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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…

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. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2043-6238

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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…

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

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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…

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

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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

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Article
Publication date: 21 April 2020

Sergio Teixeira, Pedro Mota Veiga, Ronnie Figueiredo, Cristina Fernandes, João J. Ferreira and Mário Raposo

Family firms have been the subject of various scientific studies. This interest derives not only from their unique characteristics in terms of their management but more…

Abstract

Purpose

Family firms have been the subject of various scientific studies. This interest derives not only from their unique characteristics in terms of their management but more specifically in terms of their succession in a dimension that does not impact on other companies in the same way. Hence, and as a complex field of research, this study seeks to map out and analyse the intellectual knowledge on research into family firms in Asian contexts.

Design/methodology/approach

As regards the statistical and analytical methods, the authors made recourse to the bibliometric, co-citation and cluster analysis techniques. In order to evaluate any potential patterns among the articles, the authors analysed the ways in which the articles are jointly cited. This furthermore applied hierarchical cluster analysis to the totality of the articles subject to co-citation analysis within the scope of grouping the interrelated articles into distinct sets. In order to graphically map the bibliographic co-citation analysis, the authors deployed the network and cluster determination theories.

Findings

The results enabled the identification and the classification of various theoretical perspectives on the domain of family firms into four main approaches: (1) family business behaviour; (2) family versus non-family CEOs; (3) business family performance; and (4) business family and people.

Originality/value

This study identifies, explores, analyses and summarises the main themes, contributing towards deepening the literature through the means of identifying the priority areas in relation to Asian family businesses able to guarantee international standards of excellence in comparison with their respective competitors.

Details

Journal of Family Business Management, vol. 10 no. 4
Type: Research Article
ISSN: 2043-6238

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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…

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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

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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…

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

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Article
Publication date: 1 May 2007

Domingo García Pérez de Lema and Antonio Duréndez

The aim of the present study is to test the main differences between private small/medium‐sized family businesses and non‐family businesses with regard to management…

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11566

Abstract

Purpose

The aim of the present study is to test the main differences between private small/medium‐sized family businesses and non‐family businesses with regard to management variables such as: strategy, strategic planning, manager's training and professionalism and financial techniques implementation.

Design/methodology/approach

In this empirical research, we use a sample of 639 small and medium‐sized industrial firms, distributed in 456 family and 183 non‐family firms, with the intention of determining whether family SMEs possess specific structural characteristics distinct from non‐family ones. The data collection technique used was a questionnaire obtained from a postal survey, and addressed to the manager of the company.

Findings

Results show that managers of family firms use some management tools such as management accounting systems and cash budgets for the decision making process and also give less importance to strategic planning and personnel training programmes as a competitiveness factor.

Research limitations/implications

There is a need for additional research because the findings indicate that there are different managerial behaviours between family and non‐family firms, but we need to corroborate and look for the basis of such differences, in order to address what the advantages and disadvantages of family firms are.

Practical implications

The results lead us to support the need for family firms to focus on “management development”, which should be understood as the general enhancement and growth of management skills through a learning process.

Originality/value

The paper contributes with new empirical evidence about the management function in family businesses. It is also expected that the results of the study help policy makers to make further efforts facilitating the progress of family firms, knowing they are the real engine driving and contributing to welfare of developed economies.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 13 no. 3
Type: Research Article
ISSN: 1355-2554

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Article
Publication date: 1 April 1997

Paul Westhead and Marc Cowling

Explores whether there are any significant performance and ambitions differences between independent family and non‐family unquoted companies in the UK. To detect “real”…

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3305

Abstract

Explores whether there are any significant performance and ambitions differences between independent family and non‐family unquoted companies in the UK. To detect “real” performance and ambitions differences, rather than demographic “sample” differences between family and non‐family companies, a “matched” sample methodology has been utilized. Concludes that there are strong similarities between the two groups of companies in terms of “hard” objective performance and ambition indicators. Such differences as do occur are reflected in the finding that family companies are markedly more likely to stress non‐financial objectives than non‐family companies. Discusses implications for future research exploring the characteristics and performance of family and non‐family companies.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 3 no. 1
Type: Research Article
ISSN: 1355-2554

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Article
Publication date: 1 January 1998

Michael Morley

In addition to facing a number of special management challenges, the family company, defined as a business owned and operated by a family that employs several family

Abstract

In addition to facing a number of special management challenges, the family company, defined as a business owned and operated by a family that employs several family members, must pay special attention to communicating with its stakeholders. Family companies share many stakeholder groups with all other companies. These include the communities in which they are based or maintain a significant presence as an employer; law makers and regulators who are influential in those communities or in the sectors of industry or commerce of importance; suppliers of raw materials, goods and services essential to the activities of the company; partners of various kinds in distribution, production or joint ventures; customers and consumers; employees and potential employees; and non‐family members of management. In addition, the family company has to ensure it maintains communications with certain specific groups. These are the family executives working in the company; family shareholders who are not employed by the company; and banks and financial institutions whose confidence in the company is essential as a source of capital. With all stakeholders in the first group, the company must seek to develop a positioning and communications programme that stresses the advantages of its status as family‐owned while countering any possible negative perceptions stemming from the same heritage. For the larger, longer‐established family companies which now have a large group of related shareholders and members of different branches of the founding family at work in the firm, systematic and effective family communications are of the highest importance.

Details

Journal of Communication Management, vol. 2 no. 3
Type: Research Article
ISSN: 1363-254X

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