The postponed succession: an investigation of the obstacles hindering business transmission planning in family firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Filippo Ferrari
Keyword(s):  
Social Norms ◽  
Family Firms ◽  
Point Of View ◽  
Strategic Decision ◽  
Transmission Planning ◽  
Content Type ◽  
Psychological Point ◽  
Family Smes ◽  
Decision Making Processes ◽  
Business Succession

PurposeDrawing on the theory of planned behaviour, this research aims to investigate systemically if and how incumbents and successors share attitudes, social norms and perception of the feasibility of their business succession.Design/methodology/approachQualitative research carried out on a group of small Italian family firms (N = 10).FindingsThis study provides evidence of background mechanisms (attitudes, social norms and perception of feasibility) affecting the implementation of business succession planning in family SMEs. Moreover, this study provides further evidence supporting the role of social norms in strategic decision-making processes within family firms.Research limitations/implicationsFindings from this study contribute to current literature in multiple ways and have several research implications.Practical implicationsThis study highlights that it is more appropriate to adopt a systemic rather than an individualistic approach in investigating/managing business succession.Social implicationsFamily firms are the most widespread type of firms in the world; thus, a systematic failure in business transmission represents a prominent socioeconomical problem for policy-makers and institutions.Originality/valueThis study leads to further developments in exploring business succession from a psychological point of view. Findings also highlight the limits of how a theory applied in order to predict individual behaviour can provide insight into collective behaviour involving a family.

Inside an African family business estate: the founder’s legacy and the successor’s dilemma

2017 ◽  
Vol 7 (3) ◽  
pp. 1-28 ◽  
Author(s):  
Zubaida Muhumed ◽  
Virginia Bodolica ◽  
Martin Spraggon
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Management Practices ◽  
Emerging Market ◽  
Strategic Decision ◽  
Eastern Region ◽  
Ripple Effect ◽  
Strategic Choices ◽  
Content Type ◽  
The Family

Subject area Family business. Study level/applicability Specialized undergraduate courses, Elective MBA courses. Case overview This case study uncovers the remarkable story of the relentless growth and sporadic weakening of Nurul Ain (NA) Limited, a family business conglomerate with major operations in the Eastern region of Africa. The case provides an opportunity to follow the different stages of development of this family-owned organization through a sequence of strategic events and family dynamics that led to its recurrent success, decline and rejuvenation. Despite the numerous successes of NA Limited since its establishment in the early 1990s, the ambiguous relationship between family, ownership and management systems has caused a ripple effect of strategic, structural and governance challenges that threaten the sustainability of the family business. Nowadays, the founder faces the pressing challenge of ensuring his legacy remains intact and is passed over to his chosen successor, who, in turn, is confronted with the dilemma of joining the family business or pursing an independent career outside NA Limited. Shedding light on the complexity of today’s family-run organizations, the case allows examining the effectiveness of strategic decision-making in an emerging market context by applying a variety of family business principles, theories and frameworks. Expected learning outcomes Discuss the sources of competitive advantage and the typical challenges that family firms face in the context of emerging markets. Perform a comprehensive corporate diagnosis and examine the specificities of strategic management process in family businesses. Assess the succession management practices in family-run organizations and design a profile of successful successor. Discuss the effectiveness of various corporate governance mechanisms in the context of family-owned enterprises. Evaluate the strategic choices of the top management team and offer recommendations for securing the family business longevity. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 11: Strategy.

Impact of family involvement on strategy and CEO compensation

2019 ◽  
Vol 10 (3) ◽  
pp. 189-212
Author(s):  
Manika Kohli ◽  
Suveera Gill
Keyword(s):  
Decision Making ◽  
Panel Data ◽  
Family Involvement ◽  
Ceo Compensation ◽  
Family Firms ◽  
Corporate Strategy ◽  
Dynamic Panel Data ◽  
Growth Strategy ◽  
Strategic Decision ◽  
Content Type

