Small family business in Russia: formal or informal?

2018 ◽  
Vol 38 (9/10) ◽  
pp. 809-822 ◽  
Author(s):  
Alexander Chepurenko
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Members ◽  
Family Businesses ◽  
Entrepreneurial Activity ◽  
Small Scale ◽  
Content Type ◽  
Small Family ◽  
Scale Family ◽  
Russian State

Purpose The purpose of this paper is to deal with informal entrepreneurial activity of micro and small family businesses in the specific transitional environment. Design/methodology/approach The paper uses two cases – an informal micro business (“marginal” family business), and a formal retail small firm (“simpleton” family firm), respectively, of a panel conducted in 2013–2015 in Moscow. Findings First, the real distribution of responsibilities between family members is informal; it relies more on interpersonal trust and “common law.” Second, exactly the ease of governing such trust-based businesses for the founders’ generation sets limits of succession of small-scale family businesses. Third, as trust in the state is very low, the policy of Russian authorities to quickly force informal entrepreneurs to become legalized is substantially wrong; the results would be either a transformation of “simpleton” into “marginal” businesses or quitting business. Research limitations/implications Research limitations of the study are the number of observations and the localization of the panel only in the capital of Russia. Practical implications The fundamental failure of Russian State policy toward small-scale family businesses is its attempt to convince “marginal” to formalize and to oppress “simpleton” family businesses pushing them into informality. In fact, it should be designed vice versa: tolerate “marginal” businesses and let them to “live and die” while shaping a friendly environment for “simpleton” family firms. Originality/value The paper argues that the most important facet of informality in small family entrepreneurship is the informal property rights and governance duties’ distribution among the family members.

Passing on the legacy: exploring the dynamics of succession in family businesses in Pakistan

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Asma AbdulRahim Chang ◽  
Muhammad Shujaat Mubarik ◽  
Navaz Naghavi
Keyword(s):  
Family Business ◽  
Succession Planning ◽  
Design Methodology ◽  
Family Firms ◽  
Family Members ◽  
Family Businesses ◽  
Content Type ◽  
Traditional Family ◽  
Interviewing Technique

PurposeBy taking the theory of entrepreneurial legacy as the baseline, this study explores the various aspects of succession planning in indigenous family businesses especially the role of female family members in succession and conflicts in family businesses.Design/methodology/approachThe study is qualitative in nature and adopts narrative inquiry to explore the aspects of succession planning. In doing so, the study utilizes an in-depth interviewing technique with nine participants who run their family-owned firms which are mostly in their second or third generation for analysis.FindingsThe findings are concurrent with the literature that indicates a lack of strategic succession planning although ordinary or natural succession does occur in some firms. The study also reports a lack of consideration for female members in succession, daughters in particular, for traditional family firms (FFs) in contrast to entrepreneurial FFs.Research limitations/implicationsThe study has many implications for family-owned firms in Pakistan as they need to align their family business with the theory of entrepreneurial legacy and its three strategic activities in order to ensure the longevity of their business.Originality/valueExploring how succession planning takes place in family indigenous family businesses and what is the role of female family members in succession and conflicts in family businesses are original contributions of this study.

The innovation and internationalisation processes of family businesses

2017 ◽  
Vol 27 (2) ◽  
pp. 231-247 ◽  
Author(s):  
Vitor Braga ◽  
Aldina Correia ◽  
Alexandra Braga ◽  
Sofia Lemos
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Businesses ◽  
Family Management ◽  
Multivariate Statistic ◽  
Content Type ◽  
Business Innovation ◽  
The Family ◽  
Internationalisation Strategies ◽  
Innovation Processes

