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The paper proposes a systematization of the key success factors of projects, through the theoretical review of family-owned companies operating in the EU market. It is the small and medium companies that in their own way contribute to the overall success of the national economy in terms of economic activity, increased employment, development activities and defining better business environment. The theoretical review observed numerous studies of family businesses, and the contribution of this work is in the systematization of the results of previous research – over three horizons, i.e., over the role of managers in the creation of successful projects (or owner if it is a family enterprise), institutional support for companies in Serbia and the EU, specific industries and the parent (regional) markets where a family company operates. Project management, as a general representation of the concept of implementation of strategic and operational endeavors, contains many specifics in terms of critical success factors of projects depending on the environment in which they are implemented. The goal of the paper is reflected in the identification and presentation of critical success factors of projects implemented in family companies. The paper concludes with a discussion of the research results in relation to the existing, similar research studies, as well as with the announcement of future research, which will examine the conclusions drawn on a real sample.
Siniša Arsić1,
1Telekom Srbija AD, Belgrade
Management: Journal of Sustainable Business and Management Solutions in Emerging Economies Forthcoming
Key Factors of Project Success in Family
Small and Medium-Sized Companies:
the Theoretical Review
DOI: 10.7595/management.fon.2017.0013
1. Introduction
Previous studies on the topic of project management in profit-oriented companies were based on a
consideration of structure, a model of innovation, specific industry, as well as the possibilities of commercial
exploitation of project results depending on the environment in which the project is performed. Very little
research has been devoted to the differences (and similarities as well) between family and non-family
companies, in terms of success factors that are crucial for the project to satisfy its stakeholders. It is possible,
therefore, to define the main research question, and the answer to that question lies within the
systematization of reviewed literature:
“Is the nature of project management in family companies different when compared to non-family
According to the results of previous research, the role of managers (the owner of the company, if it is a
family company) is key to the success of the project, assuming delegated authority, optimal amount of
resources available and the effects to be achieved by the implementation of the project.
Abstract: The paper proposes a systematization of the key success factors of projects, through the theoreti-
cal review of family-owned companies operating in the EU market. It is the small and medium companies that
in their own way contribute to the overall success of the national economy in terms of economic activity, in-
creased employment, development activities and defining better business environment. The theoretical re-
view observed numerous studies of family businesses, and the contribution of this work is in the
systematization of the results of previous research – over three horizons, i.e., over the role of managers in the
creation of successful projects (or owner if it is a family enterprise), institutional support for companies in Ser-
bia and the EU, specific industries and the parent (regional) markets where a family company operates. Proj-
ect management, as a general representation of the concept of implementation of strategic and operational
endeavors, contains many specifics in terms of critical success factors of projects depending on the environ-
ment in which they are implemented. The goal of the paper is reflected in the identification and presentation
of critical success factors of projects implemented in family companies. The paper concludes with a discus-
sion of the research results in relation to the existing, similar research studies, as well as with the announce-
ment of future research, which will examine the conclusions drawn on a real sample.
Keywords: factor, project, family company, industry, manager, owner
JEL : M10, M20, L20, O52
1 Corresponding author: Sinisa Arsic,
The theoretical overview is based on studies that are the product of current global trends, and it must be
noted that a narrowing of focus is present, and referring to the EU, and then to Serbia specifically. This is
particularly reflected in the part of the paper dealing with institutional support for SMEs to do business in
Serbia and the EU, and in the comparative review and comparison of support for the family versus non-
family companies.
Certainly, it should be noted, that the specifics of the industry and the domestic market are also a very
important perspective, perveived from the standpoint of project success factors of business changes which
are applied in these markets and across different industries. The discussion of results attempts to identify
similar conclusions, while the conclusion part of the paper sums up and announces the future research of
the author.
2. Key aspects of project success depending on perspective
On the basis of the defined research question, it is possible to set the overall goal of the paper.
