

family success positively impacts business success, but not vice versa. The demonstrated

relationship between family success and business success reinforces the importance of

recognizing and understanding the interrelatedness of the family and the business in family

owned businesses. Further research is needed to more exhaustively explore the causal

relationship between family success and business success. Disaggregating the two types of

family business households (single vs. dual manager) by firm size, type of business or by level of

profit or net worth could provide greater insights into this relationship.

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Examination of common family and business goals between the household and business

managers in dual manager households reveals interesting and somewhat puzzling results.

Having a common family goal has an insignificant effect on family success. In contrast, having

a common business goal has a significant negative effect on business success. Both findings

appear to be contrary to the notion that sharing common goals reduces the potential for conflict

and increases satisfaction (Deacon & Firebaugh, 1988; Hoy & Verser, 1994). The discrepancies

suggest that while the household and business managers may agree on what they want the

business to accomplish, there may be other factors such as time horizon that influence a business

manager = s evaluation of how successful the business is. Hoy, Dsouza, and McDougall (1992)

observed conflict between the long-term growth goals of the founder and the short-term wealth

accumulation goals of other family members. Given the manager = s vision for the long-term

growth and survival of the firm, the business may not be perceived as being successful. Such

conflicts, when identified early, can be addressed in an effort to improve the long-term survival

and success of the family business.

Differences between single manager and dual manager households

There are many distinct differences between single and dual manager family business

households. Business managers in single manager households are more likely to be female,

single, younger, and less experienced in the business than their counterparts in dual manager

households. Sixty-eight percent of the business managers in the single manager households are

female, and 15% are not married. In contrast, only 3% of the business managers in dual manager

households are female and 3% are not married. The single manager households are more likely

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to be located in urban areas, and their businesses are more likely to have fewer employees, be

less profitable, and not have an office outside of the home.

Notably, single manager households report significantly lower levels of family success

than dual manager households do. Since perception of family success has been shown to

influence perception of business success, it is important to understand what may be contributing

to the differing perceptions. This study has revealed that there are more differences than

similarities in the factors that influence perception of family success in the two types of

households. Excellent health of the household manager is the only variable that is common

between them. In single manager households, being in excellent health, being married, and

having higher levels of family income improve perception of family success, while having teens

in the household negatively influences it. In dual manager households, age and health status of

the household manager have a positive influence, but having only some college education has a

negative one.

While single manager and dual manager households do not appear to differ significantly

in terms of their perception of their business success, they do differ with respect to factors that

influence this perception. The only common factors are experience in the business, the presence

of an office outside of the home and perception of family success, all of which have a positive

influence. In single manager households, gender, age, and education also influence perception

of business success. In dual manager households, perception of business success is also affected

by the presence or absence of a common business goal between the business manager and the

household manager.

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The challenges faced by the single manager can be likened to those of a single

parent C one person managing multiple responsibilities that are more typically shared by two

individuals. The combined responsibilities associated with managing both the business and the

household result in different needs that require use of different strategies and supports than those

that might be used in the dual manager household. Kalleberg and Leicht =s (1991) findings

support this idea. They observed that marketing strategies that work well for men do not work as

well for women. Male-head small businesses thrived in competitive markets, but female-run

firms did not. Female-run businesses experienced stronger survival rates when they adopted

strategies that gave them an edge over their competition. For women, the winning approach was

to take a generalist orientation and to emphasize quality. Since single manager family businesses

tend to be headed by females, it is important to address gender of the business manager when

implementing business assistance programs.

This household-based study has examined the influence of micro-level factors on

perception of family and business success. The identification of different influences on the two

types of family business households suggests the need to treat them as distinct units in future

analyses of family owned businesses. It is also important to recognize that variables other than

those examined in this study may be influencing perception of family and business success, and

that the use of a single-item measure of perceived success may be a limiting factor. Efforts must

be made to identify relevant attributes and to utilize more complete measures of success to

provide greater insight into the complex interface between the family and the business in family

businesses.

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San Francisco: Jossey-Bass.

Rowe, B. R., & Bentley, M. T. (1992). The impact of the family on home-based work. Journal

of Family and Economic Issues, 13, 279-297.

