Article

Family governance – Literature review and the development of a conceptual model

June 2014
Journal of Family Business Strategy 5(2)

DOI: 10.1016/j.jfbs.2014.02.001

Authors:

Ludwig Boltzmann Gesellschaft

A growing number of articles emphasise the importance of establishing an effective system of family governance, and a synthesis of the existing literature on family governance mechanisms (henceforth FGM) seems timely and relevant. Therefore, by focusing on three FGM (family meetings, family councils and family constitutions), this systematic literature review sheds light on the factors associated with family governance. Altogether, eight family governance-related factors could be identified, which were then grouped into antecedents, correlates and outcomes and consequently consolidated into a conceptual model. The findings reveal substantial heterogeneity in family governance-related topics, ambiguity regarding the causality between FGM and related factors, a disregard of theoretical considerations and an underrepresentation of qualitative research strategies in contemporary family governance research. The article concludes with an extensive discussion of potential avenues for future research.

Hogyan professzionalizáljuk a vállalkozásunkat? – Egy longitudinális esettanulmány tapasztalatai egy hazai közepes méretű családi vállalkozás példáján keresztül

Article

Feb 2023

Egyre több publikáció hangsúlyozza a családi vállalkozások professzionalizálásának fontosságát. Jelen tanulmányban arra a kérdésre keressük a választ, hogy milyen erőforrás- és képességváltozásokon megy vagy kell keresztül mennie egy közepes méretű családi vállalkozásnak a professzionalizálás folyamata során. A publikáció első részében bemutatjuk a professzionalizálódás megközelítéseit a különböző stratégiai paradigmák megközelítéséből és elhelyezzük az erőforrás-alapú nézet keretrendszerében. A cikk második felében az esettanulmány eredményei kerülnek bemutatásra. Az eredmények rámutatnak arra, hogy a professzionalizáció dimenzió összefüggenek és az egyik vagy másikban történő lemaradás bizonytalansághoz vezet a vállalaton belül. Fontos eredmény, hogy a professzionalizálódás során a családi vállalati tulajdonosoknak minden dimenzióra figyelniük kell.

Hogyan professzionalizáljunk a családi vállalkozásunkat? - Egy longitudinális esettanulmány tapasztalatai How should we professionalize our business? - Experiences from a longitudinal case study

Article

Full-text available

Feb 2023

Egyre több publikáció hangsúlyozza a családi vállalkozások professzionalizálásának fontosságát. Jelen tanulmányban arra a kérdésre keresik a szerzők a választ, hogy milyen erőforrás- és képességváltozásokon megy vagy kell keresztül mennie egy közepes méretű családi vállalkozásnak a professzionalizálás folyamata során. A publikáció első részében bemutatják a professzionalizálódás megközelítéseit a különböző stratégiai paradigmák szemszögéből és elhelyezik az erőforrás-alapú nézet keretrendszerében. A cikk második felében az esettanulmányt mutatják be a két vizsgált időszakon keresztül. Az eredmények rámutatnak arra, hogy a professzionalizáció dimenziói összefüggenek, és az egyikben vagy másikban történő lemaradás bizonytalansághoz vezet a vállalaton belül. Fontos eredmény, hogy a professzionalizálódás során a családi vál-lalatok tulajdonosainak minden dimenzióra figyelniük kell. An emerging number of publications emphasize the importance of family business professionalization. The authors con-ducted a qualitative longitudinal case study with a resource-based perspective, concentrating on changes in the resources and capabilities a family firm undergoes while professionalizing the business. In the first part of the paper, they present approaches to professionalization from the perspective of different strategic paradigms. The second part outlines the findings of the potential relations between the dimensions of family business professionalization. The results reveal that the dimensions are interrelated, and a lack of progress in one or more dimensions can lead to uncertainty. The extensive discussion section emphasizes that family businesses should pay attention to all aspects of the firm’s professionalization.

A SYSTEMATIC REVIEW OF THE LITERATURE AND BIBLIOMETRIC ANALYSIS OF GOVERNANCE OF FAMILY FIRMS

Article

Dec 2022
J BUS ECON MANAG

Governance in family firms can profoundly influence corporate behavior and performance. Recently, family firm governance (FFG) has attracted extensive attention as increasing empirical research has been published. However, few studies have attempted to map the global research on this growing field. In this paper, a comprehensive literature review and bibliometric analysis are conducted to provide an overview of the FFG. A total of 626 relevant studies from the Web of Sciences Core Collection database between 1998 and 2020 are analyzed. First, based on a literature review by identifying the classification of FFG and topics related to family governance, an overall conceptual structure is proposed. Second, the performance and influence of journals, authors and papers are analyzed by descriptive bibliometric analysis. Finally, with assistance from the CiteSpace and VoS viewer tools, the co-authorship, co-occurrence and co-citation network are presented to display the social and intellectual structure and find the hotspots. The findings of this study help to objectively understand the evolution of FFG and to capture potential research directions.

Family businesses’ succession in posttransition countriesNasljeđivanje obiteljskih poduzeća u post-tranzicijskim zemljama: What can be learned from the action research?što se može naučiti iz akcijskog istraživanja?

Article

Full-text available

Jan 2022

Succession is a very complex process and a critical phase in the life cycle of a family business. Finding a successor in ownership and management is one of the most demanding succession challenges, especially since younger generations have little interest or intention in joining their parents’ businesses. The action research was conducted to expand our understanding of owners’ attitudes and behaviors toward succession and the factors influencing successors’ intention and decision to enter the family business. The research also addresses the applicability of informal and formal family governance mechanisms in family business succession in post-transition countries. The research findings show the importance of the family dimension and emotional aspects of succession in post-transition countries. The theoretical hypotheses developed to form the basis for future confirmatory research and have implications for the key stakeholders and support infrastructure institutions involved in family business succession in post-transition countries.

Financing decisions in private family firms: a family firm pecking order

Article

Full-text available

Dec 2022
SMALL BUS ECON

Family firms are one of the most ubiquitous forms of business organizations worldwide. Their survival and growth are thus not only crucial for the firms themselves but also for the overall economy. One of the factors that influence their survival and development are their financing decisions. These decisions are generally described through the pecking order theory. However, not much is known about the applicability of this theory in private family firms. Given the shortcomings (both theoretically and empirically) of the current literature, we analyze 1087 incremental financing decisions from 277 family firms to develop and test a specific family firm pecking order. We integrate the elements of the socioemotional wealth perspective to theoretically explain the preferred order and introduce family capital into the pecking order model. Our findings indicate that family firms first prefer internal financing, next debt financing, followed by family capital, and last external capital. We also find that SEW considerations play a role in this financing decision. Especially the retention of control over the firm and the aim to pass the firm to the next generation appear to play an important role in determining this order. These dimensions ensure that family firms try to avoid extra capital. However, when it is needed, they will opt for family capital over external capital. This paper thus provides more insight into the reasoning behind financing decisions in private family firms. Plain English Summary How do family firms finance their investments? When looking for ways to finance their investments, firms have several options. According to traditional finance theories, they generally follow a so-called pecking order: they prefer to first use their internal funds, before turning to external financing. For family firms, the most ubiquitous form of business organization worldwide, two important aspects have been ignored in this research until now. First, socioemotional aspects influence decision-making in family firms and thus probably also financing decisions. Next, the business family itself can act as an external source of finance, which is not yet accounted for in the current pecking order model. In this research, we take these issues into account in order to develop—theoretically and empirically—a family firm pecking order. We investigate over a thousand financing decisions of 277 privately held family firms. Our results show that they prefer internal financing, followed by bank debt, family capital, and external capital. Especially the retention of control over the firm and the aim to pass the firm to the next generation appear to play an important role in determining this order. Our research thus indicates that future research should pay attention to the peculiarities of family firms when investigating their financing decision.

The enterpriseness of business families: Conceptualization, scale development and validation

Article

Sep 2022

This article addresses the business family, which so far has received only limited scholarly attention. The business family as the group of family members regularly discussing and deciding business matters is key for the functioning of both the business and the family. Specifically, we propose and empirically test the concept of the enterpriseness of business families, which is the ability to handle the potentially contradictory expectations of the family and business systems. We empirically validate the enterpriseness scale using a sample of 451 business families. Results indicate high levels of validity and reliability. The two subscales decision-making ability (six items) and business family identity (four items) offer a methodically rigorous, theoretically sound, and parsimonious measure. The article presents opportunities for potential applications of the enterpriseness concept and scale for family business as well as business family research and practice.

