The nexus between size and external business advice in the family firm

2016 ◽  
Vol 29 (3) ◽  
pp. 326-346
Author(s):  
Cristina López-Cózar-Navarro ◽  
Tiziana Priede-Bergamini ◽  
Sonia Benito-Hernández
Keyword(s):  
Family Business ◽  
Design Methodology ◽  
Family Firms ◽  
Industrial Sector ◽  
Family Firm ◽  
Content Type ◽  
Legal Advice ◽  
Equality Of Means ◽  
The Family ◽  
Different Types

Purpose The purpose of this paper is to suggest two main objectives: to analyze if the size of the company is determined by the use of external legal and human resources (HR) advice; and to analyze if the size of the family business is determined by the use of these two same types of external advice. Design/methodology/approach The assessment is developed (2,013 firms, the Spanish industrial sector) by using descriptive statistics to compare the features of the different types of firms in the sample: family and non-family ones. This is completed with a test of equality of means and using econometric models. Findings Regarding legal advice, results show that as far as legal matters are concerned, when family businesses make greater use of this type of advice, they are smaller. This is a remarkable and interesting result because it differs from non-family firms, in which the use of this type of advice is positively related with size. Regarding the use of HR advice, while it remains significant in general cases with a positive result, this is not the same for family firms. Originality/value The use of advising in family firms is seldom dealt with in the literature, despite its helpfulness for family firm managers. There is gap in this field and a great deal of interesting research remains to be developed, because the authors consider that factors determining the use of advice in family and non-family firms are different.

“We are a family firm”

2018 ◽  
Vol 8 (1) ◽  
pp. 2-21 ◽  
Author(s):  
Claudia Binz Astrachan ◽  
Isabel C. Botero
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Firm ◽  
Business Owners ◽  
Public Companies ◽  
Content Type ◽  
Brand Building ◽  
Depth Interview ◽  
The Family ◽  
Family Associations

Purpose Evidence suggests that some stakeholders perceive family firms as more trustworthy, responsible, and customer-oriented than public companies. To capitalize on these positive perceptions, owning families can use references about their family nature in their organizational branding and marketing efforts. However, not all family firms actively communicate their family business brand. With this in mind, the purpose of this paper is to investigate why family firms decide to promote their “family business brand” in their communication efforts toward different stakeholders. Design/methodology/approach Data for this study were collected using an in-depth interview approach from 11 Swiss and German family business owners. Interviews were transcribed and coded to identify different themes that help explain the different motives and constraints that drive their decisions to promote the “family business brand.” Findings The analyses indicate that promoting family associations in branding efforts is driven by both identity-related (i.e. pride, identification) and outcome-related (e.g. reputational advantages) motives. However, there are several constraints that may negatively affect the promotion of the family business brand in corporate communication efforts. Originality/value This paper is one of the first to explore why family businesses decide to communicate their “family business brand.” Building on the findings, the authors present a conceptual framework identifying the antecedents and possible consequences of promoting a family firm brand. This framework can help researchers and practitioners better understand how the family business nature of the brand can influence decisions about the company’s branding and marketing practices.

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

2018 ◽  
Vol 8 (3) ◽  
pp. 218-234 ◽  
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.

Socio-emotional wealth and family: revisiting the connection

2016 ◽  
Vol 14 (3) ◽  
pp. 288-297 ◽  
Author(s):  
William Schulze
Keyword(s):  
Decision Making ◽  
Family Business ◽  
Operations Management ◽  
Design Methodology ◽  
Family Firms ◽  
Research Focus ◽  
Family Dynamic ◽  
Content Type ◽  
The Family ◽  
Complex Relationships

Purpose In this commentary, the author aims to question whether the socio-emotional wealth (SEW) construct should be limited to family firms by noting that non-family owners and founders, i.e. those who yet have to involve family in their enterprise‘s operations, management or ownership, are also motivated to maximize their socioemotional wealth. Design/methodology/approach The concept of SEW has generated significant traction in the family business literature and motivated an important body of work about how SEW alters decision-making in family firms. Professors Martin and Gomez–Mejia (this issue) extend past contributions by teasing apart complex relationships among the underlying dimensions of the construct. However, the domain of that paper, as well as the SEW construct, has heretofore been limited to family firms. The author builds his commentary on the work of Martin and Gomez–Mejia (this issue) to argue that the notion that SEW shapes decision-making in the owner controlled and owner-managed non-family firms, as well as family firms. Findings The author’s overarching conclusion is that there are several dimensions in which family interests materially alter decision-making but others in which family likely plays a moderating and possibly even a suppressor role. The surprising implication is that it may not be SEW per se that distinguishes family firms from non-family firms but rather how the family dynamic alters the influence of SEW on outcomes of interest. Originality/value Acknowledging that personal and familial SEW have a common foundation allows one to sharpen the research focus and shift it from questions about how SEW might alter decision-making in family firms to questions about how the presence of family members alters the influence of SEW on decision-making in owner-controlled and owner-managed firms. This commentary explicates the argument and offers some suggestions about how this re-framing might allow for the extension of the SEW concept from the family firm to its influence on founder-managed and non-family firms.

