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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…

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.

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

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…

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

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: 15 March 2022

Chaturong Napathorn

This paper aims to adopt the mutuality perspective from the field of human resource management (HRM) to examine family firms, specifically human resource (HR) practices…

Abstract

Purpose

This paper aims to adopt the mutuality perspective from the field of human resource management (HRM) to examine family firms, specifically human resource (HR) practices that are likely to be found in Thai family firms.

Design/methodology/approach

The cross-case analysis of three successful unreformed or authoritarian family firms in Thailand draws on semistructured interviews with top managers and/or HR managers as well as the employees of each family firm, field visits to each firm and a review of archival documents and Web-based resources.

Findings

This paper proposes that the recruitment of employees via alternative or substream recruitment channels (especially the recruitment of current employees’ relatives or family members), paternalistic employee relations practices and the management of aging employees, specifically with regard to the absence of retirement age, the facilitation of financial planning, reduced workload, the appointment of mentors/advisors and the encouragement of aging employees to transfer knowledge to younger generations tend to be found across Thai family firms, especially the unreformed or authoritarian type. These HR practices are implemented across family firms because they help to manage high levels of debt that have accumulated over many years so that employees attain financial literacy before retirement and to foster and maintain positive relationships between managers and employees across firms. These positive relationships thus foster the retention of capable and loyal, aging employees who have been developed within the firm and who have worked with the firm for a long time (so-called Look-Mor), leading to the maintenance of tacit knowledge and experience within firms and the alleviation of the problem of labor shortage. Theoretically, this paper proposes that a family-like corporate culture typically found in family firms serves as the antecedent to the adoption and implementation of those HR practices (so-called culture determinism). In particular, the fit between corporate culture and HR practices is likely to foster the strong commitment among employees to firms and the feelings of job security among these employees (so-called commitment match in the mutuality of the employment relationship).

Research limitations/implications

An important limitation of this study concerns its methodology. Because this study is based on the case studies of only three unreformed or authoritarian family firms located in Thailand, the findings in this paper only propose substream or alternative HR practices that are likely to be found across Thai family firms; therefore, generalization to all other types of family firms and all other family firms across countries is not possible. Examining whether the HR practices proposed in this paper are uniquely found across family firms should be the subject of future research. Another limitation of this study is that it does not include firms located in other industries, such as the health-care industry and the hotel and restaurant industry. Future research could explore the HR practices implemented by family firms in these industries. Moreover, quantitative studies using large samples of family firms across industries might be useful in deepening the understanding of the HR practices implemented in family firms from the mutuality perspective on HRM.

Practical implications

This paper has practical implications for top managers and/or HR managers across firms not only in Thailand but also in other countries. First, top managers and/or HR managers across family firms, especially those of the unreformed or authoritarian type, should implement the HR practices proposed in this paper that are aligned well with a family-like corporate culture found in family firms to foster the strong commitment among employees to firms and the feeling of job security among these employees. Second, other types of firms (e.g. publicly owned corporations and multinational corporations) that do not have a family-like corporate culture may have to adapt some of these HR practices to their corporate culture and workplace atmosphere within their firms. Third, to manage and retain high-quality aging employees within firms, top managers and HR managers across various types of firms should implement some of the HR practices for managing aging employees proposed in this paper so that the firms can retain invaluable aging employees over time.

Social implications

This paper provides social/policy implications for the government and/or relevant public agencies of Thailand and of several other emerging market economies. These governments should encourage the firms located in their countries to implement some of the HR practices proposed in this paper to maintain and support knowledgeable and skillful aging employees in their firms.

Originality/value

This paper contributes to the two main bodies of literature on HRM and family business in the following ways. First, most previous studies on HRM have focused on the mainstream HR practices used in large firms while neglecting the alternative or substream HR practices used in family firms. Additionally, relatively little research has specifically examined the mutuality perspective with regard to HRM. Thus, this paper extends the literature on HRM and family business settings regarding HR practices that are likely to be found across Thai family firms, corporate culture as an antecedent of the adoption and implementation of those HR practices, and the fit between corporate culture and HR practices with respect to mutuality in the employment relationship. Moreover, the literature on HRM has typically overlooked the underresearched country of Thailand; most studies in this area have primarily focused on developed countries or other emerging market economies, including China and India. The findings of this paper provide an in-depth analysis of HR practices that are likely to be found in family firms located in the emerging market economy of Thailand according to the mutuality perspective with regard to HRM.

Details

Management Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8269

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…

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: 26 November 2021

Eulalia Santos, Vasco Tavares, Fernando Oliveira Tavares and Vanessa Ratten

Risk is part of corporate activity and a consequence of the businesses' demands, the market and the changes in companies and their surroundings. The way that risk is…

Abstract

Purpose

Risk is part of corporate activity and a consequence of the businesses' demands, the market and the changes in companies and their surroundings. The way that risk is managed is different between family and non-family businesses. The paper aims to compare the different risk types experienced in the context of the coronavirus disease (COVID-19) pandemic among family and non-family businesses and to analyze whether operational, legal, strategic and image risks influence financial risks.

Design/methodology/approach

The nature of the study is quantitative and based on a questionnaire survey that analyses the perception of risks by 1,090 family businesses and 557 non-family businesses.

Findings

The results show the existence of statistically significant differences in the perception of financial and legal risks between family and non-family businesses, where the former being the businesses that give more importance to these risks. The perception of operational, legal, strategic and image risks have a positive influence on the perception of financial risk in family and non-family businesses.

Originality/value

The results obtained in the study are important because they allow an understanding about the differences in risk management between family and non-family businesses, which can lead to greater corporate sustainability and increased financial performance.

Details

Journal of Family Business Management, vol. 12 no. 4
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…

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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: 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

Keywords

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…

11660

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

Keywords

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