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1 – 10 of 836Ann 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 behavior and…
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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Daniel Magalhaes Mucci, Ann Jorissen and Fábio Frezatti
The paper investigates whether a family firm's control context is directly associated with a manager's stewardship attitude or whether this relationship is mediated by the…
Abstract
Purpose
The paper investigates whether a family firm's control context is directly associated with a manager's stewardship attitude or whether this relationship is mediated by the manager's perception with respect to the fairness of the control processes.
Design/methodology/approach
The authors have sent a survey to family businesses in Brazil. The authors tested the hypotheses with the data collected from 141 responding family and nonfamily managers with the use of structural equation modeling (SEM) analyses (SmartPLS).
Findings
The authors find that more participative and more formal controls are associated with higher procedural justice perceptions. Zooming in on the types of control, namely forward-looking action controls, like target setting (TS), and backward-looking results controls, like performance measurement (PM), the authors observe that TS is significantly positively associated with stewardship identification through a manager's procedural justice perceptions for both control characteristics (partial mediation for participative TS and full mediation for formal TS). PM on the other hand is only significantly directly related to a stewardship identification if it is of a participative character. In addition, the authors find a significant moderating effect of family affiliation, increasing the strength of the association between PM procedural justice and stewardship identification for nonfamily managers.
Originality/value
Prior literature focused on discussing stewardship attitudes and behaviors in family firms, but few provided empirical evidence that a stewardship attitude in a family firm is associated with contextual factors, like the design of controls in family firms in combination with a manager's individual perception of family firm's process factors.
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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…
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.
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Gülçin Polat and Serap Benligiray
This study aims to broaden the multidimensional conceptualization of family business professionalization, and to investigate how professionalization influences the financial…
Abstract
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.
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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.
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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 focusing on…
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.
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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.
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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 firm-centric…
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.
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Alexander Kessler and Viktoriya Zipper-Weber
Born-again global internationalization is a rarely researched topic. Especially process-oriented studies are largely missing. In loss modes concerning their socioemotional wealth…
Abstract
Purpose
Born-again global internationalization is a rarely researched topic. Especially process-oriented studies are largely missing. In loss modes concerning their socioemotional wealth (SEW), family businesses take more risks and can be informative examples of born-again global internationalization.
Design/methodology/approach
This article analyzes the process of born-again global internationalization of a mature family business triggered by succession in an SEW loss mode. The interplay of dynamic capabilities (DCs) as drivers and SEW preservation guides the in-depth analysis based on an interpretative single case study design.
Findings
The analysis reveals a model with (1) the personal and familial level of the business family, (2) the bonding and transfer level between the business family and the family business and (3) the organizational level as three levels of DCs as drivers of born-again global internationalization in family businesses and SEW preservation as a continuously influencing context.
Originality/value
The article contributes to push forward the fragmented level of knowledge in the field of born-again global internationalization of family businesses. It brings together the triggering phase of born-again global internationalization with the later phases (driving successful rapid internationalization). In particular, it explores how the triggering factors on the family level can be translated into the development of capabilities on the firm level to drive successful internationalization. Based on these insights, the article offers novel implications for research and practice.
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The aim of this paper is to explore the family firms' propensity to undertake R&D investments after going public, showing how it varies due to the ownership structure.
Abstract
Purpose
The aim of this paper is to explore the family firms' propensity to undertake R&D investments after going public, showing how it varies due to the ownership structure.
Design/methodology/approach
The analysis is based on a sample of 132 French and Italian family and nonfamily IPOs in the period 2013–2018.
Findings
The empirical findings show a positive relationship between the quantity of post-IPO shares retained by family owners and R&D investments. Furthermore, the abovementioned relationship is negatively affected by the generational stage and positively by the presence of a lone founder.
Practical implications
Outside investors of family firms may be assured in buying shares of founding family firms after going public because they are stimulated to undertake R&D investments and therefore create overall value in the long term. Furthermore, external managers of lone-founder and first-generation family firms can adopt innovation investments without fear of being replaced as a consequence of a hostile takeover. Lastly, private equity should support later generation family IPOs, providing them with capital and managerial skills in order to generate value for shareholders.
Originality/value
Past studies have mostly shown family firms' reluctance to undertake R&D investments; however, scholars have focused on private or public family firms, ruling out the analysis of family firms' innovation behaviour within the setting of an IPO. To the best of the author's knowledge, this study represents the first empirical attempt to investigate the relationship between family firms and post-IPO innovation investments, when the capital infusion relaxes the financial constraints of family firms.
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