scholarly journals Family social capital and governance of family businesses: The emerging market evidence

2022 ◽  
Vol 5 (2, special issue) ◽  
pp. 225-232
Author(s):  
Nada Moufdi ◽  
Ali Mansouri

Considered as the most dominant business form in the entrepreneurial fabric in Morocco, as in the majority of countries in the world (Salhi, 2017), the family business is distinguished by a family social capital (FSC) making it competitive and perennial (Mesfar & Ben Kahla, 2018). This paper aims to analyze the influence of this capital, through its three dimensions — structural, relational, and cognitive — on the governance system of Moroccan family firms. The results of our exploratory study conducted among 30 family businesses in the form of interviews showed, on the one hand, that the existence of a strong FSC within the company makes its governance system based on informal family mechanisms. On the other hand, the weakness of the said capital has not led the companies that are the subject of our study to adopt formal corporate governance mechanisms as shared by several researchers. This is due, according to the interviewees, to socio-cultural considerations. Our results contribute to the enrichment of the literature while showing that the informality of governance mechanisms can be explained, not only by the strength of its FSC but also by such a socio-cultural context where the family model is of a communal and clan type welded by Islamic religious values of group cohesion

2009 ◽  
Vol 22 (3) ◽  
pp. 239-253 ◽  
Author(s):  
Ritch L. Sorenson ◽  
Kenneth E. Goodpaster ◽  
Patricia R. Hedberg ◽  
Andy Yu

Based on the social capital, conflict, and ethics literatures, this study introduces a new concept, the family point of view, and provides theoretical arguments resulting in the following hypotheses: (a) The family point of view emerges from collaborative dialogue, which helps develop agreement to ethical norms; (b) the presence of ethical norms further helps cultivate family social capital; and (c) as a resource in a family business, family social capital is positively related to family firm performance. Using structural equation modeling, an exploratory test of 405 small family firms found support for all three hypotheses. The findings indicate a fully mediated relationship among collaborative dialogue, ethical norms, family social capital, and firm performance. The study not only highlights the importance of moral infrastructure in family firms but also helps clarify components of family social capital.


2019 ◽  
Vol 32 (2) ◽  
pp. 131-153 ◽  
Author(s):  
Paul Sanchez-Ruiz ◽  
Joshua J. Daspit ◽  
Daniel T. Holt ◽  
Matthew W. Rutherford

The unique form of social capital among family involved in the business, or family social capital (FSC), has both positive and negative effects on the family firm. To better understand how FSC exists across family firms and advance related theory, we develop a taxonomy of FSC. Using configuration analyses on two samples of family firms, we find that three clusters of family firms exist, which include firms with Instrumental, Identifiable, and Indistinguishable FSC. The specific configurations of each cluster are noted, and effects on economic and noneconomic outcomes are identified to advance understanding of the heterogeneous nature of family firms.


Author(s):  
Astrid Kramer ◽  
Brigitte Kroon

Family capital is all social, human, and financial capital a family has at their disposal in the family to advance the business. Family capital is the pool of resources unique to family business and it has the potential for family businesses to gain competitive advantage over nonfamily businesses in today's competitive landscape. To advance the knowledge about strategic management in family businesses, this chapter reviews quantitative empirical work on each dimension of family capital and concludes that the field is still in its infancy. Most studies concentrate on (a part of) social capital, a few on human capital, and very few on all three dimensions. The review of the literature describes avenues for further research on family capital.


2022 ◽  
pp. 938-958
Author(s):  
Astrid Kramer ◽  
Brigitte Kroon

Family capital is all social, human, and financial capital a family has at their disposal in the family to advance the business. Family capital is the pool of resources unique to family business and it has the potential for family businesses to gain competitive advantage over nonfamily businesses in today's competitive landscape. To advance the knowledge about strategic management in family businesses, this chapter reviews quantitative empirical work on each dimension of family capital and concludes that the field is still in its infancy. Most studies concentrate on (a part of) social capital, a few on human capital, and very few on all three dimensions. The review of the literature describes avenues for further research on family capital.


2021 ◽  
Vol 24 (2) ◽  
pp. 173-197
Author(s):  
Amit Chakrabarti ◽  
Kaveri Krishnan

This paper investigates the impact of the family business on illiquidity in an emerging market and how it evolves with regulatory changes. The study uses panel data multiple regression on a sample of 25,418 observations on 3,606 firms from India within nine years from 2006 to 2014. The study finds that family firms have significantly higher illiquidity compared to non-family firms. Moreover, family businesses have successfully resisted the institutional pressure to decrease illiquidity and have also defied these coercive pressures to increase the illiquidity of family businesses finally. The study also found heterogeneity in the behaviour of family businesses based on their ownership characteristics.


