Institutionalization of family-owned businesses in construction sector: The effects of family on the level of institutionalism

In todays' world, globally, family owned businesses dominate the economy regarding the volume of business that they do and the sheer number of people they employ. Despite being an essential part of both social and economic life by their unique managerial and organizational structure, their lifespan is quite limited. When the studies conducted on this subject are analyzed, it could be seen that the main cause of this situation arises from not placing the necessary importance on the institutionalization. However, it is an undeniable fact that family businesses have to institutionalize for adjusting themselves to changing & developing dynamics, the cultural environment and the competition in the industry. This research investigates the level of institutionalization in family-owned businesses which serve in construction industry of Turkey and the effects of family on this level by consulting previous research. The present study consists of four main parts. In the first part, a definition of "Family Business" is aimed to be formed in the light of previous research. Following this, the key features of family businesses, their organizational and managerial structures and lifespans are mentioned. In the second part of the study, the concept of institutionalization is examined both in a general and specific manner which focuses on family corporations. After referring to different approaches and components of institutionalization, the benefits and the impediments of the institutionalization for the company are stated. The third part of the study mainly includes the analysis of the construction industry. In this part which the place and the importance of construction industry both in the world and Turkey is demonstrated with statistics, the structure and the characteristics of this industry is explored. Thus, an opportunity for making a meaningful comparison between family businesses serving in this industry and other industries is provided. In the fourth and the last part, a field study about the level of institutionalization in family businesses which serve in Turkey's construction industry and the effect of family to this level and the findings obtained at the end of this study is presented. The field study was conducted with 35 participants whose companies are located in nine different cities of Turkey. The statements about elements of institutionalization and family effects were aimed to the participants, also factors that effect institutionalization and potential consequences of institutionalization were asked via open-ended questions. In the light of the results of this study, it is determined that the companies that reach a certain growth, start to proceed in the field of institutionalization, but the ratio is inadequate when it compared to general. Moreover, it is observed that the institutionalization of the inter-family relations is a bigger problematic issue than the institutionalization of the business, therefore solution-oriented suggestions were made in this context. The study aims to contribute to the literature on behalf of construction industry by offering some brief proposals about the effects of family on the level of institutionalization of family-owned businesses.