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The development of small firms tends to follow certain growth patterns usually referred to as business growth models. This paper reports on the conceptualisation of a “problem‐based phenomenological life cycle model”, which delineates the growth pattern of micro and small manufacturing firms in Cyprus. The empirically validated model offers guidance to small business managers, financiers and advisers as to the challenges and growth complexities accompanying the transitions taking place in small businesses as they develop along their organisational life cycle. Enhanced understanding of the barriers to the development of small business contributes to the better design of policy initiatives that seek to foster the survival, sustainable growth and prosperity of small enterprises.

This explorative research paper considers the strategic development objectives of small owner‐managed ventures in order to have an insight into how to systematically categorise the heterogeneous owner‐managed small business economy. It commences with a review of the literature and other studies pertinent to the strategic objectives of small business owner‐ managers from which the general research hypothesis is established; small firms have a variant form of strategic orientation owing to a plethora of internal (behavioural) and external market economic factors. This is followed by the research methodology and statistical analysis of a database which incorporates the views of 922 small firm owner‐managers on strategic objectives. The empirical evidence identifies four generic clusters of owner‐managers namely: growth stars, exiteers, survivors, and controllers. In order to throw more light on the profile of the variant clusters of owner‐managed small firms, the paper briefly examines the inter‐relationship of small business strategic orientation with structure (e.g. size, age, sectoral distribution), behaviour (e.g. legal form, family business control) and performance (e.g. growth, profitability). In conclusion, some tentative policy implications from the perspective of management, service providers (financiers and advisors) and policy makers, are discussed.

The purpose of this study is to empirically examine the effect of family involvement in ownership, management and directorship on audit fees during the crisis and non-crisis periods.

Following Anderson and Reeb (2003), this paper uses a two-way fixed effect model to examine the impact of family control on audit fees in crisis and non-crisis periods. The fixed effects include dummy variables for each year and each industry code in the sample.

This paper finds that during normal economic periods, family firms pay lower audit fees relative to non-family firms because of the incentive alignment or monitoring effect. While, during crisis periods, family firms pay higher audit fees because of the shareholder expropriation effect.

The results reported in this paper have both practical and policy implications for the demand and supply of audit services to firms having different ownership structures.

This is the first study of its kind to examine the effect of family ownership and involvement on audit fees during the crisis period.

Small family firms represent the predominant organizational form in Canada. They are perceived to be crucial to the development and growth of the Canadian economy. Despite this, scant attention is given to the study of human resource management practices in the specialist family business literature. A key human resource issue in family firms, which has been documented as a potential source of problems, is succession, selection and training. The objective of this research is to explore the qualities that are considered critical to an effective family business successor and discuss the crucial role that education and training could have in enhancing the qualities and skills of a successor. Results suggest that three factors are critical to an effective human resource strategy concerning the selection process of a successor. These include the successor's capacity to lead, his/her managerial skills and competencies, and the willingness and commitment of the successor to take over the family business and to assume a leadership role.

This research is aimed to better understand what characteristics of family firms create a context in which family governance systems are more frequently adopted.

We analyse a sample of 490 Spanish family businesses using cluster analysis, and we identify four different types of family businesses whose characteristics are associated to the adoption of different family governance systems, i.e. family councils and family protocols. The comparison between clusters of the baseline parameters was performed using one-way analysis of variance (ANOVA) for parametric variables, the χ2 test for parametric variables and Kruskal-Wallis for nonparametric variables. By conducting between-profile analysis of covariance (ANCOVA), we tested for differences in the dependent variables (i.e. the existence of family councils and/or existence of family protocols) between the clusters, using cluster membership as the independent variable.

Taking into account the characteristics of family firms in terms of ownership structure, management involvement, and family and organizational complexity, we identify four different contexts that create different communication needs and are related to the use of different family governance mechanisms. We characterize the different contexts or types of family firms as: founder-centric, protective, consensual and business-evolved. Our findings show that family protocols are associated to contexts with high family involvement in management and family complexity, while family councils are more frequent when there is a separation of managerial and ownership roles and there is a high organizational and family complexity.

The study highlights the value of social systems theory in order to explain the association between the characteristics of different firm types and contexts, and the use of family councils and family protocols to govern the relationship between the owner family and the business.

Family governance mechanisms are widely recommended by practitioners and scholars. However, they are usually adopted only by a small percentage of family firms. This study helps to better understand what family governance systems may be more appropriate in different contexts and relativize the necessity of these governance mechanisms in function of the communication needs created within each context.

The improvement of family governance mechanisms helps to increase the likelihood of survival and durability of family firms. These firms contribute to more than 60% of employment in most developed countries. Consequently, good governance in family firms has social implications in terms of labour conditions and stability.

