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Open Access
Article
Publication date: 3 October 2022

Goran Vlasic

As family and nonfamily businesses differ in how they do business, the focus of this manuscript is on understanding how strategy-level models can be misinterpreted if…

Abstract

Purpose

As family and nonfamily businesses differ in how they do business, the focus of this manuscript is on understanding how strategy-level models can be misinterpreted if family involvement is not considered. Thus, in this manuscript, the focus is on understanding the extent to which strategic orientations (market orientation and technology orientation, which reflect strategic approach), strategic performance metric focus (financial-based, optimization-based and market-based, which reflect strategy evaluations) and strategic audacity (which reflects boldness in envisioning and delivering strategic outcomes) play a role in driving firm performance – in family businesses vs nonfamily businesses. Understanding how these drivers impact performance differently in family vs nonfamily businesses enables companies to better direct their strategic efforts.

Design/methodology/approach

After presenting theoretical concepts, authors use regression analysis on a sample of companies in a developing European Union (EU) country (n = 282) to evaluate the impact of strategic orientation, strategic performance metric focus and strategic audacity on firm performance separately in three samples: the full sample (consisting of both family and nonfamily-owned firms), sample of family businesses and the sample of nonfamily businesses.

Findings

The role of strategic orientation, strategic audacity and focal goals in driving firm performance differs depending on the company type (family vs nonfamily). In the case of nonfamily businesses, strategic audacity and technology orientation with the focus on efficiencies and markets are driving firm performance. In the case of family businesses, both market and technology orientation are important drivers of performance; the focus on financial and market indicators of performance is positively impacting performance, while the focus on efficiency indicators is diminishing the performance of family businesses. Thus, results show that of the performance drivers for family businesses, some are insignificant (strategic audacity), while some even have a negative impact (focus on optimization-based measures of performance) on family businesses' performance. Moreover, results show that some of the drivers of performance in case of family businesses (market orientation and focus on financial-based measures of performance) are not drivers of outstanding performance in the case of nonfamily businesses.

Practical implications

Best practices differ for family vs nonfamily businesses. In case of family businesses, comparing them to nonfamily businesses, market orientation and the focus on financial-based measures of performance have a greater impact on firm performance, while, at the same time, family businesses should refrain focusing on pursuing optimization-based measures of performance as such pursuit drives down their performance. Understanding the drivers of performance specific to family businesses will enable such firms to better navigate contexts characterized by ambiguity and uncertainty.

Originality/value

The manuscript evaluates how models, generally researched in the overall firm metrics, differ between family businesses and nonfamily businesses, thus delivering new insights into the important marketing concepts.

Details

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

Keywords

Article
Publication date: 25 August 2022

Xi Zhong, Liuyang Ren and Ge Ren

The phenomenon of defamilization of family firms is gradually increasing for the growth of family firms, that is, nonfamily executives are increasingly present in the…

Abstract

Purpose

The phenomenon of defamilization of family firms is gradually increasing for the growth of family firms, that is, nonfamily executives are increasingly present in the executive teams of family firms. Although previous scholars have identified various determinants of family firms' defamilization, whether and when innovation underperformance affects the decision to defamilize family firms has not been explore. This study aims to fill the aforementioned research gaps.

Design/methodology/approach

This study empirically tests the theoretical view based on the data of Chinese A-share family listed companies from 2009 to 2017.

Findings

The authors found that innovation underperformance drives family companies to increase the percentage of nonfamily executives in their executive teams. Further, the authors found that family firms are less willing to hire nonfamily executives with an increase in socioemotional wealth, particularly when founders of such businesses serve as directors or are major shareholders, even when they are not directors.

Originality/value

This study shows that innovation underperformance and socioemotional wealth are important predictors of family firms’ defamilization decisions.

Details

Nankai Business Review International, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8749

Keywords

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.

Details

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

Article
Publication date: 10 June 2020

Emil Knezović and Nedžla Greda

The purpose of this paper is to investigate whether there is a difference in career development programs between family and nonfamily companies. Moreover, the paper…

Abstract

Purpose

The purpose of this paper is to investigate whether there is a difference in career development programs between family and nonfamily companies. Moreover, the paper explores the relationships between career development dimensions and affective commitment in a family business setting.

