Managing family business tensions: the narrative of family history

2020 ◽  
Vol 15 (5) ◽  
pp. 669-686
Author(s):  
Rocio Arteaga ◽  
Timur Uman
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Methodological Approach ◽  
Family Members ◽  
Governance Structure ◽  
Future Research ◽  
Socioemotional Wealth ◽  
Content Type ◽  
Family Meetings ◽  
The Family

PurposeThis study explores the family governance structures that family firms employ to manage family business tensions.Design/methodology/approachBuilding on socioemotional wealth perspective and adopting a narrative methodological approach, the study analyses nine unique narratives of representatives of three Swedish family firms.FindingsThe study illustrates how the hybrid arena created between formal and informal family meetings is used as a governance structure for mitigating tensions by reinforcing family relational ties.Research limitations/implicationsBased on the findings, this study suggests how reliance on hybrid arena informs the field of family business management and governance and suggests future research directions.Practical implicationsThe findings of this study provide opportunities for family business practitioners, including owners, family members, family firm advisers and other stakeholders, to effectively manage family business tensions and foster socioemotional wealth.Originality/valueIn family firms, tensions can arise due to a desire for the preservation of socioemotional wealth. The authors show that these tensions may be managed by using informal and formal family meetings that create a hybrid arena where family members separate family and business issues and emotional and rational reactions, thereby avoiding negative emotions and creating a culture of harmony within the family.

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.

Technological innovation and socioemotional wealth in family firm research

2018 ◽  
Vol 16 (3) ◽  
pp. 270-301 ◽  
Author(s):  
Rubén Martínez-Alonso ◽  
María J. Martínez-Romero ◽  
Alfonso A. Rojo-Ramírez
Keyword(s):  
Conceptual Framework ◽  
Technological Innovation ◽  
Family Business ◽  
Family Firms ◽  
Current Knowledge ◽  
Integrative Approach ◽  
Socioemotional Wealth ◽  
Content Type ◽  
The Family ◽  
New Research

Purpose There are currently two issues that generate growing interest among specialized scholars within the family business field: technological innovation (TI) and socioemotional wealth (SEW). While it is true that both topics are highly popular among researchers, the joint study of both perspectives is scarce. Thus, the purpose of this paper is to analyse the interrelationships between TI and SEW in the context of family firms. Design/methodology/approach This literature review systematically analyses the findings of 25 journal articles focusing on TI and SEW, published between 2012 and 2018. Findings The findings reveal an integrative approach, identifying different variables that relate TI and SEW. A conceptual framework is built in which these variables are incorporated into four categories (SEW, TI, moderating effects and performance). New lines of research emerge with the development of a conceptual model and the formulation of six propositions. Practical implications The conceptual framework can be useful as integrative summary of the factors that family business managers and directors should take into account to be successful in implementing innovative projects and strategies. Originality/value The study of TI from the SEW approach has emerged as a fruitful field of research in recent years, but the current knowledge of the role that SEW plays in family firms’ TI is still scarce. This paper contributes to the family business literature by offering a conceptual framework of the SEW–TI relationship and new research avenues that will provide a better comprehension for scholars and specialists for future investigations in the field.

Socioemotional wealth importance within family firm internal communication

2018 ◽  
Vol 8 (1) ◽  
pp. 22-37 ◽  
Author(s):  
Emily Marett ◽  
Laura Marler ◽  
Kent Marett
Keyword(s):  
Family Member ◽  
Family Business ◽  
Family Members ◽  
Family Firm ◽  
Internal Communication ◽  
Socioemotional Wealth ◽  
Content Type ◽  
Key Characteristics ◽  
The Family ◽  
Different Content

Purpose One of the key characteristics that distinguishes the family business from other firms is the importance of accruing and maintaining socioemotional wealth (SEW). Using an experimental design, this exploratory study investigates the communication practices of family business leaders responding to employees responsible for a business disruption. The purpose of this paper is to determine whether managers take action to protect SEW while responding to a crisis. Design/methodology/approach Three employees of a family firm participated in the experiment. A family member employee and a non-family employee were instructed to write a message informing a family member leader of a business disruption they created (infecting a computer with malware). The family member leader then received these messages and wrote a response to each employee. These responses were then content analyzed to determine whether messages expressed SEW importance and to see if SEW content differed based on the recipient’s familial status. Findings Content analysis of messages intended for family members and non-family employees indicated that messages intended for family members contain significantly different content associated with dimensions of Socioemotional Wealth Importance scale, particularly in terms of reinforcing family dominance, sustaining family continuity, and maintaining family enrichment. Originality/value This study is the first to examine crisis communication within the family firm and whether SEW endowment occurs via internal communication within the family firm. By utilizing an experiment, this study extends the SEW literature further by adding to the diversity of techniques utilized to study this topic.

