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Book part
Publication date: 12 July 2011

Cristina Cruz, Shainaz Firfiray and Luis R. Gomez-Mejia

This chapter takes a socioemotional wealth (SEW) perspective to explain the adoption of human resource (HR) practices in family-controlled firms. Previous studies on human…

Abstract

This chapter takes a socioemotional wealth (SEW) perspective to explain the adoption of human resource (HR) practices in family-controlled firms. Previous studies on human resource management (HRM) in family firms have focused only on a small range of HR practices and have rarely utilized strong conceptual frameworks. As a result, these studies have overlooked important factors that contribute to the distinctiveness of HRM in these organizations. Based on ample evidence that shows family businesses' preference for non-economically motivated objectives collectively labeled as SEW, we propose that the presence of SEW influences HR practices in family firms.

Consequently, we reexamine existing empirical evidence of the determinants of HRM in family-controlled firms under the SEW approach. We also reinterpret existing theoretical models of family-controlled firms and their implications for HRM under the SEW umbrella. Our final goal is to establish an integrated framework through a set of sound propositions on HRM in family businesses. By integrating the literature, we aim to fill theoretical gaps in our understanding of the determinants of HR practices in the family business context and direct future research in this area.

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Research in Personnel and Human Resources Management
Type: Book
ISBN: 978-0-85724-554-0

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Article
Publication date: 1 May 2015

Norhidayah Abdullah and Wee Ching Pok

– The purpose of this paper is to examine the relationship of separation of cash flow rights (CFR) and control rights (CR) and debt policy of Malaysian listed family firms.

Abstract

Purpose

The purpose of this paper is to examine the relationship of separation of cash flow rights (CFR) and control rights (CR) and debt policy of Malaysian listed family firms.

Design/methodology/approach

The sample of this study consists of 256 observations from companies listed in the Main Board of Bursa Malaysia for the period between year 2005 and 2009. The multivariate ordinary least square regressions have been conducted in order to examine the relationships between separation of CFR and CR and debt.

Findings

The study reveals that the separation of CFR and CR does not lead to the increase of debt policy among Malaysian listed family-owned firms. Thus, the results suggest there is no expropriation of minority interests in Malaysian family-owned firms. The plausible reason is that Malaysia has better investor or shareholder protection laws compared to other emerging markets such as Indonesia, Thailand and Philippines.

Research limitations/implications

The first limitation is the underestimation of CFR and CR because the affiliated business of unlisted firms and foreign companies are excluded. The second limitation is the presence of 100 percent ownership in firms controlled by family-owned firms or in firms that are controlled by another firms which are under the controlled of family-owned firms, or both, will lead to equal proportion of CFR and CR. Thus, the degree of separation of CFR and CR of such firms are indeterminable.

Originality/value

This paper investigates the expropriation of minority interests by Malaysian family-owned firms on which has not been explored.

Details

Journal of Accounting in Emerging Economies, vol. 5 no. 2
Type: Research Article
ISSN: 2042-1168

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Article
Publication date: 1 February 2004

Richard I.D. Harris, Renee S. Reid and Rodney McAdam

Nationally representative data on family businesses is available in the 1998 Workplace Employee Relations Survey, alongside comparable information for other types of firms

Abstract

Nationally representative data on family businesses is available in the 1998 Workplace Employee Relations Survey, alongside comparable information for other types of firms. We use this data to compare differences in the use of different consultation and communication procedures. We cover such practices as the use of direct communication schemes (e.g. briefings, the provision of information on financial performance to the workforce) as opposed to indirect methods such as the use of joint consultative committees. There is an a priori expectation in the literature that family‐owned businesses are either more likely to use direct forms of communication (vis‐à‐vis indirect forms) or that they will not be involved in direct communication or consultation with their employees, and we test this using multivariate techniques. Finally, we consider whether the type of consultation/communication structure matters in terms of establishment performance, and what differences exist with respect to family‐owned businesses. In particular this short paper reports the outcome of testing if those firms that consult directly with staff, as apposed to those that consult through joint consultative committees or trade unions, have higher productivity and/or other measures of performance.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 10 no. 1/2
Type: Research Article
ISSN: 1355-2554

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Article
Publication date: 25 July 2019

Muhammad Usman, Muhammad Umar Farooq, Junrui Zhang, Nanyan Dong and Muhammad Abdul Majid Makki

The purpose of this paper is to investigate the crucial question of whether gender diversity in boardroom is associated with CEO pay and CEO pay-performance link.

Abstract

Purpose

The purpose of this paper is to investigate the crucial question of whether gender diversity in boardroom is associated with CEO pay and CEO pay-performance link.

