Heterogeneity in Family Firms

This research explores in greater depth the importance of considering the heterogeneity between family businesses so as to better understand the differences in their strategic behavior, performance and business results. With this, we attempt to contribute to the theories on the relationship between corporate governance and strategic management in the field of family business research. Our study identifies the different configurations that may be adopted in the ownership structures and the management and governance bodies of family firms, analyzing how these configurations are related to the firm’s strategic outcomes. Using a sample of 111 family firms, we perform a cluster analysis that allows us to determine distinct types of family businesses based on a set of dimensions regarding the characteristics of their governance bodies, both in business and in the family, as well as their ownership structure and degree of family involvement in management tasks. We then link the different types found with the profiles of managers, the repertoire of strategies used by these companies, and the differences in obtaining results in recent years.

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Family Involvement in the Firm and Exports in the Family SME: Is the Manager’s International Orientation Influential?

Journal of Intercultural Management ◽

10.1515/joim-2015-0022 ◽

2015 ◽

Vol 7 (3) ◽

pp. 69-99 ◽

Cited By ~ 2

Author(s):

Sami Basly

Keyword(s):

Family Involvement ◽

Family Firms ◽

Positive Influence ◽

International Orientation ◽

The Family ◽

Sample Data ◽

Family Smes ◽

Family Involvement In Management ◽

The Relationship

AbstractDoes the family involvement affect exports in the family firm? The literature seems to support this view even if the direction and magnitude of this impact remains controversial. Drawing on the perspectives of agency [Chrisman et al. 2004; Schulze et al. 2001] and stewardship as applied to family firms [Davis, Schoorman and Donaldson 1997] and also on socio-emotional wealth perspective [Gómez-Mejía et al. 2007], this study seeks to contribute to this debate by studying the influence of family involvement on the SME exports intensity. To reconcile the divergent views, our research attempts to assess the role of the manager’s international orientation as a variable moderating the relationship between family involvement and exports in SMEs. Based on a hypothetical-deductive approach, the study uses a sample data of 125 family SMEs obtained through a questionnaire. The results show that even if the positive influence of the manager’s international orientation is corroborated, its moderating role seems to be limited to only one facet of the construct of family involvement i.e. involvement in management. Moreover, owning-family involvement in management seems to negatively influence exports while some results argue for a positive effect of the family involvement in ownership on exports.

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Does family involvement matter post IPO? Adding value through advertising in family firms

Journal of Family Business Management ◽

10.1108/jfbm-01-2018-0002 ◽

2018 ◽

Vol 8 (3) ◽

pp. 218-234 ◽

Cited By ~ 1

Author(s):

Atanas Nik Nikolov ◽

Yuan Wen

Keyword(s):

Firm Performance ◽

Family Involvement ◽

Family Business ◽

Family Firms ◽

Family Firm ◽

Family Businesses ◽

Publicly Traded ◽

Content Type ◽

The Public ◽

The Family

PurposeThis paper brings together research on advertising, family business, and the resource-based view (RBV) of the firm to examine performance differences between publicly traded US family vs non-family firms. The purpose of this paper is to understand the heterogeneity of family vs non-family firm advertising after such firms become publicly traded.Design/methodology/approachThe authors draw on the RBV of the firm, as well as on extensive empirical literature in family business and advertising research to empirically examine the differences between family and non-family firms in terms of performance.FindingsUsing panel data from over 2,000 companies across ten years, this research demonstrates that family businesses have higher advertising intensity than competitors, and achieve higher performance returns on their advertising investments, relative to non-family competitors. The results suggest that the “familiness” of public family firms is an intangible resource that, when combined with their advertising investments, affords family businesses a relative advantage compared to non-family businesses.Research limitations/implicationsFamily involvement in publicly traded firms may contribute toward a richer resource endowment and result in creating synergistic effects between firm “familiness” and the public status of the firm. The paper contributes toward the RBV of the firm and the advertising literature. Limitations include the lack of qualitative data to ground the findings and potential moderating effects.Practical implicationsUnderstanding how family firms’ advertising spending influences their consequent performance provides new information to family firms’ owners and management, as well as investors. The authors suggest that the “familiness” of public family firms may provide a significant advantage over their non-family-owned competitors.Social implicationsThe implications for society include that the family firm as an organizational form does not need to be relegated to a second-class citizen status in the business world: indeed, combining family firms’ characteristics within a publicly traded platform may provide firm performance benefits which benefit the founding family and other stakeholders.Originality/valueThis study contributes by highlighting the important influence of family involvement on advertising investment in the public family firm, a topic which has received limited attention. Second, it also integrates public ownership in family firms with the family involvement–advertising–firm performance relationship. As such, it uncovers a new pathway through which the family effect is leveraged to increase firm performance. Third, this study also contributes to the advertising and resource building literatures by identifying advertising as an additional resource which magnifies the impact of the bundle of resources available to the public family firm. Fourth, the use of an extensive panel data set allows for a more complex empirical investigation of the inherently dynamic relationships in the data and thus provides a contribution to the empirical stream of research in family business.