Toward a Theory of Family Social Capital in Wealthy Transgenerational Enterprise Families

Article

Full-text available

Aug 2021
ENTREP THEORY PRACT

Over generations, decaying family social capital is a primary cause of enterprise wealth loss in enterprise families that share ownership of multiple entities and multiple assets. We answer recent calls to uncover the origins of family social capital by studying seven old, wealthy, and large transgenerational enterprise families. We complement existing research on wealth creation through entrepreneurship by offering a deeper understanding of how family social capital is enhanced in transgenerational enterprise families. Our inductive qualitative study finds that enterprise family social capital appears to be enhanced by family governance, family learning, family identity, and physical grounding.

The Impact of Family Business Governance on Organizational Innovation: A Field Study at Family Firms Operating in Yemen

Article

Full-text available

Feb 2022

This study aims to investigate the impact of family business governance (FBG) on organizational innovation (OIN) in family firms operating in Yemen. The study collected data from 219 family firms, and employed PLS-SEM to test the hypotheses and validate the study model. The results provide evidence of the influence of FBG on OIN in family firms, and that the application of FBG practices promotes better results at the organizational level seen as product innovation and process innovation. The results show that there are significant differences in organizational innovation that can be attributed to the size of the firm, while no differences are found to be attributed to the generation in charge. These findings provide a better understanding of the innovativeness in family firms with respect to the different roles of formal and informal governance structures, and may help business families to develop more effective governance structures out of which more active stewards with more innovative ideas can help trigger better organizational innovation. This paper attempts to update the current knowledge concerning inconsistency of findings in prior studies, and so contributes in updating research opportunities with respect to heterogeneity in family firms.

Family Council From A Cultural Approach: the case of eastern european countries

Article

Nov 2021

The family council is a formal mechanism of the family governance in family businesses that aims to give a voice to all members of the family, and to unify the interests of all members. These interests are identified with the purpose of the family, necessary to achieve a long-term legacy, and the sustainability of the company. However, the establishment of the family council is a topic that is still at an incipient stage, both in the literature and for practitioners, so our contribution advances the understanding of family governance within the sphere of family businesses culture and context. For that purpose, we rely on two cultural indexes widely accepted in the literature. We have taken Hofstede’s dimensions and CAGE Distance Framework to explain the establishment of a family council in family businesses settled on the Eastern European countries. The prevailing culture in these countries defines the values and behaviors of their social organizations, namely, the family. The joint study of Hofstede’s dimensions and of the cultural, administrative, and economic differences in the Eastern European countries (CAGE framework) sheds light on how, when and why to establish a family council. This research opens a new field in the intersectional study of culture as an element of sociology and family business in the field of family governance. In advancing this line of research, multilevel analysis through case studies would confirm the coincidence of national values, with individual characteristics. Keywords: Family business, family council, organizational culture, eastern countries

Enhancing Enterprise Family Social Capital Through Family Governance: An Identity Perspective

Article

Full-text available

Jul 2022

Despite significant discussion surrounding the benefits of family social capital in family business research, precisely how it is built and maintained by enterprise families remains unclear. To explore how and when family governance practices can avoid the decay of enterprise family social capital, we examine the mediating role of family identity and the significance of both generational and business ownership. Testing of our moderated mediation framework using data from 175 enterprise families globally suggests that family governance can stimulate family social capital by strengthening family identity. We also find a negative moderating role for business ownership in this indirect relationship.

The Impact of Family Business Governance on Organizational Innovation: A Field Study at Family Firms Operating in Yemen

Article

Full-text available

Feb 2022

The Presence of Women in Private Family Firms’ Corporate Governance and Innovation Outcomes

Chapter

May 2022

Despite the increase in the number of studies analysing innovation in family firms over the last decade, there are still a number of critical issues that are far from being resolved. One of these issues is related to the influence of women’s presence in corporate governance structures on firms’ innovation outcomes. In light of this, the aim of the present chapter is to investigate whether the inclusion of women in private family firms’ corporate governance structures, namely, in the general shareholders’ meeting, the top management team and board of directors, influences firms’ innovation. By applying regression analyses to a sample of 339 Spanish private family firms, the findings reveal that the presence of women in general shareholders’ meetings and in top management teams has a negative and significant effect on innovation.

A theory of venture capital family business: a governance trajectory

Article

Full-text available

Dec 2021

Purpose The purpose of this study is to understand venture capital family businesses (VCFBs) governance of portfolio companies through the deal process. Design/methodology/approach This study applies a theory-developing approach. A model of VCFB governance is developed whose key aspects are illuminated by four examples (cases) of VCFBs. Findings Recent research suggests that a venture capital firm's corporate deal processes can be divided into the pre-deal, deal and post-deal phases. Based on the age, size and succession dimensions, propositions for how a governance trajectory develops for VCFBs, affecting the deal process of target family firms (TFFs), are presented. These propositions highlight how the family owners' actions and behavior are related to VCFB governance, which in turn, influences the three phases involved in making an investment. Originality/value The propositions suggest how personal and administrative VCFBs' governance of the deal process of portfolio companies is significantly affected by centrifugal and centripetal forces that drive the respective types of governance where third-generation family owners appear as changers of governance approach.

Formal HRM in family SMEs: the role of family-centered goals and family governance

Article

Full-text available

Dec 2021

This paper aims to investigate the antecedents of formal human resource management (HRM) in private family firms. Specifically, we adopt a socio-emotional wealth perspective to predict the relationship between family-centered noneconomic (FCNE) goals and formal HRM practices. In addition, we rely on the extension of the behavioral theory, i.e., the attention-based view of the firm, to understand the moderating effect of family governance practices (FGPs) on the relation between FCNE goals and formal HRM practices. Based on analyses of a sample of 293 Belgian privately-held family small and medium enterprises, we find that the pursuit of FCNE goals is associated with less formal HRM practices. In addition, simultaneously engaging in FGPs while pursuing FCNE goals reverses this negative effect.

Understanding Governance Mechanisms in Small and Medium Family Firms in Latin America

Article

Full-text available

Sep 2021

Governance mechanisms help manage, direct, and control people, resources, and the interests of those involved in a firm. In family firms, understanding the use of governance mechanisms is particularly important given their rela-tionship with the sustainability of the family and the business. Even though we know a great deal about family business governance in North America and Europe, we still know very little regarding the use of governance mechanisms in small and medium (SME) family firms in Latin America, nor do we know whether the use of governance mech-anisms impacts financial performance. To address these gaps, this paper presents the results of a survey completed by 2287 representatives of family business SMEs from 24 Latin American countries. Participants indicated the like-lihood of their using different governance mechanisms and responded to questions concerning their businesses. Our results indicate that the small and medium Latin American family firms in our study were not very likely to use formal business and family governance mechanisms, however, the use of formal business governance mechanisms was related to financial performance. The implications of these results for research and practice are discussed.

Family governance mechanisms and intergenerational transmission of a Moroccan SME: an exploratory study Les mécanismes de gouvernance de la famille et la transmission intergénérationnelle d'une PME marocaine: une étude exploratoire

Article

Full-text available

Sep 2021

The importance of family businesses in the economic development of countries around the world is well established (Kenyon-Rouviniez et al., 2004 cited by Bughin, Colot, and Finet, 2010). However, they do not survive generational change (Le Breton-Miller, Miller and Steier, 2004). This alarming reality challenges us as researchers to study this complex issue of transmission. To do so, we study this inheritance phenomenon from the perspective of family governance, while focusing on the role of "family" system governance practices in driving the intergenerational transmission of Moroccan SMEs. To this end, we conducted an exploratory qualitative study of a Moroccan family SME. The results of this investigation confirm the role of the family core governance in planning and conducting the intergenerational transmission of the SME. Résumé Le poids des entreprises familiales dans le développement économique des pays à travers le monde n'est plus à démontrer (Kenyon-Rouviniez et al., 2004 cité par Bughin, Colot, et Finet 2010). Cependant, elles ne survivent pas au changement générationnel. (Le Breton-Miller, Miller et Steier, 2004). Cette réalité alarmante nous interpelle en tant que chercheurs à étudier cette question complexe de la transmission. Pour ce faire, nous étudions ce phénomène successoral suivant la perspective de la gouvernance de la famille, tout en mettant l'accent sur le rôle des pratiques de la gouvernance du système «familial» dans la conduite de la transmission intergénérationnelle de la PME marocaine. À cet effet, nous avons mené une étude qualitative à caractère exploratoire auprès d'une PME familiale marocaine. Les résultats de cette investigation confirment le rôle de la gouvernance de l'organe familial dans la planification et la conduite de la transmission intergénérationnelle de la PME.