General goal: To define the specifics of CSF (critical success factors) of projects through the analysis of the
criteria present in the family and non-family companies
while, for purposes of partial or complete closure of identified gaps in the existing literature, it is necessary
to try to reach the specific objective of the paper:
• To focus aspects of project management which are unique only for the family company and to present
the influence of “family variables” on success of projects which are implemented within those
As previously announced, the systematization of the key aspects is determined by three perspectives
(horizons), which follow below.
2.1 The role of manager/owner in the process of creating project success
Fortune and White (2006) state that the critical success factors of projects in general are the support of top
management, the structure of defined objectives and the level of detail of project plans. Next, Kotlar et al.
(2014) define that in the non-family companies the ability to bargain and to achieve compromise solutions is
integrated into the objectives (criteria) of making profit, whereas in family companies this same ability represents
a mechanism of control and power over individuals (usually the main authority is the owner himself).
The key success factors of projects in family companies are under the direct control of the owner of the
family business (in the majority of analyzed companies, the owner is also the director of the family company).
The main challenges of achieving success are influenced by the number of family employees, which are
related to the owner, (un)defined hierarchy among family members of the owner and those who are not, as
well as transparency in the vision of goals and personal motivation of owners and employees (Mihic et al.,
2015). These conclusions have been supported by Alias et al. (2014), who outline human resources as the
key factors to project success. Muller and Turner (2010) conclude that leadership attitude and intellectual
competences of the owner/manager predetermine the success of projects, which in some cases contributes
to large variances between project success and business success.
As critical factors / influences on the success of the projects (business activities) of the company, James
(1999), Anderson and Reeb (2003), as well as Carney et al. (2017), outline the stability of the family firm in
terms of structure, but also complement their conclusions with listing the presence of succession plans, and
maximum utilization of resources. The advantages that the family company itself provides can be defined as:
• the stability of the workforce as a result of the stability of the family,
• overlapping financial resources of the family and the company,
• prevalence in a national economy which drives overall competitiveness,
• longer time horizon for achieving the goals.
Siniša Arsić Forthcoming
In contrast to these conclusions, a study conducted by PwC (2014) points out the following key success
factors of projects carried out by family companies - profitability and projects that are prioritized according
to whether they provide long-term business contracts, while the stability of workplace for family members,
as well as creating of new jobs are at the bottom of the priority list. Since the largest continuous internal
challenge of preserving the family business is the need for constant innovation (products, processes,
services), leading to shorter innovation cycles and shorter time for reaching the commercialization phase
(time to market), are considered as the main criteria of success of the project.
Memili et al. (2010) conclude that the critical success factors of projects are planned in advance, according
to the level of risk borne by the project itself, so as to ensure the target yield, as well as to maximize the
potential of business that the project is implemented in. The main causes of low efficiency in the
implementation of the main ideas of the project are the result of a smaller share of human resources in the
process of generating ideas for innovation, as well as a lower percentage of employees who are generally
able to implement the project (Liach & Nordqvist, 2010). Conflicts often overlap with the priorities in the
successful implementation of the projects, and they are a result of the parameters of the family (family
stability, interpersonal relationships, the structure of the labour force, which is a derivative of family structure),
which often interferes with the implementation of projects and the foundation of successful project
management lies within total understanding and knowledge of these terms (Liu & Low, 2010).
2.2 Institutional support to SMEs in Serbia and in the EU
Authors generally agree that the owners of family businesses are rather reluctant to take business risk when
deciding on investments (resource allocation for a project), in cases where there is a large share of the
family fortune invested in the company’s capital (Sciascia et al., 2015). As a general conclusion, it can be
noticed that family companies are looking for external sources of financing in order to successfully realize
their ideas. Financing of commercial projects in the EU is regulated within programmes and projects for
innovative activities as well as programmes supporting the competitiveness of small and medium-sized
companies. According to research by the European Commission on improving the competitiveness of SMEs
in the EU (European Commission Report, 2009), the findings are that 60% of all SMEs in the EU are family
companies, producing 50% of all jobs. In Serbia, the SME sector generates about 30% of the total country’s
GDP (Minovic et al., 2016). Cruz and Letamendia (2010) supplemented with the following facts which are
necessary for the understanding of policies of the EU countries in terms of institutional support:
• The largest share of family companies is present in Italy, France and Portugal;
• The capital of family companies is smaller than that of non-family companies, but on an average, the
number of employees is similar;
• The life cycle length of family companies is on an average 60 years, while in non-family companies,
the average life expectancy is 43 years (one-fifth of family-owned companies are older than a century);
• Investments in family projects provide better yields than those in non-family companies (since each
euro invested in the family business is due to yield 3.5 euros, while in non-family companies it yields
2.4 euros);
• Th emarket risk within family businesses is lower than that in non-family businesses;
Family companies create more jobs (employment growth rate is 3.4%, compared to non-family
companies where it is 0.8%).