Purpose The success of the family firms cannot be detached from the current paradigm where, within the present economic conditions, economic agents struggle to exploit the existing opportunities and need to take into account the risks associated to the international arena and the innovation processes. The internationalisation and innovation processes may trigger resistance within family business due to their relatively higher difficulty to take risks and to invest in industries outside the scope of their original core business. Innovation and internationalisation processes become relevant strategies for the family firms’ continuity and success. In line with such fact, the aim of this paper is to contribute with insights regarding the processes of innovation and internationalisation within family businesses. In particular, this paper aims to assess the propensity of such firms to apply such strategies, to identify the particular business behaviour and to assess the extent to which the particulars of family firms may constraint or lead to the implementation of innovation policies, and thus its internationalisation. Design/methodology/approach The data were collected through questionnaires within family business aiming to understand the scope and characteristics of internationalisation and innovation processes within these firms. The 154 replies from such data collection were analysed using different multivariate statistic procedures, although this paper is based on factorial and correlation analysis. Findings The analysis of the results shows that there is an association between the processes of innovation and internationalisation within family business. In addition, the results also suggest a typology of firms regarding their innovation and internationalisation strategies and motivations. Research limitations/implications The results of this paper are, to some extent, limited because they did not allow comparing the findings with data from non-family business. However, the authors’ aim was not to distinguish family firms, but rather to characterise them. Practical implications This paper expects to contribute with lessons for the management of family business and to raise awareness of the constraints faced by family business. It is important to highlight that family business performance may be affected by a lower propensity to risk-taking attitudes, by the lack of non-family management and to the necessity of separating the family and the business in the business dimensions that the family limits the business growth. Originality/value Although there is a significant amount of the literature devoted to explore family business, innovation and internationalisation studies, very few draw on the relationship between internationalisation and innovation processes within family business. This paper explores such a relationship within a particular business context – the family dynamics that strongly affect management and business development.

Family succession, professionalization and internationalization: a study of Brazilian family businesses

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Augusto Dalmoro Costa ◽  
Aurora Carneiro Zen ◽  
Everson dos Santos Spindler
Keyword(s):  
Family Business ◽  
Family Members ◽  
Secondary Data ◽  
Family Businesses ◽  
Three Dimensions ◽  
Content Type ◽  
The Family ◽  
Two Generations ◽  
Internationalization Strategies ◽  
The Relationship

PurposeThe purpose of this paper is to investigate the relationship between family succession, professionalization and internationalization in family businesses within the Brazilian context.Design/methodology/approachThe paper presents a multiple-case study method with three Brazilian family businesses that have at least two generations of the owning family involved in the business and an international presence of at least three years. In-depth interviews and secondary data were undertaken with family and non-family members of each case.FindingsThe authors' results show that a family business can boost its internationalization by introducing both succession planning and professionalization on international activities. As family members tend to be more risk-averse and focused on keeping the family business within the family, professionalization is a way of improving the firm's ability to expand internationally. This process tends to lead to lower performance by the firm for the first few months or the first year after the investment, but afterward, international performance tends to grow exponentially.Originality/valueOnly a few studies have been concerned on the relationship of these three dimensions. Thus, the research takes into account that professionalization and succession lead family businesses to improve their internationalization strategies.

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.

Knowledge transfer in family business successions

2015 ◽  
Vol 5 (1) ◽  
pp. 17-37 ◽  
Author(s):  
Britta Boyd ◽  
Susanne Royer ◽  
Rong Pei ◽  
Xiaolei Zhang
Keyword(s):  
Knowledge Transfer ◽  
Competitive Advantage ◽  
Family Business ◽  
Family Firms ◽  
Family Businesses ◽  
Theory And Practice ◽  
Future Research ◽  
Content Type ◽  
Business Environments ◽  
Theoretical Reasoning

Purpose – Knowledge often is the fundament for strategic competitive advantage. Thus, it is highly relevant to understand better how knowledge is transferred from one generation to the next in family businesses. The purpose of this paper is to link the competitive advantage realisation in family businesses to the success of transferring strategically valuable knowledge in different business environments to the next generation. Design/methodology/approach – Building on the contingency model of family business succession (Royer et al., 2008) knowledge transfer in family businesses from different cultures is investigated in this paper. From a resource-oriented and transaction cost inspired perspective two family businesses with a similar industry background from China and Europe are compared regarding knowledge transfer in the context of family firm succession taking into account the respective transaction atmosphere. Findings – Different successions for two long-lived family firms are illustrated in a systematic fashion: based on the theoretical elements suggested both cases are described to get insights into the usefulness of the theoretical reasoning developed. On the basis of these, the cases are compared with each other and conclusions for both cases are drawn. Implications for theory and practice as well as avenues for future research are sketched. Originality/value – The focus of the current study is to gain more insight into long-lived family businesses by comparing two cases over a period of more than 200 years with regard to strategically relevant resources as well as the underlying transaction atmospheres. Implications for family firms depending on the resource types and transaction atmosphere are discussed.