Most family firms don't use family protocols or family councils to govern the relationship between the owner family and the firm. However, little is known about the reasons for this lack of structuration of the family-firm relationship. Using social systems theory, our research contributes to better understand the conditions in which business families are more prone to use structured forms to manage this relationship, as well as the reasons that may be constraining their adoption.

Reviews the latest management developments across the globe and pinpoints practical implications from cutting‐edge research and case studies.

This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.

Small family firms are the bedrock of the Canadian economy, yet only a small proportion last into the second generation. When family businesses fail, the impact on the family is usually severe. However, with around 94 percent of Canadian businesses being categorized as family firms, there is much more than personal financial grief at stake – for the sake of national competitiveness, politicians really need to focus on the family.

Provides strategic insights and practical thinking that have influenced some of the world's leading organizations.

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy‐to‐digest format.

This paper documents the findings from an extensive postal survey conducted in 1997‐98, which looks at the tax affairs of small firms, both incorporated and unincorporated. Tax planning practices of small firms in the UK, and the implications of these practices on working capital and investment in these businesses, are considered. The results indicate that tax planning in most small firms is not very sophisticated and this has an effect on investment decisions in these businesses. As a result of poor tax planning practices small firms are not in a position to utilise fully all available tax reduction mechanisms. Instead they have to rely on mechanisms that can be decided upon after the accounting year end; unfortunately these involve the withdrawal of money from the business (eg pension schemes, salaries/bonuses). The results presented in this paper illustrate that the decision concerning the level of pension fund contributions and drawings/salaries, and subsequently the level of retained profits, will depend on both financial (business needs and market characteristics) as well as non‐financial (management characteristics) factors. However, the present combination of these factors in the small business sector favours the extraction of profits out of the business rather than the reinvestment of profits that will enhance the creation of wealth and employment. Based on the beliefs and expectations of small business owner/directors a number of tax incentives are discussed that the government could introduce in order to enhance the financial development and prosperity of small firms.

This empirical research paper draws evidence from a database of UK independent private companies (n=250) and reports on the financial aspirations of owner‐managers of family firms with respect to the flotation route. Following a brief review of the literature, the paper proceeds with an introduction of the UK survey into the financial development of private SMEs. Then evidence is presented on the perceived factors that influence the decision of owner/directors of family companies to consider the flotation option. Phase A employs univariate statistical analysis to contrast financial philosophies of the owner‐managing directors (OMDs) of family firms against those of their mainstream private counterparts. Phase B employs cluster analysis to categorise sample family companies into four generic groups that evidently highlight that the PLC route is not always tailored to financial issues. The empirical results demonstrate that the financial strategies of family companies are more or less in line with the behavioural issues shaping all private companies irrespective of family control. Finally, the paper concludes with a set of tentative policy implications. To encourage the public equity development of smaller privately held companies, particularly family firms, there is scope for more policy initiatives that are tuned to the “socio‐behavioural‐cultural” ethos of private‐OMDs as they master their corporate and entrepreneurial odyssey.

This explorative paper considers the recent developments in the emerging small family business sector in post‐reform China as the country embraces socio‐economic and structural transition from a centrally planned to a market‐orientated system. The important contributions that Chinese small family firms play in the acceleration of private sector development across the social and industrial sectors as well as the geographic boundaries of the Pacific Rim are highlighted. The authors propose typologies of Chinese entrepreneurship and tentative enterprise policy recommendations for the future development of small private family businesses in China.

Prior research has argued that family firms are reluctant to consider external equity as a source of financing because they fear a loss of control, which would limit their socioemotional wealth. However, prior empirical research has neglected potential contingencies that determine whether family firms’ need for control affects their equity financing decisions. The purpose of this paper is to provide first insight into this research void.

The paper builds on rational choice theory and a logit regression using secondary data.

The study shows that the effect of family firm owners’ need for control on their consideration of external equity depends on the extent to which owners expect investors to interfere with management and the extent to which decision making is affected by emotions. Hereby, the present study provides evidence that family firm owners’ decisions to use external equity are more complex than previously presumed.

This study has several limitations that provide fruitful avenues for further research. Overall, the authors list and detail seven different limitations in the paper, e.g. the narrow focus on equity financing, the use of a partial model, the fact that the authors did not conceptualize differences between different types of investors (such as high net worth individuals, private equity firms and venture capital firms) in the model and further more.

The study shows that investors need to understand the complex interplay among family firms’ need for control, expected investor interference and emotional decision making, to correctly assess their chances of success when approaching family firms for equity.

Prior empirical research has neglected potential contingencies that determine whether family firms’ need for control affects their equity financing decisions. The present paper provides first insight into this research void.