It should be noted that there are numerous funding programmes for projects of small and medium-sized
companies (family and non-family), naming only the most important:
• Short-term and long-term loans of commercial banks;
• Horizon 2020 program Innovation (specific call SME Instrument);
• COSME program, etc.
Peters and Westerheide (2011) outline that family businesses most often decide in favour of short term
credit funding of projects, since it enables them to get the desired investment funds in the quickest
manner.Therefore, this presents the key precondition of project success which was originally imagined.
Serbia, as a candidate country for the EU membership, tends to cooperate with its European partners, to
be able to reach the EU level of development. Individual initiatives and projects of family and non-family
enterprises are all directed towards securing grants from the EU funds, and they are still very ill-coordinated
Management: Journal of Sustainable Business and Management Solutions in Emerging Economies Forthcoming
and very seldom (having in mind the activity of certain EU countries, for instance Spain, Italy and Germany).
It has to be noticed that the institutional support of the Republic of Serbia is still very inadequate (Szabo,
2013). Also, one must have in mind that the largest number of family companies in Serbia are still owned by
their founders, and that the structure of business activities (projects) is still poor and susceptible to significant
2.3 Specifics of the home (regional) market and industry
In the last 10 years in Europe, the current trend is an increase in mergers and acquisitions, where the family
businesses are increasingly directed to diversification of business activities (projects), unlike some previous
times where the strategy was predominantly on the focus within a single industry (Defrancq et al., 2016).
Erbetta et al. (2013) in their study state that there is a direct correlation between family ownership and
company performance within specific industries and markets. Mihajlovic et al. (2011) assume that systematic
decision making and project portfolio management efficiency are key (in any industry) to utilization of
designed results of the project.
Other authors complement the definition of these correlations, stating:
• Corruption is a greater threat to the family business, than to non-family companies (impact on the
competitiveness on the domestic market is critical and is weakening the potential for growth of
company sales) (Basetti et al., 2015);
• The perspective of regional development and structure of the family company has been affected by the
direct impact on the regional economy development of individual markets (Stough et al., 2015);
• The processes of succession in family companies have different influences on the performance of the
company, according to a survey covering 190 previous papers (Zahra & Sharma, 2004; Chrisman et
al., 2003);
• Marketing identity and positioning of the company as a family company, undoubtedly brings greater
effects on the market, better commercialization of ideas, than in the case of non-family companies,
according to a study covering 26 markets (Ernst & Young, 2015);
• Innovation is in some cases directly sponsored and reciprocated by the top management of the family
company, while within non-family companies that process is organized differently and realized within
specific organizational units (Kellermans et al., 2012).
According to a research by Matijas (2015), the first phase of the life cycle of the family company takes
between 15 and 25 years and in that period, there is a very large degree of deterioration of family companies.
In different markets across the EU, notable failure rate is recognized within family businesses. Matijas argues
that “in Spain from 80 to 90 percent of family businesses fail within the first five years of operation. At the
European level, the number is quite high - 60 to 90 percent, while in the United States there is a slightly
better situation.”
Special attention should be paid to IT life cycle projects and related success factors, particularly in the area
of family SMEs. Bjelica et al. (2015) revealed some of the general critical success factors in that area: clear
business objectives, expertise, agile processes and proper stakeholder management.
It can be concluded that the phase of the life cycle of the family company is a very important if not the key
factor in the success of projects, because all parameters and results depend primarily on that parameter.