Family council from a cultural approach: The case of Eastern European countries

Conference Paper

Full-text available

May 2021

1 Business Families: An Introduction

Chapter

Full-text available

Jan 2023

Family business is a growing scholarly field that has recently seen calls to investigate different types of family businesses and connect more clearly with adjacent disciplines. We take up these challenges in this De Gruyter Handbook of Business Families by expanding our reach beyond the single-family with a single business. We investigate business families who may engage in joint entrepreneurial, investment, or philanthropic activities, identifying four overlapping research streams. The first is the family behind the firm, which explores the relatively neglected dynamics between individuals with family ties that shape the interaction between family and business. The second is business families with multiple businesses, which looks at a portfolio of activities jointly run by a family in space and time. We describe the third stream of research as governing the business family, which refers to how business families adopt formal rules and processes around their joint activities. Finally, we address the institutionalization of wealth and business families in society. This section explores the multi-generational business family as influenced by and influencing its broader socio-economic context. This handbook positions business families as a vibrant new research field with contributions straddling different disciplines and geographies.

INNOVATION AND PERFORMANCE IN PRIVATELY HELD FAMILY FIRMS: ANTECEDENTS, MODERATING AND MEDIATING EFFECTS, AND CONSEQUENCES

Thesis

Sep 2022

Rubén Martínez-Alonso

In recent decades there has been a burgeoning and heated debate in the family business world about how family involvement influences innovation. Despite the progress made, the current comprehension of the specific antecedents affecting family firm innovation is limited, with a plethora of contradictory and inconclusive results. Consequently, more research is required to understand the unique but complex innovative behaviour of family firms. In line with the above, the general objective of this thesis is to study the antecedents and consequences of innovation in the context of family firms. Specifically, we are going to investigate how different issues related to corporate governance bodies affect the innovation strategies of family firms and, ultimately, the obtained performance outcomes. This general aim is developed through four specific objectives. The first objective is to provide an overview of the family firm innovation research field through a bibliometric study. The second objective is to examine the indirect effects of technological innovation efficiency in the relationship between family management and firm performance. The third objective is to investigate the moderating role of technological collaborations on the relationship between family management and product innovation efficiency. Finally, the fourth objective is to analyse how women’s presence in different corporate governance structures affects innovation in family firms. In order to achieve the aforementioned objectives, this thesis is structured in four chapters, plus an initial introductory section and a final section for conclusions. The first chapter develops the first specific objective. In this regard, this chapter aims to contextualize the reader by identifying and synthesizing the key topics of the family firm innovation research field and by highlighting future research opportunities. Moreover, this chapter also proposes an integrative framework aimed at advancing the current knowledge on family firm innovation and identifying new research avenues to further develop the field. Chapter two develops the second specific objective. Thus, this chapter analyses the mediating and moderating influence of technological innovation efficiency in the relationship between family management and firm performance. The empirical results show that technological innovation efficiency mediates and moderates the impact of family management on firm performance. Chapter three addresses the third specific objective. In this vein, chapter three analyses the moderating role of technological collaborations with different partners in the relationship between family management and product innovation efficiency. The findings reveal that the positive influence of family management on product innovation efficiency varies according to the type of technological partner with whom the collaboration agreement is established. The fourth chapter corresponds to the fourth specific objective, which is to analyse how women’s presence in different corporate governance structures affects innovation in family firms. In this regard, the results reveal that women’s presence in general shareholders’ meetings and in top management teams negatively influences product innovation in family firms. Finally, in the conclusion section, the main contributions, practical implications, limitations and future research avenues are presented. Hence, this thesis provides valuable contributions to the family firm innovation research field, especially with regard to innovation efficiency, technological collaborations and gender, and their effect on firm performance. Furthermore, this thesis provides interesting practical insights for the development of managerial policies in family firms.

Meranie výkonnosti rodinného podniku ako východisko inovačných zámerov

Article

Full-text available

Dec 2021

Cieľom príspevku je návrh nových spôsobov merania výkonnosti podniku, ktoré môžu byť východiskom tvorby inovačných zámerov a zohľadňujú špecifická rodinného podnikania. Objektom skúmania je rodinný podnik drevospracujúceho priemyslu, v ktorom sú aplikované metódy merania výkonnosti zamerané na analýzu konkurencie (benchmarking) a metódy, pomocou ktorých je možné hodnotiť zlepšovanie v čase (náklady na kvalitu, BSC). V príspevku sú využité nasledovné metódy: analýza, syntéza, indukcia, dedukcia, komparácia, opytovacia metóda a matematicko-štatistické metódy. Prínosom príspevku je posúdenie významu týchto metód pre tvorbu inovačných zámerov v budúcnosti.

Family-centred non-economic goals and the internationalisation of family firms: Evidence from Australia

Article

Jan 2022
INT BUS REV

Despite the growing body of literature on the internationalisation of family firms, further research is required to understand the underlying factors that influence their international behaviour. Past research has consistently shown that family firms are less likely to adopt an internationalisation strategy compared to their non-family counterparts, yet we still have limited understanding of the underlying reasons why this is so. By incorporating the bifurcation bias concept to the socioemotional wealth perspective of family firm behaviour, we argue that greater attention needs to be given to the influence of family-centred non-economic (FCNE) goals on the family firm’s international behaviour. Using survey data collected on over 300 Australian family firms, regression analysis was used to examine the influence of FCNE goals on the family firm’s extent of international involvement. The results suggest that business families which emphasise FCNE goals are more likely to exhibit a lower attitudinal commitment towards international expansion, which in turn determines the level of international involvement of the family firm. Results also suggest that the extent of international involvement of the family firm has a significant negative effect on the level of achievement of FCNE goals.

Einigkeit als Herausforderung für eine Unter- nehmerfamilie -Strategien zur Erzielung von Konsens in einer Stammesorganisation, in: Lueger, M./Frank, H./Korunka, C. (Hg.) (2018): Die Unternehmerfamilie im Kontext ihres Familienunternehmens, Wien: Facultas, S. 251-284.

Chapter

Full-text available

Oct 2021

Learning in a Family Business Through Intermarriage: A Rhetorical History Perspective

Article

Feb 2023

We use concepts from rhetorical history and mnemonic communities to expand on the notion of “intermarriage” in a family business as the merger of shared histories among family members, nonfamily members, and individuals from other families and suggest that a common mnemonic narrative defines the parameters of the family business rather than the structural properties of the firm or the genetic relationships among family members. Our analysis reveals how fundamental family business practices can be changed when confronted with the intimate knowledge of the rhetorical history of the failure of others.

How does the founding family matter in corporate governance? A study of the entrenchment heterogeneity among S&P 1,500 firms

Article

Full-text available

Jan 2023
J Bus

Drawing on principal-principal agency theory and the socioemotional wealth (SEW) perspective, this paper explores the motivations and mechanisms regarding the founding family's contingent choices of governance provisions that facilitate managerial entrenchment, which can potentially threaten firm performance. By investigating S&P 1,500 firms between 2007 and 2017 and employing quasi-experimental treatment effects analyses, this study finds that family firms are less likely to utilize the E-index provisions than non-family firms in general. Further, family firms tend to adopt more E-index provisions when the first generation of the founding family remains involved in the firm. However, as these firms age, they rely less on the E-index provisions to entrench family managers. Consequently, this paper expands current research on the governance of publicly-traded family firms by illustrating the differences between family and non-family firms as well as the impact of transgenerational family governance on the use of entrenchment mechanisms over time.

