Socio-emotional wealth preservation and KPI voluntary disclosure quality

2020 ◽  
Vol 18 (3) ◽  
pp. 459-482
Author(s):  
Saoussen Boujelben ◽  
Chourouk Boujelben
Keyword(s):  
Voluntary Disclosure ◽  
Family Firms ◽  
Family Members ◽  
Family Influence ◽  
Disclosure Quality ◽  
Content Type ◽  
The Family ◽  
And Control ◽  
Practical Implications

Purpose The purpose of this paper is to examine the effect of the emotional attachment strength of family members to their business on the quality of the voluntary disclosure of their key performance indicator (KPI). More specifically, the authors focused on the effect of two dimensions of the socio-emotional theory, i.e. “family influence and control” and “firm dynasty succession.” Design/methodology/approach The authors performed a content analysis of annual reports for a sample of 87 French families listed in CAC All-Tradable to calculate a disclosure quality index of KPI. The authors proxied the “family influence and control” by the proportion of family members appointed in the board. To identify the “firm dynasty succession” concern, the authors classified firms according to the generation they belonged to. The authors estimated a cross-sectional linear regression model to meet the research objective. Findings This study confirms the role of the family affective attachment in decreasing the quality of KPI disclosure in such a way to preserve its socio-emotional wealth. The family firms’ principals who desire to sustain their control on the firm, to perpetuate the business for future generations and to protect their emotional wealth tend to avoid the disclosure of credible and reliable KPI information. Practical implications The findings have meaningful practical implications. First, they provide relevant insights into the regulatory bodies of the financial reporting regarding the increasing appeal for making KPI disclosure mandatory. Second, as the family businesses are the most widespread proprietorship in the French context, the effect of the family agenda on the quality of the KPI should be of interest to various policymakers and financial statements’ users of such firms. Third, the results inform nonfamily shareholders regarding the importance of selecting representatives on the board that should share similar interest with regard to KPI disclosure. Social implications From a societal perspective, this study is relevant in taking into account the critical role the family businesses have in the French economy. This study should help the minority shareholders to protect their interests and maximize their wealth within the family firm because it sheds light on the influence that family members have on hiding key information on the firm’s real performance. Originality/value To the best of the authors’ knowledge, no prior study in the family firms literature has examined the quality of voluntary disclosure of KPI. Although most previous studies merely compared family and nonfamily firms in terms of voluntary disclosure, the authors acknowledge and address the heterogeneity between family firms. The authors contribute to the few prior empirical validations of SEW implication on voluntary disclosure decisions by testing the effect of an additional dimension, which is family dynasty.

Capturing the Familiness of Family Businesses: Development of the Family Influence Familiness Scale (FIFS)

2017 ◽  
Vol 41 (5) ◽  
pp. 709-742 ◽  
Author(s):  
Hermann Frank ◽  
Alexander Kessler ◽  
Thomas Rusch ◽  
Julia Suess–Reyes ◽  
Daniela Weismeier–Sammer
Keyword(s):  
High Reliability ◽  
Family Members ◽  
Reliability And Validity ◽  
Family Influence ◽  
Factor Analyses ◽  
Confirmatory Factor Analyses ◽  
Proficiency Level ◽  
Confirmatory Factor ◽  
The Family ◽  
And Control

This article develops a familiness scale measuring the family influence on the business via decision premises that express familiness. In three studies, we examine familiness with qualitative and quantitative approaches based on new systems theory. Narrative interviews are employed to generate items. Exploratory and confirmatory factor analyses led to a multidimensional scale (Family Influence Familiness Scale [FIFS]) comprising six dimensions: (1) ownership, management, and control; (2) proficiency level of active family members; (3) sharing of information between active family members; (4) transgenerational orientation; (5) family–employee bond; and (6) family business identity. Results indicate high reliability and validity levels.

