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The internationalization of family-firms: a signal detection approach

Giacomo Laffranchini (College of Business and Public Management, University of La Verne, La Verne, California, USA)
John S. Hadjimarcou (Department of Marketing and Management, The University of Texas at El Paso, El Paso, Texas, USA)
Si Hyun Kim (College of Business and Public Management, University of La Verne, La Verne, California, USA)
Mike Braun (School of Business Administration, University of Montana, Missoula, Montana, USA)

Journal of Family Business Management

ISSN: 2043-6238

Article publication date: 10 October 2016

428

Abstract

Purpose

The purpose of this paper is to explore the internationalization process of small and medium family-owned businesses (FOBs). The authors strive to explain the extent to which family business CEOs identify a signal in either the domestic or international environment for internationalization as a viable business opportunity.

Design/methodology/approach

The authors rely on signal detection theory to develop a conceptual model that explains the cognitive process inducing the CEO-founder of an FOB to discover and exploit an opportunity in the international market.

Findings

The conceptual model proposes that constraints in a family-firm’s domestic market, as well as opportunities in the foreign market act, as signal strength. However, family business CEO-founders’ centrality and inward orientation might lead them to ignore a signal by generating noise and reducing the motivation to collect further information concerning the trustworthiness of the signal.

Research limitations/implications

The model is conceptual; future research should strive for a potential way to operationalize the cognitive process described herein. In addition, the theoretical argument has been developed in the context of family firms wherein the founder plays a pivotal role. Future research may extend the theoretical arguments to those family firms that are at an advanced stage of development.

Originality/value

The study reconciles conflicting findings concerning the internationalization of FOBs. In doing so, the authors employ an interdisciplinary approach and develop a conceptual model that sheds additional light on the cognitive processes underlying internationalization decisions among founder-centered family firms.

Keywords

Citation

Laffranchini, G., Hadjimarcou, J.S., Kim, S.H. and Braun, M. (2016), "The internationalization of family-firms: a signal detection approach", Journal of Family Business Management, Vol. 6 No. 3, pp. 291-309. https://doi.org/10.1108/JFBM-11-2015-0039

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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