Rowe, B. R., Haynes, G. W., & Bentley, M. (1993). Economic outcomes in family-owned

home-based businesses. Family Business Review, VI, 383-396.

Samuelson, P. A. (1947). Foundations of economic analysis, Cambridge, MA: Harvard

University Press.

Thomas, D. (1997). Incomes, expenditures and health outcomes: Evidence on intrahousehold

resource allocation. In H. Lawrence, J. Hoddinott, & H. Alderman (Eds.), Intrahousehold

resource allocation in developing countries: Models, methods and policy. (pp. 142-164).

Baltimore: The John Hopkins University Press.

Triola, M. (1992). Elementary statistics. (5 th ed.). Reading, MA: Addison-Wesley Publishing

Company.

Voydanoff, P. (1987). Work and family life. Newbury Park, CA: Sage Publications, Inc.

Winter, M., Fitzgerald, M. A., Heck, R. K. Z., Haynes, G. W. & Danes, S. M. (1998). Revisiting

the study of family businesses: Methodological challenges, dilemmas, and alternative

approaches. Family Business Review, XI, 239-252.

24

Table 1

Description of Variables

Variable Name

Description

Unit of Measure

Family success

Perceived satisfaction with

Ranking (1=very dissatisfied,

(fam/succ)

over-all family life quality

5= very satisfied)

Business success

Satisfaction with

Ranking (1=very

(bus/succ)

business

unsuccessful, 5= very

successful)

Age-x

Age

Years

Marital-x a

Marital status

1 if married; zero otherwise

Gender-x a

Gender

1 if female; zero if male

Education-high school

(EdHS)-x a

Education-some college

EdCC)-x a

Education-college

(EdBS)-x a

Highest educational level attained

is high school and below

Highest educational level attained

is some college training

Highest educational level attained

is a bachelor's degree and beyond

1 if high school and below;

zero otherwise

1 if some college training;

zero otherwise

1 if completed at least a

bachelor's degree; zero

25

Variable Name

Description

Unit of Measure

 

otherwise

Note. Income and Profit were imputed. See Montalto & Sung, 1996 for procedure used.

a x = h for household manager, x = b for business manager

Health-average

(Hlthav)- x a

Health-good

(Hlthgd)-x a

Health-excellent

(Hlthex)-x a

Average and below health

Good health

Excellent health

(table continues)

1 if average and below; zero

otherwise

1 if in good health; zero

otherwise

1 if in excellent health; zero

otherwise

Teens

Kids

Home

Number of teens in the

Number

household between 16 to 18

years old

Number of children in the

Number

household less than 5 years old

Home ownership

1 if home is owned; zero

otherwise

26

Variable Name

Description

Unit of Measure

Urban

Location of home

1 if located where population

is at least 2,500; zero

otherwise

Note. Income and Profit were imputed. See Montalto & Sung, 1996 for procedure used.

a x = h for household manager, x = b for business manager

(table continues)

Office

With or without business office

1 if with office outside the

outside the home

home; zero if without

Income

Household income in 1996

Dollars (with imputed values

 

for missing cases)

.

Profit

Profit in 1996

Dollars (with imputed values

 

for missing cases)

Full-time

Number of full-time employees

Number

Experience (Exper)

Number of years the business manager

Years

Common family goal

has in this present business

Most important long-range family goal

1 if with common goal; zero if

27

Variable Name

Description

Unit of Measure

(Comfam)

is common between the home and the

different

Common business goal

(Combus)

business manager (applies only to

dual-manager households)

Most important long-range business

goal is common between the home and

1 if with common goal; zero if

different

the business manager (applies only to

dual-manager households)

Note. Income and Profit were imputed. See Montalto & Sung, 1996 for procedure used.

a x = h for household manager, x = b for business manager.