Introduction of accounting practices in small family businesses

2017 ◽  
Vol 14 (2) ◽  
pp. 111-136 ◽  
Author(s):  
Esperanza Huerta ◽  
Yanira Petrides ◽  
Denise O’Shaughnessy
Keyword(s):  
Family Business ◽  
Perceived Competence ◽  
Family Businesses ◽  
Service Industries ◽  
Business Practices ◽  
Managerial Accounting ◽  
Content Type ◽  
Small Family ◽  
The Family ◽  
Small Family Business

Purpose This research investigates the introduction of accounting practices into small family businesses, based on socioemotional wealth theory. Design/methodology/approach A multiple-case study was conducted gathering data through interviews and documents (proprietary and public). The sample included six businesses (five Mexican and one American) from different manufacturing and service industries. Findings It was found that, although owners control the implementation of accounting practices, others (including family employees, non-family employees and external experts) at times propose practices. The owner’s control can be relaxed, or even eliminated, as the result of proposals from some family employees. However, the degree of influence of family employees is not linked to the closeness of the family relationship, but rather to the owners’ perceived competence of the family employee, indicating an interaction between competence and experience on one side, and family ties on the other. Research limitations/implications First, the owners chose which documentary data to provide and who was accessible for interviews, potentially biasing findings. Second, the degree of influence family employees can exert might change over time. Third, the study included a limited number of interviews, which can increase the risk of bias. Finally, all firms studied were still managed by the founder. It is possible that small family businesses that have undergone a succession process might incorporate accounting practices differently. Practical implications Organizations promoting the implementation of managerial accounting practices should be aware that, in addition to the owner, some family employees and external experts could influence business practices. Accountants already providing accounting services to small family business are also a good source for proposing managerial accounting practices Originality/value This study contributes to theory in four ways. First, it expands socioemotional theory to include the perceived competence of the family employee as a potential moderator in the decision-making process. Second, it categorizes the actors who can influence managerial accounting practices in small family businesses. Third, it further refines the role of these actors, based on their degree of influence. Fourth, it proposes a model that describes the introduction of managerial accounting practices in small family business.

Another hybrid? Family businesses as venture capitalists

2017 ◽  
Vol 7 (3) ◽  
pp. 329-350 ◽  
Author(s):  
Torbjörn Ljungkvist ◽  
Börje Boers
Keyword(s):  
Venture Capital ◽  
Family Business ◽  
Family Firms ◽  
Family Businesses ◽  
Board Members ◽  
Family Ownership ◽  
Venture Capitalists ◽  
Ethical Awareness ◽  
Minority Shareholders ◽  
Content Type

Purpose This paper addresses the phenomenon of venture capital firms which are also family businesses (VCFBs). The purpose of this paper is to explore and understand the phenomenon of VCFB by answering the following questions: What are the features of professionalization in VCFBs? And, how do professionalization and types of family businesses explain the strategies and governance of VCFBs? Design/methodology/approach As an explorative case study, it maps the Swedish venture capital (VC) industry and compares two VCFBs and their business investments with regard to strategy and governance. Findings By suggesting two major configurations, the study explains how family business development and levels of professionalization relate to differences in VCFBs’ strategies, which in turn, affect their governance. The personal VCFB features active owners who personally take responsibility roles and strongly focus on customers and relationships. The administrative VCFB strongly focuses on predetermined financial metrics, high ethical awareness among board members, and ongoing interplay between the active family board members and minority shareholders. Research limitations/implications The study was conducted in Sweden and concerns Swedish VCFBs. The paper contributes to the literature by combining the two currently separate research streams, i.e. family business and VC, highlighting the importance and consequences of family ownership in VC businesses. Practical implications The present study provides stock market investors and stock analysts with a deeper understanding of VCFBs’ strategy incentives. By identifying the kind of VCFB and its relation to strategy, more reasonable assessments and analyses of the VCFBs’ actions will be possible. Family firms willing to accept VC-finance should consider the type of VC and the potential consequences of family ownership. Originality/value This study is the first to classify VC firms as family businesses. Moreover, it shows the features of professionalization in VCFBs by suggesting a set of configurations.

