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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 M∼noa
Diane Masuo is an Associate Professor in the Department of Family and Consumer
Sciences, University of Hawai>i at M∼noa, 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:
Grace Fong is an Associate Professor in the Department of Family and Consumer
Sciences, University of Hawai>i at M∼noa, 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 M∼noa. E-
mail address: [email protected].
John Yanagida is a Professor and in the Department of Natural Resources and
Environmental Management, University of Hawai>i at M∼noa, 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: [email protected]
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 M∼noa, 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: [email protected].
This paper reports results from the Cooperative Regional Research Project, NE-167R,
AFamily 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.
Literature Review
Business Success
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 Athere 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.
Methods
Procedure
Data collection was done in conjunction with Cooperative Regional Research Project
NE-167R, AFamily 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 functioni 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 managerii.
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 attainmentiii, 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)
AFamily 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 Aincome@ were imputed using the Ahot-deck@ method (see Montalto & Sung, 1996).
The Acommon 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)
ABusiness 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 Aprofit@ (business profit for 1996) were imputed using the Ahot-
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 subgroupsBsingle manager households and dual manager
households. Analysis of single manager households by definition excluded the variables
Acommon family goal@ and Acommon 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 resultsiv 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
parentCone 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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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.
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Company.
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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
(fam/succ)
Perceived satisfaction with
over-all family life quality
Ranking (1=very dissatisfied,
5= very satisfied)
Business success
(bus/succ)
Satisfaction with
business
Ranking (1=very
unsuccessful, 5= very
successful)
Age-x
Age
Years
Marital-xa
Marital status 1 if married; zero otherwise
Gender-xa
Gender 1 if female; zero if male
Education-high school
(EdHS)-xa
Highest educational level attained
is high school and below
1 if high school and below;
zero otherwise
Education-some college
EdCC)-xa
Highest educational level attained
is some college training
1 if some college training;
zero otherwise
Education-college
(EdBS)-xa
Highest educational level attained
is a bachelor's degree and beyond
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.
ax = h for household manager, x = b for business manager (table continues)
Health-average
(Hlthav)- xa
Average and below health
1 if average and below; zero
otherwise
Health-good
(Hlthgd)-xa
Good health
1 if in good health; zero
otherwise
Health-excellent
(Hlthex)-xa
Excellent health
1 if in excellent health; zero
otherwise
Teens
Number of teens in the
household between 16 to 18
years old
Number
Kids
Number of children in the
household less than 5 years old
Number
Home 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.
ax = h for household manager, x = b for business manager
(table continues)
Office
With or without business office
outside the home
1 if with office outside the
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
has in this present business
Years
Common family goal
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
business manager (applies only to
dual-manager households)
different
Common business goal
(Combus)
Most important long-range business
goal is common between the home and
the business manager (applies only to
dual-manager households)
1 if with common goal; zero if
different
Note. Income and Profit were imputed. See Montalto & Sung, 1996 for procedure used.
ax = h for household manager, x = b for business manager.
28
Table 2
Comparison of Single Manager and Dual Manager Households
Single Manager
Households, N=259)
Dual Manager Households, N=414
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
Households, N=259)
Dual Manager Households, N=414
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
scale)
3.93 4.02
30
Table 3
Comparison of Variable Means between Single-Manager Households (N=259) and Dual-Manager
Households (N=414) Using the t-test
Variables
t-statistic
Significance
(2-tailed)
Manager Profile Age-ha .615
.538
Age-bb -2.089 .037**
Marital-ha -6.910 .000 ***
Marital-bb -5.941 .000 ***
Gender-ha -11.501 .000 ***
Gender-bb 25.296 .000***
Education-high school-ha -.975 .330
Education-some college-ha .069 .945
Education-college-ha .887 .375
Education-high school-bb -1.674 .095
Education-some college-bb 1.602 .110
Education-college-bb .117 .907
Health-average-ha -.249 .803
aHousehold managers. bBusiness 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
Variables
t-statistic
Significance
(2-tailed)
Health-good-ha .651
.515
Health-excellent-ha -.685 .494 Health-average- bb .194
.846
Health-good-bb -1.121 .263 Health-excellent-bb .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 aHousehold managers. bBusiness 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
Variables
Family Success
Coefficient
Family Success
t-statistic
Business Success
Coefficient
Business Success
t-statistic Age
-0.0009
-.139
-.010
-1.639*
Marital
0.359
1.932**
-.166
-.691
Gender
- .030
-.167
.376
2.626***
Education-some
college
.187
1.126
-.084
-.526
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
*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
Variables
Family Success
Coefficient
Family Success
t-statistic
Business Success
Coefficient
Business Success
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
*p#.10 **p#.05 ***p#.01
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
t-statistic
Business Success
Coefficient (x: bus. mgr.)
Business 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-x
-.305
-3.270***
.012
.114
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 Variables
Family Success
Coefficient (x: home mgr.)
Family Success
t-statistic
Business Success
Coefficient (x: bus. mgr.)
Business Success
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
1Thomas (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 Aeducation-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.