Several studies have looked at the individual stages of the life cycle:
• Growth phase is limited by the level of openness for innovative projects, and it is influenced by the
choice of the right technology, as well as with the ability for quick meeting of customer needs and
demands (Adebayo, 2014);
• Phase of success, stability, or maturity, is characterized by nine factors and those can be described as
good infrastructure, optimal usage of resources, respect for legal regulations, adaptability to economic
environment twists, international partnerships, social values, explorers’ attitude, quality of human
resources, financial conditions and support (Christen et al., 2013);
• Phase of decline is a direct result of the owner’s incompetence to prioritize projects, and to effectively
predict which projects to undertake (Ahmed & Seet, 2009).
Siniša Arsić Forthcoming
Rarely has any research integrally observed and clearly defined the life cycle stages of family SMEs, and
what is more important, the purpose and application of understanding these phases, to achieve better
business results. It certainly represents a gap which should be further explored.
PwC (2014), Banalieva et al. (2015), Fernandez Araoz et al. (2015), in their reports, discuss the main external
challenges for family companies to succeed, outlining:
• Pricing competitiveness;
• Size of the market niche;
• General economic trends (significant amount of post-WWII newly founded companies in Europe are
now facing their first change of generations);
• Poor talent management;
• Pro-market reforms of the transitioning economy.
Chaarani (2014) states that for the correct comparison of success criteria across different markets, it is
necessary to bear in mind the cultural and economic situation of individual markets.Professionals /
employees in the countries of South East Europe tend more easily to accept autocratic management styles,
and are more willing to follow a project plan that has been developed by third parties. Contryry to this,
professionals / employees in the Northern-European countries seek active participation in the planning of
projects, and want a more active role in decision-making and planning of projects. Their colleagues from
Sweden recognize the need for coordination, and are willing to follow a plan that has already been prepared,
although they want to participate in its development. On the other hand, employees in Irish companies are
very reluctant to imposed control and predefined goals (success criteria) (Turner et al., 2010).
3. Discussion of theoretical research results
Success factors of projects defined in this study differ from success criteria defined in some other studies
(Holt et al., 2016; Merino et al., 2015; Gallo et al., 2004). In these studies, major “outcomes” of family
companies’ business activities are measured through:
• The value of the portfolio of projects of a family business;
• Cohesion and emotional stability of the owner’s family with family members who are employed in his
• Continuation of the business “tradition”;
• Internationalization as a consequence of family experience and culture orientation;
• Image of the company and involvement in community activities.
It must be noted that there is a clear difference in the success rates of projects in the current literature that
looks exclusively at family business and entrepreneurial ventures, compared to non-family companies
In non-family companies, the success factors are:
• The financial performance of the project, the increase in market presence (Zellweger & Sieger, 2012);
• Estimated attractiveness of innovation, which is estimated by the top management (Collins & Reutzel,
• Entrepreneurial leadership, promotion of human and social capital, the growth of all performances in
the market (Koryak et al., 2015);
The correct perception of the environment, controlled ambitions of top management for business
growth, greater flexibility and innovation, extensive use of private network of contacts (Hansen &
Hamilton, 2011);
• “Organic development”, the internal expansion of the business, good company reputation (Jamieson
et al., 2012),
• Appreciation of stakeholders, project personnel, contracting partners and main clients (Westerweld,
Management: Journal of Sustainable Business and Management Solutions in Emerging Economies Forthcoming
Siniša Arsić Forthcoming
while, in family companies, project success is measured by:
• Appointment of a non-family professional to key management positions in the firm (Minichilli et al.,
• Contribution to the long-term preservation of the family company and business, as well as a successful
balance between financial and non-financial dimensions of business. (Zellweger & Sieger, 2012);
• Owner’s actions, ownership structure, age of the owner, and a proper understanding of the objectives
and importance of the company for the family (Wallace, 2010);
Quality relationships with other family companies, whether established by the owner of the family
company as a “subsidiary” company (son of the owner is usually the owner of the subsidiary company)
or are associated with another family company (Szabo, 2013).