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Strategic Behavior in Family Firms

10.4018/978-1-6684-3550-2.ch045 ◽

2022 ◽

pp. 974-996

Author(s):

Ismael Barros ◽

Juan Hernangómez ◽

Natalia Martín Cruz

Keyword(s):

Knowledge Management ◽

Strategic Behavior ◽

Family Firms ◽

Family Influence ◽

Organizational Routines ◽

Business Operations ◽

Management Processes ◽

The Family ◽

Prior Literature ◽

The Relationship

Previous research emphasizes that the participation of the family in business operations is the source of resources and capabilities that conditions the strategic behavior of the family firm. This influence has been recognized as “familiness.” However, this definition is contextualized from static reasoning that ignores the effect of family dynamics on the behavior and value generation of the family-owned business. Prior literature has recognized that the family influence has a dynamic character based on the idiosyncratic process of knowledge management that manifests itself in the company, dynamic familiness. This family capability is shaped by family organizational routines through the family influence and aims to increase its knowledge portfolios for the strategic use of its resources. This chapter addresses the relationship between family influence and the process of learning and knowledge management. The analysis of this relationship allows assessing how family influence can promote the generation of family organizational routines based on knowledge management processes.

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Direct and indirect effect of entrepreneurial orientation, family involvement and gender on family business performance

Journal of Family Business Management ◽

10.1108/jfbm-07-2020-0064 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Erny Rachmawati ◽

Suliyanto ◽

Agus Suroso

Keyword(s):

Family Involvement ◽

Family Business ◽

Entrepreneurial Orientation ◽

Business Performance ◽

Family Businesses ◽

Future Research ◽

Content Type ◽

The Family ◽

The Relationship

PurposeThis study aims to determine the direct effect of entrepreneurial orientation on family business performance. This study also discusses the role of family involvement as a mediating variable and the role of gender as a moderating variable in the relationship between entrepreneurial orientation and family business performance.Design/methodology/approachA total of 328 hotels in Yogyakarta, Indonesia, were selected as samples by the convenience sampling method. Primary data is collected through structured questionnaires that are delivered by themselves to key people in the hotel such as owners, directors and key staff (HRD, financial, relationship). Hypotheses are tested by structural equation modeling procedures using AMOS 22.0. Sobel test is used to determine the indirect effect of the mediation variable.FindingsThe results showed that entrepreneurial orientation had no significant effect on family business performance. Family involvement acts as a full mediation in the relationship between entrepreneurial orientation and family business performance. Gender acts as a moderating variable that can strengthen the relationship between entrepreneurial orientation and family business performance. The results showed support for previous research.Research limitations/implicationsThe results of the study cannot conclude the national family business because it adopts convenience sampling and the sampling area is limited in Yogyakarta. Future research can use a larger sample. This study only researches hotels managed by family businesses, so it is not feasible to conclude for family businesses in general. Future research may choose to use several types of family businesses so that more varied results can be obtained. Future research could also compare hotels managed by family businesses with non-family businesses. The results also found that in addition to gender roles, respondent heterogeneity was an important component in the study of social identity. Therefore, research examining the influence of different cultures on the relationship between entrepreneurial orientation and family business performance should be an extraordinary topic for future study. Other results from this study also indicate that there is a role for religion in improving hotel performance. Future research is needed to further explore Islamic business modeling for family businesses.Practical implicationsThis finding has significant implications that can help family businesses in developing strategies that are suitable for business management. Entrepreneurial orientation occupies a strategic position in developing sustainable competitive advantage in the family business of the tourism sector especially the hotel business in Yogyakarta for the better. Besides, the results of the study also showed that entrepreneurial orientation had no significant effect on performance. This relationship becomes significant when combined with active family involvement. This finding also shows that entrepreneurial orientation has the potential to have a more beneficial effect because of the active involvement of the family in helping with business management, alleviating business-related problems, and having a significant influence when the family also acts as management.Social implicationsResearch findings indicate the role of gender in strengthening the relationship between entrepreneurial orientation and family business performance. This provides a good position for women in the social environment to show achievement. To place women on the side of gender equality and justice in the family business in Indonesia. By opening wider access for Indonesian women in the realm of business management, expanding women's participation in a family business, increasing the role of control for women, and increasing women's knowledge and skills to increase the benefits in managing family businesses so that they have sustainable resilience in the face of global competition.Originality/valueThe results of this study provide a new model in providing an overview of the direct and indirect roles (mediating and moderating) in the assessment of family business performance. This study uses three variables which are important in performance appraisal, namely entrepreneurial orientation (independent variable), family involvement (mediating variable) and gender (moderating variable). Where research that combines these four variables, directly and indirectly, has never been done before.