The auditor as consigliere in family firm

2017 ◽  
Vol 7 (1) ◽  
pp. 2-20 ◽  
Author(s):  
Sven-Olof Yrjö Collin ◽  
Jenny Ahlberg ◽  
Karin Berg ◽  
Pernilla Broberg ◽  
Amelie Karlsson
Keyword(s):  
Design Methodology ◽  
Family Firms ◽  
Response Rate ◽  
Family Firm ◽  
Social Implications ◽  
Content Type ◽  
The Family ◽  
Professional Independence ◽  
Practical Implications

Purpose The purpose of this paper is to develop and test a concept of auditor as consigliere in family firms, that captures additional functions to monitoring, those of advice, mediating, and conveying. Design/methodology/approach The concept is tested through a survey conducted on 309 Swedish auditors. Findings The data indicate that the consigliere role is generally not emphasized, indicating that auditors primarily perform the monitoring role of the audit. However, the authors do find indications of the auditor performing the consigliere role, through performing the advisory and mediating functions and, to a smaller degree, the conveying function. Research limitations/implications The survey is limited in response rate and in separating governance situations from consigliere functions. Practical implications With reservation for professional independence, the auditor as consigliere could be part of the governance of the family firm, but should be trained for this activity. Social implications Regulators should pay attention to the consigliere role when, for example, stipulating compulsory rotation of auditors. Originality/value The paper shows that the auditor is more than a monitor in family firms. The consigliere role, even if not at all dominating, has to be considered, at least in family firms.

Do dissimilarities in the family involvement in family firms lead to different levels of indebtedness? Evidence from Spain

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
María Comino-Jurado ◽  
Sonia Sánchez-Andújar ◽  
Purificación Parrado-Martínez
Keyword(s):  
Family Involvement ◽  
Family Business ◽  
Design Methodology ◽  
Family Firms ◽  
Governance Structure ◽  
Three Dimensions ◽  
Content Type ◽  
The Family ◽  
Family Business Group ◽  
Different Levels

PurposeThis paper examines how differences in the family involvement in a family business can influence its level of indebtedness. Assuming the influence of family is not the same for all family firms, we consider each company as a combination of the family involvement in three dimensions of the business: ownership, management and governance structure.Design/methodology/approachUsing the partial least squares technique allows us to address the heterogeneity of family firms through an integral concept of family involvement in business that jointly considers the level of family participation in the ownership, management and governance structure of each firm.FindingsOur results demonstrate that the level of family involvement in a family firm, considering the heterogeneity existing within the family business group, directly influences its level of indebtedness. In addition, we find that family involvement in ownership and governance structures individually considered are positively related to the level of indebtedness of the family business.Originality/valueOur findings prove that some indebtedness patterns, which previous literature has described as common to all Spanish family businesses, may actually be valid only for specific family firms with a particular level of family involvement. In addition, the way of measuring family business heterogeneity through our integral concept of family involvement can be replicated by other authors because of the manageability of the items, thus contributing to an increased understanding of the effects of family involvement in firms' development.