Design/methodology/approach

A cross-sectional questionnaire-based survey was used to collect data from 506 employees in Bosnia and Herzegovina across the different industries. Independent t-test and hierarchical regression were used to test the hypotheses developed in the study.

Findings

The findings supported our assumptions that there is a significant difference in career development opportunities between family and nonfamily companies. Moreover, career development has a higher influence on affective commitment in the family business setting.

Research limitations/implications

The data for this study was collected by using convenience sampling, as well as a cross-sectional survey method, which limits the generalization of results. Due to the unavailability of a public database, we relied on employees’ perceptions when it comes to the ownership of a company.

Practical implications

To keep key employees, family business owners and managers have to invest in career development programs. The study shows that by aligning employee and organizational goals, offering professional development and remunerating the positive performance helps in keeping the most valuable assets within the company.

Originality/value

So far, the research about career development in family businesses was insensible. This study provides an important contribution to the understanding of career development and its outcomes in family businesses.

Details

Journal of Family Business Management, vol. 11 no. 4
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 5 June 2019

Lea Iaia, Demetris Vrontis, Amedeo Maizza, Monica Fait, Paola Scorrano and Federica Cavallo

The purpose of this paper is to identify the distinctive elements of CSR communications that characterize the communications models of family businesses in the Italian…

Abstract

Purpose

The purpose of this paper is to identify the distinctive elements of CSR communications that characterize the communications models of family businesses in the Italian wine industry, and to compare them with nonfamily businesses.

Design/methodology/approach

Using a case study approach, a sample of large and medium companies practicing corporate social responsibility was identified. The content of their websites was examined using content analysis and text mining (correspondence analysis techniques and word association analysis using the T-Lab software).

Findings

The analysis indicates that the ownership structure nature makes a difference in the online CSR communications process. The cultural identity in both family and nonfamily businesses is founded on intangible factors such as tradition; however, being a family business is a fundamental driver in the online CSR communications process, no longer forming a bond among players in the wine industry, but rather linking with other wine family businesses.

Research limitations/implications

One limitation of this work is the small size of the investigated sample. An added value it contributes is its focus on the Italian wine industry. The paper provides the essential elements that family and nonfamily wine businesses should consider in customizing their CSR communications with the brand’s specific details.

Originality/value

The authors highlighted the similarities and differences of family and nonfamily wine businesses in terms of their online CSR communications. The authors also observed how the family wine business identity, in its multidimensional construct, has common factors with what we call “familiness.” This research could establish a starting point for further work within this important sector.

Details

British Food Journal, vol. 121 no. 7
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 25 June 2020

Ann 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…

3963

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.

Open Access
Article
Publication date: 19 August 2021

Giovanna Gavana, Pietro Gottardo and Anna Maria Moisello

This paper aims to investigate the effect of the nature of ownership and board characteristics on the investment choices in joint ventures (JVs) from the dimensional point…

Abstract

Purpose

This paper aims to investigate the effect of the nature of ownership and board characteristics on the investment choices in joint ventures (JVs) from the dimensional point of view, controlling for the effect of JV type and other components of intellectual capital.

Design/methodology/approach

The authors study a sample of Italian, Spanish, German and French nonfinancial listed firms over the 2010–2018 period, controlling for the fixed effects of the company's sector of operation and the year. The authors also analyze the effect of family control and influence on JV investment size, taking into consideration certain board characteristics, the type of JV, human capital efficiency, structural capital efficiency and capital employed efficiency while also controlling for a firm's profitability and size. To test the hypotheses, GLS panel data was used.

Findings

The results indicate that the size of the investment in JVs is smaller for family firms than for nonfamily businesses. The presence of CEO duality has an opposing effect on the size of the investment in joint ventures as it has a lowering effect in family businesses while it exerts an amplifier influence in nonfamily businesses. Moreover, the type of joint venture has a significant effect for family firms: the choice of a link joint venture reduces the size of the investment. The authors find that human capital efficiency increases JV investment size for all firms.

Originality/value

This study is the first to analyze the effect of the main dimension of socioemotional wealth – family control and influence – on a firm's JV investment size. It controls for the effect of JV type – link or scale – and the interplay of the other IC components.