It must be noted that some studies have dealt with the general review of the factors of success of small and
medium-sized companies. So, Meister (2006) cites several key factors, from a well-defined mission of the
project, up to the ability to properly resolve unexpected situations and deviations from the plan. At the same
time, in the statistical report of the Enterprise Europe Network on a sample of 200 companies from EU
countries, the following success factors can be distinguished:
• 83% of projects led to the successful establishment of contacts that are the basis for further research,
• 80% of companies have participated in more than one project and 76% of companies have performed
projects related to the core business activities,
• half of the projects funded by the EU have led to new business contracts (business expansion). (EU
Commission, 2016).
In addition to this, Todorovic et al. (2015) reveal the existence of correlation between knowledge transfer and
more effective problem solving, as well as more efficient task schedule management. Xi et al. (2015)
concludes that the quality of succession plans affects the continuity of the family business activities, therefore
ongoing projects as well.
What is not deeply explored in the literature is the impact of the professionalization of staff upon the success
of projects (a new model called the “family business”), and the extent to which non-family companies record
better results as a consequence of a higher level of training and formal approach to work obligations. Also,
there was no further research on how to find factors of project success in companies which do not have the
ambition to grow, or maximize profit, because they simply want to stabilize their activities and remain in the
stability zone as long as possible.
The theoretical review concerning family and non-family business studies examined the role of managers in the creation and
execution of successful projects, institutional support for companies in Serbia and the EU, and specific industries and the
parent / regional markets in which a family company operates. The key contribution of this paper is the definition of key
success factors of projects over these three horizons, whose specific combination and configuration requires a “light” model
of project management, which should be organized around top management requirements as its primary purpose. The
second most important precondition (for success) is to establish a proper support function in the process of realization of
customer demands. The effectiveness and value of the model is crucial in assessing priorities among a number of projects,
and this was noticed particularly in case of owners of family companies. Without a direct support of top management (family
business owner), any measure of success is unnecessary because the project is not of interest to the company.
The paper clearly highlights the shortcomings of the existing literature, but there is also a fact that the business environment,
in terms of family-owned companies, has not been explored fully in Serbia, nor were specific recommendations to support
the operations of family-owned companies in Serbia initiated. Specific focus should be defined for IT industry projects,
particularly in the family business segment, since there is a clear need for such a research.
The main limitation of this paper is the fact that it does not involve a real sample of projects and opinion of experts. Further
expansion of this study concerns specific factors of success of projects in family companies in a particular market over the
period of several years, including a real sample of companies and projects executed in Serbia and the EU region.
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Siniša Arsić Forthcoming
Management: Journal of Sustainable Business and Management Solutions in Emerging Economies Forthcoming
About the Author
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(January 2017 / August 2017)
Siniša Arsić
Telekom Srbija
Siniša Arsić is currently employed at the Telekom Srbija (since 2015), where he works as
a product porfolio management associate for private mobile users. Also, he is a PhD
student at the Faculty of Organizational Sciences, University of Belgrade, studying
quantitative management at his 1st year. His main research interests, and history of
published papers, deal mainly with family businesses, project management and
innovation management. In 2014 he took part in a research and innovation project,
which applied for EU Horizon 2020 funds under specific call named SME Instrument.
The project proposal dealt with research innovation involving a Serbian SME, two
Italian SMEs and a Slovenian research institute for quality and standardization.
... Međutim, nepravedno bi bilo nekritički prihvati takvu tvrdnju, obzirom da postoji dejstvo brojnih internih i eksternih faktora. U Srbiji postoji relativno razvijen sistem mikrofinansiranja preduzeća (Lazarevic-Moravčevic, et al., 2018; Arsić, 2018), mada je glavno usmerenje finansijera usmereno na stabilne firme sa dužim stažom na tržištu, i pozitivnim rezultatima poslovanja. Ukoliko se kao finansijeri pojavljuju banke, sasvim je logično da nijedna ne bi trebalo da odobri kredit, bez odgovarajućih sistema obezbeđenja. ...