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Strategic Behavior in Family Firms

Handbook of Research on Entrepreneurial Leadership and Competitive Strategy in Family Business - Advances in Business Strategy and Competitive Advantage ◽

10.4018/978-1-5225-8012-6.ch017 ◽

2019 ◽

pp. 348-370

Author(s):

Ismael Barros ◽

Juan Hernangómez ◽

Natalia Martín Cruz

Keyword(s):

Knowledge Management ◽

Strategic Behavior ◽

Family Firms ◽

Family Influence ◽

Organizational Routines ◽

Business Operations ◽

Management Processes ◽

The Family ◽

Prior Literature ◽

The Relationship

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The Speed of the Internationalisation Process and the Institutional Networks of Family SMEs in the DOC Rioja Wine Industry

Wine Economics and Policy ◽

10.36253/web-8371 ◽

2020 ◽

Vol 9 (1) ◽

pp. 43-50

Author(s):

Marta Fernández Olmos ◽

Giulio Malorgio

Keyword(s):

Family Involvement ◽

Family Firms ◽

Family Members ◽

Wine Industry ◽

Strategic Decision ◽

Top Managers ◽

The Family ◽

Family Smes ◽

The Relationship

Institutional networking is a key element in businesses’ internationalisation processes and is an important strategy for promoting the long-term growth and survivability of family SMEs in the DOC Rioja wine industry. We hold that the proportion of family members in the TMT plays an important role in strategic decision-making and helps to explain the speed of their internationalisation process. This paper contributes to the scant research on the influence of family involvement in the TMT by analysing the moderating effects of two diversities on the relationship between institutional networking and the speed of internationalisation: the family TMT ratio and generational involvement. Using a broad sample of 77 family wineries in DOC Rioja, the results obtained indicate that institutional networking plays a signiﬁcant role in explaining the speed of internationalisation in family ﬁrms and that this relationship is weaker when a larger proportion of family members serve as top managers. The empirical results also have interesting implications for the managers of family firms as it may help them to identify the effective composition of TMTs to be considered when deciding on the process of internationalisation.

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Understanding Family Firm Profitability Heterogeneity

Advances in Business Strategy and Competitive Advantage - Competitiveness, Organizational Management, and Governance in Family Firms ◽

10.4018/978-1-7998-1655-3.ch013 ◽

2020 ◽

pp. 305-329 ◽

Cited By ~ 2

Author(s):

María J. Martínez-Romero ◽

Rubén Martínez-Alonso ◽

Alfonso A. Rojo-Ramírez ◽

Julio Diéguez-Soto

Keyword(s):

Family Involvement ◽

Family Firms ◽

Firm Heterogeneity ◽

Family Firm ◽

Research Field ◽

The Family ◽

Firm Profitability ◽

Strategic Element ◽

Family Involvement In Management ◽

Positive Effect

Understanding family firm heterogeneity has become a topic of critical importance among academics and practitioners in the family business research field. This chapter aims to provide new insights into this theme by examining the differences in profitability within the pool of family firms. Furthermore, this chapter introduces an exceptional strategic element, namely innovative effort, to analyse when and to what extent the deployed innovative effort influences the family involvement in management-firm profitability relationship. Using a panel dataset on 3,164 observations of Spanish private manufacturing firms over the 2000–2015 period, the findings reveal significant differences in the profitability of family firms depending on the degree of family involvement in the firm's management. The findings also show that innovative effort reinforces the positive effect that family involvement in management exerts on firm profitability.