In the mother’s shadow: exploring power dynamics in family business succession

2019 ◽  
Vol 34 (2) ◽  
pp. 121-139 ◽  
Author(s):  
Filippo Ferrari
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Reliability And Validity ◽  
Value Systems ◽  
Future Research ◽  
Power Dynamics ◽  
Content Type ◽  
Business Power ◽  
Gender Biases ◽  
The Family

Purpose This paper aims to investigate and explain the power dynamics involving the mother (as the founder) and the daughter (as the successor) during the business transmission process. Design/methodology/approach This qualitative research was conducted on a sample of Italian family SMEs. The adopted approach is consistent with the narration paradigm, where the biographical features of the participant are investigated to highlight the culture, value systems and other background features. Findings This research suggests that if the founder is her mother, the daughter faces further challenges. Findings suggest that during business transmission, it is also important to consider the cultural and contextual factors, such as gender biases, both in the family and in the workplace. This paper seems to suggest that power is important in itself, regardless of the gender of those who exercise it. Research limitations/implications Future research should investigate, quantitatively, the same issues considered in this research, to assess the reliability and validity of the evidence discussed here. Practical implications This paper suggests how to overcome dysfunctional dynamics in mother–daughter business transmission. Social implications Family firms are the most widespread type of firm in the world; as a consequence, systematic failures in business transmission represent a prominent socio-economical problem for policymakers and institutions. Originality/value This research shows that in family business, power is not dynamic and does not shift among family members, as suggested by previous research. Even once the mother retires, a stable power hierarchy remains within the family firm.

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.

The financial decisions of family businesses

2017 ◽  
Vol 7 (3) ◽  
pp. 351-373 ◽  
Author(s):  
Anna Motylska-Kuzma
Keyword(s):  
Decision Making ◽  
Family Business ◽  
Family Firms ◽  
Family Businesses ◽  
Future Research ◽  
Content Type ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
The Family ◽  
Financial Decision

Purpose The purpose of this paper is to examine the status, trends and potential future research areas in the field of financial decision-making process in family firms. Design/methodology/approach The bibliometric indicators and methods are applied in order to describe the publication activity and to analyze the contents of the articles. The material examined are the journals included in the SCOPUS, SAGE and EBSCO database and the peer-reviewed article, which contain in their titles, keywords or abstracts with a combination of phrases “family firms,” “family business” or “family enterprise” with “financial decision” or one of the subcategories: capital structure, investment decision, capital budgeting, working capital management or dividend policy. The study covers the period from 2000 to 2016. Findings Although the interest in family business research is growing rapidly, the area of financial decision making is underestimated. Despite of the fact that the vast majority of the studies into financial decisions in family firms is are focused on the capital structure, they do not give clear answers to the question of how the family businesses behave in this scope and what their true financial logic is. Additionally, the area of the investment decisions and dividend policy is rather not better left uncovered. Research limitations/implications The analyses enable the identification of potential avenues for future research which could be vital to make an advancement in the consolidation of the discipline. Practical implications The analyses ought to have a potential meaning mainly for external institutions (especially financial institutions) in better understanding of the family businesses and their point of view. Originality/value This paper fulfills the need of a comprehensive review of financial decision making process in family firms. It provides a literature review and bibliography for the period between 2000 and 2016 for the use of both academicians and practitioners.

Examining employment relationship activities in family business research

2016 ◽  
Vol 6 (3) ◽  
pp. 210-224 ◽  
Author(s):  
Holly Ferraro ◽  
Jennifer Marrone
Keyword(s):  
Family Business ◽  
Family Members ◽  
Family Businesses ◽  
Theory And Practice ◽  
Employment Relationship ◽  
Future Research ◽  
Business Research ◽  
Content Type ◽  
The Family ◽  
Advance Theory

