Family managers' propensity towards mergers and acquisitions: the role of performance feedback

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rosalia Santulli ◽  
Carmen Gallucci ◽  
Mariateresa Torchia ◽  
Andrea Calabrò
Keyword(s):  
Firm Performance ◽  
Family Involvement ◽  
Performance Feedback ◽  
Family Firms ◽  
Theory Of The Firm ◽  
Point Of View ◽  
Content Type ◽  
Mediating Role ◽  
Upper Echelons Theory

PurposeDrawing on upper echelons theory (UET) and arguments from behavioral theory of the firm, this paper aims to contribute to the debate on family involvement-performance relationship, by considering the mediating role of the propensity towards merger and acquisition (M&A) and the moderating role of performance feedback.Design/methodology/approachThe hypotheses are tested by applying a moderated mediation analysis on a sample of 111 German family firms. First, a mediation model is run to verify the mediation role of the propensity towards M&A; then, to evaluate the magnitude of the mediation at different values of the moderator (performance feedback), conditional indirect effects are tested using normal-theory standard errors and bootstrapping procedure.FindingsThe main findings suggest that a higher percentage of family members sitting in TMT is related to better performance and that this effect is mediated by the propensity towards M&A. Furthermore, findings also show that a higher percentage of family managers is positively related to the propensity towards M&A and, in turn, exerts a positive effect of firm performance, especially when performance feedback is negative.Practical implicationsThe paper suggests to family firms' managers that when performance feedback is negative, a riskier behavior, such as M&A, could represent a way to improve firm performance.Originality/valueThe paper provides a full application of UET to the context of family firms, offers the point of view of TMT, instead of that of ownership, to study the propensity towards M&A in family firms and goes beyond the rational view to explain family managers' risk-taking behaviors.

The role of cooperation agreements in the internationalization of Spanish winery and olive oil family firms

2019 ◽  
Vol 31 (4) ◽  
pp. 555-577 ◽  
Author(s):  
Valeriano Sanchez-Famoso ◽  
Myriam Cano-Rubio ◽  
Guadalupe Fuentes-Lombardo
Keyword(s):  
Olive Oil ◽  
Family Involvement ◽  
Family Firms ◽  
International Strategy ◽  
Content Type ◽  
Oil Companies ◽  
Mediating Role ◽  
High Level ◽  
The Relationship

Purpose This study aims to identify the mediating role of cooperation agreements in the relationship between family involvement in international firms and their level of international commitment. Design/methodology/approach The study focuses on Spanish international wine and olive oil companies that have varying levels of family involvement. The final sample consists of 263 companies. SmartPLS was used to perform the analysis. Findings A higher level of family involvement in business implies greater difficulties with cooperation agreements. Additionally, family involvement is negatively associated with the firm’s level of international commitment, and the perceived difficulties of cooperation agreements mediate this relationship. Practical implications This study is of interest to business managers with different levels of family involvement. The study clarifies their perceptions of cooperation agreements and international business commitment. Managers of firms with a high level of family involvement should emphasize the multiple benefits of cooperation agreements for international strategy performance rather than the drawbacks of cooperation. Additionally, through cooperation, companies can learn about destination markets, which may help them to focus their resources effectively in those markets. Originality/value This study contributes to the literature on the internationalization strategies of family businesses. This study is the first to address the mediating role of cooperation agreements in the relationship between family involvement and international commitment.

Market orientation, performance and the mediating role of innovation in Indonesian SMEs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Clare D'souza ◽  
Marthin Nanere ◽  
Malliga Marimuthu ◽  
Mokhamad Arwani ◽  
Ninh Nguyen
Keyword(s):  
Firm Performance ◽  
Market Orientation ◽  
Structural Equation ◽  
Customer Orientation ◽  
Point Of View ◽  
Theoretical Point ◽  
Content Type ◽  
Mediating Role ◽  
Competitor Orientation