... The conducted research rejects the claim that the perspective of regional development of family business is under direct influence if regional economic development of individual markets (Arsić, 2018). Conducted research results would maybe be different if more companies of different organization structures and cultures, as well as organizations that don't belong to the family business were researched. ...
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This paper examines the existence of a cause-and-effect relationship between state funding and the lifespan of startup companies in Serbia. The literature is dominated by two opposing views. According to first, there is a positive impact of state financial support on the growth and the survival rate of companies. On the other hand, the prevailing notion is that state financial support for startups, especially in countries in transition, is less efficient than other state measures. The goal of this paper is to evaluate the effectiveness of state financial support for newly formed companies in Serbia, given the contradictory results presented. The starting assumption is that the financial resources that the state allocates through subsidies and dedicated loans for start-up companies in Serbia has a positive effect on the duration of their lifespan. The survey covered 100 companies that had been founded in the period of 5 to 6 years. The data obtained was statistically analyzed using appropriate non-parametric methods. Results show the presence of a positive impact of state funded support on the lifespan of start-up companies in Serbia. The results obtained can help further define state policies for the development of small and medium-sized enterprises.
... The table below contains a potential set of variables divided by segment, which can be discussed and broadened within a qualitative research. Research Parameters Organization [22][23][24] Owner is the same person as the CEO -a parameter that identifies the owner with the chief manager, with the idea of understanding if there is a concentration of power in the image of the owner; CEO is the same person as the professional manager -similar to the previous parameter, with the exception that this parameter allows testing the differences between the owner (s) occupying the position based on previous experience, or based on the formal level of expertise (validated by the academic institution or certification body); The owner already had a company (which went bankrupt, or was sold) -a parameter which provides an insight into the history of previous endeavours of the owner, which can contribute to the future quality of decision-making; Level of corporate culture -a parameter that talks about the compliance of the mission and the vision of top management members and company owners Strategy [25,26] Impact of consumers -a parameter which defines to whom it is intended to offer products and services of a company, to a public or private owned company, operating in foreign or domestic market; Market competition -a parameter which defines the level of competition on the market where the company markets goods; Suppliers -parameter describing the length of the chain in the process of production or service delivery, as well as the diversity of the network of associates The share of online sales in total sales -a parameter that shows the level of supply representation in all cities and regions where there is no physical place for selling products and services; Level of innovativeness -the number of innovations in the phase of the idea (approved by management), which are not yet in the prototype stage or brought to commercialization; (continued) By evaluating individual, organizational and market performances, while taking into account the trends and institutional framework for the operations of a particular company, it is possible to use an integral model, which can be further upgraded, and which serves the management as a modern tool for everyday use. In addition, the defined quantitative model is also an excellent input for the continuous analysis of the trend by the company's life cycle phases, which can be used by individual users and organizations, which in different ways provide the resources necessary for the functioning of profit-oriented companies (institutions of the government, banks, investment funds, etc.). ...
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In this paper, an overview of existing methods and techniques of quantitative management has been elaborated, which can be used for the definition of an integral model for management support. A special focus is on the needs of management in terms of a gradual, scientific approach to the organization’s management processes, appropriate methodologies and techniques, validation and verification tools for defined models. The subject of the research is an analysis of the scope and parameters necessary for defining an integral model for support of management in profit-oriented companies. In addition to analysis of the input parameters for the model and analysis of the output parameters from the model, the subject of the research includes defining the ways to implement the model in everyday business practice.
... Parallel with the development of national economy and banking sector, project finance in Serbia has experienced a positive, rising trend, thereby attracting a significant attention of researchers and academic community. Research of domestic market in the domain of project finance refers to risk evaluation of project finance in Serbia [2,3], potential and challenges of project finance of renewable energy sources [4], capital structure [5,6], analysis of methodologies of project finance and their applicability depending on the type of project [7], analysis of key factors of successful project realisation in family enterprises [8], project management in the public sector [9], influence of intellectual capital on project performances [10], etc. The aim of the paper is to present and analyse the principles ofproject finance in the housing construction and point the challenges and potentials of this market segment. ...