Inertia as inhibiting competitiveness in Philippine family businesses

2015 ◽  
Vol 5 (2) ◽  
pp. 257-276 ◽  
Author(s):  
Andrea Santiago
Keyword(s):  
Life Cycle ◽  
Family Business ◽  
Family Members ◽  
The Philippines ◽  
Business Owners ◽  
Family Businesses ◽  
Business Failure ◽  
Content Type ◽  
Business Operations ◽  
Practical Implications

Purpose – The failure to innovate has been recognized as one of the prime causes of business failure. In addition to this, the purpose of this paper is to explore whether it is the failure to act or inertia that can also explain the inability of family businesses to move forward. Design/methodology/approach – This research documented the experiences of five family businesses in the Philippines that were unable to sustain their business operations. Only five families were identified since it was difficult to trace the business owners of businesses that failed, and once identified, not all were willing to discuss the reason for their business failure. Findings – The cases showed that business decline actually results from the failure of family members to address the challenges brought about the change in the different life cycle dimensions. In hindsight, arresting a downward trend necessitates varied strategic approaches. While some family members may felt incapable of introducing innovation in their business, the failure to act, by itself, was a guarantee of business failure. Research limitations/implications – The research was limited to five family businesses in the Philippines. It is possible that there may be many other reasons for family business failure based on the experiences of other families. Unfortunately, many business families in the Philippines are tight-lipped about failure, even if there are lessons to be learned. Practical implications – This paper brings attention to the need of family business owners to be more proactive in meeting the changing needs of their family business. Formula that worked before may not be appropriate at a different time. Originality/value – Research has shown that there are many reasons for family business failure. This paper shows the importance of transcending the feeling of inertia so that family members can be more proactive in meeting the challenges that they are bound to face as their families, their products, their businesses, and the industries they are in, move from one stage of the life cycle to another.

Moderating role of education on succession process in small family businesses in Pakistan

2018 ◽  
Vol 8 (3) ◽  
pp. 293-305 ◽  
Author(s):  
Zeeshan Ahmad ◽  
Muhammad Rizwan Yaseen
Keyword(s):  
Family Business ◽  
Positive Impact ◽  
Family Businesses ◽  
Business Strategies ◽  
Customer Focus ◽  
Control Analysis ◽  
Subsequent Generation ◽  
Content Type ◽  
Small Family ◽  
Succession Process

Purpose The purpose of this paper is to enhance the longevity and improve the succession process in small family businesses sustaining in Pakistan. Family businesses perform an active role in economic development of any country. Statistics shows, 30/13/3 business transfers into subsequent generation in the interfamily business (Ward, 2016). Design/methodology/approach Data are collected from 365 respondents who were either incumbents or successor in 135 small family businesses in Pakistan. Simple linear regression and process control analysis by Andrew Hayes are used for moderating variable analysis in SPSS20. Findings The results show that customer focus management, business strategies and governance board have a significant positive impact on the succession process of small family business in Pakistan. There is negative significant moderating impact of education on business strategies and customer focus management while there is no moderating impact of education over governance board and satisfaction with succession. Research limitations/implications This study will help the family business incumbents to focus deliberately on the factors that influence the succession process so that business could be transferred to the subsequent generation successfully. Originality/value The previous research does not show the effect of education at different levels and importance of customer focus management toward the succession process.

Work group support as an undervalued resource of small family businesses

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Susanne Royer ◽  
Lisa Bradley
Keyword(s):  
Competitive Advantage ◽  
Family Firms ◽  
Work Group ◽  
Specific Aspect ◽  
Family Businesses ◽  
Group Support ◽  
Business Research ◽  
Structured Interviews ◽  
Content Type ◽  
Small Family

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.

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