Purpose As widely known and well established, strategic decision-making at family firms is an interface between business interests and family considerations. The purpose of this paper is to understand the underlying basis of decision-making in setting corporate strategy and designing chief executive officer (CEO) compensation at founder- vis-à-vis descendant-led family firms in the Indian pharmaceutical sector. Design/methodology/approach A sample of 106 BSE-listed pharmaceutical companies have been studied over the period 2012–2017 resulting in a total of 636 firm-year observations. Impact of family involvement in business (FIB) on corporate strategy and CEO compensation has been analysed by constructing multivariate panel data regression models. To deal with the problem of endogeneity, Arellano-Bond (1991) dynamic panel data estimation procedure has moreover been conducted. Findings Supporting stewardship theory, founder-owned and governed firms have been found to favour “growth” strategy and distribute “conservative” executive pay, thereby exerting a positive moderating impact on the strategy-compensation linkage. On the contrary, descendants/second-generation entrepreneurs have put forth a “conservative” stance for growth and innovation, and have rather been observed to favour a “liberal” compensation policy, thereby showcasing the application of behavioural agency theory. Originality/value The research is a novel attempt to unravel the interaction between corporate strategy and CEO compensation in a family firm backdrop carried out in the context of an emerging economy. The study, moreover, adopted an all-encompassing definition of FIB (ownership, management and governance).

scholarly journals Practising open innovation: a framework of reference

2017 ◽  
Vol 23 (6) ◽  
pp. 1311-1336 ◽  
Author(s):  
Cinzia Battistella ◽  
Alberto Felice De Toni ◽  
Elena Pessot
Keyword(s):  
Decision Making ◽  
Open Innovation ◽  
Design Methodology ◽  
Empirical Investigation ◽  
Innovation Process ◽  
Point Of View ◽  
Content Type ◽  
Exploratory Survey ◽  
Decision Making Processes ◽  
Opening Up

Purpose This work provides new insights into possible managerial choices and development directions for practising open innovation (OI) in companies. The purpose of this paper is to explore the different practices, actors and tools adopted for opening up the innovation process, in particular, by small- and medium-sized enterprises (SMEs) that are still facing difficulties in its implementation. Design/methodology/approach The paper is based on a literature review and an exploratory survey of a sample of 85 European SMEs. Findings The study identifies a total of 23 practices, 20 actors and 11 tools involved in the OI processes of companies. It highlights, through literature and empirical evidence, how different combinations of practices, actors and tools are put into practice. Research limitations/implications The developed framework offers new insights both from OI literature and from practitioners’ point of view into the supporting decision-making processes regarding which practices to implement, tools to adopt and actors to collaborate with. A wider investigation is recommended to include more variables to define the differences among the combinations of practices, actors and tools in terms of types of innovation (e.g. product, process, etc.), the openness degree and other contextual factors. Originality/value The originality of this paper is based on the fact that it focusses on a practical perspective of OI implementation, building a framework of reference from previous literature and empirical investigation.

scholarly journals Managing consumer behaviour through social communications

2021 ◽  
Vol 39 (3) ◽  
Author(s):  
Natalia Zykun ◽  
Yana Zoska ◽  
Vilena Voronova ◽  
Diana Fayvishenko ◽  
Yuliia Kyiashko ◽  
...  
Keyword(s):  
Consumer Behaviour ◽  
Point Of View ◽  
Communication Process ◽  
Consumer Decision Making ◽  
Customer Base ◽  
Composite Tool ◽  
Social Communications ◽  
Psychological Point ◽  
Decision Making Processes

The article examines the issues of using social communications as an integral part of marketing technologies for managing and modifying consumer behaviour. The motivating determinants influencing the formation of consumer behaviour are analyzed; the current role of communications in the field of marketing technologies is considered.The communication process itself is considered both from a socio-psychological point of view and from the standpoint of the effectiveness of using marketing tools. The points of influence of social communications on consumer decision-making processes have been determined. The article also proposes a methodology for the complex formation and use of social communications as a composite tool for managing and influencing consumers.In practice, an example of the implementation of this technique has been analyzed, in case of the need to increase the loyalty of customers of an unprofitable company that has encountered difficulties in expanding its customer base and the need to transform the negative opinion of consumers about their own brand.

A systematic review of innovation in family firms and future research agenda

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Manzoor Ul Akram ◽  
Koustab Ghosh ◽  
Dheeraj Sharma
Keyword(s):  
Dynamic Capabilities ◽  
Family Firms ◽  
Institutional Environment ◽  
Family Firm ◽  
Strategic Decision ◽  
Future Research ◽  
Research Directions ◽  
Content Type ◽  
Future Research Agenda ◽  
Future Research Directions

