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Article
Publication date: 25 June 2020

Ann Sophie K. Löhde, Giovanna Campopiano and Andrea Calabrò

Challenging the static view of family business governance, we propose a model of owner–manager relationships derived from the configurational analysis of managerial…

Abstract

Purpose

Challenging the static view of family business governance, we propose a model of owner–manager relationships derived from the configurational analysis of managerial behavior and change in governance structure.

Design/methodology/approach

Stemming from social exchange theory and building on the 4C model proposed by Miller and Le Breton-Miller (2005), we consider the evolving owner–manager relationship in four main configurations. On the one hand, we account for family businesses shifting from a generalized to a restricted exchange system, and vice versa, according to whether a family manager misbehaves in a stewardship-oriented governance structure or a nonfamily manager succeeds in building a trusting relationship in an agency-oriented governance structure. On the other hand, we consider that family firms will strengthen a generalized exchange system, rather than a restricted one, according to whether a family manager contributes to the stewardship-oriented culture in the business or a nonfamily manager proves to be driven by extrinsic rewards. Four scenarios are analyzed in terms of the managerial behavior and governance structure that characterize the phases of the relationship between owners and managers.

Findings

Various factors trigger managerial behavior, making the firm deviate from or further build on what is assumed by stewardship and agency theories (i.e. proorganizational versus opportunistic behavior, respectively), which determine the governance structure over time. Workplace deviance, asymmetric altruism and patriarchy on the one hand, and proorganizational behavior, relationship building and long-term commitment on the other, are found to determine how the manager behaves and thus characterize the owner's reactions in terms of governance mechanisms. This enables us to present a dynamic view of governance structures, which adapt to the actual attitudes and behaviors of employed managers.

Research limitations/implications

As time is a relevant dimension affecting individual behavior and triggering change in an organization, one must consider family business governance as being dynamic in nature. Moreover, it is not family membership that determines the most appropriate governance structure but the owner–manager relationship that evolves over time, thus contributing to the 4C model.

Originality/value

The proposed model integrates social exchange theory and the 4C model to predict changes in governance structure, as summarized in the final framework we propose.

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Book part
Publication date: 30 November 2020

Edem M. Azila-Gbettor, Robert J. Blomme, Ad Kil and Ben Q. Honyenuga

The study examines organization citizenship behavior (OCB) as a mediating variable between instrumental work values (IWVs) and organizational performance; and group…

Abstract

The study examines organization citizenship behavior (OCB) as a mediating variable between instrumental work values (IWVs) and organizational performance; and group differences between family manager and nonfamily manager for integrated models in family hotels. Data were collected from 189 hotels (n = 921) ranging from budget to three-star family hotels in Ghana using questionnaire administered conveniently. Data were analyzed using structural equation modeling. Work value positively influences OCB and organizational performance of family hotels. OCB mediates the relationship between work values and organizational performance. The study also found significant support for group differences between family and nonfamily firms for IWVs and mediating effect of OCB on the relationship between IWVs and performance.

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Article
Publication date: 28 August 2020

Gülçin Polat

Although it has been implicitly or explicitly assumed that family business professionalization is indeed a multidimensional construct, there has been a tendency to confine…

Abstract

Purpose

Although it has been implicitly or explicitly assumed that family business professionalization is indeed a multidimensional construct, there has been a tendency to confine it to the employment of nonfamily managers and delegating authority in academic research. Dekker et al. (2013) have made an impressive work in untangling the multidimensional structure of family business professionalization. This paper aims to introduce a more comprehensive multidimensional approach and a framework to understand and study family business professionalization by identifying additional dimensions.

Design/methodology/approach

The conceptual framework relies on insights derived from the literature on family business professionalization, occupational professionalism and organizational professionalism to reveal the broader multidimensionality of family business professionalization.

Findings

The proposed framework extends the definition of family business professionalization and offers additional dimensions which were grouped under five overarching headings: professionalization of management, professionalization of organizational structure, processes and operations, professionalization of family's relationship with business, professionalization of employees and professionalization of work environment and culture.

Originality/value

This paper contributes to the literature by providing a wider approach for the understanding of family business professionalization. It presents a new way of thinking about family business professionalization, underlining the importance of employees and organizational culture for the professionalization process in family firms.

Details

Journal of Family Business Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2043-6238

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Article
Publication date: 2 April 2019

Mario Ossorio

The purpose of this paper is to shed light on the propensity of family firms to join a cross-border acquisition as acquirers.

Abstract

Purpose

The purpose of this paper is to shed light on the propensity of family firms to join a cross-border acquisition as acquirers.

Design/methodology/approach

The present study analyzes a sample of 270 acquisitions in the period 2015–2017 whose acquiring firms are represented by family and nonfamily listed European firms.

Findings

The results point out that family firms are less likely to make a cross-border acquisition than nonfamily counterparts.

Research limitations/implications

Mergers and acquisitions (M&A) activity is cyclical by nature, represented by waves of concentrated intensity rather than necessarily by constant activity over time. Therefore, the main limitation is represented by the period analyzed (2015–2017), which restricts the possibility of seizing a greater number of transactions.