Design/methodology/approach

The authors used the data of companies listed on the Pakistan Stock Exchange for a sample consisting of KSE-100 index companies for the period of five years. The authors used the ordinary least square regression technique to test the developed hypotheses. The authors also used the two-step Heckman selection model, two-stage least square regression and propensity score matching method to control the problem of endogeneity.

Findings

The authors find reliable evidence of a negative association between gender diversity and CEO pay and of board gender diversity’s strengthening the relationship between CEO pay and firm performance. The authors also find that women director are more effective in setting the optimal contract in non-family-owned firms and firms with dispersed ownership structure as compared to family-owned firms and firms with concentrated ownership structure. Moreover, results also reflect that the influence of board diversity on both CEO pay and CEO pay-performance link is stronger when gender diversity goes beyond tokenism.

Practical implications

The findings have implications in terms of providing the basis for policy makers to accord the same level of importance to gender diversity in the boardroom as well as contributing to the current debate on the desirability of mandating or recommending gender diversity on boardrooms.

Originality/value

This study is among the few studies which investigate the moderating role of boardroom gender diversity on the CEO pay-performance link. In addition, this study contributes to the institutional theory by providing the empirical evidence that the effect boardroom gender diversity on CEO pay and CEO pay-performance link varies by type of ownership.

Details

International Journal of Manpower, vol. 40 no. 7
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 6 November 2019

Subramanian Shanmugasundaram

The purpose of this paper is to study the relationship between corporate governance practices and internationalization through foreign direct investments in the context of…

Abstract

Purpose

The purpose of this paper is to study the relationship between corporate governance practices and internationalization through foreign direct investments in the context of family-owned business groups in India.

Design/methodology/approach

The comparative case study method is used to understand the relationship between corporate governance practices and internationalization using four family-owned business groups in India.

Findings

The ownership concentration negatively influences the internationalization, while transparency has a positive association. Professionalization of management helps in internationalization. Overall, good corporate governance practices have a positive influence on group internationalization.

Research limitations/implications

This paper provides detailed discussions based on the case study research which would help the future research work on the relationship between corporate governance practices and internationalization.

Originality/value

The existing literature studies in this field in the context of emerging markets are inconclusive. Hence, this paper uses the case study method to understand the relationship better.

Details

Journal of Family Business Management, vol. 10 no. 1
Type: Research Article
ISSN: 2043-6238

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Article
Publication date: 5 December 2017

George Saridakis, Yanqing Lai, Rebeca I. Muñoz Torres and Anne-Marie Mohammed

Drawing on the motivation theory and family business literature, the purpose of this paper is to investigate the influence of family effect in growth behaviour of…

Abstract

Purpose

Drawing on the motivation theory and family business literature, the purpose of this paper is to investigate the influence of family effect in growth behaviour of small-and-medium-sized enterprises (SMEs) in the UK.

Design/methodology/approach

The authors first compare the actual and expected growth of family and non-family-owned SMEs. The authors then compare the growth behaviour of small family firms managed by owner-directors and small family businesses co-managed by family and non-family directors with the non-family-owned SMEs.

Findings

The authors find a negative effect of family ownership on actual and intended small business growth behaviours. In addition, the findings also suggest that small family firms co-managed by non-family and family directors are no different from non-family-owned firms, in terms of reporting past actual growth in employment size and turnover as well as expecting growth in workforce size and turnover. The authors also observe a significant difference in anticipating sales growth between family-controlled and non-family-controlled firms. However, this difference is not explained by the heterogeneity of a top management team.

Practical implications

The study has important implications for managerial practice to family firms and on policies that improve the growth of SMEs. Specifically, the competence of managers and decision makers matters considerably in evaluating the efficient operation of the business and maximising the economic growth in SMEs.

Originality/value

The study makes two important theoretical contributions to small business growth literature. First, the findings underline a negative family effect in the actual and expected growth behaviour of SMEs. Second, the mode of family ownership alone may not sufficiently capture family effect and offer a thorough understanding of growth behaviour in SMEs.