Family firms in Ibero-America: an introduction

2016 ◽  
Vol 29 (3) ◽  
pp. 219-230 ◽  
Author(s):  
Maria José Parada ◽  
Claudio Müller ◽  
Alberto Gimeno
Keyword(s):  
Family Business ◽  
Design Methodology ◽  
Family Firms ◽  
Content Type ◽  
Family Governance ◽  
Economic Context ◽  
The Family ◽  
Business Dynamics ◽  
And Behavior

Purpose This paper highlights the importance of understanding family firms in different contexts. The purpose of this paper is to reflect on the characteristics and behavior of family firms in Ibero-America, and their contribution and fit to the broader field of research. Based on the five articles in this special issue, this paper attempts to give an overview of their main contributions. Design/methodology/approach This paper explains in a contextual and analytical way the contributions of five papers that focus their attention on Ibero-American family firms, by linking them to the current research in the field and finding their fit within the broader field of family business. Tackling different topics, these five papers discuss about the comparison between family vs non-family businesses, innovation in family firms, and governance in family firms Findings Findings suggest that there is a need to stimulate research in family business in Ibero-America, especially Latin America, regarding family business dynamics, the different roles of the family within the enterprise, family governance, and the role of women. With regards to innovation the cultural and economic context play an important role in how they perform innovative activities. Originality/value This paper contributes to further understanding family firms by discussing the importance of the context and by linking all five papers with the broader literature in family business. The introduction also discusses topics worth to be further researched in Ibero-America.

Family firm employees: identification, stewardship practices and citizenship behaviors

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Michele N. Medina-Craven ◽  
Danielle Cooper ◽  
Christopher Penney ◽  
Miguel P. Caldas
Keyword(s):  
Organizational Citizenship ◽  
Organizational Identification ◽  
Design Methodology ◽  
Family Firms ◽  
Family Firm ◽  
Stewardship Theory ◽  
Citizenship Behaviors ◽  
Content Type ◽  
Relational Identification ◽  
The Family

PurposeThis paper aims to understand the factors that influence employee organizational identification in family firms, and through identification, the willingness to engage in citizenship behaviors.Design/methodology/approachDrawing from the stewardship theory, the authors develop a model to test the relationships between family relatedness and relational identification to the family firm owner, employee-focused stewardship practices, organizational identification and organizational citizenship behaviors. The authors test the hypotheses using regression and the Preacher and Hayes PROCESS macro on a sample of 292 family firm employees.FindingsThe findings suggest that both relational identification with the family firm owner and employee-focused stewardship practices positively influence organizational identification, and that familial ties to the family firm owner can influence relationships with citizenship behaviors for non-family employees.Originality/valueThe authors build on existing literature to investigate how employees identify themselves within a family firm and how stewardship practices from the employee's perspective (rather than managers' or founders' perspectives) can influence organizational identification and citizenship behaviors.

Emotional intelligence in family firms

2014 ◽  
Vol 4 (1) ◽  
pp. 4-23 ◽  
Author(s):  
Gonzalo Gómez Betancourt ◽  
Isabel C. Botero ◽  
Jose Bernardo Betancourt Ramirez ◽  
Maria Piedad López Vergara
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Members ◽  
Family Firm ◽  
Business Owners ◽  
Interpersonal Dynamics ◽  
Content Type ◽  
The Family

Purpose – Although researchers have highlighted the importance of relational and family factors for the sustainability of a family firm, there is not much empirical research exploring how emotions and the management of emotions play a role in the interpersonal dynamics of family business owners. The purpose of this paper is to explore how the way family members manage their emotions affects the interpersonal dynamics in the family, business, and ownership subsystems of a family firm. Design/methodology/approach – The paper presents an in-depth case study from a family firm in Colombia-South America. Findings – The results indicate that the capability that family members have to manage their emotions influences the interpersonal dynamics that take place in the family firm at the individual and group level. In this case, the paper found that although emotional intelligence (EI) affected interpersonal relationships in a firm, this effect was based on the individual's willingness to use their EI capabilities, previous history between people, and the goals individuals have within each subsystem in a family firm. The paper also found that interpersonal dynamics, in turn, influence how family members work together. Research limitations/implications – Because this study uses an in-depth case study, the intention of the paper is to provide an initial picture of how EI can play a role in the interpersonal interactions between family business owners. The authors hope that this study can be used as a building block to enhance the understanding of the role of EI in family firms. Practical implications – EI represents an individual's capability to perceive, understand, manage, and regulate self and other's emotions. For family firms, this means that family business owners can use this capability to determine how to enact their roles in the family firm and how to interact with other to ensure harmony in their relationships. Originality/value – This paper builds on previous work on emotions in family firms to explore the role of EI in family firms, and provides an empirical exploration of the role of management of emotions in family firms.

