Strategic Divestments in Family Firms: Role of Family Structure and Community Culture

2005 ◽  
Vol 29 (3) ◽  
pp. 293-311 ◽  
Author(s):  
Pramodita Sharma ◽  
S. Manikutty
Keyword(s):  
Family Structure ◽  
Competitive Advantage ◽  
Family Firms ◽  
Community Culture ◽  
Path Dependencies ◽  
Practical Implications

Timely acquisition and divestment of resources is essential for sustaining the competitive advantage and longevity of family firms. A combination of past successes, emotional attachments, and path dependencies can lead to extensive inertia toward divestment in these firms. This article develops a framework to understand the influence of community culture and family structure on divestment decisions in family firms. Propositions on the varying levels of inertia to divest—depending on the values held by the owning family and the culture prevailing in their community—are developed. Research and practical implications are discussed.

Revisiting the concept of a competitive “cash advantage”

2015 ◽  
Vol 43 (4) ◽  
pp. 38-46 ◽  
Author(s):  
Joseph Calandro, Jr.
Keyword(s):  
Competitive Advantage ◽  
Corporate Strategy ◽  
Academic Research ◽  
Cash Holdings ◽  
Content Type ◽  
Cash Reserves ◽  
Changing Role ◽  
Viable Method ◽  
Practical Implications

Purpose – The purpose of this paper is to profile how ample cash holdings can serve as a competitive advantage by first mitigating the risk of becoming a forced seller during times of distress, and then positioning a firm to take strategic advantage of forced selling and other forms of distress-generated opportunities. Design/methodology/approach – The author reviews the changing role of cash over time in corporate strategy, and how inadequate cash has caused or contributed to corporate failures. Findings – The findings of this paper, which are supported by historical and contemporary examples, are that ample cash reserves can be a powerful source of comparative advantage. Practical implications – This article supports earlier work published in Strategy & Leadership that shows how Graham-and-Dodd-based analysis is a viable avenue of academic research and a viable method with which to assess and formulate corporate strategic initiatives such as mergers and acquisitions, share buy-backs, risk management and, in this case, the strategic uses of cash. Originality/value – This paper offers leaders and financial executives a practical explanation of how ample cash holdings can serve as a competitive advantage.

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.

scholarly journals The Dynamic Model of Intellectual Capital Creation in Family Business: The Dynamic Capabilities Perspective

2021 ◽  
Vol 4 (2) ◽  
Author(s):  
Tung-Shan Liao ◽  
Thi Thuy Dung Pham ◽  
Juin-Cherng Lu
Keyword(s):  
Competitive Advantage ◽  
Family Involvement ◽  
Family Business ◽  
Intellectual Capital ◽  
Dynamic Capabilities ◽  
Family Firms ◽  
Knowledge Accumulation ◽  
The Subject ◽  
The Relationship

The paper's purpose is to examine the role of knowledge and learning as a dynamic capability that leads to competitive advantage in family firms. It further conceptually develops a model showing the relationship between intellectual capital, firm performance, and dynamic capabilities in family firms. Using past case studies related to the subject, this study highlights the importance of knowledge accumulation, integration, codification, and the preservation of socioemotional wealth as dynamic capabilities that allow a family firm to sense and seize business opportunities that transform the business to a competitive advantage. Findings from the case applications reveal that family businesses benefit from the accumulation of knowledge through expertise, skills, and employment of non-family members and having family involvement as strategic important assets that lead to increased value in family firms’ performance.

Entrepreneurial orientation and the role of the context. The case of the firm “Sa Panada Srl”

2020 ◽  
Vol 27 (3) ◽  
pp. 349-363 ◽  
Author(s):  
Michela Floris ◽  
Angela Dettori ◽  
Camilla Melis ◽  
Cinzia Dessì
Keyword(s):  
Entrepreneurial Orientation ◽  
Best Practice ◽  
Family Firms ◽  
Single Case ◽  
Narrative Approach ◽  
Content Type ◽  
Exploratory Approach ◽  
Practical Implications

