A Study of Succession in a Family Firm

2001 ◽  
Vol 14 (3) ◽  
pp. 245-258 ◽  
Author(s):  
A.B. Ibrahim ◽  
K. Soufani ◽  
J. Lam
Keyword(s):  
Family Business ◽  
Case History ◽  
Family Firms ◽  
Family Members ◽  
New Economy ◽  
Family Firm ◽  
Next Generation ◽  
Succession Process

For many founders of family firms, the decision to retire and relinquish control of the business to their offspring is difficult. Pierre Peladeau founded Quebecor Inc., a family business and a communications leader in the new economy. The present research describes the reluctance of the founder to let go of the business to his offspring and the succession process after the death of the founder. The methodology employed is a combination of case history and study of public documents. The study underscores the need to manage conflict between family members and to plan for succession for the next generation effectively.

scholarly journals Coexistence, Unity, Professionalism and Prudence

2021 ◽  
Vol 11 (1) ◽  
Author(s):  
Miguel-Angel Gallo
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Members ◽  
Family Firm ◽  
Family Businesses ◽  
The Family ◽  
Over Time

Family firms are complex and dynamic entities that are rich with peculiar, idiosyncratic features. The objective of this paper is to provide guidance to help those involved in family businesses, businesspersons, and family members to pursue the continuity of the family firm over time. Based on the author’s experience with entrepreneurs who built successful businesses, this paper identifies four elements that are critical to achieve transgenerational continuity in family firms, namely: coexistence, unity, professionalism, and prudence. The analysis of each element provides suggestions and key considerations for both scholars and practitioners in the family business field.

Emotional intelligence in family firms

2014 ◽  
Vol 4 (1) ◽  
pp. 4-23 ◽  
Author(s):  
Gonzalo Gómez Betancourt ◽  
Isabel C. Botero ◽  
Jose Bernardo Betancourt Ramirez ◽  
Maria Piedad López Vergara
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Members ◽  
Family Firm ◽  
Business Owners ◽  
Interpersonal Dynamics ◽  
Content Type ◽  
The Family

Purpose – Although researchers have highlighted the importance of relational and family factors for the sustainability of a family firm, there is not much empirical research exploring how emotions and the management of emotions play a role in the interpersonal dynamics of family business owners. The purpose of this paper is to explore how the way family members manage their emotions affects the interpersonal dynamics in the family, business, and ownership subsystems of a family firm. Design/methodology/approach – The paper presents an in-depth case study from a family firm in Colombia-South America. Findings – The results indicate that the capability that family members have to manage their emotions influences the interpersonal dynamics that take place in the family firm at the individual and group level. In this case, the paper found that although emotional intelligence (EI) affected interpersonal relationships in a firm, this effect was based on the individual's willingness to use their EI capabilities, previous history between people, and the goals individuals have within each subsystem in a family firm. The paper also found that interpersonal dynamics, in turn, influence how family members work together. Research limitations/implications – Because this study uses an in-depth case study, the intention of the paper is to provide an initial picture of how EI can play a role in the interpersonal interactions between family business owners. The authors hope that this study can be used as a building block to enhance the understanding of the role of EI in family firms. Practical implications – EI represents an individual's capability to perceive, understand, manage, and regulate self and other's emotions. For family firms, this means that family business owners can use this capability to determine how to enact their roles in the family firm and how to interact with other to ensure harmony in their relationships. Originality/value – This paper builds on previous work on emotions in family firms to explore the role of EI in family firms, and provides an empirical exploration of the role of management of emotions in family firms.

A Four Factor Model: A Guide to Planning Next Generation Involvement in the Family Firm

1998 ◽  
Vol 11 (2) ◽  
pp. 135-142 ◽  
Author(s):  
Eleni T. Stavrou
Keyword(s):  
Conceptual Model ◽  
Family Business ◽  
Decision Process ◽  
Family Firms ◽  
Factor Model ◽  
Family Firm ◽  
Next Generation ◽  
Level Of Involvement ◽  
The Family

The involvement of and the reasons for the involvement of offspring in their parents' firms can significantly affect the firm's future. In this paper, a conceptual model is presented that explains the decision process through which the most suitable level of involvement for the next generation in the firm may be assessed. The decision process involves four factors: family, business, personal, and market. These factors set the context for managing intergenerational transitions in family firms.

Does the Family Business Interaction Factor Represent a Resource or a Cost?

2004 ◽  
Vol 17 (2) ◽  
pp. 99-118 ◽  
Author(s):  
Ernesto J. Poza ◽  
Susan Hanlon ◽  
Reiko Kishida
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Management Practices ◽  
Family Members ◽  
Agency Cost ◽  
Family Firm ◽  
Interaction Factor ◽  
The Family ◽  
Governance Practices ◽  
The Impact

The authors investigate the interaction between families and their businesses and the impact of this interaction on management and governance practices used. Family businesses participating in the family business programs at three U.S. universities completed questionnaires pertaining to family and business culture and practices. The research draws on the agency cost theory, governance, systems theory, and the resource-based view of organizations literature in the consideration of family firm attributes and the relationship between family members, nonfamily managers, and the firm. Chief executive officers generally perceive management practices, succession processes, and family environment more favorably than do either other family members or nonfamily managers. There are no significant differences in perceptions between active and inactive family members on the family scales. The difference in perceptions of the family firm between nonfamily managers and family managers is discussed as a challenge to the full utilization of professional management capabilities by family firms. Finally, owning family unity, the perception of business opportunity, and how positive the relation between firm and family is influences managerial and governance practices and therefore represents a resource for competitive advantage and sustained business performance.

