Jess Chua

• Doctor of Philosophy
• Professor at The University of Calgary, University of Lancaster

Long-term orientation has been proposed as one of the differences between family and nonfamily firms. Family business scholars base this difference theoretically on the incumbent generation’s altruism for the next generation and the intention for intrafamily succession. We point out that the applicable boundaries for these two theoretical bases are...

Business families think of their family enterprises as dynamically optimized business portfolios that require new businesses for growth and replacement of existing ones that no longer contribute to the families’ visions. This needs to continue adding new businesses makes promoting entrepreneurship among the next-generation family members (NGFE) dif...

The heterogeneity of family firms and their simultaneous pursuit of financial and nonfinancial goals is well established in the literature. However, causal factors underlying the variance in the goals, behaviors, and performance of family firms remain unclear. To help fill this gap, the articles in this special issue point to psychological aspects...

In this introduction, we observe that the study of social structures and social relationships constitutes a common theme among the articles and commentaries contained within this special issue on Theories of Family Enterprise. Individuals and organizations are embedded in complex networks of social organization and exchange. Within business enterpr...

Governance, along with goals and resources, is a key determinant of the distinctiveness and heterogeneity of family firms. Our introduction discusses formal and informal governance mechanisms that emanate from inside and outside the firm and then reviews, integrates, and extends the contributions to this topic of the six articles and four commentar...

Assessments of family firm effectiveness depend critically on how goals and performance outputs are measured. Similarly, assessments of family firm efficiency depend critically on how performance outputs and resource inputs are measured. We illustrate this by showing that the assessment of performance is affected by how different family firm goal s...

Kotlar and Chrisman (2018) examine how family involvement influences organizational change resulting in change behaviour distinctive from that of non-family firms. Family firms, however, are heterogeneous in terms of their goals, governance, and resources; therefore, the behavioural distinctions proposed by Kotlar and Chrisman are not common to all...

The distinctiveness of family firms’ goals, structures, resources, strategies, and performance has been studied in terms of what family firms do or are able to achieve that are different from those of nonfamily firms. This dominant approach to studying family firm behavior has contributed significantly to our understanding of such organizations. Cu...

Family firm owners accumulate economic and noneconomic wealth that they may wish to transfer to the next generation. Their challenges in doing so include: what, to whom, when, and how to transfer this wealth. The decisions made and actions taken will impact behavior and performance as well as the type and amount of wealth eventually transferred. Th...

Incumbents’ attitude toward intrafamily succession (IFS) is a critical individual-level determinant of family firms’ IFS intention, which is, in turn, an important component of family business essence. Knowledge about its antecedents, however, is fragmented and very limited. Drawing on the theory of planned behavior and general attitude literature,...

This introduction traces the disappearance of Chinese family businesses from 1949 to 1978, their revival since then, and their future challenges. It then summarizes the three papers included in this Special Issue and proposes an agenda for family business studies in China. The article first focuses on the nonmarket social and political network stra...

We use the articles and commentaries in this special issue to reinvigorate the theme of family business governance and extend its scope beyond the single business, single-family approach that has traditionally dominated the family business literature. Through a discussion of the implications of the articles and commentaries included in this special...

We present a framework of how family involvement influences innovation management based on ability (discretion to act) and willingness (disposition to act), two drivers that distinguish family firms from nonfamily firms and lead to heterogeneity among family firms. Paradoxically, family firms have superior ability yet lower willingness to engage in...

We supplement the recent work by Miller and Le Breton-Miller by evaluating more closely two related theoretical aspects of the socioemotional wealth concept: (1) the stocks and flows of noneconomic benefits and how they influence family firm behavior; and (2) the use of prospect theory as an umbrella concept. We, thus, contribute to family business...

Management succession in family firms is different from that in non family firms. First, the age and experiential gaps between the incumbent and successor are counted in decades rather than years. Second, the incumbent who retires and family candidates not selected to be the CEO can continue to have a long-term influence on the business through the...

There has been increasing attention to the heterogeneity of family businesses but recognition of the heterogeneity of the contexts in which family firms operate is only now emerging. The articles and commentaries in this special issue contribute to the understanding of some of the institutional and organizational contexts in which family businesses...

Distinguishing sufficient conditions from necessary conditions is crucial in both theoretical and empirical studies. We propose that the sufficiency condition for family involvement to produce family-oriented particularistic behavior in a firm requires the presence of both ability and willingness. We demonstrate how the omission of this sufficiency...

Research shows that intention for intra-family succession is an important determinant of family firm behavior. To provide a systematic analysis of the antecedents of such intention, we use the theory of planned behavior to model the incumbent leader’s attitude toward intra-family succession because that particular attitude is idiosyncratic to famil...