2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cizhi Wang ◽  
Giulia Flamini ◽  
Kai Wang ◽  
Rong Pei ◽  
Chiyin Chen

PurposeThe purpose of this paper is to adopt a collective perspective in the study of entrepreneurial decision-making processes and empirically analyse the ways in which social relationships between family members can shape their collective entrepreneurial decision-making behaviour (ED).Design/methodology/approachThis paper considers the family social capital (FSC) in inducing overall conformity to the focal family member's decision to exploit an opportunity. In terms of the seminal construct of social capital, the authors propose three FSC dimensions that can be used to induce conformity: structural, relational and cognitive dimensions. Then, the authors design questionnaires to collect data pertaining to the relationships between the family members' ED and the FSC. Finally, the authors collect 152 valid questionnaires from Chinese family firms.FindingsThe data analysis consists of two parts. The first section of this paper analyses conformity by testing the discriminant validity of models. Regression analysis is then used to test the relationship between family members' ED and the FSC. Significant relationships between the cognitive dimension of FSC and the entrepreneur's decision-making are found.Originality/valueThe research contributes towards academic literature concerning both entrepreneurship and social capital. On the one hand, this paper is one of the rare pieces of entrepreneurial research that responds to the call for the study of entrepreneurship from a collective perspective. On the other hand, our study quantitatively tests the impact of FSC at a multidimensional level. It provides conclusions regarding the social influence of other family members and provides insights into social capital by studying entrepreneurship from a social/community perspective.


2017 ◽  
Vol 27 (2) ◽  
pp. 231-247 ◽  
Author(s):  
Vitor Braga ◽  
Aldina Correia ◽  
Alexandra Braga ◽  
Sofia Lemos

Purpose The success of the family firms cannot be detached from the current paradigm where, within the present economic conditions, economic agents struggle to exploit the existing opportunities and need to take into account the risks associated to the international arena and the innovation processes. The internationalisation and innovation processes may trigger resistance within family business due to their relatively higher difficulty to take risks and to invest in industries outside the scope of their original core business. Innovation and internationalisation processes become relevant strategies for the family firms’ continuity and success. In line with such fact, the aim of this paper is to contribute with insights regarding the processes of innovation and internationalisation within family businesses. In particular, this paper aims to assess the propensity of such firms to apply such strategies, to identify the particular business behaviour and to assess the extent to which the particulars of family firms may constraint or lead to the implementation of innovation policies, and thus its internationalisation. Design/methodology/approach The data were collected through questionnaires within family business aiming to understand the scope and characteristics of internationalisation and innovation processes within these firms. The 154 replies from such data collection were analysed using different multivariate statistic procedures, although this paper is based on factorial and correlation analysis. Findings The analysis of the results shows that there is an association between the processes of innovation and internationalisation within family business. In addition, the results also suggest a typology of firms regarding their innovation and internationalisation strategies and motivations. Research limitations/implications The results of this paper are, to some extent, limited because they did not allow comparing the findings with data from non-family business. However, the authors’ aim was not to distinguish family firms, but rather to characterise them. Practical implications This paper expects to contribute with lessons for the management of family business and to raise awareness of the constraints faced by family business. It is important to highlight that family business performance may be affected by a lower propensity to risk-taking attitudes, by the lack of non-family management and to the necessity of separating the family and the business in the business dimensions that the family limits the business growth. Originality/value Although there is a significant amount of the literature devoted to explore family business, innovation and internationalisation studies, very few draw on the relationship between internationalisation and innovation processes within family business. This paper explores such a relationship within a particular business context – the family dynamics that strongly affect management and business development.


2015 ◽  
Vol 5 (2) ◽  
pp. 157-181 ◽  
Author(s):  
Torsten Schmidts ◽  
Deborah Shepherd

Purpose – The purpose of this paper is to use social identity theory to explore factors that contribute to the development of family social capital. Effects are investigated both for the family and the business. Design/methodology/approach – A single in-depth case study focussing on the family unit was coducted within a fourth-generation family business involved in the arts retailing. Findings – The findings suggest that social identity theory is a useful lens to explore the development of family social capital. The six themes identified highlight that there is a normative and an affective dimension, leading to family members’ desire to uphold the status of the business. Evidence suggests that the normative factors may be both positively and negatively related to the development of family social capital, due to their potentially restrictive nature. Originality/value – The paper’s findings imply that social identity can contribute to understanding family dynamics. Evidence highlights various factors for family members that are not involved in the family business to uphold its status. This is attributed to the emotional significance of the business to the family’s identity. Furthermore, this paper suggests that the strong focus on norms and values, which developed gradually, may have adverse effects on the identification with the business and the willingness to uphold its status. Propositions are offered to provide guidance for future research to investigate this controversial evidence regarding the impact of value orientation on family social capital.


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