Family businesses are businesses whose majority share is owned by the family, and therefore it has the greatest impact on the development of the company. Although it is quite easy to describe what family entrepreneurship means, since family and entrepreneurship are key factors, it is quite difficult to give precise definition. Most Croatian companies are micro-enterprises and small businesses, and it is estimated that more than 50% of employees in Croatia work in family businesses. Family businesses, like all other businesses, have their own organizational culture, which has a significant impact on business operations. Organizational culture represents the expectation that the employees of the organization behave according to a recognizable pattern towards each other and, more importantly, towards buyers in everyday situations. A specific organizational culture is described by the symbols, predictable beliefs, values, and behaviors of employees. Organizational cultures are different in every company. The organizational culture of well-managed family businesses gathers their employees together and creates a stable organization, which ultimately reflects on the company's success. A family business with good leadership and an organizational culture that encourages and motivates employees to achieve the best results, growth, and progress can be an important source of competitive advantage in the market.