The Enigma of the Family Successor–Firm Performance Relationship: A Methodological Reflection and Reconciliation Attempt

2019 ◽  
Vol 43 (3) ◽  
pp. 437-474 ◽  
Author(s):  
Jan-Philipp Ahrens ◽  
Andrea Calabrò ◽  
Jolien Huybrechts ◽  
Michael Woywode
Keyword(s):  
Firm Performance ◽  
Family Member ◽  
Family Involvement ◽  
Family Firms ◽  
Empirical Studies ◽  
Ceo Succession ◽  
The Family ◽  
The Individual ◽  
Positive Effect ◽  
Methodological Reflection

Empirical studies examining firm performance following CEO succession in family firms predominantly document inferior performance of family successors. This evidence is at odds with general theoretical literature that attests a positive effect of family involvement inside the firm. To explore this enigma, we theoretically and empirically disentangle the influence of the CEO attribute family member (i.e., the CEO is affiliated to the family) on post-succession firm performance, from other, distinct CEO attributes (e.g., CEO-related human capital). Our analysis on the individual CEO level shows that after respective controls, the family member attribute is significantly positively related to post-succession firm performance.

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.

Understanding Family Firm Profitability Heterogeneity

2020 ◽  
pp. 305-329 ◽  
Author(s):  
María J. Martínez-Romero ◽  
Rubén Martínez-Alonso ◽  
Alfonso A. Rojo-Ramírez ◽  
Julio Diéguez-Soto
Keyword(s):  
Family Involvement ◽  
Family Firms ◽  
Firm Heterogeneity ◽  
Family Firm ◽  
Research Field ◽  
The Family ◽  
Firm Profitability ◽  
Strategic Element ◽  
Family Involvement In Management ◽  
Positive Effect

Understanding family firm heterogeneity has become a topic of critical importance among academics and practitioners in the family business research field. This chapter aims to provide new insights into this theme by examining the differences in profitability within the pool of family firms. Furthermore, this chapter introduces an exceptional strategic element, namely innovative effort, to analyse when and to what extent the deployed innovative effort influences the family involvement in management-firm profitability relationship. Using a panel dataset on 3,164 observations of Spanish private manufacturing firms over the 2000–2015 period, the findings reveal significant differences in the profitability of family firms depending on the degree of family involvement in the firm's management. The findings also show that innovative effort reinforces the positive effect that family involvement in management exerts on firm profitability.

Family Firms, Social Responsibility, and Non-Family Member Employees Identification

Think India ◽  
2013 ◽  
Vol 16 (3) ◽  
pp. 10-19
Author(s):  
Ang Bao
Keyword(s):  
Resource Allocation ◽  
Social Responsibility ◽  
Family Member ◽  
Program Implementation ◽  
Social Identity Theory ◽  
Family Firms ◽  
The Family ◽  
Corporate Social ◽  
The Relationship ◽  
Csr Engagement

The objective of this paper is to find the relationship between family firms’ CSR engagement and their non-family member employees’ organisational identification. Drawing upon the existing literature on social identity theory, corporate social responsibility and family firms, the author proposes that family firms engage actively in CSR programs in a balanced manner to increase non-family member employees’ organisational identification. The findings of the research suggest that by developing and implementing balanced CSR programs, and actively getting engaged in CSR activities, family firms may help their non-family member employees better identify themselves with the firms. The article points out that due to unbalanced CSR resource allocation, family firms face the problem of inefficient CSR program implementation, and are suggested to switch alternatively to an improved scheme. Family firms may be advised to take corresponding steps to select right employees, communicate better with non-family member employees, use resources better and handle firms’ succession problems efficiently. The paper extends employees’ identification and CSR research into the family firm research domain and points out some drawbacks in family firms’ CSR resource allocation while formerly were seldom noticed.

