This work attempts to develop an evolutionary family business theory, positioning family businesses as a distinct organizational form (based on conjectures from organizational ecology). An open and uninhibited playing field - achieved through utilizing a grounded theory methodology - heightens chances for observing precisely how family businesses behave. An introductory chapter is followed by a literature review, beginning with a review of family business research. This is followed by a discussion of family business definitional issues, and accompanied by some data to show the economic importance of family business. There follows a review of the research literature on grounded theory, its developments, and its epistemological and ontological assumptions in the light of contemporary philosophy of science. A literature review and historical outline of organizational ecology including the theoretical achievements is provided. Also, the comparison with the other main organizational theories, justifying the theory selection, is offered.