28

Table 2

Comparison of Single Manager and Dual Manager Households

 

Single Manager

Dual Manager Households, N=414

Households, N=259)

Household

Business

Manager

Manager

Business Manager Characteristics

     

Age (mean years)

 

44.93

44.41

46.76

Gender

     

Female

 

68%

97%

3%

Male

 

32%

3%

97%

Marital Status

     

Married

 

85%

97%

97%

Not married

 

15%

3%

3%

Education

     

High school or less

 

29%

34%

36%

Some college

 

34%

33%

28%

Bachelor= s degree or higher

 

37%

33%

36%

Health

     

Average or below

 

13%

12%

10%

Good

 

45%

43%

50%

Excellent

 

42%

45%

40%

Business Experience (mean

 

9.32

 

13.84

29

 

Single Manager

Dual Manager Households, N=414

Households, N=259)

Household

Business

Manager

Manager

years)

     

Household Characteristics

     

Household Income (mean)

$69,544

$70,403

 

Location of residence

     

Urban

58%

50%

 

Rural

42%

50%

 

Home ownership

     

Own home

89%

92%

 

Do not own home

11%

8%

 

Family success (mean, 1-5 scale)

4.01

4.21

 

Business Characteristics

     

Profit (mean)

$26,067

 

$130,258

No. full-time employees (mean)

2.4

 

7.0

Office outside of home

     

Yes

36%

 

49%

No

64%

 

51%

Business success (mean, 1-5

3.93

 

4.02

scale)

30

Table 3

Comparison of Variable Means between Single-Manager Households (N=259) and Dual-Manager

Households (N=414) Using the t-test

       

Significance

Variables

t-statistic

(2-tailed)

Manager Profile

       

Age-h a

 

.615

 

.538

Age-b b

 

-2.089

 

.037**

Marital-h a

 

-6.910

 

.000 ***

Marital-b b

 

-5.941

 

.000 ***

Gender-h a

 

-11.501

 

.000 ***

Gender-b b

 

25.296

 

.000***

Education-high school-h a

 

-.975

 

.330

Education-some college-h a

 

.069

 

.945

Education-college-h a

 

.887

 

.375

Education-high school-b b

 

-1.674

 

.095

Education-some college-b b

 

1.602

 

.110

Education-college-b b

 

.117

 

.907

Health-average-h a

-.249

.803

a Household managers. b Business managers. *p#.10

**p#.05

*** p#.01

Note. See Triola (1992, p. 353) for discussion of statistical significance versus substantive

significance for researchers= choice of critical significance level.

 
 

(table continues)

31

   

Significance

Variables

t-statistic

(2-tailed)

Health-good-h a

.651

.515

Health-excellent-h a

-.685

.494

Health-average- b b

.194

.846

Health-good-b b

-1.121

.263

Health-excellent-b b

.546

.585

Experience

-5.144

.000***

Household Characteristics

   

Urban

1.967

.050 **

Home

-1.133

.257

Teens

-.467

.641

Kids

-1.151

.250

Income

-.157

.875

Family success

-3.012

.003 ***

Business Characteristics

   

Office

-3.423

.001 ***

Profit

-3.065

.002 **

Full-time

-2.558

.011 **

Business success

-1.550

.122

a Household managers. b Business managers. *p#.10

**p#.05

***p#.01

32

Note. See Triola (1992, p. 353) for discussion of statistical significance versus substantive significance

for researchers= choice of critical significance level.

33

Table 4

Simultaneous Regression Results Predicting Family Success and Business Success in Single-

Manager Households, N=259

Explanatory

Family Success

Family Success

Business Success

Business Success

Variables

Coefficient

t-statistic

Coefficient

t-statistic

Age

-0.0009

-.139

-.010

-1.639*

Marital

0.359

1.932**

-.166

-.691

Gender

- .030

-.167

.376

2.626***

Education-some

.187

1.126

-.084

-.526

college

Education-college

.055

.305

.253

1.734*

Health-good

.864

3.273***

-.168

-.472

Health-excellent

1.327

4.895***

-.480

-.903

Teens

-.267

-1.894*

NA

NA

Kids

-.122

-.701

NA

NA

34

34 * p # .10 ** p # .05 *** p # .01 Note. See Triola
34 * p # .10 ** p # .05 *** p # .01 Note. See Triola
34 * p # .10 ** p # .05 *** p # .01 Note. See Triola
34 * p # .10 ** p # .05 *** p # .01 Note. See Triola
34 * p # .10 ** p # .05 *** p # .01 Note. See Triola

*p#.10

**p#.05

***p#.01

Note. See Triola (1992, p. 353) for discussion of statistical significance versus substantive significance

for researchers= choice of critical significance level.