We briefly reflect on the theoretical contributions of the ongoing series of special issues on theories of family enterprise and discuss the contributions of each article and commentary in the current special issue. We observe that the meta-themes—the unique goals, governance, and resources of family firms—are not only primary sources of heterogene...

This article discusses some of the notable trends in family business research. The critical role of context in building usable knowledge on family enterprises is highlighted. The Asia Pacific region offers a plethora of unique opportunities to build such knowledge as illustrated by some articles in this Special Issue. Families and their enterprises...

Family firms without able and willing family successors are frequently sold to non-family managers through management buy-outs (MBOs). Whether MBOs create value is thought to be dependent upon the ability to reduce owner–manager agency costs. In this article we examine the agency costs of MBOs that acquire family firms. We contribute to theory by a...

Family business researchers have devoted substantial attention to comparing family firms with nonfamily firms. Many of these comparisons rely on dichotomous variables, which implicitly treat family firms as homogeneous entities. However, recent studies have started to use moderators and mediators as well as continuous measures of family involvement...

'If I had been asked to suggest the currently most-needed editorial endeavor for advancing family business studies, I would have answered with no hesitation: an up-to-date annotated bibliography. The field's growth over the past 15 years has been so intense, that even experts who devote most of their research efforts to family business - not to men...

This article uses data from The Performance Project: Group Angel Investor, released by the Kauffman Foundation and the Angel Capital Education Foundation in 2007 to investigate the value added by angels through their postinvestment involvement (PII) with ventures. In contrast with findings showing that venture capitalist PII may not significantly a...

Management and Organization Review Special Issue on ‘Expanding Research on Family Business in China’ - Volume 8 Issue 2 - Jess Chua, Ling Chen, Bradley L. Kirkman, Xin-chun Li, Sara Rynes, Luis R. Gomez-Mejia

Family firms are thought to pursue non-financial goals that provide socioemotional wealth but socioemotional wealth is feasible only with family control of the firm. Using prospect theory, we hypothesize that socioemotional wealth increases with the extent of current control, duration of control, and intentions for transgenerational control thus ad...

Family firms are thought to pursue nonfinancial goals that provide socioemotional wealth, but socioemotional wealth is feasible only with family control of the firm. Using prospect theory, we hypothesize that socioemotional wealth increases with the extent of current control, duration of control, and intentions for transgenerational control, thus a...

Management and Organization Review Special Issue on ‘Expanding Research on Family Business in China’ - Volume 8 Issue 1 - Jess Chua, Ling Chen, Bradley L. Kirkman, Xin-chun Li, Sara Rynes, Luis Gomez-Mejia

Family firms have long been a prominent feature of the organizational landscape and researchers have found some variations of this organizational form to be more resilient than others. The articles and commentaries in this special issue address some of the bases of this resilience including arranged marriages as a management succession strategy, lo...

New ventures often require debt financing but face difficulties convincing lenders of their creditworthiness because of agency problems. Researchers have shown that social capital can help small firms reduce lenders' agency concerns but new ventures do not yet have their own social capital. We propose that family involvement increases a venture's a...

An important difference between family and nonfamily firms, and among different types of family firms, is in the way they make outsourcing decisions and thereby define the boundaries of the firm. The authors propose that transaction costs arising from human asset specificity, threats of opportunism, and risk aversion will make small-and medium-size...

In this article we compare the governance choices of family and non-family firms regarding their subcontracting tendencies. Based on transaction cost theory, we argue that family firms are less likely to engage in subcontracting than non-family firms and that kinship ties, the extent to which a family firm's production activities are important, and...

New ventures often require debt financing but face difficulties convincing lenders of their creditworthiness because of agency problems. Researchers have shown that social capital can help small firms reduce lenders' agency concerns but new ventures do not yet have their own social capital. We propose that family involvement increases a venture's a...

We provide an overview of the articles and commentaries devoted to theories of family enterprise in this special issue and link them to the concept of trust. Trust is a governance mechanism and theoretical construct of particular relevance for family firms, encapsulating some of their advantages and disadvantages. Trust is also linked to theoretica...

This overview is based substantially on a speech given at the 2010 Family Business Forum of the International Family Enterprise Research Academy at Zhuhai, China. Its purpose is to outline what the authors believe are the most important and distinctive research issues about family firms in China.

Using behavioral and stakeholder theories, we suggest that family firms may have family-centered non-economic goals and that these goals could influence firm behaviors. This study extends the literature by hypothesizing that the essence of family influence partially mediates the relationship between family involvement and family firms' adoption of...

