The Interaction Between Family Businesses and Institutional Environment in Africa: An Exploration of Contextual Issues

Family businesses in Africa play a vital role in creation of socio-economic wealth as they operate at the intersection of social orders such as the family, the market, community, the state and corporates as well as formal and informal institutions. Family businesses are required to manage the expectations of these social orders and institutions. Although some family business researchers’ attempts to use an institutional perspective to examine the effects of institutional environment on family businesses, less is known about how they influence changes in the institutional environments and the nature of the effects of such interactions, within developing economies such as in Africa. Additionally, institutional voids, have substantial impacts on the way in which family businesses behave and operate in Africa. This chapter addresses these important gaps by advancing theoretically-and contextually- driven propositions to guide future research on the links between family, family businesses, and the institutional environments in Africa.