(table continues)

35

Explanatory

Family Success

Family Success

Business Success

Business Success

Variables

Coefficient

t-statistic

Coefficient

t-statistic

Income

2.557 x 10 -6

1.677*

NA

NA

Experience

NA

NA

.011

1.652*

Home

NA

NA

-.033

-.163

Urban

NA

NA

-.106

-.745

Office

NA

NA

.394

2.309**

Profit

NA

NA

-7.436 x 10 -7

-1.087

Full-time

NA

NA

-.001

-.423

Family success

NA

NA

.715

1.761*

Business success

-0.525

-1.192

NA

NA

Constant

4.683

3.094**

1.497

1.369

36

Note. See Triola (1992, p. 353) for discussion of statistical significance versus substantive significance

for researchers= choice of critical significance level.

37

Table 5

Simultaneous Regression Results Predicting Family Success and Business Success in Dual-Manager

Households, N=414

Explanatory Variables

Family Success Coefficient (x: home mgr.)

Family Success

Business Success Coefficient (x: bus. mgr.)

Business

t-statistic

Success

t-statistic

Age-x

.010

2.684***

-.005

-1.262

Marital-x

 

.198

.666

-.342

-1.440

Gender-x

-.225

-1.010

-.077

-.327

Education-some college-

-.305

-3.270***

.012

.114

x

Education-college-x

-.092

-.972

-.058

-.589

Health-good-x

 

.006

.056

.085

.620

Health-excellent-x

.245

1.919*

.324

2.264**

Teens

-.030

-.385

NA

NA

Kids

.025

.293

NA

NA

Income

-1.095 x 10 -7

-.181

NA

NA

Common family goal

.072

.899

NA

NA

*p#.10

**p#.05

***p#.01

Note. See Triola (1992, p. 353) for discussion of statistical significance versus substantive significance

for researchers= choice of critical significance level.

(table continues)

38

Explanatory

Family Success Coefficient (x: home mgr.)

Family Success

Business Success Coefficient (x: bus. mgr.)

Business Success

Variables

t-statistic

t-statistic

Experience

NA

NA

.009

2.428**

Home

NA

NA

.122

.843

Urban

NA

NA

.121

1.418

Office

NA

NA

.188

2.228**

Profit

NA

NA

1.574 x 10 -7

1.558

Full-time

NA

NA

.001

.627

Common business goal

NA

NA

-.196

-2.384**

Family success

NA

NA

.396

1.962**

Business success

.166

1.117

NA

NA

Constant

3.112

4.091***

2.442

3.154***

*p#.10

**p#.05

*** p#.01

Note. See Triola (1992, p. 353) for discussion of statistical significance versus substantive significance

for researchers= choice of critical significance level.

39

Endnotes

1 Thomas (1997) develops a household welfare function similar to the Bergson-

Samuelson social welfare function. Household welfare depends on the utility or satisfaction of

each of the household members. The household welfare function is derived by aggregating the

individual = s utility functions. This is similar to Bergson =s social welfare function which is a

function that converts individual utilities of members of society to a single numerical ranking.

2 Plug and Van Praag (1998) suggest that response behavior which reflects preferences

and perceptions can be formulated into the single welfare approach. This follows the work by

Becker (1974 and 1981) which explain household welfare in terms of the utility function of the

household head who integrates member utility functions into one consistent family function.

3 Dummy variables or binary variables are often used to measure qualitative response and

threshold effects. In the case of the highest level of education attainment representation, it is

important that one less binary variable be used than the number of education attainment

categories because of linear dependence among regressors. The category that is dropped is used

as the standard and the effects for the other categories are considered relative to the dropped

category. In this study, the variable A education-high school @ was eliminated. (See discussion in

Greene, 1993, pp. 229-235.)

4 See Pindyck and Rubinfeld (1998) for a useful discussion on simultaneous equations

and the two-stage least squares procedure. For systems of equations, the identification problem

must be addressed. Identification is equivalent in asking whether the equations can be

40

determined with knowledge of only the endogenous variables in the system of equations.

Equations 1 and 2 are identified by the order condition and two stage-least squares is an

appropriate procedure for obtaining estimates of the structural parameters. The statistical

package used for estimation is SPSS Version 8.0, procedure called 2 stage least squares.