Family firms are embedded in social structures that differ substantially from those of nonfamily firms. While these social structures can be sources of strength, they can also lead to dysfunctional consequences. The four papers and three commentaries contained in this special issue on theories of family enterprise deal with the various positive and...

Using insights from the resource-based view, social capital, and network theories, the authors develop a model of how family social capital, as well as an entrepreneur’s knowledge capital and external social capital, influences the venture creation process. The model is tested on a sample of 85 nascent Hispanic entrepreneurs. Results indicate that...

Board monitoring should affect a firm's access to debt financing because it improves firm performance and the board is ultimately responsible for the firm's debt. In this study, we show empirically that access to debt financing indeed benefits in two ways from board monitoring: directly from the monitoring and indirectly from improvement in perform...

This article discusses how the performance of family firms and nonfamily firms might differ as a result of the different priorities flowing from family influence, even when the two types of firms possess comparable levels of resource stocks. Using hierarchical regression to analyze data from a national study of the Small Business Development Center...

The professionalized firm must evaluate the performance of managers and provide incentives that will motivate them to achieve the firm's goals. Using the agency theoretic framework we develop propositions on how differences in goals, altruistic tendencies, and strategic time horizons might affect performance evaluation and incentive compensation in...

The existence of gains from international portfolio diversification has been illustrated with market indices. A small investor does not have the wealth to construct a world market portfolio . One way for the small Canadian Investor to access the gains from international diversification is to invest in shares of mutual funds traded in the major inte...

An important distinction between family and nonfamily firms and among different types of family firms is the manner in which strategy is formulated and implemented. These differences in strategic behaviors can cause variations in firm performance. Understanding the nature of these differences and how the family form of organization drives them ther...

Based on the assessments of 40 prominent family business scholars, this study provides the first ranking of management journals as outlets for family business research. In all, 22 management journals are evaluated on both their appropriateness and quality. Implications and future research opportunities are discussed.

Although research on management succession is a dominant topic in the family business literature, little systematic attention has been given to the factors that prevent intra-family succession from occurring. Based on a review and analysis of the literature, this article presents a preliminary model on the factors that prevent intra-family successi...

The formation of family firms, as well as their scale and scope, is likely to be influenced by the characteristics of the environment. This study presents preliminary findings on the relationship between economic development and the prevalence of family vs. nonfamily firms in the United States. We use three samples consisting of 15,918 firms aggreg...

Equity financing is important in financing growth but its special features in small business have not been well addressed in the finance or entrepreneurship literature. Since many small firms have family involvement and research shows that family firms have both advantages and disadvantages in managing agency costs, how family involvement and agenc...

Family business researchers are split on whether family managers in family firms are agents or stewards. If family managers behave as agents, family firms are expected to impose agency cost control mechanisms on them, and this will improve performance. The results based on a sample of small privately held family firms indicate that family managers...

Negative changes in lending terms could create a worse financial crisis for the small business than that faced by the firm from not getting the loan in the first place. This study examines the drivers of such negative changes using an agency perspective. Agency theory predicts that a borrowing firm’s access to debt financing depends on its ability...

This study considers whether or not gold has been an effective hedge against inflation for investors in six major indusrial countries over the period 1975 to 1980, Gold is considered a hedge against inflation if changes in the returns on gold investments systematically offset changes in the general price level of a particular country. The results i...

This commentary makes two contributions to a better understanding of interlocking directorates in family firms. First, we compare agency costs in family and nonfamily firms. Second, we present additional propositions on how interlocking directorates address agency issues in family firms.

Fundamental assumptions of any theory of the family firm are that family firms will behave in ways that differ from nonfamily firms, and that the behaviors of family firms will also exhibit substantial variations. This special issue includes a set of articles and commentaries that study such differences. This introduction synthesizes these articles...

We discuss implementation problems and test approaches for using the full-information approach for estimating divisional betas. For both full-information and pure-play estimates, variations using capital structure adjusted betas perform better than those with raw betas, and those with betas estimated using the M&M no-tax type capital structure adju...

This article provides a review of important trends in the strategic management approach to studying family firms: convergence in definitions, accumulating evidence that family involvement may affect performance, and the emergence of agency theory and the resource-based view of the firm as the leading theoretical perspectives. We conclude by discuss...

Family firms are unique organizational forms as a result of the interactions between family members, the family, and the business. Distinctive familiness has been used as a notion to encompass these interactions and the consequent systemic synergies that could lead to competitive advantages. This introduction discusses the notion and reviews the pa...

Family involvement in a business has the potential to both increase and decrease financial performance due to agency costs. In this article we discuss the different nature of agency costs in family firms and specify the combination of conditions necessary to determine the relative levels of agency costs in family and non-family firms through the im...