Conference Paper
Full-text available
Project finance is characterised by a range of specific features in comparison with standard financing sources such as corporative or credit financing. In most cases, the difference arises from the characteristics of the borrower and way of generating cash for loan repayment. Accordingly, if the project has passed the elimination criteria, that is, golden rules of project finance, it can be regarded as potentially suitable for financing. The application of project financein the Republic of Serbia is a consequence of experience and expertise of leading foreign banks, due to need for further expansion on the market, but also in changes that happened in the banking sectors by implementation of Basel regulations. The paper aims to point to the general principles of project finance on an example from business practice and to analyse capability of financing in the area of residential construction, appreciating the fact that significant diversifications of project finance in the Republic of Serbia can be expected in the forthcoming period.
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1. INTRODUCCIÓN La cuarta revolución industrial está sucediendo ahora y como las anteriores se construye a partir de la última revolución, en este caso de la tercera revolución y de la revolución digital que empezó a emerger a mediados del siglo pasado (Sentryo, 2017; Viharos, Soós, Nick, Várgedő y Beregi, 2017). Esta cuarta revolución se distingue por la unión de tecnologías, que hace que se borren las líneas entre lo físico, lo digital y lo biológico para desarraigar completamente las industrias de todo el mundo (Sentryo, 2017; Viharos et al., 2017).
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This paper focuses on micro, small and medium-sized enterprises in Serbia, with a special emphasis on family-owned businesses. The main goal of this research is to analyze family business owners’ perception of stress caused by high levels of responsibility and flexible working hours, as well as to analyze the influence of family member employees on the success of a company. This research has confirmed that high levels of responsibility and flexible working hours do not represent important factors for giving up on starting a business. Furthermore, owners perceive these two stressors as “positive” stress. The second important result of this study is that a large number of family member employees, and unclear hierarchy between them, can endanger a company’s success in terms of annual income and annual turnover.
Full-text available
The main objective of the paper is to identify the sources of competitive advantage of small and medium-sized enterprises in Serbia. Gaining a competitive advantage is the key priority of market-oriented enterprises regardless of their size and sector. Since business environment in Serbia is not stimulating enough for enterprises’ growth and development, the paper highlights the role of strategic orientation in business promotion and development. In order to identify the sources of competitive advantage, the empirical research is conducted by using the survey method. The research sample is created by using a selective approach, namely, the sample includes enterprises with more than ten employees, and enterprises identified to have the potential for growth and development. The research results indicate that small and medium-sized enterprises in Serbia are generally focused on costs as a source of competitive advantage, i.e., they gain competitive advantage in a selected market segment by offering low price and average quality products/services. In addition, the results of the research point out that the Serbian small and medium-sized enterprises are innovation-oriented. Organizations qualifying as middle-sized enterprises are predominantly focused on process innovations, while small businesses are primarily oriented towards product innovations. One of the limitations of the research refers to the small presence of the research sample within the category of middle-sized enterprises. The smaller sample presence than it was previously planned is mostly due to the lack of managers’ willingness to participate in the research, as well as to the fact that these enterprises account for the smaller share in the total number of enterprises in the small-and medium-sized enterprises’ sector. Taking into account that the sector of small and medium-sized enterprises generates around 30% of the country’s GDP, we consider the research results to be beneficial for both scientific and professional communities, as well as for economic policy makers in Serbia.
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This article examines the role of top managers in shaping the innovation investment actions of small and medium-sized enterprises (SMEs) in India. Survey responses from 477 top managers of Indian SMEs suggest that investment in innovation is influenced by top manager perceptions of innovation opportunity attractiveness as well as ability to appropriate innovation investment value. Specifically, the results indicate an inverted U-shaped relationship between top manager entrepreneurial orientation and firm investment in innovation and also suggest that top manager perceptions of environmental munificence, firm resource management capabilities, and organizational controls are positively related to firm investment in innovation.
