Group families can and do work, but be very careful when integrating partners with children into one family. The experience can be very rewarding for all involved, but devistating if the relationship terminates.
I personally live in a polyamorous household and have children, and had a partner who lived with me for a year with a son of her own. Her son and my son were like brothers. It would have been worth keeping the relationship going to keep the family intact, but things didn't work out that way. The loss of the family unit as we knew it has been devistating to all of us.
Children can be very accepting of polyamory, and if brought up with it, don't realize that everyone's marriages don't include outside relationships with other people who come and go through their lives. We've explained to our children as they matured into adults that sometimes, we fall in love with more than one person and that the new love doesn't change the love that we have for the first person. This is different from "swinging", for some relationships over the years have been nonsexual.
So the simple answer is yes, polyamory and the family unit *can* work.