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Article

A.B. Ibrahim, K. Soufani and Jose Lam

Family firms play an important role in the working of the Canadian economy; despite their importance to the economic activities and job creation it is observed that family

Abstract

Family firms play an important role in the working of the Canadian economy; despite their importance to the economic activities and job creation it is observed that family businesses have lower survival rates than non‐family firms, some argue that this can possibly be attributed (amongst other factors) to the lack of training. Most of the training activities in Canadian family businesses tend to be limited, and it is argued that family firms tend to perceive training more as an expense than an asset that enhances future growth and development of the business. This paper introduces a training framework and a coherent strategy that provides key elements of a national training agenda for Canadian small family firms, including the role of various relevant organizations.

Details

Education + Training, vol. 45 no. 8/9
Type: Research Article
ISSN: 0040-0912

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Book part

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

Bernice Kotey

To examine differences between family and non‐family SMEs in business goals, management practices and performance as they grow.

Abstract

Purpose

To examine differences between family and non‐family SMEs in business goals, management practices and performance as they grow.

Design/methodology/approach

The study was based on 233 small non‐family and 362 small family firms. Medium firms comprised 305 family and 341 non‐family firms. Chi‐square tests and t‐tests were used to investigate the hypotheses formulated.

Findings

Small family firms were less likely to pursue growth compared with similar non‐family firms. Although medium family proprietors desired growth, their actual growth was lower than similar non‐family firms. Management practices were less formal in family firms and the gap between family and non‐family firms in this area widened with growth. Small family firms achieved greater profits than their non‐family counterparts, although this disparity disappeared at the medium level. Exports were low for both firms at the small level. However, medium family firms were less likely than similar non‐family firms to export.

Research limitations/implications

Firms in the various size groups examined were independent of one another. A longitudinal investigation of family and non‐family firms as they progress through various growth stages should complement the findings.

Practical implications

The findings should assist policies makers, advisers, owners and management in designing policies and programs, providing advice and managing the two ownership types. Informal management procedures and the associated flexibility may enhance performance of small family firms but may impede their performance at larger sizes.

Originality/value

The paper demonstrates that the relationship between goals, strategies and performance varies between family and non‐family firms and the variations change with firm size.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 11 no. 1
Type: Research Article
ISSN: 1355-2554

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Article

Sanjay Chaudhary and Safal Batra

Despite the recognized importance of knowledge management for small family firms, relatively little empirical research has been done so far to understand the mechanisms…

Abstract

Purpose

Despite the recognized importance of knowledge management for small family firms, relatively little empirical research has been done so far to understand the mechanisms through which absorptive capacity (AC) assists their performance. The purpose of this study is to understand the relationship between absorptive capacity and performance in small family firms.

Design/methodology/approach

In this study, the authors theoretically argue and empirically validate that AC enables the creation of entrepreneurial, market and technology orientations in small family firms, which, in turn, lead to superior firm performance. They also tested the study’s hypotheses using mediation and multiple linear regression analyses on data collected from 272 small Indian family firms.

Findings

The study’s findings suggest indirect relationship between AC and performance. The strategic orientations provide a mechanism through which investments in small family firms’ AC results in firm performance.

Practical implications

This study offers crucial insights to practitioners and small firm managers regarding the use of knowledge-based capabilities in creating appropriate strategic postures, which, in turn, assist firm performance.

Originality/value

This study is among few research attempts in understanding the knowledge aspects of small family firms. The present research contributes to the existing literature by unravelling the relationship between knowledge management and small family firm performance. Also, by bringing in data from an under-studied context of an emerging economy, this study strengthens the theoretical applicability of knowledge management in different contexts.

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Article

Bernice Kotey

The purpose of this study is to examine the impact of firm size on performance (measured as profits, growth, efficiency and liquidity) differences between family and non…

Abstract

Purpose

The purpose of this study is to examine the impact of firm size on performance (measured as profits, growth, efficiency and liquidity) differences between family and non‐family small‐ to medium‐sized enterprises (SMEs).

Design/methodology/approach

The samples of 441 family and 473 non‐family firms were divided into four size groups and performance differences analysed for each size group using MANOVA.

Findings

The findings indicate that family SMEs perform at least as well as non‐family SMEs. Although the two types of firms shared several similar performance characteristics at the small level, certain differences were evident. Performance differences between family and non‐family SMEs became prominent at the critical growth phase (20‐49 employees), reached an optimum at 50‐99 employees and narrowed again thereafter. For family firms, the benefits of higher gross margins and efficient use of assets began to wane after 100 plus employees but the disadvantages of lower employee performance continued.

Research limitations/implications

The study could be improved by a longitudinal examination of the same firms across various growth stages. Further, the findings may be industry‐specific and not generally applicable.

Practical implications

The findings show that greater resources do not necessary lead to better performance and that non‐family firms could benefit from more efficient use of resources. The findings also confirm that the benefits of the informal system are not sustainable at larger firm sizes and that larger family firms would benefit from improved management of employee performance.