The effects of goals attainment on CEO-owner satisfaction and the role of family involvement

2019 ◽  
Vol 10 (2) ◽  
pp. 116-127
Author(s):  
Ondřej Machek ◽  
Jiří Hnilica
Keyword(s):  
Family Involvement ◽  
Family Business ◽  
Firm Value ◽  
Family Firms ◽  
Hierarchical Regression ◽  
Content Type ◽  
Business Goals ◽  
Growth Increase ◽  
The Family ◽  
Owner Satisfaction

Purpose The purpose of this paper is to examine how the satisfaction with economic and non-economic goals achievement is related to the overall satisfaction with the business of the CEO-owner, and whether family involvement moderates this relationship. Design/methodology/approach Based on a survey among 323 CEO-owners of family and non-family businesses operating in the Czech Republic, the authors employ the OLS hierarchical regression analysis and test the moderating effects of family involvement on the relationship between the satisfaction with different goals attainment and the overall satisfaction with the business. Findings The main finding is that family and non-family CEO-owner’s satisfaction does not differ significantly when economic goals (profit maximisation, sales growth, increase in market share or firm value) and firm-oriented non-economic goals (satisfaction of employees, corporate reputation) are being achieved; both classes of goals increase the overall satisfaction with the firm and the family involvement does not strengthen this relationship. However, when it comes to external non-economic goals related to the society or environment, there is a significant and positive moderating effect of family involvement. Originality/value The study contributes to the family business literature. First, to date, most of the studies focused on family business goals have been qualitative, thus not allowing for generalisation of findings. Second, there is a lack of evidence on the ways in which family firms integrate their financial and non-financial goals. Third, the authors contribute to the literature on the determinants of personal satisfaction with the business for CEOs, which has been the focus on a relatively scarce number of studies.

scholarly journals Adolesence and Family Crises

1968 ◽  
Vol 13 (2) ◽  
pp. 125-133 ◽  
Author(s):  
Donald G. Langsley ◽  
Robert H. Fairbairn ◽  
Carol D. Deyoung
Keyword(s):  
Family Member ◽  
Point Of View ◽  
Tension Reduction ◽  
Therapy Approach ◽  
Family Crisis ◽  
The Family ◽  
Adaptive Solution ◽  
Developmental Point ◽  
The Individual

Like the individual, the family may be better understood from a developmental point of view. It has different tasks and problems at various stages of its existence. The family with adolescent children faces a change in composition (loss of children and the responsibility of helping these children become adults). This threat may produce a family crisis and individual members may react to the specific conflicts in a manner which depends on their previous problems. The family member who becomes a ‘patient’ may be the teenager or a parent. A family crisis therapy approach permits tension reduction within the group, improves functioning on the part of the ‘patient’ and permits the family to work out a more adaptive solution.

scholarly journals How Does Family Involvement Affect Environmental Innovation? A Socioemotional Wealth Perspective

2021 ◽  
Vol 13 (23) ◽  
pp. 13114
Author(s):  
Joohee Han ◽  
Juil Lee ◽  
Sang-Joon Kim
Keyword(s):  
Family Involvement ◽  
Environmental Performance ◽  
Boards Of Directors ◽  
Family Firms ◽  
Technological Development ◽  
Environmental Issues ◽  
Environmental Innovation ◽  
Socioemotional Wealth ◽  
Public Firms ◽  
Positive Effect

The purpose of this study was to examine how family involvement affects the environmental innovation of firms. While prior studies have shown that family involvement can enhance environmental performance, these environmental performances have been portrayed as firm activities to prevent environmental issues, such as air pollution, CO2 emissions, etc. We maintain that environmental performance should be more proactive and enable firms to transform their activities more fundamentally towards environmental protection. In this sense, we consider environmental innovation, i.e., technological development to address environmental issues, as a proactive measure enacting firm activities to address environmental issues. Furthermore, we determine whether and how family involvement can motivate firms to develop technologies for environmental performance. To illuminate this relation, we utilized a socioemotional wealth perspective, which provides useful insights into how family-controlled firms behave differently in comparison to non-family firms. Building on this socioemotional wealth approach, we suggest that family involvement helps firms engage in environmental innovation. In this study, we also explore how the positive link between family involvement and environmental innovation is dependent on family interlocks—the circumstance wherein a firm’s family directors are affiliated with the boards of directors of other firms. Specifically, we suggest that an increase in a firm’s family interlocks would strengthen the positive relationship between family involvement and environmental innovation. To test our ideas, we used a sample of 623 US public firms ranging from 1996 to 2010, which yielded 5047 firm-year observations. We find that family involvement facilitates the environmental innovation of firms. We also find that family interlocks intensify the positive effect of family involvement on environmental innovation. Finally, we discuss the theoretical and empirical implications of our results.