PurposeDespite the theoretical advancements of market orientation and firm performance, there is a paucity of research regarding SMEs in Indonesia. Customer and competitor orientation were examined as two distinct constructs as per the literature, as it has been questioned for its robustness. They have been used synonymously, even though customer orientation is operationalised as a component of a market orientation construct. There is support for the argument from a theoretical point of view to keep customer orientation and competitor orientation separate. The objective of this research was to empirically test market orientation concepts on firm performance and assessing customer and competitor orientation separately. Furthermore, it also tests whether innovation plays a mediating role.Design/methodology/approachA sample of 309 small and medium-sized firms was found eligible for this study. Structural Equation Modelling was used to analyze the data. A multi-industry sample of firms was used to strengthen the generalisability of the results. The sample was acquired from two databases of SMEs directory in Kudus and Pati, East Java Indonesia, participants were randomly selected.FindingsThe findings show that innovation mediates the relationship between competitor orientation and firm performance, while competitor orientation had no significant relationship with firm performance. Customer orientation was found to positively influence firm performance.Originality/valueThe role of innovation as a mediator within SMEs in a developing country opens up avenues for further research among other developing countries. By examining both the concepts of customer and competitor orientation separately and establishing relationships, we validate support for this argument both from a methodological and theoretical point of view.

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.

scholarly journals Refining the influence of family involvement in management on firm performance: The mediating role of technological innovation efficiency

2020 ◽  
pp. 234094442095733
Author(s):  
Rubén Martínez-Alonso ◽  
María J. Martínez-Romero ◽  
Alfonso A. Rojo-Ramírez
Keyword(s):  
Firm Performance ◽  
Technological Innovation ◽  
Family Involvement ◽  
Family Firms ◽  
Performance Outcomes ◽  
Jel Classification ◽  
Theory And Practice ◽  
Mediating Role ◽  
Research Fields ◽  
Family Involvement In Management

Determining what factors influence firm performance constitutes an essential issue in both the management and the family firm research fields. This article, building on the resource-based view perspective, develops a mediation model that involves a unique intervening mechanism, namely, technological innovation efficiency (TI efficiency), with the potential to explain the inconsistencies found in prior work on the ways through which family involvement in management affects performance outcomes. Regression analyses utilizing a longitudinal sample of 1,118 Spanish private firms largely support the hypothesized mediating relationship, revealing that TI efficiency leads to richer firm performance in family firms with active family involvement in management. Overall, our findings help elucidate the black box of performance outcomes within family firms and make several contributions to theory and practice. JEL CLASSIFICATION L25; M12; O32

External knowledge sourcing and innovation in family firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Manzoor Ul Akram ◽  
Koustab Ghosh ◽  
Rojers P. Joseph
Keyword(s):  
Social Capital ◽  
Absorptive Capacity ◽  
Product Innovation ◽  
Family Firms ◽  
Family Firm ◽  
Content Type ◽  
External Knowledge ◽  
Mediating Role ◽  
Realized Absorptive Capacity

Purpose This study aims to investigate the external knowledge search behaviors in terms of search breadth and search depth in family firms and the resultant product innovation in Indian context. The authors theorize the mediating role of absorptive capacity (potential and realized absorptive capacity) between knowledge sourcing from external sources and product innovation. Further, the authors examine the moderating role of crucial internal social capital of the family firm in enhancing the use of external knowledge for firm innovation activities. Design/methodology/approach The study uses a quantitative research design taking single informant for collection of data from 151 family small and medium enterprises in automotive sector in India. The authors use structural equation modeling to test hypothesized relationships. Findings The findings indicate that both search breadth and search depth of family firms are positively associated with product innovation in family firms. The authors also find evidence for partial mediating role of potential and realized absorptive capacity in the relationship between search breadth and innovation and search depth and innovation. The results show how family firms learning taking place while scanning external knowledge sources in terms of external absorptive capacity routines. Finally, the authors find that family firm internal social capital positively moderate the relationship between search breadth and depth, and product innovation. Practical implications Family firms need to innovate to remain relevant in the long-run and as such development of superior capabilities is of great significance to them. Family firm managers must be open to external knowledge as such knowledge help them improve the firm level of innovation through absorptive capacity. Further, family firms must realize and act upon the importance of their social capital for the integration and utilization of acquired knowledge. Originality/value This paper is amongst a few papers that take dynamic capability views of innovation in family firms wherein the authors theorize how external search breadth and depth lead to the development of potential and realized absorptive capacity in family firms. The importance of family firm internal social capital as a strong integrating and knowledge sharing mechanism that helps family firms transform external knowledge into innovation is also highlighted.