Practical implications

If careful evaluation leads to the consideration of M&A as the optimal mode of entry into a certain foreign market, family firms should broaden the pool from which managers are selected in order to access more qualified staff, who are able to face international M&As.

Originality/value

In recent years, a growing body of literature has focused on the effects of family ownership on the propensity of making an M&A, on the method of payment chosen by an acquired family firm, and on the reaction of the market at the announcement of a family business’ M&A. However, despite of the relevance of the entry modes of firms’ internationalization strategies, scant attention has been devoted to cross-border M&As conducted by family firms, which occur when a family firm acquires a firm located in a foreign country. In order to fill the research gap, this work investigates the likelihood of a family firm’s acquisition of a foreign target.

Details

EuroMed Journal of Business, vol. 14 no. 2
Type: Research Article
ISSN: 1450-2194

Keywords

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Book part
Publication date: 8 July 2010

Alex Stewart and Michael A. Hitt

Are the social domains of kinship and business on balance complementary or contradictory? Do ventures that invest heavily in both – conventionally referred to as “family

Abstract

Are the social domains of kinship and business on balance complementary or contradictory? Do ventures that invest heavily in both – conventionally referred to as “family firms” – bear a net gain or net loss? We are scarcely the first to raise these questions. How then will we try to contribute to an answer? We try this in five ways, all of them based on previous literature. First, we develop the dichotomy of kinship and business by taking seriously the metaphor of yin and yang, merging it with the anthropological constructs of structural domains such as “domestic” and “public.” This metaphor proves to shed light on the relevant literature. Second, we provide a qualitative survey of the costs and benefits of kinship in business. Third, we summarize the empirical work that addresses the performance outcomes from family involvement. Fourth, we consider the practitioner implications of these studies. Finally, we ask if scholars are as yet in a position to answer these questions.

Details

Entrepreneurship and Family Business
Type: Book
ISBN: 978-0-85724-097-2

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Article
Publication date: 19 June 2017

Antonio Leotta, Carmela Rizza and Daniela Ruggeri

Succession in family firms may determine the survival or the failure of the business itself. Management accounting literature has added little to this issue, mainly…

Abstract

Purpose

Succession in family firms may determine the survival or the failure of the business itself. Management accounting literature has added little to this issue, mainly focusing on the process of succession and change (Songini et al., 2013; Giovannoni and Maraghini, 2013; Giovannoni et al., 2011). This study aims to deal with new management accounting (MA) practices that the junior generation may introduce during the process of succession. The aim of the study is to show that the introduction of new MA practices can contribute to constructing the leadership profile of the junior generation.

Design/methodology/approach

Drawing on the perspective of actor-reality construction (ARC), the authors conducted a case study at a small-sized family firm producing solar shading systems. The authors examined how the construction of the successor’s leadership derives from the integration of four dimensions of reality: facts, possibilities, values and communication. Such an integration is facilitated by the introduction of a new accounting information system and cost reporting.

Findings

The case evidence highlights that the construction of the new generation leadership may emerge as a consequence of the introduction of new MA practices. Moreover, the field evidence highlights that the construction of a new generation leadership is a process that integrates the four dimensions of reality.

Originality/value

From the emergent perspective of ARC, the paper highlights how new MA practices play an active role in constructing the new generation leadership.

Details

Qualitative Research in Accounting & Management, vol. 14 no. 2
Type: Research Article
ISSN: 1176-6093

Keywords

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Article
Publication date: 22 July 2020

Giulia Flamini, Luca Gnan and Massimiliano Matteo Pellegrini

This paper explores the field of human resource management (HRM) in family firms, assessing the evolution of this research through a four-domain model that reflects the…

Abstract

Purpose

This paper explores the field of human resource management (HRM) in family firms, assessing the evolution of this research through a four-domain model that reflects the relationships between cognitions, actions and performances associated with organizational choices.

Design/methodology/approach

The authors have performed a bibliometric review of 363 peer-reviewed papers from over the past four decades (1976–2016) in order to provide activity indicators for the overall phenomenon and systemize the entire body of literature into specific HRM strategy domains or practices, using a double-entered pivot table.

Findings

The study framework provides managerial implications with regard to the HRM decisions made when attempting to improve human capital in family firms. Accordingly, the authors view HRM-centered decisions and strategies in family firms as ways to scan for and appraise contingent dimensions, make sense of the current environment, make good choices and achieve high performance levels.

Originality/value

The authors offer this four-domain theoretical scheme as a framework through which the field can be interpreted, proposing some potential avenues for moving forward.

Details

Journal of Family Business Management, vol. 11 no. 3
Type: Research Article
ISSN: 2043-6238

Keywords

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Article
Publication date: 29 April 2021

Mohammad Rezaur Razzak, Suaad Jassem, Alima Akter and Syed Abdulla Al Mamun

The purpose of this research is to examine the interplay between family commitment as a family-centric resource and professionalization of the organization as a…

Abstract

Purpose

The purpose of this research is to examine the interplay between family commitment as a family-centric resource and professionalization of the organization as a firm-centric resource to determine how the two phenomenon come together to enhance business performance in the context of privately held family firms.

