IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 20, Issue 3. Ver. VII (March. 2018), PP 08-12 www.iosrjournals.org DOI: 10.9790/487X-2003070812 www.iosrjournals.org 8 | Page Social Networks of Family-Owned Businesses in Sri Lanka Kumarasinghe P J Senior Lecturer,Department of Business Economics,Faculty of Management Studies and Commerce,University of Sri Jayewardenepura Corresponding Author: Kumarasinghe P J Abstract: The development of Family-owned Businesses in developing countries including Sri Lanka is of great importance for increasing national production, providing employment for youth, developing rural and village industries, establishing a sound national industrial base, encouraging indigenous creativity and reducing the dependence on imported goods. Although the Family-owned Businesses are a vital instrument for realizing the above mentioned goals, the Family Business industrialists who are considered as a principal character, have a very poor survival rate in the economy. Thus, the problem in which the present research will concentrate entails developing a better understanding of how Family-owned Businesses can avoid failure and improve their effectiveness by using outside assistance. For this purpose a sample of 45 Family-owned Businesses were studied. The units of analysis were the network of actors offering support services to Family-owned Businesses and the entrepreneur skills. For simplicity only selected actors of support were considered, but particular attention paid to some intermediary actors who have served to activate, maintain and promote the resource networks with the Family Business.The statistical analysis model has provided significant statistical support for the acceptance that the successes of the Family-owned Businesses are closely related with the Social Networks and the Entrepreneur Skills. Keywords: Family-owned Businesses, Social Networks, Entrepreneur skills --------------------------------------------------------------------------------------------------------------------------------------- Date of Submission: 05-02-2018 Date of acceptance: 19-03-2018 ------------------------------------------------------------------------------------------------------------------------------------- I. Introduction Family-owned Businesses perform a strategic role in developed countries as well as in developing countries like Sri Lanka. Family-owned Businesses generate substantial benefits to the economy and to the society as a whole, including serving as an important source of job creation, and as a vital means of sustaining and transmitting important business and social values. Therefore the overall development of Family-owned Businesses and their establishment of linkages with the other sectors of the economy, particularly with the rural sector are important for Sri Lanka to reach the status of a developed country. It is generally recognized these type of businesses have the capacity to achieve economic growth faster in view of their high employment potential, small gestation period and relatively limited financial requirements (Remenyi, 2012). In Sri Lanka, governments have taken various steps to promote and develop Family-owned business since independence. This has resulted in the emergence of a number of entrepreneurship development programs intended to increase the number and quality of start-ups and to improve their chances of survival and further growth (Harry, (2002). Although the Family-owned Business represents a powerful force in the sustainable development of the most powerful nations in the world, when these business fails, the entire community suffers in one way or another through the loss of jobs, decreased local purchasing power, declining government tax revenues, and higher costs of welfare assistance. A study of organization and the structural features or patterns of relationships and of an organization by Michael H. Zack suggests that organizational systems may affect the ability of people in the organization to connect and communicate with social network. This capability may range from direct communication to indirectly exchanging information using a pull or subscription service, to creating organizational yellow pages to facilitate finding others with similar interests or needs. Further he says these relationships will enhance the business expansion process, chances of survival and further growth of the business (Anderson and Reeb, 2004). In this study, the term Family-owned business is used in a broad perspective and includes all activities such as industry, services and trade. Braun and Latham (2009) define Family-owned Business as A Company in which family members are directly involved in the ownership and/ or functioning. II. The Research Problem The family owned-business exists in all industries, from manufacturers to retail and service establishments, and range from the smallest ventures to large multinational corporations. But the shocking reality is that only very few of family businesses survive and last long. Most of the family –owned business