Do women perform better in family firms?

2017 ◽  
Vol 29 (3) ◽  
pp. 299-315 ◽  
Author(s):  
Antonio D’Amato
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Gender Diversity ◽  
Family Firm ◽  
Campania Region ◽  
Content Type ◽  
Novel Approach ◽  
Panel Data Regression ◽  
Moderating Role

Purpose Empirical evidence on the relation between female involvement at the head of a company and firm performance remains inconclusive. This study aims to disentangle the existing evidence by exploring the moderating role of family firm status. Design/methodology/approach The study analyzes the moderating role of family firm status on the relation between gender diversity and firm performance among a sample of 88 Italian wine firms from Campania region during the 2007-2014 period. This work uses random effects panel data regression and tests the robustness of the results using alternative econometric techniques. Performance is measured in terms of profitability. Findings The findings reveal that women in top positions do not affect firm performance. However, it is found that this relation is significantly moderated by family firm status. Specifically, compared to high family-controlled firms, female involvement negatively impacts firm performance in low family-controlled firms. Research limitations/implications From a theoretical standpoint, the results enable a more nuanced interpretation of the relationship between female involvement and firm performance. From a managerial perspective, the results highlight conditions that may promote the role of women in business. Originality/value This paper provides insights into the relation between gender diversity and firm performance by exploring the moderating role of family firm status – a novel approach in the management and wine business literature.

“Ownership structure and firm performance: the mediating role of board characteristics”

2020 ◽  
Vol 20 (4) ◽  
pp. 719-737 ◽  
Author(s):  
Md Mamunur Rashid
Keyword(s):  
Firm Performance ◽  
Ownership Structure ◽  
Indirect Effect ◽  
Positive Influence ◽  
Board Independence ◽  
Content Type ◽  
Board Characteristics ◽  
Mediating Role ◽  
The Relationship

Purpose The purpose of this study is to examine the mediating role of corporate board characteristics in the relationship between ownership structure and firm performance in the listed public limited companies of Bangladesh. Design/methodology/approach The study analyzed 527 annual reports of listed companies in Bangladesh for the years 2015-2017. The direct and indirect effect of ownership structure on firm performance was examined using AMOS 23. Baron and Kenny’s (1986) four steps procedure was used to establish the mediating role of board characteristics. Findings The results demonstrated that foreign ownership and director ownership have significant positive influence on both accounting and market based firm’s performance, while institutional ownership exhibits positive influence only on accounting-based performance (return on assets). With respect to mediating effect, the results show that board size and board independence partially mediate the relationship between ownership structure and firm performance. Research limitations/implications The major limitation of the study is that it focuses only on three years data in examining the hypothesized relationship among the variables. Practical implications Investors, regulators and managers can get evocative insights, particularly who seek to improve their company’s performance in the capital market through restructuring their ownership structure and board composition. Originality/value The study focuses on both direct and indirect effect of ownership structure on firm performance in the context of an emerging and developing economy. In examining the indirect effect, the study uses board size and board independence as the mediating variables.

scholarly journals Family Involvement in Management and Product Innovation: The Mediating Role of R&D Strategies

2019 ◽  
Vol 11 (7) ◽  
pp. 2162 ◽  
Author(s):  
Julio Diéguez-Soto ◽  
María J. Martínez-Romero
Keyword(s):  
Family Involvement ◽  
Product Innovation ◽  
Family Firms ◽  
Panel Data Analysis ◽  
Investment Strategy ◽  
Family Management ◽  
Mediating Role ◽  
Product Innovations ◽  
Family Involvement In Management

Following calls to capture family firms’ innovative behavior and to specifically clarify how family firms manage product innovations to achieve sustainable economic development, this study empirically investigates the mediating role of Research & Development (R&D) strategies (i.e., intramural R&D investments, extramural R&D investments, and the combination of both intramural and extramural R&D investments) in the relationship between family involvement in the management and likelihood of obtaining product innovations. Carrying out a panel data analysis that is based on 7264 observations of Spanish manufacturing firms throughout the 2000–2015 period, our results suggest a negative effect of the level of family management on the likelihood of introducing product innovations. Moreover, we found that intramural R&D investments and the investment strategy consisting of both intramural and extramural R&D mediated the family involvement in management-likelihood of obtaining product innovations relationship. Our findings contribute important insights to the comprehension of which determinants instigate product innovation in family managed firms.