Details

Journal of Organizational Effectiveness: People and Performance, vol. 5 no. 1
Type: Research Article
ISSN: 2051-6614

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Book part
Publication date: 9 July 2018

Philip M. Beattie

Despite being the dominant form of business globally, it is widely recognised that research focused on the governance of small family-owned entities has been largely…

Abstract

Despite being the dominant form of business globally, it is widely recognised that research focused on the governance of small family-owned entities has been largely overlooked. The benefits of sound governance practices are deemed salutary for small business prosperity; however, these enterprises are confronted with significant governance issues and unique concerns of their own. One particular issue concerns the compliance costs of governance for family-owned businesses and the extent to which the regulatory environment actually encourages an evolvement towards an improvement in governance practices in smaller businesses. Reconciling decision speed, flexibility and entrepreneurial innovation to necessary enhanced governance practices and procedures remains problematic. It is argued that a proper balance between the costs and benefits of proper governance codes and structures for smaller firms can only be achieved with a strong emphasis on flexibility to take account of myriad types of governance requirements of firms. This would entail the development of an evolutionary view of corporate governance implementation, one which mirrors the process of delegation of the entrepreneurial function to company boards and management. This would lend support to the view that there is no universal ‘best way’ for all firms at all stages of the business life cycle. In this respect, the application of the principles of subsidiarity and incentives plays an important role.

Details

Governance and Regulations’ Contemporary Issues
Type: Book
ISBN: 978-1-78743-815-6

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Article
Publication date: 27 May 2014

Beyza Oba, Elvin Tigrel and Pinar Sener

This paper aims to understand the determinants of board structure of listed firms at institutional, industry and firm levels within an emerging economy. At the…

Abstract

Purpose

This paper aims to understand the determinants of board structure of listed firms at institutional, industry and firm levels within an emerging economy. At the institutional level, the paper explores laws, managerial culture and the role of state in instituting and endorsing corporate governance practices. At the firm level, ownership patterns (family and non-family), experience in the capital markets, age and size of the firms are studied to find out the relation between these variables and the board structure.

Design/methodology/approach

The research domain of the study is listed firms operating on the Istanbul Stock Exchange. The data for the study are collected at two phases; at the first phase, compliance reports, annual reports, articles of association and annual shareholders’ meeting reports of each firm in the sample are analyzed. At the second stage, secondary data are used for understanding the dynamics of Turkish institutional context.

Findings

The results of this study reveal that boards of directors of listed Turkish firms comply with the governance practices instituted by state agencies, except on issues as independent members and committees that will influence the majority owners’ control domain and private benefits.

Originality/value

This paper draws attention on institutional context and argues that “good governance” instruments developed for Anglo-Saxon stock market-controlled business systems provide limited explanation for an emerging economy that is characterized by close cooperation between the state, family-owned businesses and financial markets. The study offers insight to policy makers at a national level, interested in developing corporate governance principles regarding boards of directors of listed firms.

Details

Corporate Governance, vol. 14 no. 3
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 7 September 2012

Tanja Kontinen and Arto Ojala

The purpose of this paper is to increase understanding of the internationalization of family firms; to investigate how the framework by Bell et al. on the…

Abstract

Purpose

The purpose of this paper is to increase understanding of the internationalization of family firms; to investigate how the framework by Bell et al. on the internationalization patterns of firms could explain the internationalization pathways taken by family‐owned small to medium‐sized enterprises (SMEs); and to identify typical patterns and features in the various pathways taken by family‐owned SMEs.

Design/methodology/approach

This paper reports findings from an in‐depth multiple case study with eight Finnish family‐owned SMEs.

Findings

The ownership structure had the most important role in defining the internationalization pathways followed by the family‐owned SMEs: a fragmented ownership structure led to traditional internationalization pathway whereas a concentrated ownership base led to born global or born‐again global pathways.

Practical implications

Family entrepreneurs should carefully consider the division of ownership and seek to build new relationships in foreign markets, in addition to their primary co‐operators.

Originality/value

The authors extend the integrative model of small firm internationalization by Bell et al. toward family‐owned SMEs and highlight the most important dimensions in the different internationalization pathways of family SMEs. The ownership dimension is integrated within discussion on differing internationalization pathways. The authors utilize a family business specific perspective (the stewardship perspective), in order to understand the specific features of internationalization among family SMEs, and also how these features differ between family SMEs and other firms.

Details

International Marketing Review, vol. 29 no. 5
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 1 December 2002

Renee S. Reid and Richard I.D. Harris

This study looks at SME spending on training in Northern Ireland. We include a range of human resource management functions, as well as workforce characteristics, the…

Abstract

This study looks at SME spending on training in Northern Ireland. We include a range of human resource management functions, as well as workforce characteristics, the external environment, size, and the impact of changes in ownership status as important determinants of training expenditure in SMEs. Particular attention is also paid to the importance of whether the enterprise is family owned and/or managed. Generally, our results show that HR functions do generally matter; however, workforce characteristics (other than shift working), ownership characteristics and external factors, and even to some extent size, were much less important than expected. What our results do show is that whether the firm is family‐owned/managed is a major factor in determining training budgets in SMEs in Northern Ireland.

Details

Education + Training, vol. 44 no. 8/9
Type: Research Article
ISSN: 0040-0912

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