Understanding family firm innovation heterogeneity

2016 ◽  
Vol 6 (2) ◽  
pp. 103-121 ◽  
Author(s):  
Zonghui Li ◽  
Joshua J. Daspit
Keyword(s):  
Family Involvement ◽  
Family Business ◽  
Family Firms ◽  
Firm Heterogeneity ◽  
Family Firm ◽  
Firm Innovation ◽  
Content Type ◽  
Business Studies ◽  
The Family ◽  
Innovation Strategies

Purpose – In family business studies, inconsistent findings exist regarding the relationship between family involvement and firm innovation. The purpose of this paper is to understand the heterogeneity of family firm innovation. Design/methodology/approach – The authors draw on governance literature and the socioemotional wealth (SEW) perspective to examine how the extent of family governance and the type of SEW objectives jointly influence innovation strategies in family firms. Findings – The authors develop a typology of family firm innovation strategies, positing that the family firm’s risk orientation, innovation goal, and knowledge diversity vary depending on the degree of family involvement in governance and the type of SEW objective. The authors propose that four family firm innovation strategies (e.g. Limited Innovators, Intended Innovators, Potential Innovators, and Active Innovators) emerge when family involvement in the dominant coalition (high or low) is contrasted with the SEW objective (restricted or extended) pursued by the family. Practical implications – Understanding how governance and SEW goals work together to influence the firm’s innovation strategies is potentially valuable for managers of family firms. The authors offer practical suggestions for how to strategically reposition the firm to pursue innovation strategies more in line with those of the Active Innovator. Originality/value – This study contributes to the family business literature by using a multi-dimensional approach to examine family firm heterogeneity. In addition, by articulating various family firm innovation strategies, the authors offer insight into the previously inconsistent findings concerning firm innovation behavior and outcomes in family business studies.

Intergenerational communication in family firm succession

2018 ◽  
Vol 8 (1) ◽  
pp. 75-90 ◽  
Author(s):  
Gabriela Leiß ◽  
Anita Zehrer
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Small Sample Size ◽  
Family Firm ◽  
Family Businesses ◽  
Small Sample ◽  
Intergenerational Communication ◽  
Interaction Patterns ◽  
Content Type ◽  
The Family

Purpose The purpose of this paper is to explore how intergenerational communication between predecessors and successors impacts on the entrepreneurial family and the family business, and aims at developing a typology of communication patterns in family business succession. Design/methodology/approach Based on grounded theory methodology, ten in-depth narrative family interviews with predecessors and successors were conducted, transcribed and analyzed. The qualitative data analysis followed a hermeneutic approach focusing on in situ language phenomena such as positioning, syntax, semantics and interaction patterns. Findings The reconstruction of the interviewees’ subjective realities resulted in a theoretical concept with four communication types, varying between continuity and change, and between relatedness and autonomy. Given the fact that succession is not a single event but a long-lasting process, the typology can be transferred into a dynamic model for succession comprising three consecutive stages: intergenerational transmission, independent acquisition and finally interdependent development of the family firm heritage. Research limitations/implications First, the results are based upon a small sample size (n=10) that should not be generalized to the population of family businesses at large. Hence, to complete the overall picture, a broader survey among family-run firms by means of an extended qualitative or even a quantitative survey would be most valuable to generate more objective data. Another shortcoming is that the authors only investigated intra-family succession and challenges. No attention was paid to the various opportunities of external succession of family businesses, such as management buyout, management buy in, external management or liquidation. Practical implications Understanding the sociological and psychological aspects of communication helps family firms to identify characteristics in communication during their succession process. First, the knowledge that various communication types are highly dependent upon the personal interactions among the parties involved, might be an asset for family firms which are handing over their company in the future. Second, knowledge on different communication types might raise awareness for and prevent from conflicts and emotional relationships during the firm succession and thus function as a strategic advantage. Social implications Following a sustainable and responsible strategy, family firms can be regarded as the pillars of our economy. Yet, they can be compared to an endangered species often not surviving the transfer from one generation to the next. Succession seems to be a delicate stage in a company’s lifecycle, the failure of which threatens thousands of jobs every year. When it comes to the survival rate of family firms, the increase of communicative and reflexive competence as it is addressed by this paper, is one of the key factors helping the family to deal with conflicts and thus strengthen their self-efficacy. Originality/value The dynamic succession model presented in this paper gives experts a comprehensive insight into the inner logic of entrepreneurial families reconstructed by their communicative patterns. Understanding the different dimensions of succession lays the foundation for consulting and supporting family members in transition processes helping them to cope with intergenerational ambivalences and find solutions that are both beneficial for the individuals as well as for the business.

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