THE FAMILY BUSINESS

Abstract

My assignment tonight, one filled so admirably by Mira Wilkins last year, is a nostalgic one, for it calls for the speaker to be autobiographical-to look backward in one's career over the whole body of research and writing efforts. This generally is a revealing experience, and it was for me, for I realized how centrally my own efforts in the field of business history have been concentrated on family firms. There are a number of famous family names in American business history-the Rockefellers, Fords, Du Ponts, Vanderbilts, Watsohs-yes, even the Binghams and the Quayles. In most cases these have been family businesses in the sense that both ownership and management passed from one generation to the next. Yet it is startling to realize how few major American companies which started this way have been able to carry the family management thread much beyond the second generation, let alone the third. The Du Ponts have done so, counting in-laws; Henry Ford II was, of course, the third generation, but that seemed to be the last of the Fords in top management, although a recent set of articles in the press have suggested that the string, although broken, might be mended. Yet the family business has been an enduring American institution and has lessons to relate, both positive and negative. For a moment, let me use my own work as examples of the family business in the United States. It is a small set but has the advantage of being one of quite varied businesses. Perhaps most important, in most of them I had the special opportunity of being on the scene studying them just at the point of transition from one generation to the next. I will put particular focus on the issue of transition in my remarks tonight. My first book, also my doctoral dissertation, was a business history of Norwalk Truck Line company, at the time (1954) one of the half dozen large interstate motor carriers. While it was a corporation, it really was the child of one person, the sole owner. A wonderful old man of German extraction, John Ernsthausen, had started the company in 1920 as a produce wholesaler, driving his own truck from the country into Cleveland, Ohio. By sheer persistence and hard work over 35 years he had built it into a major business. Ernsthausen was unsophisticated and had only a primitive view of the management process, but he gave me an acute sense of how important one individual can be in an organization. He had a naivete about business life that was at once both charming and frightening. For example, he made the