Abstract: Selling the Family Silver: Ownership and Foreign Investment in German Family Firms in the Late Twentieth Century
The German term "<i>Mittelstand</i>" refers to family-influenced, closely held companies with a long-term business strategy. Building on a sample of over 300 German businesses, I analyze the corporate governance of these businesses in the 1960s, which was centered on a highly concentrated ownership structure and built on the assumption that the business is a part of the multi-generational family heritage. "Selling the family silver" was therefore considered a personal defeat. Despite the politically influential concept of the <i>Mittelstand</i>, the changes in the market structure since the 1970s forced many companies eventually to open up to external, mostly American investors. When selling was unavoidable, the first contacts and negotiations with the investors were interlaced by mutual misunderstandings and different conceptions of business ownership. By comparing two qualitative case studies, I examine the process of selling out, which adds to a better understanding of the family business and of ownership as a culturally embedded concept.