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AbstractThis paper's point of departure is that business families are permanently confronted with a dual function: They engage in typical family relations yet also have formal decision‐making processes for business and family strategy. However, large business families—which may consist of several hundred shareholders who own one or more family businesses—are confronted with an additional challenge. Alongside being simultaneously a family and an organization, they also have to establish and maintain notions of membership and modes of communication between distantly related shareholders. This we have called family network or family 3.0. The challenges involved in initiating, shaping and maintaining such networks require new strategic reconsideration in the family itself and an extension of the existing theoretical observations regarding family businesses, thereby establishing the basis for a better understanding of large‐scale business families. For this, we try to combine family business research, organization studies and systems theory.

Japanese family businesses are among the oldest in the world and many of them prove a history record of 200 years and more. Research on several case studies of century old firms ('shinise') in Japan reveal three factors as secrets of their longevity: (1) the Japanese family system ('ie') favours the eldest son for succession; (2) the option for adopting a capable successor; (3) the inclusion of the relationships with employees, customers, and members of the local community into the strategic decision making. The analysis deals with the succession process in Japan compared to the WIFU Model of Succession in German family firms, and rounds off with perspectives on how to deal with the challenges the Japanese family businesses face regarding the recent changes in the Japanese society.

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