CONCEPTUALIZING A FRAMEWORK FOR SUCCESSION PLANNING IN FAMILY-OWNED CONSTRUCTION FIRMS IN GHANA

Article

Full-text available

May 2022

Purpose-This article aims to review the literature on succession planning for family-owned construction firms. The purpose is to unearth and contextualize the succession planning information within the construction industry, particularly for family-owned construction firms. Design/methodology/approach-A systematic and meticulous literature search of family-business magazines, and trustworthy journal databases was carried out after a brainstorming session to determine what relevant information would be unearthed for the study. This resulted in search criteria of several terms related to the topic (‗succession', ‗succession planning', ‗transition planning', ‗family firms', ‗family-owned construction firms', ‗family-owned business', ‗agency cost theory', resource-based view', and ‗theory of planned behavior') and using connectors AND and OR to link the descriptors. The retrieval process resulted in over 500 articles and the filtering process cleaned the data to over 100 which literature resulted in a conceptual framework being proposed. Findings-Key findings of the study include the significance of succession planning in family-owned construction firms, drivers, barriers, application of the agency cost, resource-based view and planned behavior theories to underpin succession planning, and the conceptual framework in which family-owned construction firms, in particular, can rely on when undertaking succession planning. Limitations/implications-The weakness of this paper is the lack of theoretical development and being a literature review does not concern itself also with the causal relationship of the constructs in the framework. The findings highlight key areas for future research and help to contextualize the topic for any potential new developments in succession planning for family-owned construction firms. Practical implications-Family-owned construction firms are getting extinct by the day and the statistics are startling mainly due to a lack of succession planning. Thus, firms especially family-owned construction firms are admonished to pay attention and employ adequate resources for succession planning to promote their long-term survival and prosperity. Originality/value-This paper gives researchers and industry practitioners insights into the succession planning process. It paves the way for an exploration of the applicability of succession planning processes as applied in other sectors to be tried in the construction sector. The value this paper comes with is that it employs agency theory, resource-based view theory, and theory of planned behavior to reinforce the study whilst developing/ proposing a conceptual framework based on the available information to guide family-owned construction firms in Ghana to undertake succession planning. KEYWORDS-Succession, Succession planning, family firm, family-owned construction firm, family-owned business, agency cost, resource-based view, and theory of planned behavior.

The “open family firm”: openness as boundary work in family enterprises

Article

Full-text available

Aug 2022
SMALL BUS ECON

Plain English Summary Openness as boundary work is a significant challenge for many family firms but is critically important in an increasingly complex business environment. We develop a generative framework and future research agenda. Our main implications are for (1) research: our conceptual framework on openness as boundary work and the research questions we put forward as a critical future research agenda open up many possibilities for further developing meaningful and useful theory on openness, boundaries, and boundary work in family firms and entrepreneurial families; (2) practice: we help family firms, entrepreneurial families, and family business advisors better understand the dynamics, complexities, and consequences of openness to make more informed boundary decisions; and (3) society: when family firms open up their boundaries, not only can they create more opportunities for other societal actors, but they can also generate more value than they can do alone.

The impact of family business professionalization on financial performance: a multidimensional approach

Article

Feb 2022
J Small Bus Enterprise Dev

Purpose This study aims to broaden the multidimensional conceptualization of family business professionalization, and to investigate how professionalization influences the financial performance of family firms, in the context of private family firms. Design/methodology/approach Taking a quantitative research approach, the study empirically examines the effect of professionalization on family firm performance, using a sample of 111 privately held Turkish family firms. The hypotheses were tested using regression analysis and the independent samples t -test. Findings The results indicate that the professionalization of family businesses has a positive effect on their financial performance, and the professionalization of employees is the prominent dimension of professionalization in this effect. Research limitations/implications This study advances the understanding of how professionalization influences family firm performance by providing additional empirical evidence regarding the positive influence of multifaceted family business professionalization on financial performance. Practical implications The professionalization framework depicted in this study helps owners, managers, or consultants of family businesses assess the professionalization level of their firm and understand the performance effects of each of the family business professionalization dimensions on financial performance. It can also serve as a roadmap for family firms to professionalize and achieve better performance. Originality/value Unlike previous studies, this study incorporates employees, organizational culture and work environment, often neglected in the family business literature, into the multidimensional family business professionalization construct, thus extending previous research. The study contributes to a deeper understanding of the relationship between family businesses professionalization and firm performance.

The Moderating Effect of Family Management on R&D Productivity in Privately Held Firms

Chapter

Jan 2022

The aim of this chapter is to analyze the moderating effect of family management on the relationship between R&D inputs and R&D outcomes, that is, R&D productivity. Using a longitudinal sample of 337 Spanish privately held manufacturing firms, the results show that in general terms, although family managed firms invest less in R&D than their non-family managed counterparts, they reinforce the conversion of R&D inputs into R&D outcomes. Moreover, the findings reveal that the strengthening effect of family management on R&D productivity is contingent upon the level of R&D expenditures. Thus, this chapter contributes to shedding some light into the debate regarding innovation management in privately held family firms.

Implementação de governança familiar em uma empresa de transportes do interior de São Paulo

Article

Full-text available

Dec 2021

As empresas familiares apresentam índices significativos de mortalidade, sendo o processo de sucessão do fundador crucial para sua sobrevivência. Ao contrário de empresas de capital aberto, a sucessão na empresa familiar envolve alterações nas dimensões família, propriedade e empresa. A utilização de mecanismos de governança nesse processo é útil para auxiliar na separação de papéis de cada indivíduo e para formalização de fóruns de debate para cada uma das dimensões. Contudo, devido a limitação de recursos, muitas vezes é necessário priorizar a implementação de alguns mecanismos. Dado esse contexto, o objetivo deste trabalho foi entender qual a importância de cada mecanismo de governança familiar no processo de sucessão. Para tanto, foi realizado um estudo de caso em uma empresa de transportes que implementou três dos quatro principais mecanismos de governança familiar citados na literatura. Por meio de entrevistas, consultas a documentos eobservação de uma reunião do conselho de administração foi avaliada a percepção de importância dos sócios, familiares e funcionários em relação a cada mecanismo de governança familiar. A diretoria executiva e o conselho de administração foram identificados como os mecanismos mais importantes, enquanto o conselho de sócios e o conselho familiar tornam-se relevantes em determinadas situações e para grupos específicos. Desse modo, recomenda-se priorizar a implementação da diretoria executiva e do conselho de administração em relação aos demais mecanismos de governança familiar.

Family Control and Investment Efficiency: Does Financial Analyst Coverage Matter?Contrôle familial et efficacité des investissements : le suivi par les analystes financiers est-il important ?Control familiar y eficiencia de la inversión: ¿Importa el siguiente analista financiero?

Article

Jan 2021

Nachfolge im Spannungsfeld unterschiedlicher generationaler Erwartungshaltungen in einem innovativen Familienunternehmen

Chapter

Full-text available

Jan 2018

Die Unternehmerfamilie ist eine wichtige Ressource für das Familienunternehmen. Sie kann entweder einen Wettbewerbsvorteil bringen oder, im kritischen Fall, auch zur Beeinträchtigung bis hin zur Zerstörung des Familienunternehmens führen. Gerade in der Nachfolgephase kann die Funktionsweise der Unternehmerfamilie gravierende Auswirkungen auf den Umgang mit Konflikten, die Ausgestaltung und Bewältigung der Nachfolge und die Innovations- bzw. Wandelfähigkeit des Unternehmens haben. Ziel dieses Beitrages ist die Herausarbeitung familiärer Dynamiken und deren Einfluss auf die Nachfolge sowie der Rolle der Unternehmerfamilie für die Entwicklung von Innovationen mithilfe einer Good Practice-Fallstudie.