Family Firms and the Choice Between Wholly Owned Subsidiaries and Joint Ventures: A Transaction Costs Perspective

2018 ◽  
Vol 44 (2) ◽  
pp. 211-232 ◽  
Author(s):  
Maria Cristina Sestu ◽  
Antonio Majocchi
Keyword(s):  
Transaction Costs ◽  
Family Involvement ◽  
Family Firms ◽  
Joint Venture ◽  
Entry Modes ◽  
Family Control ◽  
The Family ◽  
Wholly Owned Subsidiary ◽  
Transaction Costs Economics

We examine the effects of family control on entry mode choice by integrating Transaction Costs Economics with the family business literature. Using a dataset of 951 foreign investments, we investigate the role of family involvement on entry modes. After controlling for endogeneity, we find that if both the investing and the local firm are family firms, forming a joint venture is preferred, while if only the investing firm is a family firm, a wholly owned subsidiary is more likely. Results show that family control has an important impact on entry modes, an hypothesis that has not yet been fully explored.

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

Differences between family and non-family SMEs: A comparative study of Australia and Belgium

2008 ◽  
Vol 14 (1) ◽  
pp. 40-58 ◽  
Author(s):  
Max Smith
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Empirical Studies ◽  
Business Relationship ◽  
Detailed Understanding ◽  
National Differences ◽  
The Family ◽  
Family Smes ◽  
Australian Experience ◽  
Cross National

AbstractThis study attempts to further the development of family business theory by providing a more detailed understanding of the differences between family and non-family firms' profitability, growth, exporting and networking behaviour. Utilising data from 2190 Australian SMEs, the study compares the Australian experience of differences between family and non-family firms with those found among Belgium firms. The Australian results are consistent with the growth and some of the networking behaviour found among Belgium firms, but not with their profitability and exporting behaviour. The study's findings support the contentions that the differences between family and non-family firms may be less than many earlier studies have indicated and that industry differences and cross-national differences in corporate governance environments may lead to variances in these differences. It also demonstrates that the underlying theoretical rationale for a number of predicted differences between family and non-family firms appears flawed. These findings indicate that new empirical studies that control for context are urgently needed to ensure the scholarly literature on family businesses is not being built on false assumptions. They also indicate that studies designed to explain differences in the family/non-family business relationship between industries and nations may lead to advances in family business theory.

scholarly journals Family Involvement in the Firm and Exports in the Family SME: Is the Manager’s International Orientation Influential?

2015 ◽  
Vol 7 (3) ◽  
pp. 69-99 ◽  
Author(s):  
Sami Basly
Keyword(s):  
Family Involvement ◽  
Family Firms ◽  
Positive Influence ◽  
International Orientation ◽  
The Family ◽  
Sample Data ◽  
Family Smes ◽  
Family Involvement In Management ◽  
The Relationship

AbstractDoes the family involvement affect exports in the family firm? The literature seems to support this view even if the direction and magnitude of this impact remains controversial. Drawing on the perspectives of agency [Chrisman et al. 2004; Schulze et al. 2001] and stewardship as applied to family firms [Davis, Schoorman and Donaldson 1997] and also on socio-emotional wealth perspective [Gómez-Mejía et al. 2007], this study seeks to contribute to this debate by studying the influence of family involvement on the SME exports intensity. To reconcile the divergent views, our research attempts to assess the role of the manager’s international orientation as a variable moderating the relationship between family involvement and exports in SMEs. Based on a hypothetical-deductive approach, the study uses a sample data of 125 family SMEs obtained through a questionnaire. The results show that even if the positive influence of the manager’s international orientation is corroborated, its moderating role seems to be limited to only one facet of the construct of family involvement i.e. involvement in management. Moreover, owning-family involvement in management seems to negatively influence exports while some results argue for a positive effect of the family involvement in ownership on exports.

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