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Book part
Publication date: 28 November 2022

Araceli Almaraz Alvarado and Javier Vidal Olivares

The internationalization process in recent decades has been discussed from different approaches. In this chapter, we study the evolution of selected Latin American and Spanish…

Abstract

The internationalization process in recent decades has been discussed from different approaches. In this chapter, we study the evolution of selected Latin American and Spanish companies that have experienced a growing evolution from small or medium-sized enterprises to large corporations with participation in global markets and a strategic role played by the family organizations and small business groups. It is a study of multiple cases scope focused on two main lines of discussion. In one hand, the trajectories of internationalization and, and the other, the family firm organization and structure, correspondingly to sectorial aspects and the global situations that have encouraged the expansion of markets, the acquisitions of assets outside the countries of origin, and the outsourcing system. The group of companies selected to discuss the heterogeneity of the internationalization processes is based in case studies: Lojas Amerianas-Brazil, Crystal Lagoons-Chile, Despegar.com-Argentina, Sol-Meliá, Spain, Ferrovial, Spain, Talgo, Spain. Among the findings of this comparative study, the following stand out: (1) debates about the family business are alive, (2) multidimensional perspectives between countries are needed to understand not only internationalization but also the relevance of competitive learning, entrepreneurial vision evolution, and diversity of trajectories between sectors and companies, and finally (3) the importance of culture and immigration in business and family development from Small and Medium Enterprises (hereafter SME) to large businesses.

Open Access
Book part
Publication date: 14 December 2023

Stefan Prigge and Katharina J. Mengers

This chapter presents the current research status of family constitutions from an economics perspective. It locates the family constitution as part of the family and business…

Abstract

This chapter presents the current research status of family constitutions from an economics perspective. It locates the family constitution as part of the family and business governance structure of a family firm and the owner family. The typical structure and content of a family constitution are introduced. The chapter focuses on the status of research about family constitutions and provides a structured map for future research. With regard to extant research, it must be stated that the stock of literature is small. The contributions to literature are categorized in surveys; conceptual contributions; survey data; small sample, qualitative, empirical studies; and big sample, quantitative, empirical studies. The latter group includes three studies with a separate family constitution variable. This small number symbolizes that the family constitution still is an under-researched area. Therefore, family constitution research is far away from being able to answer central questions of advice-seeking owner families like, for example, whether a family constitution affects family performance, firm performance, or both; or whether the development process of a family constitutions disposes of an effect on family or firm performance separately from the hypothesized effect of the family constitution document.

Book part
Publication date: 17 July 2014

Hasnah Kamardin

The main purpose of the study is to examine the influence of family directors on the firm performance of public listed companies (PLCs) in Malaysia. This study provides empirical…

Abstract

Purpose

The main purpose of the study is to examine the influence of family directors on the firm performance of public listed companies (PLCs) in Malaysia. This study provides empirical evidence on the agency problems between controlling shareholders and minority interests in the concentrated ownership setting.

Design/methodology/approach

Samples of the study are 112 PLCs in year 2006. Two measures of firm performance are used: return on assets (ROA) and Tobin’s Q. Managerial ownership refers to the percentage shareholdings of executive directors with direct and indirect holdings. It was further categorized into family ownership and non-family ownership.

Findings

In relation to ROA, managerial ownership is found positively significant. The results also show that the positive relationship between managerial ownership is contributed by the managerial-non-family ownership. In relation to Tobin’s Q, the results show a U-shape with turning point at 31.38% for managerial ownership and 28.29% for the managerial-family ownership. The results found significant and positive relationships between managerial ownership and both measures of firm performance which indicates that managerial ownership and family ownership yield greater efficiency.

Research implications

The study highlights the effects of corporate governance on ROA and Tobin’s Q are somewhat different. It provides some evidence on the need to use appropriate measure of firm performance. The significant relationship supports the argument of Chami (1999), Fama and Jensen (1983), and DeAngelo and DeAngelo (1985) and empirical evidence of Lee (2004) that family ownership enhances monitoring activities.

Originality/value

Differentiating the types of managerial ownership into family and non-family categories enriches our knowledge about who actually contributes to the improved performance.