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Family Involvement in Ownership and Management: Exploring Nonlinear Effects on Performance

Family Business Review ◽

10.1177/08944865080210040105 ◽

2008 ◽

Vol 21 (4) ◽

pp. 331-345 ◽

Cited By ~ 226

Author(s):

Salvatore Sciascia ◽

Pietro Mazzola

Keyword(s):

Goal Orientation ◽

Family Involvement ◽

Family Firms ◽

Nonlinear Effects ◽

Positive Effects ◽

Privately Held Firms ◽

And Performance ◽

Family Involvement In Management ◽

The Relationship ◽

Privately Held

Research on the performance of family firms is growing, but results are mixed, especially for nonlisted companies. Thus, on the basis of the co-presence of benefits and disadvantages of family involvement in ownership and management, we explored the presence of nonlinear effects of these two variables on performance. We run regression analyses on data drawn from 620 privately held family firms in Italy: A negative quadratic relationship between family involvement in management and performance was found, but we did not find any association between family involvement in ownership and performance. Our results suggest that in privately held firms the positive effects that previous literature associates with the presence of family managers do not appear strong enough to compensate for the disadvantages deriving from a nonmonetary goal orientation, nor do they compensate for the costs deriving from the need to solve conflicts between family managers and the impossibility of enlarging the company's social and intellectual capital through the employment of nonfamily managers. Moreover, the quadratic nature of the relationship calls for greater attention to be paid to these effects by family business owners, especially in those cases where family involvement in management is high.

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How important is family involvement for small companies’ growth?

Journal of Small Business and Enterprise Development ◽

10.1108/jsbed-06-2019-0190 ◽

2020 ◽

Vol 27 (4) ◽

pp. 531-554

Author(s):

Lucia Garcés-Galdeano ◽

Carmen García-Olaverri

Keyword(s):

Family Involvement ◽

Firm Growth ◽

Family Firms ◽

Negative Impact ◽

High Tech ◽

Small Companies ◽

Content Type ◽

The Family ◽

Management Positions ◽

Family Involvement In Management

PurposeOur paper seeks to further understand how family involvement in management influences firm growth.Design/methodology/approachUsing 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.FindingsConsistent 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/implicationsImplications for the theory of family firms are discussed.Originality/valueThe 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.

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Managerial Controls in Private Family Firms: The Influence of a Family’s Decision Premises

Sustainability ◽

10.3390/su13042158 ◽

2021 ◽

Vol 13 (4) ◽

pp. 2158

Author(s):

Daniel Magalhães Mucci ◽

Ann Jorissen ◽

Fabio Frezatti ◽

Diógenes de Souza Bido

Keyword(s):

Family Involvement ◽

Family Business ◽

Family Firms ◽

Firm Behavior ◽

Family Firm ◽

Single Family ◽

The Family ◽

Family Involvement In Management ◽

Formal Controls ◽

New System

In most studies, the affiliation of the manager (family-affiliated or non-family affiliated) and supposedly related behavior (agent or steward) is considered the sole antecedent to explain a family business’ (non) professionalization of managerial controls. This paper, based on Luhmann’s new system theory, examines whether a family’s decision premises influence the design of managerial controls in family firms in addition to a manager’s family affiliation status. Using survey data of 135 large and medium-sized Brazilian family firms and testing the hypotheses with SEM, this study provides evidence that a family’s decision premises significantly influence the design of managerial controls in family firms. This study provides evidence that when a family’s intention to transfer the firm to next generation (TGO) is high, more formal controls, as well as controls of a more participative nature are adopted in a family firm. Moreover, the results do not indicate that the level of family involvement in management affects the design of controls in firms with high TGO. The results only showed a significant relationship between a family’s intention to control and influence (FCI) the firm and the absence of participative controls. In addition, these findings also illustrate that each single family-induced decision premise has the potential to explain family firm behavior, since each of the two premises considered in our study is related to a different design of the controls adopted by the family firm.

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