PurposeIn this paper, the authors have used a systematic literature review methodology of 147 journal articles published in peer-reviewed journals. The analysis includes studies based on country of origin, the periodic proliferation of studies and the methodological design of the studies. As an outcome of the review, the studies are classified on the innovation in family firms under four broad categories – innovation input, family governance mechanisms, innovation output and the external environment. Some fruitful avenues of research are outlined in this domain.Design/methodology/approachThe literature on innovation in family firms – the most dominant and ubiquitous form of organization across the world – is gaining pace. The influence of family by way controlling ownership, management and governance on, and in interaction with business acts as a complex proposition that shapes the strategic decision-making in the family firm including innovation. The purpose of this paper, therefore, is to advance the understanding of innovation in family firms and provide a list of future research questions of theoretical and practical value.FindingsBased on this review, the authors provide future research directions pertaining to innovation in emerging economy family firms, effect of the institutional environment of family firm innovation as well family firms' innovativeness in the wake of pro-market reforms, different classes of ownership in family firms and innovation, family firm goal heterogeneity and innovation, and family firm dynamic capabilities and innovation.Originality/valueThe review provides a comprehensive understanding, trends and future research directions in the domain of innovation in family firms.

WOMEN, GLASS CEILING, AND PROFESSIONALIZATION IN FAMILY SMEs: A MISSED LINK

2009 ◽  
Vol 17 (04) ◽  
pp. 497-525 ◽  
Author(s):  
LUCREZIA SONGINI ◽  
LUCA GNAN
Keyword(s):  
Glass Ceiling ◽  
Family Firms ◽  
Structure Design ◽  
Strategy Formulation ◽  
Managerial Roles ◽  
Family Smes ◽  
Decision Making Processes ◽  
Managerial Reporting ◽  
Governance Roles ◽  
Women's Role

Literature and practical evidence on the glass ceiling have showed that women's presence in ownership does not ensure that they can significantly influence firm decisional processes. Similarly women's presence in governance roles does not entail glass ceiling removal, even in family firms, which are expected to be a more favorable context. Moreover, literature on women's role in family firms has focused mostly on women's expectations, values, and objectives, on the decision-making processes led by women, on their leadership styles and so on. Very few studies have dealt with women's contribution in strategy formulation, organizational structure design, implementing and using managerial mechanisms. This article focuses on two main topics: the role of women in family firms and the professionalization of the company. It aims at understanding both women's involvement in governance and managerial roles, and the relationship with the family firms' professionalization. The findings reveal, on one hand, that family SMEs are a more favorable context for the removal of the glass ceiling only with regard to the roles of member of board of directors and functional director. On the other hand, they show that some managerial mechanisms, such as incentives and managerial reporting systems, are more relevant when women are involved in governance and managerial roles.

Strategic characterization of process assets based on asset quality and business impact

2017 ◽  
Vol 117 (8) ◽  
pp. 1720-1737 ◽  
Author(s):  
Maria-Isabel Sanchez-Segura ◽  
Alejandro Ruiz-Robles ◽  
Fuensanta Medina-Dominguez ◽  
German-Lenin Dugarte-Peña
Keyword(s):  
Intellectual Capital ◽  
Intangible Assets ◽  
Point Of View ◽  
Strategic Decision ◽  
Real Case ◽  
Content Type ◽  
Business Goals ◽  
Asset Quality ◽  
The Impact ◽  
Organizational Objectives

Purpose The purpose of this paper is to present the strategic intangible process assets characterization (SIPAC) methodology illustrated by an example of its application to the field of information technology (IT). This is a pioneering methodology for characterizing the impact and quality of intangible process assets and intellectual capital as levers to achieve organizational objectives. This strategic intellectual capital approach will help to identify both intangible assets and indicators geared to meeting organizational objectives. This is of vital importance since the success of an organization can be construed in terms of goal achievement. Design/methodology/approach The paper illustrates an example of the step-by-step application of the proposed methodology at an IT company. The aim is to describe its use in a real case so that other companies can benefit from the replication of the methodology used. Findings The proposed methodology (SIPAC) that the authors have designed and applied has been found to be useful and provide an insightful new point of view for strategic decision making in the IT industry taking into account intangible process assets. Practical implications The proposed methodology has been exemplified in a real case. This should help organizations to use the methodology to replicate the results. Originality/value Each and every organization has know-how represented by intangible assets. This paper meets an identified need to use intangible process assets as levers to help organizations achieve their business goals.