Purpose The purpose of this paper is to examine the family business literature on human resource management (HRM) activities within family-owned businesses to advance theory and practice. Design/methodology/approach This paper is a review of research on the formation, adaptation, and termination of the employment relationship within family businesses. Findings Important areas for future research are revealed. For example, little research investigates how family members are recruited, socialized, or how exit decisions are made. In contrast, significant attention has been given to role transitions during succession. Research limitations/implications The paper focuses on managing employment relationships (e.g. recruitment, selection, etc.) within family businesses. The research revealed HRM activities within family businesses are often informal so aspects of the employment relationship may not be fully captured by extant research. Practical implications This review provides specific HRM suggestions for practitioners to consider. For example, this review highlights that training inside the family business can be as effective as training outside the family business. Originality/value This review is novel in applying an established HRM framework to family business research and focuses on HRM activities of family members as opposed to non-family employees. The paper offers considerations for families bringing next generation members into their businesses and preparing offspring to run them successfully.

Torn between individual aspirations and the family legacy – individual career development in family firms

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Leona Achtenhagen ◽  
Kajsa Haag ◽  
Kajsa Hultén ◽  
Jen Lundgren
Keyword(s):  
Career Development ◽  
Family Business ◽  
Family Firms ◽  
Career Planning ◽  
Family Members ◽  
Career Management ◽  
Content Type ◽  
Business Context ◽  
The Family ◽  
Individual Career Management

PurposeThe purpose of this paper is to explore individual career management by family members in the context of their family firms.Design/methodology/approachThe interpretative interview study of family members active in family businesses explores how this context affects the choice, planning, goals and development of family members' careers in their family business.FindingsThe authors find that career management in the family business setting focuses on fulfilling the family business goals rather than the personal goals of family members. Career management is rather reactive and less self-directed than current literature on career development recommends. Based on the results, the authors develop a process model for individual career management in the family business context.Originality/valueLittle is known about individual career management of family members in a family business context, as research on careers in family firms has so far focused mainly on transgenerational succession. The authors explore how in family firms, the trend towards self-directed, individual career planning is in tension with a commitment to the family business and its legacy.

The effects of goals attainment on CEO-owner satisfaction and the role of family involvement

2019 ◽  
Vol 10 (2) ◽  
pp. 116-127
Author(s):  
Ondřej Machek ◽  
Jiří Hnilica
Keyword(s):  
Family Involvement ◽  
Family Business ◽  
Firm Value ◽  
Family Firms ◽  
Hierarchical Regression ◽  
Content Type ◽  
Business Goals ◽  
Growth Increase ◽  
The Family ◽  
Owner Satisfaction

Purpose The purpose of this paper is to examine how the satisfaction with economic and non-economic goals achievement is related to the overall satisfaction with the business of the CEO-owner, and whether family involvement moderates this relationship. Design/methodology/approach Based on a survey among 323 CEO-owners of family and non-family businesses operating in the Czech Republic, the authors employ the OLS hierarchical regression analysis and test the moderating effects of family involvement on the relationship between the satisfaction with different goals attainment and the overall satisfaction with the business. Findings The main finding is that family and non-family CEO-owner’s satisfaction does not differ significantly when economic goals (profit maximisation, sales growth, increase in market share or firm value) and firm-oriented non-economic goals (satisfaction of employees, corporate reputation) are being achieved; both classes of goals increase the overall satisfaction with the firm and the family involvement does not strengthen this relationship. However, when it comes to external non-economic goals related to the society or environment, there is a significant and positive moderating effect of family involvement. Originality/value The study contributes to the family business literature. First, to date, most of the studies focused on family business goals have been qualitative, thus not allowing for generalisation of findings. Second, there is a lack of evidence on the ways in which family firms integrate their financial and non-financial goals. Third, the authors contribute to the literature on the determinants of personal satisfaction with the business for CEOs, which has been the focus on a relatively scarce number of studies.

scholarly journals Beyond agency and stewardship theory: shareholder–manager relationships and governance structures in family firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ann Sophie K. Löhde ◽  
Giovanna Campopiano ◽  
Andrea Calabrò
Keyword(s):  
Social Exchange ◽  
Family Business ◽  
Social Exchange Theory ◽  
Family Firms ◽  
Governance Structure ◽  
Managerial Behavior ◽  
Exchange System ◽  
Content Type ◽  
The One ◽  
Over Time

PurposeChallenging 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/approachStemming 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.FindingsVarious 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/implicationsAs 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/valueThe proposed model integrates social exchange theory and the 4C model to predict changes in governance structure, as summarized in the final framework we propose.

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