Details

Journal of Intellectual Capital, vol. 22 no. 7
Type: Research Article
ISSN: 1469-1930

Keywords

Open Access
Article
Publication date: 9 December 2021

Patrick Sven Ulrich, Alice Timmermann and Vanessa Frank

The starting point for the considerations the authors make in this paper are the special features of family businesses in the area of management discussed in the…

Abstract

Purpose

The starting point for the considerations the authors make in this paper are the special features of family businesses in the area of management discussed in the literature. It has been established here that family businesses sometimes choose different organizational setups than nonfamily businesses. This has not yet been investigated for cybersecurity. In the context of cybersecurity, there has been little theoretical or empirical work addressing the question of whether the qualitative characteristics of family businesses have an impact on the understanding of cybersecurity and the organization of cyber risk defense in the companies. Based on theoretically founded hypotheses, a quantitative empirical study was conducted in German companies.

Design/methodology/approach

The article is based on a quantitative-empirical survey of 184 companies, the results of which were analyzed using statistical-empirical methods.

Findings

The article asked – based on the subjective perception of cybersecurity and cyber risks – to what extent family businesses are sensitized to the topic and what conclusions they draw from it. An interesting tension emerges: family businesses see their employees more as a security risk, but do less than nonfamily businesses in terms of both training and organizational establishment. Whether this is due to a lack of technical or managerial expertise, or whether family businesses simply think they can prevent cybersecurity with less formal methods such as trust, is open to conjecture, but cannot be demonstrated with the research approach taken here. Qualitative follow-up studies are needed here.

Originality/value

This paper represents the first quantitative survey on cybersecurity with a specific focus on family businesses. It shows tension between awareness, especially of risks emanating from employees, and organizational routines that have not been implemented or established.

Details

Organizational Cybersecurity Journal: Practice, Process and People, vol. 2 no. 1
Type: Research Article
ISSN: 2635-0270

Keywords

Article
Publication date: 10 October 2016

Jonas Heinrich Steeger and Malte Hoffmann

Research disputes whether family businesses are more or less innovative than their nonfamily counterparts. So far, no consistent results have been achieved. The recently…

1039

Abstract

Purpose

Research disputes whether family businesses are more or less innovative than their nonfamily counterparts. So far, no consistent results have been achieved. The recently introduced willingness and ability framework suggest that idiosyncratic behavior is only to be expected if both sufficiency conditions – willingness and ability – are fulfilled. The purpose of this paper is to test this hypothesis empirically.

Design/methodology/approach

A large cross-sectional sample of German small- and medium-sized enterprises is used. The sample offers – alongside numerous moderators commonly used in innovation research – several family firm definitions. Given the censored nature of the endogenous variable chosen, a Tobit model is used.

Findings

Drawing upon agency theory and the ability and willingness paradox in family firm innovation, it finds family firms to be less innovative only if both willingness and ability conditions are fulfilled.

Originality/value

To the best of the knowledge, the study provides the first attempt to test the willingness and ability theorem. Therefore, the commonly used family firm-specific measures (self-assessment-, ownership-, and management criterion) are operationalized to better understand what drives innovativeness in family firms. The findings thus add to the ongoing discussion on what really drives family impact on firm-level decisions.

Details

Journal of Family Business Management, vol. 6 no. 3
Type: Research Article
ISSN: 2043-6238

Keywords

Article
Publication date: 1 September 1994

Karen Maru File, Judith L. Mack and Russ Alan Prince

There are increasing signs that business‐to‐business marketers aretargeting the 50 percent of all US companies which are family firms. Newtheory from the family business

8720

Abstract

There are increasing signs that business‐to‐business marketers are targeting the 50 percent of all US companies which are family firms. New theory from the family business studies field creates a reasonable expectation that the buyer behavior of family firms is distinctive, but there has been, to date, no empirical validation of this hypothesis. This exploratory study of 124 businesses contrasts family and non‐family firms on four dimensions of purchasing and finds that family business engage in more protracted pre‐purchase search processes, and require more interaction with their providers but reward providers with higher propensity to engage in positive word‐of‐mouth behaviors and repurchase intentions. These findings are both consistent with emerging theory in the field and relevant to marketers to family businesses.

Details

Journal of Business & Industrial Marketing, vol. 9 no. 3
Type: Research Article
ISSN: 0885-8624

Keywords

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