Design/methodology/approach

Deploying the theoretical lens offered by the resource-based view, a conceptual link is developed between family commitment to the firm and firm performance with the potential moderating influence of firm professionalization. The hypotheses are tested using data collected from 357 privately held medium-to-large family-owned manufacturing companies in Bangladesh. The data are analyzed through structural equation modeling using SmartPLS (v.3.2).

Findings

The data analysis suggests that in absence of the moderator; professionalization, family commitment has a positive and significant association with firm performance. While in the presence of the moderator the above relationship is substantially stronger. The findings indicate that when family-specific resources and firm-specific resources are synchronized, it enhances performance of the family firm and puts it on a strong economic footing toward a more sustainable future.

Research limitations/implications

Cross-sectional nature of the study exposes it to the specter of common method bias despite the fact that procedural remedies were initiated to minimize the impact of such occurrence. Furthermore, data were collected from a single individual in each organization. Therefore, a longitudinal study with data obtained from multiple individuals at different levels of the organization would possibly yield more robust findings.

Practical implications

Leaders of family firms may find pertinent clues from the outcome of this study. Particularly, the confluence of family commitment to the firm as a family-specific resource and professionalization as a firm-specific resource can be valuable, rare, difficult to imitate and substitute source of competitive advantage for the family business organization.

Social implications

Survival of family businesses is vital to the global economy as one of the primary drivers of global gross domestic product growth and source of new employment. Policymakers can benefit from the findings of this study to customize policies to nurture growth of family enterprises and incentivize family firms to adopt professionalization through better governance and transparent managerial procedures.

Originality/value

A nuanced understanding of how family commitment and firm professionalization combine to significantly improve performance of family firms has not been dominant in the literature. Therefore, findings of this study carry special theoretical implications, because it suggests that both family-specific features and firm-specific features are necessary for enhanced levels of firm-centric business outcomes such as economic performance.

Details

Journal of Small Business and Enterprise Development, vol. 28 no. 5
Type: Research Article
ISSN: 1462-6004

Keywords

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Article
Publication date: 1 April 2020

Shabir Ahmad, Rosmini Omar and Farzana Quoquab

The objective of this research is to investigate the influence of family involvement in business and innovation capability on sustainable longevity of family firms.

Abstract

Purpose

The objective of this research is to investigate the influence of family involvement in business and innovation capability on sustainable longevity of family firms.

Design/methodology/approach

Data collected from 553 executives of 200 family firms that survived to the second generation and beyond was analyzed using partial least square (PLS) approach of structural equation modeling (SEM) to test the hypotheses and validate the model.

Findings

The results provided evidence of the significant influence of family involvement in business on sustainable longevity of family firms and partial mediation of innovation capability between family involvement in business and corporate sustainable longevity.

Research limitations/implications

The sample included family firms owned and governed by the owner family. The future researchers may focus on professionally managed or publicly listed family firms.

Practical implications

The path to family firms' sustainable longevity goes through innovation capability apart from effective family control, succession, commitment to the business and family enrichment. That requires the family firm to be proactive in innovation capability.

Originality/value

Family firms are the dominant form of business representing around 80% of global business structure that strives for survival and consistently pursues sustainable longevity strategies. In the current globally competitive environment, innovation capability has become a matter of life and death for any firm. Based on the transaction cost economics (TCE) theory of family firms, this study proposes an integrative model of sustainable longevity for family firms.

Details

Journal of Family Business Management, vol. 11 no. 1
Type: Research Article
ISSN: 2043-6238

Keywords

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Article
Publication date: 2 March 2021

María Comino-Jurado, Sonia Sánchez-Andújar and Purificación Parrado-Martínez

This paper examines how differences in the family involvement in a family business can influence its level of indebtedness. Assuming the influence of family is not the…

Abstract

Purpose

This paper examines how differences in the family involvement in a family business can influence its level of indebtedness. Assuming the influence of family is not the same for all family firms, we consider each company as a combination of the family involvement in three dimensions of the business: ownership, management and governance structure.

Design/methodology/approach

Using the partial least squares technique allows us to address the heterogeneity of family firms through an integral concept of family involvement in business that jointly considers the level of family participation in the ownership, management and governance structure of each firm.

Findings

Our results demonstrate that the level of family involvement in a family firm, considering the heterogeneity existing within the family business group, directly influences its level of indebtedness. In addition, we find that family involvement in ownership and governance structures individually considered are positively related to the level of indebtedness of the family business.

Originality/value

Our findings prove that some indebtedness patterns, which previous literature has described as common to all Spanish family businesses, may actually be valid only for specific family firms with a particular level of family involvement. In addition, the way of measuring family business heterogeneity through our integral concept of family involvement can be replicated by other authors because of the manageability of the items, thus contributing to an increased understanding of the effects of family involvement in firms' development.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

Keywords

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