Family ties and emotions: a missing piece in the knowledge transfer puzzle

2010 ◽  
Vol 17 (3) ◽  
pp. 418-436 ◽  
Author(s):  
Rosa Nelly Trevinyo‐Rodríguez ◽  
Nick Bontis
Keyword(s):  
Knowledge Transfer ◽  
Family Firms ◽  
Original Learning ◽  
Family Members ◽  
Term Survival ◽  
Content Type ◽  
Business Context ◽  
The Family ◽  
Family Based ◽  
Transfer Mechanisms

PurposeThe paper aims to develop a model of knowledge transfer that considers kinship ties and emotions in family‐based firms.Design/methodology/approachThere exist several models, which show how information flows among individuals and within organizations. One school of thought is known as Cultural‐Historical Activity Theory (CHAT), which was initially formulated by Lev Vygotsky, the Founder of the school. However, when analyzing CHAT within the family business context, the model no longer holds true. This paper examines knowledge‐transfer mechanisms through the lens of family firms.FindingsFamily traditions, ties, and emotions, which are not considered in the original learning framework, affect knowledge transfer, commitment, and the motivation of family members.Research limitations/implicationsBased on CHAT and subsequently on other social networks theories, a more appropriate next generation learning model is developed which explains how intergenerational knowledge transfer takes place within family firms.Practical implicationsThis paper improves the understanding of how family members' shared knowledge (i.e. traditions) may become sources of competitive advantages for the family firm (i.e. long‐term survival).Originality/valueThis paper is among the first known to examine knowledge‐transfer mechanisms specifically for family‐based businesses.

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.

Secrets of succession: how one family business reached the ninth generation

2019 ◽  
Vol 40 (5) ◽  
pp. 12-20 ◽  
Author(s):  
Chamsa Fendri ◽  
Pascal Nguyen
Keyword(s):  
Family Firms ◽  
Single Case ◽  
Content Type ◽  
Theoretical Concepts ◽  
The Social ◽  
The Family ◽  
Consistent Picture ◽  
Practical Implications ◽  
Insight Into

Purpose The purpose of this paper is to provide insight into the specific structures and routines of family firms and to highlight their strengths and weaknesses using a case study. Design/methodology/approach The case describes a French SME in the construction sector that is undergoing succession from the eighth to the ninth generation. Both generations have offered their viewpoints. The succession context allows us to better distinguish what makes a family firm uniquely resilient and what may easily turn into a weakness. Findings The case indicates that the trust that family owners have cultivated with employees allows the firm to operate less formally and with less rigid procedures. It also encourages employees to take initiatives and contributes to their greater engagement. On the other hand, it may expose the firm to more structured and well-organized competitors. Research limitations/implications The limitations are those relative to the use of a single case. Practical implications Succession is a delicate process that needs to be well prepared and executed without any haste. It involves retaining the firm’s strengths, such as the social capital that the family has patiently amassed. But it also represents an opportunity to review the firm’s practices and to introduce a good dose of innovation. Originality/value The case provides a vivid illustration of what makes family firms so distinctive. Theoretical concepts and empirical findings from the literature are put together in a single consistent picture.

Supervisor workplace gossip and its impact on employees

2018 ◽  
Vol 33 (1) ◽  
pp. 93-105 ◽  
Author(s):  
Chien-Chih Kuo ◽  
Chih-Ying Wu ◽  
Chia-Wu Lin
Keyword(s):  
Communication Style ◽  
Control Variables ◽  
Content Type ◽  
Member Exchange ◽  
Research Findings ◽  
And Control ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to explore the role of supervisor gossip in the workplace. This paper proposes a hypothetical model in which supervisor gossip has an effect on leader-member exchange (LMX), in turn resulting in perceived supervisor ostracism among subordinates. Design/methodology/approach A dyadic research design was applied to collect data from Taiwanese employees. Supervisors participated in a survey containing measures of supervisor gossip and control variables, whereas subordinates responded to a questionnaire on LMX, perceived supervisor ostracism, and control variables. Findings The results indicated that positive supervisor gossip significantly affected LMX. Furthermore, healthy LMX reduced subordinates’ perceptions of supervisor ostracism. Research limitations/implications All participants were recruited in Taiwan, which is a limitation for generalising the research findings. Future studies should investigate multiple societies of various cultural profiles. Practical implications To improve the quality of the supervisor-subordinate relationship, supervisors should adopt a positive informal communication style, and organisations should provide supervisors with information regarding the implications of workplace gossip, illustrating the substantial benefits of positive gossip and the potential drawbacks of negative gossip. Originality/value The present study highlighted the role of supervisor workplace gossip in the field of leadership and empirically investigated the impact of supervisor gossip on subordinates’ reactions.