Details

Ethics, Governance and Corporate Crime: Challenges and Consequences
Type: Book
ISBN: 978-1-78350-674-3

Keywords

Book part
Publication date: 28 August 2020

Xileidys Parra, Xavier Tort-Martorell, Fernando Alvarez-Gomez and Carmen Ruiz-Viñals

Rational use of the information available to companies is one of the strategic concerns for both family businesses and non-family businesses. The aim is to make the best use of…

Abstract

Rational use of the information available to companies is one of the strategic concerns for both family businesses and non-family businesses. The aim is to make the best use of the information resulting from data analysis in order to gain strategic advantage and to be more competitive as a company in all its functional areas. Experience indicates that emotions play an important role, especially in family businesses. Many maturation models exist to analyze decision-making processes (DMPs), but none from the perspective of family business cognition. The authors start from their own “Circumplex Hierarchical Representation of Organisation Maturity Assessment” (CHROMA) model (Parra, Tort-Martorell, Ruiz-Viñals, & Alvarez-Gomez, 2017), which was created to support decision processes in family businesses. This model was proven successful in the analysis of DMPs in large family businesses. The model was simplified as CHROMA-SHADE (Parra, Tort-Martorell, Ruiz-Viñals, & Alvarez-Gomez, 2019), more adequate for the analysis of small and medium-sized family businesses. Despite being a good DMP analysis instrument, intangible aspects such as family values and emotions have not yet been included. Both entrepreneurial emotions and entrepreneurial cognition must be taken into account when analyzing the DMP of the family business. In this chapter, the authors wish to explore attributes that can be introduced into a new dimension in the CHROMA model in order to make it more specific in the analysis of DMPs of family businesses regardless of size. The resulting FAMILY-CHROMA model represents a specific maturation model to evaluate DMPs based on the use of business information of family businesses.

Details

The Entrepreneurial Behaviour: Unveiling the cognitive and emotional aspect of entrepreneurship
Type: Book
ISBN: 978-1-78973-508-6

Keywords

Open Access
Book part
Publication date: 14 December 2023

Holger Fleischer

This chapter provides an introduction to the world of family companies and family constitutions from a legal perspective. It first studies the legal types of business…

Abstract

This chapter provides an introduction to the world of family companies and family constitutions from a legal perspective. It first studies the legal types of business organizations that family firms have chosen across time and jurisdictions. It then illustrates how early predecessors of family constitutions evolved in the late Middle Ages and what modern family constitutions look like in different countries today. Further considerations are devoted to the governance framework of family firms. The chapter concludes by exploring the potential legal effects of family constitutions under German company and contract law.

Case study
Publication date: 20 January 2017

John L. Ward and Christina N. Goletz

Shows how a regional family company threatened by national competition must make changes to its structure and way of doing business or face extinction or sale.

Abstract

Shows how a regional family company threatened by national competition must make changes to its structure and way of doing business or face extinction or sale.

Details

Kellogg School of Management Cases, vol. no.
Type: Case Study
ISSN: 2474-6568
Published by: Kellogg School of Management

Keywords

Article
Publication date: 7 June 2023

Hafiz Muhammad Muien, Sabariah Nordin and Bazeet Olayemi Badru

As the benefit of gender diversity continues to receive significant attention, a holistic investigation of its effect on corporate financial distress (CFD) is lacking. Therefore…

Abstract

Purpose

As the benefit of gender diversity continues to receive significant attention, a holistic investigation of its effect on corporate financial distress (CFD) is lacking. Therefore, this study examines the effects of board gender diversity, measured in different forms, such as the presence and proportion of female directors, family-affiliated female directors and the chief executive officer (CEO) gender, on CFD in Pakistan. The study also investigates the interacting effects of family-controlled (20 and 50% family-owned) companies on the association between board gender diversity and CFD.

Design/methodology/approach

The study applied the pooled cross-sectional logistic regression model to examine the effect of board gender diversity (presence and proportion of female directors, family-affiliated female directors and CEO gender) on CFD through a sample of 285 non-financial companies in Pakistan over the period of 2006–2017.

Findings

The results reveal that gender diversity on boards is significantly and negatively associated with CFD in Pakistan. In addition, when family ownership is 50% or more, the interacting effect of family control is found to be significant, while gender effects remain negative. The results suggest that female directors contribute to the long-term viability of companies, especially family-owned companies. Female directors are also found to be more prevalent in family-owned companies compared to their non-family counterparts.