Innovation in Familienunternehmen

Book

Full-text available

Jan 2018

Die Innovationskraft von Familienunternehmen als tragende Säule unserer Wirtschaft ist ein wesentlicher Faktor für den Erfolg und das langfristige Überleben dieses Unternehmenstyps. So unterschiedlich dieser Typ von Unternehmen ist, so unterschiedlich ist auch sein Innovationsverhalten in Bezug auf die Innovationsart, den Innovationsgrad, die Gestaltung des Innovationsprozesses und die betrieblichen und familiären Rahmenbedingungen. Nach dem Motto "Lernen von den Besten" werden anhand von Good Practice Fällen fünf erfolgreiche Familienunternehmen analysiert und deren Innovationsverhalten dargestellt. Die detaillierte Darstellung der Fallergebnisse eröffnet fundierte Einblicke für die Theorie und vor allem für die Praxis. Den Abschluss bildet eine zusammenfassende Reflexion, die zu "11 Geboten erfolgreichen Innovierens" verdichtet wird und Familienunternehmen als Inspiration für ihr eigenes Innovationsmanagement dienen kann.

Special issue on Professionalizing the family Business and business-owning family: Challenging our beliefs and moving the needle

Article

Full-text available

Sep 2021

Managerialization, professionalization and firm performance in family business: A Systems Thinking perspective

Article

Feb 2023

This paper proposes a systemic model on the intertwined relations among managerialization, professionalization and firm economic performance, considering both business‐ and family‐specific features and issues. It sheds light on the role that, in the family business, the firm economic performance may play in favouring a positive development of both the business and the family itself. It aims at understanding how, in family businesses, the firm managerialization and professionalization may represent relevant drivers of firm performance. A Systems Thinking model based on causal loop diagrams was developed, to provide a clear framing of the interrelationships among the various aspects at stake. The conceptual model combines with systemic perspective all the variables and relationships that come into play when considering jointly the growth and development of the company and the family. This paper provides not only a conceptual background but also practical insights for family business' owners, managers and consultants.

Chapitre 11. Capacité d’anticipation des PME et entrepreneuriat transgénérationnel : le cas des PME familiales d’Alexandrie

Chapter

Apr 2022

Conceptualising the Governing Ownership System in a Family Business Group

Chapter

Dec 2022

Professionalization of Family Firms: Striking a Balance Between Personal and Non-Personal Factors

Conference Paper

Apr 2021

Zoltán Kárpáti

The amount of research on family businesses’ analysis has increased significantly in recent years, thus showing the high importance of the topic. In most countries, family businesses occupy a prominent place in contributing to the economy with the added value they produce. However, less attention has been paid to the professionalization of family businesses and the exploration and presentation of the related literature. The professionalization of family business is a significant research concern in the entrepreneurship and governance literature. In the context of family businesses, professionalization initially meant nothing more than hiring an outside, non-family manager. For today, the content of professionalization has expanded, and a multidimensional model has evolved: a broader, deeper understanding has evolved, which involves other vital aspects such as developing formal control and human resource systems, decentralization of authority, formal strategic planning, or top-level activeness. This study aims to present the essential international literature on professionalization and provide a comprehensive overview of the studies published. The literature review mainly summarizes the results of the last twenty years and closely related articles. The paper follows the next logic; in the first part, the definition of professionalization is introduced along with its benefits and challenges. Then, based on the research methodology presented, the related empirical and theoretical studies are examined. In the end, the review summarizes the key findings in a table.

Managing Paradoxes in Family Firms: A Closer Look at Public Politics in Spain

Chapter

Nov 2022

Knowledge on Boards of Directors of Family Firms: From Developed Economies to Latin America

Chapter

Nov 2022

The influence of familiness on decision-making quality in top management teams: The role of emotional dissonance and perceived team support

Article

Nov 2022

This article studies the relationship between familiness, approached from a new systems theory perspective, and decision-making quality in family firm top management teams. We focus on two potential explanations of this relationship by examining the mediating role of emotional dissonance and perceived team support. A hand-collected multiple-respondent dataset of 212 top managers from 45 Belgian family firm TMTs shows a positive relationship between familiness and decision-making quality, mediated by the level of perceived team support. Moreover, we find that familiness decreases the level of emotional dissonance experienced by these top managers.

Family governance and firm performance: exploring the intermediate effects of family functioning and competitive advantage

Article

Nov 2022

Purpose Scholars and practitioners agree that governance practices are at the core of what differentiates family firms from other forms of business. Yet, there is a lack of consensus in the extant literature about how and the extent to which family governance affects firm performance. This study aims to address the matter by taking a more comprehensive unified systems perspective to explore the pathways through which variations in family governance mechanisms simultaneously affect both the business and the family system. Design/methodology/approach This study utilises a global dataset sourced from a survey and structural equation modelling to empirically measure several intermediate and final outcomes of family governance. Findings This study finds that the use of family protocols, as well as formal and informal meetings, have positive effects on the functioning of the family, whereas family involvement in the top management team diminishes the firm's competitive advantage. In turn, this study demonstrates that both family functioning and competitive advantage are positively related to firm performance. Originality/value By taking into consideration the complexity of the family and business systems, and measuring their interlinkages, this study advances knowledge by providing a more complete picture of the family governance/firm performance relationship.

From family to families: pushing family entrepreneurship forward

Chapter

Sep 2022

From family to families: pushing family entrepreneurship forward

Article

Full-text available

Jun 2021
ENTREP REGION DEV

The present guest editorial offers a review of the different conceptualizations of families in business used in research to date, shedding light on the unique characteristics of each type. Understanding the family through the lens of social systems theory offers a means for researchers to study contextually embedded family systems, offering a foundation for studying differences among families. We demonstrate that the family business system (ownership, business, family) is incomplete without a fourth component, that of the family in business. We then present the papers included in this special issue and highlight the collective contribution to research in the fields of family business and family entrepreneurship and provide directions for future research.

Innovation in Family Farms: The Roles of the Market, the Family, and Farm Performance

Article

Full-text available

Apr 2022

Elena Fuetsch

Most farms are struggling with aggravating economic, social and ecological conditions. If family farms want to survive in the long run, they need to develop innovation strategies. In line with the resource-based view, this paper argues that market orientation and multiple family generations in management are valuable resources of a family farm, which can contribute to innovation by facilitating the development of innovative ideas. This paper also explores the role of farm performance as a moderator. Since small- and medium-sized businesses in rural areas tend to lack growth orientation, it is assumed that family farms do not feel a strong urge to make use of their innovation potentials unless their performance falls to a critically low level. A regression analysis is conducted to test the relationships with a sample of 690 Austrian family farms. The results confirm the positive effect of both market orientation and multiple generations in management on innovation. As expected, farm performance moderates this relationship negatively. The findings are discussed against the backdrop of the family business, innovation and farming literature and suggestions are made how family farms can make best use of the market and the family as two important potential innovation sources.

Special issue on: Professionalizing the family business and business-owning family: Challenging our beliefs and moving theneedle

Article

Mar 2022

The relationship between collaboration, productivity and publications: an empirical analysis in field of family business

Article

Full-text available

Mar 2022

Purpose It is widely accepted that coauthorship and collaboration promotes intellectual partnerships and improves the quality of publications. This paper examines the relationship between collaboration, productivity and publications in the field of family business. Design/methodology/approach The authors identify the most prolific authors, affiliations and countries and focus on the evolution of research in the field of family business. In doing so, the authors employ social network analysis to discover the structure of the networks and the ways in which authors, institutions and countries interact. Findings The empirical results show that collaboration is positively related to productivity, and there is significant evidence that the shaped networks exhibit small-world characteristics, a condition in which collaboration within authors becomes integrated in conjunction with time. Practical implications The findings highlight the mechanics of collaborative research production and can be useful to understand the importance of collaboration patterns to be followed in the field of family business. Originality/value The contributions are as follows: (a) application of social network analysis to model the coauthorship patterns among individuals, institutions and countries in family business; (b) distinguishing the most degree-central authors in the social network of collaborating academics; (c) investigation of the academic collaborations in family business that have the characteristics of a small-world social network and (d) suggesting a unique connection, through published keywords, between the research priorities of the most central or prolific authors with the research trends in the family business literature. The authors demonstrate that authors' collaboration becomes integrated in conjunction with time.

