The stereotype of the highly unified ethnic business family—serving their customers with the grandparents’ old-world ideals while the grandchildren learn the business from the bottom up—does not reflect reality. Ethnic family businesses with immigrant founders don’t have an easier time negotiating intergenerational differences. In fact, they may find that conflict resolution is harder.
Immigrant business owners trying to integrate the next generation into their companies face the same obstacles as their American-born counterparts. But the immigrants have an additional challenge to confront: cultural differences within the family.
For example, consider the Ramirez family, a composite of the many Mexican American families I have worked with in the last ten years as an organizational development consultant specializing in multicultural organizations. Geraldo Ramirez opened his grocery store in Santa Ana, Calif., in 1968. Having saved his money from ten years of working in orange groves and restaurant kitchens, he pooled his funds with a loan from his in-laws and paid cash in full for a tiny corner store. He lined the shelves behind the cash register with convenience items that were commonplace in the town of Zamora, Mexico, where he was born. His customers were paisanos who were willing to pay a bit more for such items as imported Mexican soft drinks, galletas (biscuits), dried herbs and chile peppers, and pan dulce (cake breads).
Geraldo and his wife were the sole store clerks until their oldest son, Pancho, was old enough to help out. As business grew, Geraldo bought the shoe repair shop next door, converted it to grocery space and expanded into it. Pancho was promoted to cashier at age 16. By this time, Geraldo had paid back all the money he owed his in-laws. He had developed good credit and enough knowledge of the U.S. banking system to take out a commercial loan. Within five years, Geraldo had propelled his expanding business to a new building in a better location.
Pancho was a bright young man. He used his paychecks from the family grocery, combined with government loans and private scholarships, to pay for college. To his father’s delight, Pancho majored in business administration and prepared himself to stay with the family business. Anyone outside the family readily assumed that the future of Ramirez Grocery was built on strong family unity and sound knowledge of the core competencies needed to maintain their family business success. While all of these factors contributed to the family’s financial security, Geraldo and Pancho privately struggled with an issue that had been brewing since Geraldo was old enough to see over the top of the counter: a cultural divide that existed between them.
No mere generation gap
Like many ethnic families with immigrant parents and U.S.-born children, Geraldo and Pancho had different cultural backgrounds. In some respects, they shared common traditions and values, but in many ways these two Mexican American men had sharply divergent world views that created significant conflicts on the job. Their situation is not unique to families of Mexican heritage. The cultural divide can be seen among immigrant families who come from all parts of the globe to create their own version of the American dream. Russians, Laotians, Chileans, Nigerians, Cubans, Indians and dozens more can tell their own stories of family divisions: The younger generation, usually born in the U.S., has taken on ideas, values, beliefs and customs quite different from the ones their parents brought from the homeland.
Family business owners are often advised to seek outside help when family conflicts threaten the stability of their companies, but immigrant families are less likely to ask an outsider for help with family conflicts. The immigrant parents’ traditions often demand that family matters be kept within the family. Because so many ethnic families reject outside help, few professionals have experience in addressing the unique dynamics in these families. If a consultant or counselor is engaged to help, that professional at first blush might assess the family conflicts to be simply a generation gap or a chasm caused by different degrees of educational achievement. Without cultural sensitivity, standard professional interventions meant to solve the problems are likely to fail.
Geraldo and Pancho, for example, had very different notions about how to handle money. Although both of them understood the need to move from the pay-as-you-go tradition known to small businesses in Mexico, father and son disagreed on what constitutes excessive financial risk. Geraldo was willing to put up his home and the equity in his business as collateral for a new loan, but he was willing to seek only a small amount, so he would not be worried about making payments. Pancho, on the other hand, wanted to sell business stock to investors without losing principal control of the business.
Geraldo did not want to have outsiders looking into the business’s books. Nor did he want to risk his reputation if the return on the investment was less than anticipated. Pancho felt that total transparency in the business was perfectly acceptable, since the family had nothing to hide about its business practices. Pancho also believed that full disclosure to investors would eliminate any misconceptions about investor risk and ensure that all the investors were making a responsible and informed decision in regard to potential returns.
For his part, Pancho was unwilling to jeopardize the security of his own young family and the retirement plans of his aging parents by putting their properties at risk. Geraldo, on the other hand, argued that he was a self-made man, he had used this method to obtain small loans in the past, and he didn’t want to “go begging” to people outside the family for help. Pancho retorted that small loans and small thinking would forever keep their business undercapitalized and underdeveloped when, in fact, they were well positioned to create a Mexican grocery chain.
Geraldo’s view represented the traditional closely held, personally private family business. Pancho’s views represented the fast-track, aggressive-growth outlook of modern-day venture capitalists. These cultural conflicts paralyzed progress in the business, since they were deadlocked on how to move forward to finance growth.
The culture clash between father and son affected other business decisions, as well. Geraldo continued to handle personnel matters, preferring to leave inventory, accounting systems and regulatory compliance issues to his college-educated son. For the most part, Pancho was content with this division of roles. He knew his father was a likeable man who had earned the loyalty of the store’s long-time employees, and he respected Geraldo’s emphasis on excellent customer service.
But little by little, staff members began to visit Pancho’s back-room office to express their concerns. While he attempted to redirect them to his father, he discovered that Geraldo was lending a deaf ear to complaints that had to be addressed. Apparently, Geraldo had no compunction about giving the better-paying jobs to male employees. He also prohibited women to work night shifts, reasoning that las mujeres needed to be home with their families, and it was not safe for them to be in the store at night.
One young Hispanic man complained to Pancho about Geraldo’s insistence that employees speak Spanish. This employee struggled with the language and didn’t want to have to speak it. Pancho did not believe clerks who stocked the store’s shelves needed to speak Spanish. He knew his father’s Spanish-only rule had to do with Geraldo’s comfort level and fear that the store would lose its ethnic appeal.