Many organizations, ranging from small entrepreneurial start-ups to large, multi-business and multi-national enterprises, exhibit a family dimension. Although there is much evidence that this familial dimension is pervasive in organizing economic activities, it remains understudied. The articles in this special issue further our understanding of fa...

This article consists of two parts. The first part reports findings from a survey of the issues facing top executives in 272 Canadian family firms. Results show that succession is their No. 1 concern, thus supporting the predominant focus of family business researchers on succession issues. Results also show that concern about relationships with no...

Do businesses tend to be born as family firms or do they become family firms at a later stage in their development? The question has important implications for family business studies. In this article we examine this question using data extracted from survey responses of small business clients of the Small Business Development Center (SBDC) program...

Recent theoretical developments suggest that satisfaction with the succession process in family firms is enhanced by the incumbent's propensity to step aside, the successor's willingness to take over, agreement among family members to maintain family involvement in the business, acceptance of individual roles, and succession planning. Data from inc...

This commentary discusses how, by substituting value creation for wealth creation as the defining function of family businesses, we can further extend and integrate the theoretical contributions of Habbershon et al. [J. Bus. Venturing (2003)].

This paper uses the theory of planned behavior to hypothesize the influence of the incumbent's desire to keep the business in the family, the family's commitment to the business, and the propensity of a trusted successor to take over on the extent to which family firms engage in succession planning activities. We test these hypotheses using data co...

This White Paper, commissioned by the Coleman Foundation and U.S. Association of Small Business and Entrepreneurship, has three specific objectives. The first is to provide a review of the most important contributions to the field with respect to progress in the development of a theory of the family firm. The second is to discuss the most important...

This empirical study tests how dimensions of national culture affect entrepreneurs' collective perceptions of the business environment and the performances of newly created firms in the United States. The data are aggregated to the state level from survey responses of 3,619 preventure clients of the Small Business Development Center (SBDC) program....

Leadership succession continues to form the core of the family business literature. Numerous studies have suggested factors that influence family members’ initial satisfaction with the succession process, but this body of work is highly fragmented and lacks a unifying framework. In this paper, we draw on stakeholder theory and other organizational,...

Despite exhortations about the importance of succession planning for the family firm, many believe that family firms continue to leave succession planning to chance. This study shows that family members have different opinions about whether their family firms engaged in succession planning. The incumbents believe that they did while the other famil...

It is generally accepted that a family's involvement in the business makes the family business unique; but the literature continues to have difficulty defining the family business. We argue for a distinction between theoretical and operational definitions. A theoretical definition must identify the esence that distinguishes the family business from...

Respondents from 485 family firms in Canada rated integrity and commitment to the business as the most important attributes of a successor. Results indicated that the older the family business and the longer the respondent's tenure in that business, the more important these attributes became. Birth order and gender were rated the least important, d...

This article reviews the literature on family business from a strategic management perspective. In general, this literature is dominated by descriptive articles that typically focus on family relationships. However, the literature does not usually address how these relationships affect the performance of a family business. Taking a strategic manage...

Recently, there has been a significant rise in interest about family firms. As evidence, the American Business Index — Global shows that the number of articles related to family business rose from 188, during the 14 year period between January 1971 and December 1985, to 680 for the period from 1986 to 1995.

Interest in the study of family business has increased significantly over the last decade. The research on this subject - and the related subject of entrepreneurship - has developed in parallel within a number of different disciplines, making it the perfect candidate for an annotated bibliography. This book aims to catalog the major empirical, theo...

The Net Present Value (NPV) Rule provides the basic principle underlying the sharing of ownership in a new venture. The principle often fails because the entrepreneur and the venture capitalist cannot agree on the potential profitability value of the venture.First, the venture capitalist may simply have a less optimistic interpretation of the data...

Introduction This paper grows out of the author's experience in working with many of the major oil and gas companies in Canada and in the area of project evaluation and hurdle rate determination. Over the past few years, many Canadian oil producers have increasingly shirred their exploration efforts to finding larger reserves outside of Canada. Th...

Over the past few years, U.S. energy producers have shifted exploration activities to areas outside the U.S. This paper focuses on which hurdle rate is appropriate for the evaluation of these particular energy projects. While conventional wisdom may suggest that these projects are riskier than equivalent domestic projects and therefore should be ev...

This study first discusses the logic underlying financial market determined hurdle rates. In particular, this section argues that financial riskiness of any project must be measured, not in isolation but by reference to a benchmark portfolio held by the representative investor. The following section looks at the conventional benchmark portfolios us...