With a little help from my friends

2016 ◽  
Vol 54 (10) ◽  
pp. 2562-2586 ◽  
Author(s):  
Melissa Intindola ◽  
Judith Weisinger ◽  
Claudia Gomez
Keyword(s):  
Decision Making ◽  
Public Administration ◽  
Nonprofit Sector ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Research Directions ◽  
Content Type ◽  
The Public ◽  
Decision Making Processes ◽  
Shed Light

Purpose Studies of multi-sector collaborations have increased in recent years. However, the topic is still complex and lacks synthesis. Toward that end, the purpose of this paper is to investigate how collaboration is addressed in the public administration and nonprofit sector journals, and applies well-established strategic decision-making theories to shed light on possible research directions that would provide rigor to the field of collaboration. Design/methodology/approach The authors conduct a literature review of the top nonprofit and public administration journals, believing these most likely to contain articles on the topic of multi-sector collaboration. Findings The authors identify a number of themes, including need for clarity, temporality, call to collaborate, funding, partnering issues and processes, benefits of collaboration across three different collaborative types. Originality/value The authors embed well-known strategic decision-making theories into the themes emergent from this review and offer suggestions as to how future researchers may test strategic decision-making processes within multi-sector collaborations.

scholarly journals Understanding strategic decision-making through a multi-paradigm perspective

2017 ◽  
Vol 7 (1) ◽  
pp. 2-20 ◽  
Author(s):  
Christos Anagnostopoulos ◽  
Terri Byers ◽  
Dimitrios Kolyperas
Keyword(s):  
Decision Making ◽  
Empirical Work ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Strategy Formulation ◽  
Managerial Decision ◽  
Content Type ◽  
Charitable Foundations ◽  
Decision Making Processes ◽  
Corporate Social

Purpose The purpose of this paper is to illustrate the efficacy of using a multi-paradigm perspective to examine the relationship between corporate social responsibility (CSR) and strategic decision-making processes in the context of charitable foundations. Design/methodology/approach This paper integrates and synthesizes the micro-social processes of “assessable transcendence” (Anagnostopoulos et al., 2014) with Whittington’s (2001) perspectives on strategy. “Assessable transcendence” was achieved from the constant comparison of categories developed through an early iterative process in which data collection and analysis occurred during the same period. In all, 32 interviews were conducted among a sample of key managers in the charitable foundations for the first two divisions of English football. Findings The present study illustrates empirically that strategic decision making in charitable foundations does not “seat” neatly in any one of Whittington’s perspectives. On the contrary, this study indicates a great deal of overlap within these perspectives, and suggests that conflicting paradigms should be celebrated rather than viewed as signs of theoretical immaturity. Multi-paradigm approaches can potentially reveal insights into the “mechanics” of managerial decision making that are not easily discernible from a mono-paradigmatic perspective. Originality/value This is the first empirical work that examines CSR in relation to strategy within the context of the English football clubs’ charitable foundations, and does so by employing a multi-paradigm perspective on strategy formulation and implementation.

Limits to psychological ownership in the family business

2018 ◽  
Vol 8 (2) ◽  
pp. 196-216 ◽  
Author(s):  
Wouter Broekaert ◽  
Bart Henssen ◽  
Johan Lambrecht ◽  
Koenraad Debackere ◽  
Petra Andries
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Strategic Decision ◽  
Psychological Ownership ◽  
Operational Control ◽  
Negative Effects ◽  
Additional Insight ◽  
Content Type ◽  
The Family ◽  
And Control

Purpose The purpose of this paper is to analyze how the sense of control, psychological ownership and motivation of both family owners and non-family managers in family firms are interrelated. This paper analyzes the limits set by family owners when delegating control to their non-family managers and the resulting potential for conflict and demotivation of the non-family managers. Design/methodology/approach Building on the existing literature, first, an overview of the literature on psychological ownership and control is presented. Second, the paper analyzes the insights gained from interviews with 15 family owners and non-family managers in five family firms. Findings This study finds that motivating non-family managers is not merely a matter of promoting a sense of psychological ownership throughout the company. A strong sense of psychological ownership may facilitate but also hinder the cooperation between family and non-family. Family owners are often only willing to delegate operational control, while non-family managers also feel entitled to participate in strategic decision making. This leads to the proposition that non-family managers’ psychological ownership in family firms’ conflicts with family owners’ desire to maintain control. Originality/value This study answers the calls to seek additional insight in how non-family managers function within family firms. By shedding light on the complex relationship between control, psychological ownership and motivation in family firms, the study responds to the calls for more empirical validation of the psychological ownership framework and for more research into the potential negative effects of psychological ownership in the family business.

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