PurposeThe paper aims to analyse the case of “Sa Panada srl”, a tiny Sardinian family firm, to provide intriguing insights for the study of entrepreneurial orientation in a context that is anchored in an apparent and hostile past.Design/methodology/approachAn exploratory approach is used to analyse a single-case study through a narrative approach. Data were analysed through the hermeneutic trio consisting of three phases: (1) explication – contextualisation, reconstruction and synthesis of the history; (2) explanation – identification, description and understanding of the meaning of the narrative; and (3) exploration – discussion and identification of theoretical and practical implications.FindingsThe study introduces novel best practices that help enhance entrepreneurial orientation in a difficult setting based on change reluctance and past anchored culture.Research limitations/implicationsTheoretically, the study contributes to the literature on entrepreneurial orientation, internationalisation and innovativeness of family firms embedded in a hostile context. The main drawback of the study is its explorative analysis of a single case.Practical implicationsFor practitioners, the research proposes the case study as a best practice able to inspire successful resilient behaviour and decisions for other firms that experience daily challenges.Originality/valueThe study elucidates the relevance of individual factors of family owners as endogenous elements that can balance contextual obstacles with ambitions of growth and development.

scholarly journals Path Dependence, VRIN Resource Endowments, and Managers: Towards an Integration of Resource-Based Theory and Upper Echelons Theory

2013 ◽  
Vol 1 (1) ◽  
pp. 109
Author(s):  
Dev K. Dutta
Keyword(s):  
Competitive Advantage ◽  
Path Dependence ◽  
Sustainable Competitive Advantage ◽  
Upper Echelons ◽  
Upper Echelons Theory ◽  
Path Dependencies ◽  
Resource Endowments ◽  
Proactive Role ◽  
Resource Based Theory

<p>Path dependencies associated with the firm’s evolving resource endowments lead to redundancies,<br />which makes it sub-optimal to attain sustainable competitive advantage based on these resource<br />bundles. In this context, managers can play a proactive role by ensuring that resource endowments<br />continue to remain beneficial for their organizations. By suggesting such a linkage and the enabling<br />role of managers, I provide a way to integrate core arguments of two of the foremost organizational<br />theories in vogue: resource-based theory (RBT) and upper echelons theory (UET).</p>

Giving Rise to Creative Leadership: Contextual Enablers and Redundancies

2019 ◽  
Vol 44 (2) ◽  
pp. 288-319 ◽  
Author(s):  
Amy E. Randel ◽  
Kimberly S. Jaussi
Keyword(s):  
Competitive Advantage ◽  
Contextual Factors ◽  
Levels Of Analysis ◽  
Contextual Variables ◽  
Motivation To Lead ◽  
Creative Leadership ◽  
Substitutes For Leadership Theory ◽  
Substitutes For Leadership ◽  
Practical Implications

Creative leadership plays a key role in realizing the competitive advantage of creativity for organizations, yet little is known about the contextual factors that give rise to creative leadership. We propose a model that includes enabling contextual variables that facilitate individuals with the motivation to lead for creativity to engage in creative leadership. In addition, building on substitutes for leadership theory, contextual redundancies that reduce the necessity for creative leadership as a means for realizing creative outcomes are proposed. This model provides new insights about the role of contextual enablers and redundancies at the organizational and external environmental levels of analysis for creative leadership. Theoretical and practical implications of this model are also discussed.

Family Firms, Plural Forms of Governance, and the Evolving Role of Trust

2001 ◽  
Vol 14 (4) ◽  
pp. 353-367 ◽  
Author(s):  
Lloyd Steier
Keyword(s):  
Transaction Costs ◽  
Competitive Advantage ◽  
Family Relationships ◽  
Family Firms ◽  
Family Firm ◽  
Governance Mechanism ◽  
Case Examples ◽  
The Family ◽  
Changing Role

Trust plays an important role in the governance of most organizations. For the family firm, trust represents a particularly important source of strategic advantage. For example, in the early stages of firm development, the trust indigenous in most family relationships allows firms to reduce transaction costs substantially. As family firms evolve, so does the optimal role of trust as a governance mechanism. Ironically, in some cases, what was once a very resilient trust is replaced by an atmosphere of fragile trust or even distrust and an important source of strategic advantage is lost. As family firms naturally evolve, a major transitional task for them is optimizing the changing role of trust in firm governance. Using research-based case examples, this paper seeks to further the understanding of the dynamics of trust as a governance mechanism and source of competitive advantage within family firms.