The role of internationalization in entrepreneurial orientation-performance link: empirical study of SMEs in a developing nation perspective

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zaynab Dadzie ◽  
Ahmed Agyapong ◽  
Abdulai Suglo
Keyword(s):  
Firm Performance ◽  
Empirical Study ◽  
Entrepreneurial Orientation ◽  
Developing Nation ◽  
Content Type ◽  
Mediating Role ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Purpose This study aims to examine the mediating role of internationalization in the relationship between the dimensions of entrepreneurial orientation (EO) and performance, empirical study of small and medium scale enterprises (SMEs) in a developing nation. Design/methodology/approach The study uses a sample of 158 exporting SMEs based in the sub-Saharan developing economy, Ghana. The use of hierarchical regression (ordinary least square analysis) was used by the researcher to assess the suggested model of the study. Findings Largely supporting the conjectural predictions, the study indicates that EO positively and significantly influences performance; internationalization fully mediates the relationship between innovativeness and performance of export firms; internationalization fully mediates the relationship between risk-taking and performance of export firms; and finally, internationalization partially mediates the relationship between competitive aggressiveness and performance of export firms. Managers are, therefore, encouraged to strategically develop both their EO and internationalization, as the study has confirmed that EO has both a direct and indirect relationship with performance. Originality/value This study integrated a resource-based view of the firm and international entrepreneurship theory as a theoretical foundation. Theoretically, internationalization’s mediating role reveals the relevance of this construct in the linkage between entrepreneurial orientation and firm performance. Furthermore, the study extends the entrepreneurial orientation concept to the international business literature by estimating and testing models of the mediating link between entrepreneurial orientation and performance. Moreover, the study seeks to broaden the knowledge of entrepreneurial orientation and its relationship with performance in small and medium businesses. The study further extends the limited studies on performance, driven by entrepreneurial orientation and internationalization in a developing nation (Ghanaian) context. This paper besides seeks to highlight the impact of entrepreneurial orientation on performance when channeled through internationalization. The study also reveals the dimensions of entrepreneurial orientation to be important antecedents of internationalization, in attempts at unearthing the critical predictors of firm performance, especially those of international characteristics.

High-performance human resource management and firm performance

2015 ◽  
Vol 115 (2) ◽  
pp. 353-382 ◽  
Author(s):  
Kangyin Lu ◽  
Jinxia Zhu ◽  
Haijun Bao
Keyword(s):  
Firm Performance ◽  
Human Resources ◽  
High Performance ◽  
Human Resources Management ◽  
Chinese Enterprises ◽  
Content Type ◽  
Resources Management ◽  
Mediating Role ◽  
The Relationship

Purpose – Human resources have become a key issue in relation to the strong competition between service firms. Therefore, the purpose of this paper is to explore the relationship between high-performance human resource management (HRM) within this field to firm performance, making a useful attempt to explore the “black box” of enterprise human resources management effect on firm performance. Design/methodology/approach – In order to validate the relationship between high-performance HRM and firm performance, Chinese service industry samples were collected. Structural equation modeling and regression are adopted to estimate the direct effect of high-performance HRM on firm performance and the mediating role of innovation. Findings – The results show that the impacts of high-performance HRM on firm performance are significant. Moreover, innovation plays a partial mediating role between them. Training, work analysis and employee participation has a significantly positive impact on firm performance, while effects of profit sharing, employee development and performance evaluation on enterprise performance is not significant. The results strongly support the hypothesis that innovation holds intermediary variables between high-performance HRM and firm performance. Practical implications – Studying the relationship between high-performance HRM and firm performance can help Chinese enterprises more reasonable and effective learning foreign advanced management ideas and methods. And then can help Chinese enterprises to establish a high-performance HRM system that is suitable for Chinese enterprises; the research can help enterprises to identify meaningful practice of human resources management, outstanding keys, and perfect the HRM system of enterprises; research on innovation and innovative thinking is conducive to develop employees’ innovation motive, promote employee’ innovative behavior, and improve firm performance. Originality/value – This paper takes innovation as a mediating variable into the model and studies the intermediary role of innovation.

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