Burma Drinx Group (B) Strategizing for Corporate Governance in a Family Business

Article

Mar 2022

Burma Drinx Group (BDG), a large family-owned conglomerate in Myanmar, operates in several industries but has the largest presence in the soft drinks industry, led by its flagship company, Burma Drinx Company (BDC). The case explores the challenges and issues that BDC and BDG are experiencing as a family-owned conglomerate operating in a ‘non-friendly’ business environment, and a turbulent political and economic context. It focuses on an urgent topic, the corporate governance transformation of BDC and BDG. The reader is invited to understand the specificities of BDG’s internal environment and to manage the idiosyncrasies of this family business conglomerate related to its corporate governance system. BDC’s decision-makers face critical challenges for the future and have to completely rebuild the governance system. This current case follows a first case (Degravel & Tun, 2021) titled BDG(A) ‘Strategizing for Succession in a Family Business’, which described and reflected on the process of succession that BDG implemented to successfully replace the former CEO and founder of the company, Aung Win. The current case proposes a consulting-case style where analysis enables the provision of relevant solutions to the top management. Material from the academic literature about corporate governance and change management is offered as a resource. This case continues the story of BDG after its CEO succession.

Impact of effective governance structure on succession process in the family business: exploring the mediating role of management succession planning

Article

Dec 2021

Purpose The aim of this research is to analyze empirical evidence of the effect of governance structure (GS) on perceived success of the succession process. It is also reported that in India, family firms have a more informal organization structure and governance and have an informal and unplanned approach to bringing the successors into family business. Previous studies have reported that GS is an important factor for a successful succession process. This study examines the role of management succession planning as an intervening variable to achieve perceived success of the succession process. Design/methodology/approach Data have been collected using a questionnaire schedule with 113 respondents who are successors from family business firms in Kerala, India. The study uses snowball sampling technique. Partial least square-structural equation modeling has been used to do data analysis. Findings The results of the study showed that GS has a significant positive effect on the success of the succession process. GS has a significant positive effect on management succession planning. Management succession planning partially mediates the relationship between GS and perceived success of the succession process. Research limitations/implications The results of the study indicate the effect of GS on the relationship between, perceived success of the succession process and management succession planning. The mediating role of management succession planning in the above relationship is also confirmed. Therefore, before starting the succession process a good GS should be put in place for ensuring the success of the succession process. Family firms must implement the succession plan well to make the succession process successful. Originality/value The main contribution of the study is to empirically investigate the effect of GS and management succession planning to enhance the success of the succession process.

BUSINESS FAMILY GOVERNANCE 2.0 Leveraging Business Family Governance for Family Business Continuity

Technical Report

Full-text available

Nov 2021

This report seeks to shed light on what holistic family governance involves in practice, and on the issues that families need to pay attention to when designing their family governance system. It provides an overview of the current state of research on family governance and shares the findings from new research to present evidence-based guidance to motivate business families to reflect on current family governance and explore new ways of managing and inspiring their family shareholder/beneficiary group so that they can perpetuate their family’s stewardship for many generations to come. Based on survey and case study data from business-owning families in the UK and beyond, we provide suggestions for business families at any stage of their life cycle and governance journey who seek to engage in meaningful conversations within their own families and with their advisors.

Frank, H./Lueger, M. (2018). Ein Plädoyer für mehr Forschung über Unternehmerfamilien, in Lueger, M./Frank, H./Korunka, C. (Hg.) (2018). Die Unternehmerfamilie im Kontext ihres Familienunternehmens, Wien: Facultas, S. 15-27

Chapter

Full-text available

Oct 2021

Strategic planning for the family in business

Article

Full-text available

Jan 2005

Dennis T. Jaffe

Keeping the family in business

Article

Full-text available

Jan 2003

Heinz-Peter Elstrodt

The phenomenon of substantive conflict in the family firm: A cross-generational study

Article

Full-text available

Jan 2001

This study investigates the influence that family members exert on the extent and frequency of substantive conflict within family firms across generations as a result of their familial relationship (distance) with the owner/manager of the firm and the positions these family members occupy in the family workgroup and social (non-work) group. Following Beckhard and Dyer (1983), the construct of substantive conflict was vested in four key issues pertinent to family firms: (1) ownership continuity or change; (2) executive leadership continuity or change; (3) power and asset distribution; and (4) management's vision for the role of the firm in society. The results establish a relationship between conflict in a family business and the composition of the family's work group, non-work (social) group, and the extensiveness of the family's social interactions. The relationships between conflict and family influence were found to be moderated by the generations (first, second, third, or later) among involved family businesses.

Socioemotional Wealth and Business Risks in Family-Controlled Firms: Evidence from Spanish Olive Oil Mills

Article

Full-text available

Mar 2007
ADMIN SCI QUART

This paper challenges the prevalent notion that family-owned firms are more risk averse than publicly owned firms. Using behavioral theory, we argue that for family firms, the primary reference point is the loss of their socioemotional wealth, and to avoid those losses, family firms are willing to accept a significant risk to their performance; yet at the same time, they avoid risky business decisions that might aggravate that risk. Thus, we propose that the predictions of behavioral theory differ depending on family ownership. We confirm our hypotheses using a population of 1,237 family-owned olive oil mills in Southern Spain who faced the choice during a 54-year period of becoming a member of a cooperative, a decision associated with loss of family control but lower business risk, or remaining independent, which preserves the family's socioemotional wealth but greatly increases its performance hazard. As shown in this study, family firms may be risk willing and risk averse at the same time.

The Nova Group case study: Family dynamics in a multigenerational French family business

Article

Full-text available

Jan 2011

Rania Labaki

This case illustrates the evolution of family relationships in a multigenerational family business and its impact on performance. Building on a systems perspective, it uses the organizational finance, family therapy, and family business literatures to explain how and why family relationships in a large French food distribution group weakened over the life cycle and lead to increasing conflicts of interests between active and non-active family shareholders, thus to the loss of the family control over the business. The case highlights the role of values transmission across generations and governance mechanisms. Finally, it suggests key learning lessons for family businesses to strengthen their family relationships and ensure the family continuity in the business.

Socioemotional Wealth in Family Firms

Article

Full-text available

Sep 2012

This article makes the case for the socioemotional wealth (SEW) approach as the potential dominant paradigm in the family business field. The authors argue that SEW is the most important differentiator of the family firm as a unique entity and, as such, helps explain why family firms behave distinctively. In doing so, the authors review the concept of SEW, its different dimensions, and its links with other theoretical approaches. The authors also address the issue of how to measure this construct and offer various alternatives for operationalizing it. Finally, they offer a set of topics that can be pursued in future studies using the SEW approach.

Family Business and Financial Performance: Current State of Knowledge and Future Research Challenges

Article

Full-text available

Sep 2011

Chiara Mazzi

The present study investigates the link between family ownership/control/management and firm performance, focusing on financial relations. This study aims to reconstruct the existing theoretical framework and systematize the current state of knowledge, distinguishing between widely corroborated findings and those that have not been clearly substantiated. Towards this aim, the present work analyses 23 articles that were selected according to systematic review criteria in the most relevant databases for social sciences research. The lack of homogeneity in the results of previous studies suggests that the relationships between family business and corporate performance are complex and very probably moderated or mediated by factors that have not been included in these analyses. The main areas that need further investigation are as follows: (i) the multidimensional concept of performance and the shift from wealth creation to value creation, (ii) the validity and perspectives of theoretical approaches to the study of family firms, (iii) the family business definition dilemma and its implications, and (iv) the growing interest in privately held family firms. These topics represent strategic challenges and opportunities for future research.

A Guide to Writing the Dissertation Literature Review

Article

Full-text available

Jan 2007

Justus Randolph

Writing a faulty literature review is one of many ways to derail a dissertation. This article summarizes some pivotal information on how to write a high-quality dissertation literature review. It begins with a discussion of the purposes of a review, presents taxonomy of literature reviews, and then discusses the steps in conducting a quantitative or qualitative literature review. The article concludes with a discussion of common mistakes and a framework for the self-evaluation of a literature review.

The Landscape of Family Business Outcomes

Article

Full-text available

Mar 2012

To promote theoretical development in family business research, this research identified 327 dependent/outcome variables used in 257 empirical family business studies in 1998-2009. In four studies, the authors categorized outcome variables, developed a numerical taxonomy with seven clusters (performance, strategy, social and economic impact, governance, succession, family business roles, and family dynamics) plotted along two dimensions (business–family and short-term–long-term), validated their research, and identified missing outcome variables and variables that deserve more attention. Experts agree that family business roles, succession, and family dynamics make the family business domain unique and that noneconomic performance and family-specific topics deserve more attention.