The effect of internal factors and family influence on firms’ adoption of green product innovation

2016 ◽  
Vol 39 (10) ◽  
pp. 1167-1198 ◽  
Author(s):  
Yi-Chun Huang ◽  
Min-Li Yang ◽  
Ying-Jiuan Wong
Keyword(s):  
Firm Size ◽  
Family Firms ◽  
Behavioral Theory ◽  
Family Influence ◽  
Future Research ◽  
Green Product ◽  
Internal Factors ◽  
Content Type ◽  
And Control ◽  
The Relationship

Purpose Little research has been conducted on the internal factors that drive green product (GP) innovation and how family influence affects firm adoption of GP innovation. This study aims to apply multiple perspectives to bridge this research gap, adopting the resource-based view (RBV) to examine what and how internal factors affect firm adoption of GP innovation, and using the behavioral theory of family firms to investigate whether family influence fosters or hinders firm adoption of GP innovation. Design/methodology/approach This study used a multichannel approach and adopted content analysis to collect and evaluate data on listed Taiwanese firms and used cross-sectional regression analysis to examine the effect of internal factors and family influence on firm adoption of GP innovation. Findings The results showed that the internal factors of green capabilities, R&D intensity and firm size significantly and positively affected firm adoption of GP innovation separately. Furthermore, the study found that family influence (ownership and control) significantly and negatively affects firm adoption of GP innovation separately. Research limitations/implications This study contributes to the academic research of innovation management, green management and family firms in several aspects, but also has some limitations. This study examined only the relationship between a firm’s internal factors and GP innovation. Future research might test the relationship between a firm’s internal factors and adoption of green process innovation. In addition, such research can explore how integrated internal and external factors influence firm adoption of GP innovation. Practical implications From the RBV, the internal factors of green capabilities, R&D intensity and firm size that can exert crucial effects on firm engage in firm’s adoption of GP innovation. This study suggests that top managers in family-influenced businesses should maintain appropriate commitment and support for fostering and facilitating firm GP innovation. Social implications From the RBV, this study examined how internal factors affect firm adoption of GP innovation. Moreover, based on the behavioral theory of family firms, this study further examined how family influence (ownership and control) affects firm adoption of GP innovation. This paper extended both perspectives to examine green issues. Originality/value From the RBV, this study examined how internal factors affect firms’ GP innovation. Moreover, based on institutional theory, this study further examines how a family firm moderates the relationship between a firm’s internal factors and GP innovation. The paper extended both perspectives to probe further the green issues.

Revisiting women’s entrepreneurship

2014 ◽  
Vol 6 (3) ◽  
pp. 231-254 ◽  
Author(s):  
Mary Barrett
Keyword(s):  
Women Entrepreneurs ◽  
Family Firms ◽  
Family Firm ◽  
Self Organization ◽  
Content Type ◽  
Women’S Entrepreneurship ◽  
The Family ◽  
Research Questions ◽  
Women's Entrepreneurship ◽  
Practical Implications

