Family-owned businesses are considered major role players of the economy around the world (IMF, 2001). Specifically, family-owned businesses in Honduras represent 90% of the small & medium enterprises and are key providers of employment (Scarlet Alvarez, 2013). The human resource management field of family-owned businesses has the peculiar characteristic of having the involvement of the family dimension within its form of organization. The family dimension can bring some challenges to the firm, therefore, the research question relating these two fields is stated as follows: how can family-own businesses reduce their unique challenges related to their “Family Trait” involvement in the firm, through the usage of adequate human resource practices?
The literature review supporting this investigation is composed by four main concepts: a. model of growth development of family-owned business (DMFB) proposed by Gersick (1997) in which family-owned businesses are identify in three dimensions with different stages of development (ownership, family & business) b. the influence of organizational culture in the strategies decided within the family-owned business c. family governance institutions proposed as practices to reduce challenges d. HRM practices within family-owned businesses and its role as a partner strategy with the governance institutions.
The methodology consisted of six family-owned business cases which were investigated with the help of virtual interviews held both simultaneously and non-simultaneously. The semi-structure questionnaire used for the interviews is found in the appendix. The analysis of patterns through the categorization of the interviews identify the following results: the cases were classified in three stages within the dimensions of ownership, family and business, stage #1 single-ownership; stage #3 Working together and stage #2 formalization/ expansion stage. This horizontal connection of stages allowed a better understanding of their challenges: a. centralized decision making b. communication problems c. higher qualification of family collaborators d. overestimation of the trust value within the family collaborators. The challenges helped answered the first part of the research question, which consisted of the identification of challenges related to the “family trait.” Then the family governance practices and HRM practices were identified as aiders in the reduction of these challenges in order for family-owned businesses transit from one stage to another in a more efficient way.

• Aldrich, H.E. & Cliff J.E. 2003. “The Persuasive Effects of Family on Entrepreneurs Ship: Toward a Family Embeddednes Perspective.” Journal of Business Venturing 18: 573-596.
• Andrea Colli, Mary Rose. 2008.”Family Business.” The Oxford Handbook Of Business History
• Astrachan & Kolenko.1994. “A Neglected Factor Explaining Family Business Success: Human Resources Practices”: Family Business Review 7 (3).
• Baron R. and Kreps. 1999. Strategic Human Resources: Frameworks for General Managers. New York
• Beer M, & Spector B. 1984. Human Resource Management: The Integration of Industrial Relations & Organizational Development .Greenwich Conn: JAI Press
• Boxall P. 1998. “Achieving Competitive Advantage through Human Resource Management: Towards a Theory of Industry Dynamics.” Human Resource Management Review 8(3):265-88
• Daily C.M and M.J Dollinger. 1993. “Alternative Methods for Identifying Families versus Nonfamily-managed Business.” Journal of Small Business Management 31 (2):79-90.
• David Ulrich, Dale Lake.1991. “Organizational Capability: Creating a Competitive Advantage”: Academy of Management Executive 1 5 (1).
• Denzin N.K, 1989.Interpretative Interactionism. Newbury Park CA: Sage
• Diaroweb Centroamerica: Economia y Turismo: “Honduras: 1.8 millones sin empleo y aun no hay estrategia” Abril 15 2013: Instituto Nacional de Estadisticas (INE) and Obervatorio del Mercado Laboral (http://www.diariowebcentroamerica.com/economia-y-turismo/honduras-1-8-millones-sin-empleo-y-aun-no-hay-estrategia/)
• Dr. Santiago Dodero.”Investigacion sobre la Empresa Familiar en LatinoAmerica.” ADEN Business School, Instituto de la Empresa Familiar
• Dyer L. 1988. “Studying Human Resource Strategy” Industrial Relations 23(2): 156 69. and Holder G. 1988. A Strategic Perspective of Human Resource Management: Evolving Roles and Responsibilities. Washington BNA.
• Dyer W. G. 1988. “Culture and Continuity in Family Firms.” Family Business Source Book
• Dyer, W.G 2003. “The Family: The Missing Value in Organizational Research.” Entrepreneurship Theory and Practice 27 (4):401-416
• Eugene Fama C. Jensen. 1983. “Agency Problems and Residual Claims” Journal of Law & Economics 2 ( 2) Corporations & Private Property University of Chicago Press
• G.B and Rallis S.F.2003. Learning in the Field an Introduction to Qualitative Research. Thousand Oaks CA: Sage: (2):31-60.
• Gersick Kelin, John Davis, Marion McCollon Hampton and Ivan Lansberg .1997. “Generation to Generation: Life Cycles of the Family Business.” Boston: Harvard Business School Press.
• Gomez-Mejia, L.R, Nunez-Nickel, M. Gutierrez, I. 2001. “The Role of Family Ties in Agency Contracts” Academy of Management Journal 44 (1): 81-95.
• Hendry C., A Jones M. Arthur and A. Pettigrew. 1991. Human Resource Development in Small to Medium. London: Employment Department
• Hansen J. S. and B. Wernerfelt.1989. “Determinants of Firm Predominance: The Relative Importance of Economic and Organizational Factors” Strategic Management Journal 10: 399-411.