Pancho tried to raise the issue with his father from a labor law standpoint, under the theory that talking about potential lawsuits was safer than talking about equality and fairness. But Geraldo just scoffed; he countered that his son was afraid to take an authoritative leadership stance with employees and that Pancho had no respect for La Raza—his own people—for whom Spanish was essential. Their differences of opinion on personnel matters caused them a lot of emotional pain, more so than their disagreements about financial matters. Both of them began to take the issues personally, as they sided with one employee or another.
How to build a bridge
Geraldo and Pancho had to come to terms with a fact of life that many ethnic family businesses must face: Even though they are related, the two generations might as well be strangers when it comes to certain vital cultural issues that have nothing to do with their caring and dedication to each other or their determination to make the business highly profitable. In order for Geraldo to reach the point where he feels confident about turning the business over to his son—and in order for Pancho to maintain his interest in the business long enough to take it over when his father retires—both must bridge the cultural divide.
Here are some suggestions for ethnic families that are grappling with similar issues:
• Recognize your differences as cultural, not personal. The first step is for families like the Ramirezes is to view their differences objectively. Even though a cultural divide has probably existed since the offspring were in grade school, the family may not recognize how the gap is affecting their business relations. When Geraldo’s children were young, he and his wife could more easily notice the cultural differences when the children rebelled. They felt they were losing control because the kids did not want to attend Mass, let their great-aunt take over their bedroom during a visit or bring tamales to their teacher at Christmas. As the children grew up, the differences grew subtler. Understanding that these dynamics inevitably occur because of a cultural divide takes away the temptation to blame or feel blamed.
• Understand the process of acculturation. Within families, each person culturally adapts—becomes a part of the “host” culture—at different rates. Most often, immigrants acculturate well enough to have a friendly relationship with their American neighbors, but they relate best to people from their homeland. The first and second generations born in the U.S., by contrast, tend to relate best to American-born people. While they may respect and understand their parents’ culture, they may not relate to it on the deepest emotional levels. Social scientists have noted that there are five or more stages of acculturation: isolation, accommodation to social rules, comfortable coexistence, social integration and complete assimilation. A person can become frozen at any specific stage for a number of reasons related to his or her unique personality and external forces. Once family members can identify the stage that each relative exhibits, it becomes easier for them to understand each other’s perspective.
• Be willing to adapt, knowing you don’t have to completely give in. No family member has to give up his or her point of view by compromising a cultural value that he or she holds dear. As with any good negotiation process, the parties must seek a win-win solution that is based on their mutual interest. For example, if Geraldo wants to be sure that the female employees are safe at night, Pancho could suggest security policies and procedures that would help ensure their safety but allow them to work later hours. If Pancho insists that men and women be given equal opportunities but Geraldo believes men must earn enough to be the sole support of their families, then both genders could be offered extra-pay holiday and weekend shifts that the men might be more likely to accept. If Geraldo is more comfortable talking to employees in Spanish, the primarily Spanish-speaking employees could report to him and the primarily English-speaking employees could report to Pancho.
• Be willing to teach, but don’t lecture. Each generation has something to teach the other about their world views. Sometimes members of each generation hold an attitude that the other generation “should know this already!” Such is not the case. Neither can make assumptions about what the other knows. Each should be patient while the other generation learns about the differences, their origin and why one set of cultural views is just as valid as another. At no time should the tone be one of admonishing the other to believe differently or condescending to the other as if one’s cultural perspective is the “right” one.
• Listen and be willing to learn. Closed minds forfeit creative thinking and shun opportunities. Families that are open to biculturalism are able to realize that it is as enriching and profitable as bilingualism. The personal and business model for family development must become one of expansiveness and inclusion, one of acceptance and respect, one of cultural curiosity and cultural awareness. Much is to be gained by learning from each other and integrating the best aspects of the two cultures. A family business—worse yet, a whole family—can be lost when one culture shuts out another. Stalemates, lawsuits, broken contracts and lost fortunes are some of the disasters that can occur when family members refuse to listen and to learn. Cultural differences make listening harder but learning more exciting if the generations are willing.
As immigrants continue to arrive from all parts of the world, these family dynamics will be played out again and again in community businesses. Cultural differences must be ironed out if these intergenerational family businesses are to thrive and be handed down to the next generation.
Trula M. LaCalle, Ph.D., is president of Bella International Inc., an organizational and business development consulting firm located in Sacramento and Sonoma counties in California (www.bellaii.com).
Research alert
Does ethnicity affect entrepreneurship?
A study published in Blackwell Publishing’s Journal of Small Business Management in September found that entrepreneurs’ ethnic traditions are a contributing, but not an overriding, factor in their approach to business.
In the study (M. Morris and M. Schindehutte, “Entrepreneurial values and the ethnic enterprise: An examination of six subcultures,” Journal of Small Business Management, 43[4]: 453-79, 2005), researchers Michael Morris of Syracuse University and Minet Schindehutte of Miami University questioned 30 first-generation entrepreneurs in each of six ethnic groups from Hawaii: Japanese, Korean, Filipino, Chinese, Vietnamese and native Hawaiian.
While members of each group cited values generally associated with their particular ethnic backgrounds (frugality for the Koreans, risk-aversion for the Japanese, hospitality for the Hawaiians), the respondents also cited values not necessarily related to—and in some cases conflicting with—their ethnic tradition, the authors reported. The values that conflicted with the ethnic cultures were those historically associated with entrepreneurship, such as independence, success, achievement and ambition. “The findings indicate that entrepreneurship is a values-driven activity,” the researchers wrote.