The Theory of Social Systems as a Framework for Understanding Family Businesses

Article

Full-text available

Jul 2013

There is a long tradition of systemic approaches in family business research, although recent developments of the theory of social systems have been widely ignored. This paper gives a brief overview of these systemic approaches and models and then introduces the most important assertions made by the modern theory of social systems. Systems theory no longer considers individuals as parts of the system but assumes that the basic elements of a social system are acts of communication. In each system (family, business, ownership), a specific communication pattern evolves and each system operates on the basis of a specific functional logic. Families operate on the basis of attachment communication, businesses operate on the basis of communicated decisions and ownership operates on the basis of legally secured communication. Each of these three structurally coupled systems provides a specific context. The functional logics are context markers and assign meaning to the communicative acts. In order to understand how a family business functions, it is important to understand the concrete functional logics and the structural coupling of the three systems.

Organizational Social Capital and Employment Practices

Article

Full-text available

Jul 1999
ACAD MANAGE REV

We introduce the construct of organizational social capital and develop a model of its components and consequences. Organizational social capital is defined as a resource reflecting the character of social relations within the organization. It is realized through members' levels of collective goal orientation and shared trust, which create value by facilitating successful collective action. We discuss employment practices as primary mechanisms by which social capital is fostered or discouraged within organizations.

The Phenomenon of Substantive Conflict in the Family Firm: A Cross‐Generational Study

Article

Full-text available

Dec 2002
J SMALL BUS MANAGE

This study investigates the influence that family members exert on the extent and frequency of substantive conflict within family firms across generations as a result of their familial relationship (distance) with the owner/manager of the firm and the positions these family members occupy in the family work group and social (non-work) group. Following Beckhard and Dyer (1983), the construct of substantive conflict was vested in four key issues pertinent to family firms: (1) ownership continuity or change; (2) executive leadership continuity or change; (3) power and asset distribution; and (4) management's vision for the role of the firm in society. The results establish a relationship between conflict in a family business and the composition of the family's work group, non-work (social) group, and the extensiveness of the family's social interactions. The relationships between conflict and family influence were found to be moderated by the generations (first, second, third, or later) among involved family businesses.

Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure

Article

Jan 1998

This paper integrates elements from the theory of agency, the theory of property rights and the theory of finance to develop a theory of the ownership structure of the firm. We define the concept of agency costs, show its relationship to the 'separation and control' issue, investigate the nature of the agency costs generated by the existence of debt and outside equity, demonstrate who bears the costs and why, and investigate the Pareto optimality of their existence. We also provide a new definition of the firm, and show how our analysis of the factors influencing the creation and issuance of debt and equity claims is a special case of the supply side of the completeness of markets problem.

Family Meetings : How to Build a Stronger Family and a Stronger Business

Article

Dec 2010

Family Meetings demonstrates the value of family meetings and how to effectively use family meetings to achieve family and business milestones. In its information-packed pages you'll learn ten benefits of effective family meetings; how to use family meetings to plan for future ownership and participation in the family business; how to use family meetings to preserve family traditions and history and to recognize and resolve conflicts; the key questions to be dealt with at family meetings; how to organize and run effective family meetings; how family meetings change as the business evolves; how to separate family issues from business issues; how to use rituals and ceremonies for bonding and recognition.

The Importance of Family and Business Governance

Chapter

Jan 2005

Corporate governance has gained tremendous attention in recent years, While the process is greatly discussed, it is not always well understood, especially in family businesses, Family business governance is a system of processes and structures put in place at the highest level of the business, family, and ownership to make the best possible decisions regarding the direction of the business and assurance of accountability and control In a well-developed family business, this involves understanding how the business and its governance structure — the board of directors and the management’s executive committee — interact with the family and its structures (the family council, shareholders’ committee, and so on; see Figure 4.1) This chapter explores the respective roles of these structures, their composition, and their function.

Family Business Governance als Erfolgsfaktor von Familienunternehmen

Article

Jan 2012

Un aspecto ignorado que explica el éxito de la empresa familiar: Las prácticas de recursos humanos

Article

Jan 1994
FAM BUS REV

How governing family businesses is different

Article

Jan 2004

J. Ward

Corporate Governance in geschlossenen Gesellschaften insbesondere Familienunternehmen - unter besonderer Berücksichtigung von Aufsichtsgremien

Article

Jan 2012

Single family offices: Private wealth management in the family context

Article

Jan 2008

Governing the Family Enterprise: Practices, Performance, and Research

Article

Jan 2014

The family business: Its governance for sustainability

Article

Jan 1998
LONG RANGE PLANN

Defining Family Business by Behavior

Article

Jul 1999
ENTREP THEORY PRACT

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 other businesses. It is the standard against which operational definitions must be measured. We propose a theoretical definition based on behavior as the essence of a family business. Our conceptual analysis shows that most of the operational definitions based on the components of family involvement overlap with our theoretical definition. Our empirical results suggest, however, that the components of family involvement typically used in operational definitions are weak predictors of intentions and, therefore, are not always reliable for distinguishing family businesses from non-family ones.

Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure

Article

Oct 1976

In this paper we draw on recent progress in the theory of (1) property rights, (2) agency, and (3) finance to develop a theory of ownership structure for the firm.1 In addition to tying together elements of the theory of each of these three areas, our analysis casts new light on and has implications for a variety of issues in the professional and popular literature, such as the definition of the firm, the “separation of ownership and control,” the “social responsibility” of business, the definition of a “corporate objective function,” the determination of an optimal capital structure, the specification of the content of credit agreements, the theory of organizations, and the supply side of the completeness-of-markets problem.

Succeeding Generations: Realizing the Dream of Families in Business

Article

Jun 2000
ADMIN SCI QUART

Finding the right successor to a well-loved founder or president is often the most difficult task an organization can face--and the challenge can be even greater for family-run businesses. Succeeding Generations explores leadership transitions in family businesses, offering a clear-eyed assessment of the different options, from direct succession to building partnerships between siblings and cousins. Family-owned companies may dominate the worldwide business landscape, yet surprisingly few are successfully passed down from one generation to the next, and fewer still reach the third generation intact. Author Ivan Lansberg, an organizational psychologist who grew up in a family business, examines the reasons behind this high failure rate and reveals the factors that contribute to long-term success. He offers practical advice on how to mentor successors, how to set up a systematic selection process, and how to make the best use of the board of directors during times of transition. With a wealth of examples from companies in the United States, Europe, and Latin America, Succeeding Generations provides a thoughtful and comprehensive look at the sensitive dynamics of leadership succession in family businesses.

Toward A Stewardship Theory of Management

Article

Jan 1997
ACAD MANAGE REV

Recent thinking about top management has been influenced by alternative models of man.1 Economic approaches to governance such as agency theory tend to assume some form of homo-economicus, which depict subordinates as individualistic, opportunistic, and self-serving. Alternatively, sociological and psychological approaches to governance such as stewardship theory depict subordinates as collectivists, pro-organizational, and trustworthy. Through this research, we attempt to reconcile the differences between these assumptions by proposing a model based upon the subordinate's psychological attributes and the organization's situational characteristics.

The family's effect on family firm performance: A model testing the demographic and essence approaches

Article

Mar 2013

Rodrigo Basco

The demographic and essence approaches have emerged as two separate streams to tackle the issue of how the family affects family firm performance. However, this debate is still open. After analyzing 80 published articles from 2007 to 2011, I conclude that the contradictions between these two approaches come from implicit assumptions that are not modeled when each approach is tested individually. Therefore, the aim of this article is to put the demographic and essence approaches to the test. To reach this objective, I developed a theoretical framework to analyze the relationship between family management involvement, family-oriented strategic decision making, and family firm performance. I conclude that contradictory conclusions may result from each model whether they are tested separately or together.

Differentiating value orientations and unity in values as predictors of varying FB system processes

Article

Oct 2011

This study evaluates a human ecology conceptual framework for family businesses where the value orientations within the family business system are considered a distinct construct from unity in values. This study uses the 2007 American Family Business Survey to differentiate values from unity. Findings from this study support this human ecology differentiation and results include; a lack of relationship between unity and values, and the disproportionate role of unity in the creation and maintenance of formal processes, whereas values, and specifically “family-first” businesses tend to preference the creation of family councils. Implications include relevance for future investigative studies focused on the role of family involvement, and practical implication for the creation and maintenance of formal processes such as family councils.