Research limitations/implications

The findings imply that female directors may efficiently manage and control all functions necessary to guarantee the company's long-term prosperity. Similarly, gender effects can outweigh the detrimental impact of family control when female directors are in reasonable numbers and of high quality in the boardroom.

Practical implications

The practical relevance of the findings is that female directors play a significant role on the corporate board. Thus, it is a wakeup call for Pakistani companies to recognize the critical role and uniqueness of women on the corporate ladder. Family companies can also galvanize on the uniqueness of women to improve their governance structure.

Originality/value

This study adds to the literature on the benefits of gender diversity in family and non-family-owned companies. Specifically, this study applied multiple measures of gender diversity and family control in a single study. In addition, the study was conducted in a country that is ranked as the second worst country in the Global Gender Gap Index 2022, implying that investigating this type of research would go a long way towards changing the minds of corporate executives and regulators about the critical role that women can play in the economy.

Details

Journal of Family Business Management, vol. 14 no. 1
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 1 March 2002

Daniel Vloeberghs

States that there is a need for a practical instrument to measure the present situation of work‐life balance. Describes the development process of the Family and Business Audit…

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Abstract

States that there is a need for a practical instrument to measure the present situation of work‐life balance. Describes the development process of the Family and Business Audit within the Flemish context. Details the setting up and aims of the system before outlining its application in some detail and other existing instruments also emploiyed. Provides a number of short case studies to demonstrate its effectiveness.

Details

Equal Opportunities International, vol. 21 no. 2
Type: Research Article
ISSN: 0261-0159

Keywords

Article
Publication date: 4 October 2021

Augusto Dalmoro Costa, Aurora Carneiro Zen and Everson dos Santos Spindler

The purpose of this paper is to investigate the relationship between family succession, professionalization and internationalization in family businesses within the Brazilian…

Abstract

Purpose

The purpose of this paper is to investigate the relationship between family succession, professionalization and internationalization in family businesses within the Brazilian context.

Design/methodology/approach

The paper presents a multiple-case study method with three Brazilian family businesses that have at least two generations of the owning family involved in the business and an international presence of at least three years. In-depth interviews and secondary data were undertaken with family and non-family members of each case.

Findings

The authors' results show that a family business can boost its internationalization by introducing both succession planning and professionalization on international activities. As family members tend to be more risk-averse and focused on keeping the family business within the family, professionalization is a way of improving the firm's ability to expand internationally. This process tends to lead to lower performance by the firm for the first few months or the first year after the investment, but afterward, international performance tends to grow exponentially.

Originality/value

Only a few studies have been concerned on the relationship of these three dimensions. Thus, the research takes into account that professionalization and succession lead family businesses to improve their internationalization strategies.

Details

Journal of Family Business Management, vol. 12 no. 4
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 29 October 2019

Waddah Kamal Hassan Omer and Adel Ali Al-Qadasi

Responding to the call for research into the behavior of family companies to provide better understanding of corporate governance, this paper aims to examine the impact of boards’…

Abstract

Purpose

Responding to the call for research into the behavior of family companies to provide better understanding of corporate governance, this paper aims to examine the impact of boards’ effectiveness on the investment in monitoring costs (i.e. audit fees, internal audit function budget and executive remuneration) and how this relationship is moderated by family control.

Design/methodology/approach

A sample of 2,176 firm-year observations of Malaysian listed companies is used. The ordinary least square regression is used to examine the associations. Additional sensitivity tests are performed.

Findings

The study finds that there is no relationship between boards’ effectiveness and the demand for monitoring costs for the full sample. However, the findings of sub-samples (family and non-family companies) indicate that a family company with an effective board is less likely to invest more in monitoring, suggesting that the complementary association between the board’s effectiveness and investment in monitoring is a more dominant relationship than the substitution relationship in non-family companies. These findings show that the boards of directors of Malaysian family companies perform a deficient monitoring role, where the presence of family controlling shareholders in management may reduce their independence and efficiency in performing their monitoring role. The findings remain robust after performing additional sensitivity tests.

Originality/value

This paper contributes to the literature on corporate governance in a unique setting (family companies), where conflict of interest is created between controlling insiders and minority shareholders (Type II agency problem). It provides insight for Malaysian policymakers in assessing the issue of expropriation in family companies and enhancing the policy related to its boards.

Details

Managerial Auditing Journal, vol. 35 no. 4
Type: Research Article
ISSN: 0268-6902

Keywords

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