• Harold Demsetz. 1988. “The Theory of the Firm Revisted” Journal of Law, Economics & Organization l 4(1):141-161.
• Herriot, T., Bickman, L., & Rog, D.J. 1993. Applied Research Designed. Newbury Park, CA: Sage.
• Hill R. and J Stewart 1999, “Human Resource Development in Small Organizations” Human Resource Development International 2 (2):103-123.
• John W. Creswell, 2013. Qualitative Inquiry and Research Design. Third Edition University of Nebraska, Lincoln USA: Sage Publications Inc.
• Ibrahim A. and W. Ellis.1994. Family Business Management: Concepts and Practices. Dubuque Iowa: Kendall Hunt Publishing Company.
• IFC, International Finance Institution. 2008. “Practical Guide to Corporate Governance.”
• Imanol Belausteguigoitia Rius. 2009. “El Campo de las Empresas Familiares en Latino America: Nuevas Perspectivas”: Gestion & Sociedad
• Justin M Andrews. 2010. Managing Growth: Best Practices of Family-Owned Business. Faculty Sponsor: Lori A. Coakley 3(8): 13-14
• Lado A.A and M.C Wilson.1994. “Human Resource Systems and Sustained Competitive Advantage: A competency based perspective”: Academy of Management Business Review 19: 699-727.
• Lincoln Y.S & Guba E.G. 1985.Naturalistic Inquiry. Beverly Hills CA: Sage
• Mahoney J.T and J.R Panadian. 1992. “The Resource Based-View within the Conversation of Strategic Management.” Strategic Management Journal 13 (5): 363-380.
• Mathew Q. Rutherford, Lori A. Muse, Sharon L. Oswald. “A New Perspective on the Developmental Model for Family Business”: Family Business Review Blackwell Publishing Limited Edition.
• McCaffrey K. J. 2003. Using Qualitative Methods in Health Research: A practical guide to qualitative interview. Australasian Epidemiologist 10(2):18-23.
• Merriam S. 1998. Case Study Research in Education: A qualitative approach. San Fransisco: Jossey Bass.
• Patton M. Q. 1987. How to use Qualitative Methods in evaluations. Newbury Park, CA: Sage (2).
• Peter Boxall, John Purcell, Patrick Wright. 2007. “The Oxford Handbook of Human Resource Management”: Oxford University Press.
• Prahalad C. K. and G Hamel. 1990. “The Core Competence of the Corporation,” Harvard Business Review 68 (3):79-91.
• Priem R.L and J.E Butler, 2001.”Is the Resource Based View A Useful Perspective for Strategic Management Research?” Academy of Management Review 26(1):22-40.
• Ralph Chami. 2001. “What is Different about Family Business?” Authorized Distribution by Samir El-Khouri: International Monetary Fund.
• Randoy T & Goel S. 2003. “Ownership Structure founder leadership and performance in Norwegian SMEs” Implications for financing entrepreneurial opportunities. Journal of Business Venturing 18(5): 619-637.
• Reid R.S Adams J.S 2001. “Human Resource Management- A Survey of Practices within Family and Non-Family Firms” Journal of European Industrial Training 25 (6): 310-320.
• Robert K. Yin, 2009. Case Study Research Design and Methods. Thousand Oaks California: Sage Publications
• Scarlet Alvarez. 2013. “Las Empresas Familiares en Honduras y su vinculación con el desarrollo” Universidad Católica de Honduras, Dirección de Postgrado e Investigación
• Seidman I.E. 1991. Interviewing as Qualitative Research: A guide for researchers in education and social sciences. New York: NY: Teachers Colleague Press
• Shaffer, John W.1982. Family and Farm: Agrarian Change and Household Organization in the Loire Valley, 1500-1900. Albany: Suny Press.
• Shanker, Melissa Carey and Joseph H. Astrachan.1996. “Myths and Realities: Family Business Contribution to the US Economy: A Framework for Assessing Family Business Statistics.” Family Business Review 9: 107-110.
• Stafford K. Ducan K.A, Dones S.M & Winter, M.1999. “A Research Model of Sustainable Family Business”: Family Business Review 12, 197-208
• Steier L. 2003. “Variants of Agency contracts in Family Financed Ventures as Continuum of Familiar Altruistic and Market Rationalities.” Journal of Business Venturing, 18(5): 597-618.
• Shulze W. G Lutbakin, M. H Dino R.N 2003. “Toward a Theory of Agency and Altruism in Family Firms.” Journal of Business Venturing 18: 473-490.
• Stake R. 1995,”The Art of Case Study Research”: Thousand Oaks. CA: Sage
• Ulrich D. and Lake D. 1991. “Organizational Capability: Creating Competitive Advantage.” Academy of Management Executive 5(1):77-92.
• Ward J. 1996. “The Special Role of Strategic Planning for Family Business.” in the best of FBR: A celebration Ed. Richard Beckhard, Boston, Mass: Family Business Institute 140-147.
• William H. Meckling .1976. “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.” Foundations of Organizational Strategy Harvard University Press