International Entrepreneurship Research (1989–2009): A Domain Ontology and Thematic Analysis

Article

Nov 2011
J BUS VENTURING

A Resource-Based Framework for Assessing the Strategic Advantage of Family Firms

Article

Mar 1999

The Resource-Based View (RBV) of competitive advantage provides a theoretical framework from the field of strategic management for assessing the competitive advantages of family firms. The RBV isolates idiosyncratic resources that are complex, intangible, and dynamic within a particular firm. The bundle of resources that are distinctive to a firm as a result of family involvement are identified as the “familiness” of the firm. This approach provides a research and practice method for assessing the specific behavioral and social phenomena within a firm that provide an advantage. Using a familiness model for assessing competitive advantage overcomes many of the problems associated with the generic claim that family companies have an advantage over nonfamily companies. It also provides a unified systems perspective of family firm performance.

Research Note: Perceptions Are Reality: How Family Meetings Lead to Collective Action

Article

Mar 1997

Family meetings develop family unity through the creation of perceived shared beliefs. The article presents a model with strategic implications showing how shared beliefs lead to collective action, which leads to outcomes and then the reassessment of the shared beliefs. Finally, the article reports on initial research on the reliability of instruments developed to explore one aspect of this model: The creation of shared beliefs through family meetings. The initial results suggest that perceptions of shared beliefs may be an important stimulant of collective family activity.

A Neglected Factor Explaining Family Business Success: Human Resource Practices

Article

Sep 1994

Over 600 family firms were involved in this examination of the impact of human resource management (HRM) and professional governance practices on family business success and survival. Our findings identified some of the most prevalent family firm HRM practices and found significant positive correlations among HRM practices, gross firm revenues, and CEO personal income levels. The results support prior arguments for competitive advantage in the marketplace gained through effective use of HRM practices. An interesting additional finding was that while boards of directors, strategic planning, and frequent family meetings were correlated with business longevity over multiple generations, succession planning was not. Such practices are important. for current competitive advantage and may also be crucial to the longevity of the business.

The Family Business: Toward Definitional Clarity

Article

Aug 1995

Reginald Litz

There is considerable definitional confusion concerning the term family business. This chapter addresses this issue through two complementary approaches: a structure-based approach, which considers family involvement infirm ownership and management, and an intention-based approach, which focuses on the realized and unrealized value preferences of the organization's upper echelons.

The Influence of Life Stage on Father-Son Work Relationships in Family Companies

Article

Mar 1989

The authors examine the relationship between the life cycles of fathers and sons who work together, concluding that the quality of the work relationship varies as a function of their respective life stages. The intersection of their individual developmental paths can have positive or negative effects on the nature of the work relationship, on the resolution of such problem issues as succession, and on productivity.

The Influence of Management Journals in the 1980s and 1990s

Article

May 2005
STRATEGIC MANAGE J

It is difficult to get a clear picture of the relative influence of management journals because previous studies have focused on a single sub-area in the field over a relatively restricted number of years, and/or have used inconsistent criteria to judge journal influence. Therefore, the purpose of this study is to examine journal influence using citations from 28 journals over the past two decades. The findings show that the top seven journals accounted for 61 percent of all of the citations in the journals included, and that the three journals that showed the greatest increase in influence over the past 20 years were AMJ, AMR, and SMJ. Copyright © 2005 John Wiley & Sons, Ltd.

Governance in Spanish Family Business

Article

Feb 2004

This explorative research paper illuminates the governance systems in Spanish family businesses, and evaluates the extent to which they pursue good governance practise both in the business and family areas. Empirical evidence is drawn from a database of 112 sizeable Spanish firms, and the results show the absolute dominance of the leading family in the ownership, control and management of sample firms. Approximately half of the members of the board tend to be insiders and more than two-thirds are family members. It emerges that generational firms (with third generation and beyond owner-managers) exhibit greater similarity in their governance structures to first generation firms than second generation ones; this might be due to the so-called “pruning” which is used as a survival mechanism. Overall, it emerges that family firms have a very low degree of board regulation by formal rules and family governance systems are hardly developed.

The Family Point of View, Family Social Capital, and Firm PerformanceAn Exploratory Test

Article

Aug 2009

Based on the social capital, conflict, and ethics literatures, this study introduces a new concept, the family point of view, and provides theoretical arguments resulting in the following hypotheses: (a) The family point of view emerges from collaborative dialogue, which helps develop agreement to ethical norms; (b) the presence of ethical norms further helps cultivate family social capital; and (c) as a resource in a family business, family social capital is positively related to family firm performance. Using structural equation modeling, an exploratory test of 405 small family firms found support for all three hypotheses. The findings indicate a fully mediated relationship among collaborative dialogue, ethical norms, family social capital, and firm performance. The study not only highlights the importance of moral infrastructure in family firms but also helps clarify components of family social capital.

Generation to Generation: Life Cycles of the Family Business

Article

Jan 1997

Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns

Article

Jun 1991

Agency theory argues that shareholder interests require protection by separation of incumbency of rôles of board chair and CEO. Stewardship theory argues shareholder interests are maximised by shared incumbency of these rôles. Results of an empirical test fail to support agency theory and provide some support for stewardship theory.

Relational and Contractual Governance in Family Firms: Effects on Strategic Decision Making

Article

Sep 2002

Governance of family firms differs from mainstream corporate governance in an important respect: Important owners, i.e., family members, may have multiple roles in the business. In this paper, we develop and test a model of family firm governance that incorporates both formal control and social control aspects of governance. Governance based on the formal control draws on agency theory, whereas the social control aspects draw on social theories of governance, addressing social capital embedded in relationships. Drawing on these theories, we examine the influence of different governance mechanisms on the quality of strategic decision making. The Family Business Governance Model is tested using survey data from 192 family firms in Finland. We use structural equation modeling in testing the empirical validity of the model. The empirical analysis largely supports our hypotheses on formal control and social control as well as their influences on the decision-making quality.

Family Business Research in the New Millennium: An Overview of the Who, the Where, the What, and the Why

Article

Apr 2009
FAM BUS REV

The authors' analysis of 291 family business articles published in 30 management journals between 2001 and 2007 reports the contributions of individual scholars and academic institutions to family business research. To better understand the interrelationships among scholars who have contributed to family business research, a network analysis of coauthor relationships was conducted. The authors also provide a content analysis of the articles and offer suggestions for future research. By analyzing the who, where, and what of family business research, the reasons why the developmental trends have occurred and how the field's momentum can be maintained and directed toward productive ends become clearer.

An exploratory study on a new corporate governance mechanism: Evidence from small family firms

Article

Dec 2008
Manag Res News

Josiane Fahed-Sreih

Purpose – The purpose of this paper is to explore relationships between different governance configurations and firm survival. The objective is to describe the alternative mechanisms through which the owning family takes a stake in the governance of the firm. Design/methodology/approach – The governance systems of 116 family enterprises in Lebanon are examined. The study integrates family, ownership, leadership and the business itself constituting the four structural elements of a family firm's governance system. Then, the study tests four hypotheses whether the family, the ownership, the leadership and the business dimensions influence positively firm survival/longevity. The other hypotheses tested concern the advisory services and the legal form of the board, and how that might affect the survival/longevity of the family firm. Findings – This integrative view allows observation of interactions among the different structures, and the establishment of a coordinating governing structure. Hypotheses testing results show that family, leadership and business dimensions have an impact on the performance/survival of the firm, whereas the ownership dimension has no effect. Research limitations/implications – Limitations of this paper relate to the relatively small size of the sample, and the sampled firms are young and small according to international standards. The study also suffers from common method bias and external validity. Practical implications – The proposed framework allows the establishment of a governance structure, for control and co-ordination. Ownership should be integrally separated from the other dimensions in the governance of a family firm to be able to achieve fairly good performance and ensure the survival and longevity of the firm. Originality/value – No other studies have been conducted on Lebanon. Moreover, the study integrates the four governance mechanisms developed by Klein which was not done previously.

Family governance – Literature review and the development of a conceptual model

Abstract

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