Full-text available
This study investigates the success factors that can influence the performance and the continuity of the French and Lebanese family firms. Based on the literature review, the performance of the family firms was found to be linked to effective success keys like the succession planning, networking strategy, financial structure, management practices and finally the governance structure. Effectively, the results of this study indicate that French family firms are linked to four success keys (Planning for Succession, Using of Emotional intelligence, Professional HR management and Long Term Overview) while the Lebanese family firms are linked to five success keys (Financial structure with low leverage, Planning for Succession, Using of Emotional intelligence, professional HR management and Governmental Networking). Due to the non-significant impact of governance structure, an advanced investigation has been applied to detect the impact of this variable on the performance of family firm. The results of this advanced study indicate a negative correlation between the performance of family firms and the board of directors' size. Moreover, a positive correlation has been found between family firm performance and the presence of the outsiders in the board of directors.
We revisit the question of family firms (FFs) and their capacity for internationalization, and link it to the literature on national competitiveness. We draw widely on the FF competitive advantage and internationalization literature to argue that FFs’ organizing preferences and capabilities will typically support exporting and that these same organizing preferences will mitigate against outward FDI, two dimensions of national competitiveness. Using the logic of aggregation, we hypothesize that family firm prevalence (FFP), measured at the country level, negatively moderates a series of country-level variables associated with country outward FDI, and positively moderates a series of variables associated with country exports.We develop a unique dataset on FFP across countries using a novel method in which we extract estimates from from both published and unpublished academic studies. We develop empirical tests that are rooted in Porter's Competitive Advantage of Nations (Porter, 1990), and its extensions in the Global Competitiveness Index (GCI). Our results provide consistent confirmation of the positive moderator effect of FFP on country export performance hypothesis, but contrary to expectation, higher FFP in a country has a null or positive effect on outward FDI at the country level, thus suggesting a more nuanced view of FF strengths and weaknesses. We conclude by discussing the implications of these results for both the competitiveness and the FF literatures.
Family firms are distinguished theoretically from nonfamily firms due to their pursuit of unique, family-related aspirations and goals. The pursuit of these aspirations and goals leads many family firms to define success or failure in terms of a broader set of outcomes than nonfamily firms. Despite this, family firm research has generally taken a constricted view of family firm outcomes by concentrating on narrowly defined financial performance as measured by accounting and/or market-based indicators. We contend that this somewhat myopic focus has slowed the field’s development to some degree, by constraining our ability to test its fundamental tenets. To address this, we draw on several disciplines to systematically order family firm outcomes within a family firm(s) outcomes model that encompasses both financial and nonfinancial dimensions. While financial performance is important in research and practice, herein we refer to both financial and nonfinancial outcomes and explain how these outcomes map on the family unit and the family firm. Furthermore, we suggest measures that can be used and explain how the model can be applied when researchers select financial and nonfinancial outcomes important to family members as the family firm’s success or failure is gauged.
We investigate how family ownership influences the industry-diversifying nature of M&As by listed companies in Continental Europe and the corresponding shareholder value effects at deal announcement. For a large sample of 3485 M&As during 2005–2013, we observe that acquirers having a family as the largest shareholder are less inclined to take over an unrelated target firm than lone-founder and other types of non-family firms. However, as the size of the family ownership stake increases, family firms become more eager to follow an industry-diversifying M&A strategy. While industry-diversifying M&As are associated with lower abnormal returns for acquirer shareholders on average, we also observe that family ownership fully reverses this negative effect. We therefore conclude that those unrelated M&As, although still representing a conflict of interest with the family firm’s minority investors, do not destroy shareholder value on average.
This paper focuses on micro, small and medium-sized enterprises in Serbia, with a special emphasis on family-owned businesses. The main goal of this research is to analyze family business owners’ perception of stress caused by high levels of responsibility and flexible working hours, as well as to analyze the influence of family member employees on the success of a company. This research has confirmed that high levels of responsibility and flexible working hours do not represent important factors for giving up on starting a business. Furthermore, owners perceive these two stressors as “positive” stress. The second important result of this study is that a large number of family member employees, and unclear hierarchy between them, can endanger a company’s success in terms of annual income and annual turnover.