Great question Nicolette. One of the messy issues in studying families is what is family process and what is family outcome. The use of systems perspectives suggests both are interrelated. I think both prior posts suggest good ideas. My view (following up on earlier work from Joan Patterson on family resilience) is that families are functioning competently when they show evidence of individual competence, family competence in fulfilling basic family functions, and good family-ecosystem fit.
Take a look at these publications for more insights:
Henry, C. S., Morris, A. S., & Harrist, A. W. (2015). Family resilience: Moving into the third wave. Family Relations, 64(1):22-43. doi: 10.1111/fare.12106
Patterson, J. M. (2002). Integrating family resilience and family stress theory. Journal of Marriage and the Family, 64, 349-360. doi:10.1111/j.1741-3737.2002.00349.x