Originality/value

The pattern of performance differences observed between family and non‐family SMEs is unique to the paper. The paper shows that differences in performance between the two types of firms noted in the literature do no hold at all firm sizes.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 11 no. 6
Type: Research Article
ISSN: 1355-2554

Keywords

Content available
Article

Matthew C. Sonfield and Robert N. Lussier

This is an empirical study of family firm size, as measured by the number of employees, and the relationship of a firmʼs size to a variety of management activities…

Abstract

This is an empirical study of family firm size, as measured by the number of employees, and the relationship of a firmʼs size to a variety of management activities, styles, and characteristics. A statistical analysis of data drawn from 159 American family businesses indicates significant differences by size with regard to the number of nonfamily members in top management, use of outside advisors, time spent engaged in strategic management, use of sophisticated methods of financial management, proportion of women family members involved in firm management, and level of conflict between family members. Implications are offered for family firm owner-managers, for those who assist such businesses, and for researchers in the field of family business.

Details

New England Journal of Entrepreneurship, vol. 11 no. 2
Type: Research Article
ISSN: 2574-8904

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Article

Birgit Pikkemaat and Anita Zehrer

This paper aims to explore the pertinent issues of innovation and service experiences in family firms in the tourism industry, which are mostly small- and medium-sized enterprises.

Abstract

Purpose

This paper aims to explore the pertinent issues of innovation and service experiences in family firms in the tourism industry, which are mostly small- and medium-sized enterprises.

Design/methodology/approach

The conceptual paper, building on social identity theory, undertakes a thorough review of the relevant literature before developing propositions regarding innovation and service experiences for small family firms in the tourism industry.

Findings

Small tourism family firms are faced with deficits in strategic orientation and innovation, and cooperation seems to be a means to overcome size deficits in family-run businesses. Customers integrated into the service experience enhance innovative developments and foster innovation in small tourism firms. As a prerequisite, the service experience must be appropriately managed by collecting and evaluating relevant data on customers’ needs, expectations and satisfaction. An open-minded and consumer-focused market-driven strategy seems to be an advantage.

Practical implications

Future research should undertake empirical studies to validate and/or modify the propositions presented in this conceptual paper.

Originality/value

This is one of the few studies to have addressed the relationship between service experiences and innovation for family-run small businesses in the tourism industry.

Details

International Journal of Culture, Tourism and Hospitality Research, vol. 10 no. 4
Type: Research Article
ISSN: 1750-6182

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Article

Lucia Garcés-Galdeano and Carmen García-Olaverri

Our paper seeks to further understand how family involvement in management influences firm growth.

Abstract

Purpose

Our paper seeks to further understand how family involvement in management influences firm growth.

Design/methodology/approach

Using a sample of small high-tech firms, we classify three different types of firms: family firms managed by family-CEOs, family firms managed by non-family CEOs and non-family firms.

Findings

Consistent with our expectations, we show that firms managed by family-CEOs have less firm growth in comparison with the other two groups. When the family firm is managed by non-family CEOs, the presence of another family member in management positions has a negative impact on firm growth. Finally, we found that founder-led family firms have better firm growth than descendant-led family firms.

Research limitations/implications

Implications for the theory of family firms are discussed.

Originality/value

The value of the present study is to analyse in depth the heterogeneity of the family business trying to close the gap by exploring the effect of family involvement on small firm growth. Thus, we will find different behaviours of these family companies, depending on the family member’s presence in management positions.

Details

Journal of Small Business and Enterprise Development, vol. 27 no. 4
Type: Research Article
ISSN: 1462-6004

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Article

Susanne Royer and Lisa Bradley

The purpose of this paper is to propose advances for developing our understandings of valuable resources in small family firms. The focus is on group support behavior…

Abstract

Purpose

The purpose of this paper is to propose advances for developing our understandings of valuable resources in small family firms. The focus is on group support behavior within firms. It is proposed that this behavior is unique and valuable within small family firms. Propositions are presented that are built upon previous work in psychology and family business research and is linked to the concept of familiness.

Design/methodology/approach

Two small family businesses are the two cases used to investigate the propositions. Semi-structured interviews were conducted with the owner/manager and several other staff within each firm.

Findings

The paper presents evidence for the propositions, showing that work group support is unique in family firms as it is based on factors beyond the workplace. These relationships have the potential to be strong, contributing positively to the firm’s competitive advantage.

Research limitations/implications

Two in-depth case studies of firms are included in this investigation. They are in a similar industry and location. As the findings are similar it lends weight to the evidence for the propositions; however, care should be taken with generalizing to other firms in other industries.

Originality/value

This research pulls together previous evidence and understandings and applies them to a specific aspect of small family firms that has not previously been examined in depth. The increased understanding can help family firms leverage their unique competitive advantage.

Details

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

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Article

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 small

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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