Purpose – The purpose of this paper is to study women’s entrepreneurship from the family-firm context and radical subjectivist (RS) economics. While women’s entrepreneurship is a long-standing topic of research interest, there have been calls for more theory-oriented research and research which takes context factors in women’s entrepreneurship seriously. The paper responds to this by using an RS’s view of economics as a theoretical lens to consider women’s entrepreneurship in family firms. Design/methodology/approach – The paper briefly reviews the potential of the family-firm context for examining women’s entrepreneurship in a non-reductive fashion, then outlines radical subjectivism (RS). The three main elements of RS’s “entrepreneurial imagination” are explained, then linked with other theories of family-firm behaviour and applied to casework on women entrepreneurs in family firms. Findings – Each element of the entrepreneurial imagination, empathy, modularity and self-organization, generates new research questions which contest previous apparently settled views about women entrepreneurs. Protocols for investigating the questions are suggested. The third element, self-organization, while more difficult to operationalize for empirical testing, suggests how women’s entrepreneurship might generate new industries. Research limitations/implications – While this is primarily a conceptual study, its case studies invite further exploration of both women entrepreneurs and family firms. The RS perspective could also increase understanding of shared leadership and innovation in family firms. Specific research questions and protocols for investigating them are offered. Practical implications – Insights from the research have practical implications for entrepreneurship education, for understanding entrepreneurship at the level of society, the firm and the individual. Social implications – The importance of both family firms and women entrepreneurs to society makes it important to understand both of them better. The RS perspective can help. Originality/value – The paper highlights the value of combining attention to entrepreneurial context (family firms) and theory (RS) to reinvigorate some old research questions about women entrepreneurs. The combination of family firms and RS is also novel.

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.

When family businesses go international: management sets the path

2017 ◽  
Vol 38 (1) ◽  
pp. 31-38 ◽  
Author(s):  
Marta Jorge ◽  
Maria Couto ◽  
Tânia Veloso ◽  
Mário Franco
Keyword(s):  
Family Firms ◽  
International Markets ◽  
International Management ◽  
Internationalization Process ◽  
Content Type ◽  
Family Factor ◽  
The Family ◽  
Specific Factors ◽  
Exploratory Case Studies ◽  
Practical Implications

Purpose The purpose of this study is to understand the characteristics and decision processes of small- and medium-sized family firms (FSMEs) regarding the internationalization process. Design/methodology/approach For this purpose, the authors decided on a qualitative approach and performed exploratory case studies of two small- and medium-sized firms (SMEs) in Portugal, one family and the other non-family. Findings The authors found that the internationalization of FSME is not entirely explained by gradual processes of commitment to international markets. Restricted access to resources (financial and human) is compensated for by specific factors of FSMEs. Practical implications This study shows the relevance of FSME management for the process that seems to be at the basis of the commitment to, and success in international markets, concerning both the risk taken on and its cultural mentality. Originality/value Although family firms are many in number and central in the dynamics of the world economy, the family factor has not been approached as a determinant characteristic in the internationalization process. This holds particularly for the realm of FSMEs.

When family firm corporate governance fails: the case of El Corte Inglés

2019 ◽  
Vol 10 (2) ◽  
pp. 97-115
Author(s):  
María Sacristán-Navarro ◽  
Laura Cabeza-García
Keyword(s):  
Corporate Governance ◽  
Family Firms ◽  
Family Members ◽  
Family Firm ◽  
Governance Mechanisms ◽  
Content Type ◽  
Theoretical Concepts ◽  
Corporate Governance Mechanisms ◽  
The Right ◽  
Practical Implications

Purpose The purpose of this paper is to describe internal corporate governance mechanisms in family firms as well as conflicts that may arise among shareholders and family members in the absence of specific corporate governance mechanisms. Design/methodology/approach After presenting theoretical concepts, the authors study the case of Spanish family firm El Corte Inglés to understand some of the corporate governance difficulties the company has experienced over the past few years. Findings This case illustrates how corporate governance problems can arise because the right mechanisms have not been used, leading to conflicts among family members, valuation problems and power struggles. Practical implications There is a need for family firms to employ suitable corporate governance mechanisms as governance complexity increases. Originality/value This study aims to contribute to the understanding of corporate governance problems among family members and their possible solutions.

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