Managing Generational Handover in Family Business

2021 ◽  
pp. 244-263
Author(s):  
Barbara Barabaschi ◽  
Franca Cantoni ◽  
Roberta Virtuani
Keyword(s):  
Case Studies ◽  
Family Business ◽  
Family Firms ◽  
Family Members ◽  
Specific Role ◽  
Third Generation ◽  
Two Generations ◽  
Succession Process ◽  
Hr Function ◽  
The Relationship

The aim of this chapter is to highlight the peculiarities of the succession in family-owned businesses and to discuss the main difficulties encountered by second and third-generation entrepreneurs during the succession process. By the use of direct interviews, the authors collected information about the specific role played by the multiplicity of stakeholders involved, first of all the HR function and the relationship with non family employees. The case studies analysed consider family firms that are managing their succession process. Two generations coexist in two cases with family members belonging to different branches of the same family. Non-family managers and employees represents a fundamental stakeholder that influence the success and sustainability of the succession process. One aim of the chapter is to analyse how the HR practices have changed during the succession process considering how the successors entered and integrated with non-family managers and employees according to the management for stakeholders approach.

Strategic Planning in Family Business: A Powerful Developmental Tool for the Next Generation

2008 ◽  
Vol 21 (3) ◽  
pp. 239-258 ◽  
Author(s):  
Pietro Mazzola ◽  
Gaia Marchisio ◽  
Joe Astrachan
Keyword(s):  
Strategic Planning ◽  
Family Business ◽  
Family Firms ◽  
Planning Process ◽  
Developmental Process ◽  
Family Members ◽  
Work Relationships ◽  
Next Generation ◽  
Generation Family ◽  
Planning Processes

This article addresses the issue of training next-generation family members once they have joined the management team in their family firm. The qualitative analysis of strategic planning processes of 18 Italian family firms shows that involving next-generation family members in the planning process benefits their developmental process. The findings indicate that this involvement provides the next generation with crucial tacit business knowledge and skills, facilitating interpersonal work relationships between incumbents and next-generation leaders and building credibility and legitimacy for the next generation. The comparative analysis of the cases allowed us to identify the five variables that seem to combine in explaining much of the observed differences in the amount and composition of benefits experienced in the 18 firms. Our findings extend current understanding of two understudied topics in family business: the postentryphase training of the next generation and strategic management in family firms.

scholarly journals Company manager altruism and behavioural biases in family firms

2017 ◽  
Vol 1 (1) ◽  
pp. 55-62
Author(s):  
Gérard HIRIGOYEN
Keyword(s):  
Firm Performance ◽  
Family Business ◽  
Agency Costs ◽  
Family Firms ◽  
Family Members ◽  
Theoretical Work ◽  
Family Firm ◽  
Behavioral Bias ◽  
The Family ◽  
Impact On Family

Family actors behaviors have not been much studied over the last 20 years, while at the same time, literature about family firms produced increasingly many valuable papers. That is why a relevant Framework for knowing and understanding the behavioral biases of family members is still missing, and this lack concerns also the causes, outcomes and mechanisms of such biases. Particularly and contrary to the prominent literature, the altruism of the manager will be construed as behavioral bias leading to agency costs with an impact on family firm performance. Based on theoretical work, a modeling of these different problems of agency and altruism in the family business will be proposed.(paper in French)

“We are a family firm”

2018 ◽  
Vol 8 (1) ◽  
pp. 2-21 ◽  
Author(s):  
Claudia Binz Astrachan ◽  
Isabel C. Botero
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Firm ◽  
Business Owners ◽  
Public Companies ◽  
Content Type ◽  
Brand Building ◽  
Depth Interview ◽  
The Family ◽  
Family Associations

Purpose Evidence suggests that some stakeholders perceive family firms as more trustworthy, responsible, and customer-oriented than public companies. To capitalize on these positive perceptions, owning families can use references about their family nature in their organizational branding and marketing efforts. However, not all family firms actively communicate their family business brand. With this in mind, the purpose of this paper is to investigate why family firms decide to promote their “family business brand” in their communication efforts toward different stakeholders. Design/methodology/approach Data for this study were collected using an in-depth interview approach from 11 Swiss and German family business owners. Interviews were transcribed and coded to identify different themes that help explain the different motives and constraints that drive their decisions to promote the “family business brand.” Findings The analyses indicate that promoting family associations in branding efforts is driven by both identity-related (i.e. pride, identification) and outcome-related (e.g. reputational advantages) motives. However, there are several constraints that may negatively affect the promotion of the family business brand in corporate communication efforts. Originality/value This paper is one of the first to explore why family businesses decide to communicate their “family business brand.” Building on the findings, the authors present a conceptual framework identifying the antecedents and possible consequences of promoting a family firm brand. This framework can help researchers and practitioners better understand how the family business nature of the brand can influence decisions about the company’s branding and marketing practices.

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.

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.

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