scholarly journals BUSINESS STRATEGY AND COMPETITIVE ADVANTAGE IN FAMILY BUSINESSES IN GHANA: THE ROLE OF SOCIAL NETWORKING RELATIONSHIPS

2011 ◽  
Vol 16 (01) ◽  
pp. 103-126 ◽  
Author(s):  
MOSES ACQUAAH
Keyword(s):  
Social Networking ◽  
Competitive Advantage ◽  
Business Strategy ◽  
Family Firms ◽  
Family Businesses ◽  
Business Strategies ◽  
Community Leaders ◽  
Political Leaders ◽  
Using Data

The business strategy perspective argues that achieving competitive advantage hinges on pursing a coherent competitive strategy. Family businesses are also said to manifest a strong desire to develop enduring and committed social relationships with external stakeholders. This study examines the effect of business strategy on performance of family businesses and how their managerial social networking relationships with external entities moderate the business strategy–performance link. Using data from 54 family firms from Ghana, the findings indicate that: (1) the pursuit of the business strategies of cost leadership and differentiation create competitive advantage for family businesses; (2) social networking relationships with government bureaucratic officials and community leaders are beneficial to family businesses, but social networking relationships with political leaders is detrimental to family businesses; and (3) the benefit of business strategy to family businesses is moderated positively by networking with community leaders, but negatively by networking with political leaders.

The Role of Market Orientation and Organizational Capabilities of Family Businesses on Competitive Advantage

2020 ◽  
pp. 45-66
Author(s):  
Özgür Atılgan
Keyword(s):  
Competitive Advantage ◽  
Market Orientation ◽  
First Generation ◽  
Family Firms ◽  
Family Businesses ◽  
Organizational Capabilities ◽  
Business Organizations ◽  
Management Ability ◽  
Almost All

Family businesses are described as organizations owned by one or more members of the same family. Most of the business organizations in the world consists of family firms. However, although they constitute a larger share in almost all of the economies, in their first 5 years of operation, 90% of the family businesses disappear. Of the remaining 10%, 67% die or change ownership after first generation. Only 12% survive under current ownership past the third generation. Therefore, in order to maintain the continuity of the business, family businesses have to achieve competitive advantage. One way to achieve competitive advantage is through becoming market oriented. In this connection, the purpose of this chapter is to identify the role of market orientation and the four basic organizational capabilities (entrepreneurial ability, management ability, global ability, and building partnerships ability) on gaining competitive advantage by systematically reviewing relevant concepts, thereby contributing to the existing literature.

Exploring drivers of innovation in hospitality family firms

2018 ◽  
Vol 30 (3) ◽  
pp. 1978-1995 ◽  
Author(s):  
Andreas Kallmuenzer
Keyword(s):  
Text Analysis ◽  
Family Dynamics ◽  
Family Firms ◽  
Future Research ◽  
Regional Politics ◽  
Content Type ◽  
Complex Products ◽  
Key Drivers ◽  
Practical Implications

Purpose The purpose of this study is to explore which actors in the hospitality industry drive innovation in hospitality family firms and particularly aims at understanding how these drivers contribute to create and sustain competitive advantage. The peculiar role of family dynamics in these efforts is considered. Design/methodology/approach Narrative interviews in 22 hospitality family firms in Western Austria were conducted. Data were analyzed using the qualitative text analysis software GABEK©. Findings Results show that the entrepreneurial family and employees are key drivers for innovation as actors internal to the firm, but also the guests and regional competitors as external drivers provide comprehensive innovation input. These innovation efforts are perceived to stimulate growth and business development. Research limitations/implications Future research might want to test and further concretize the propositions from this study in quantitative surveys. Additionally, the entrepreneurial family formed the central focus of this study; thus it would be interesting to investigate the other actors identified as key drivers of innovation in hospitality family firms. Practical implications Recommendations to entrepreneurs and regional politics are to capitalize on the identified actors as important drivers of innovation. Originality/value Research widely agrees that in hospitality collaboration, innovation is necessary, for many actors jointly offer complex products and services to tourists. However, it remains unclear which actors are mainly driving innovation in hospitality and how they do this, particularly when considering that the majority of firms in this industry are family firms and therefore family dynamics need to be considered for analysis.

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