scholarly journals Understanding Governance Mechanisms in Small and Medium Family Firms in Latin America

2021 ◽  
Vol 14 (2) ◽  
pp. 107-120
Author(s):  
Isabel Botero ◽  
Fernando Sandoval Arzaga ◽  
Brøndsted Bullock
Keyword(s):  
Latin America ◽  
Financial Performance ◽  
Latin American ◽  
Family Business ◽  
Family Firms ◽  
Governance Mechanisms ◽  
Family Governance ◽  
The Family ◽  
And Control ◽  
Formal Business

Governance mechanisms help manage, direct, and control people, resources, and the interests of those involved in a firm. In family firms, understanding the use of governance mechanisms is particularly important given their rela-tionship with the sustainability of the family and the business. Even though we know a great deal about family business governance in North America and Europe, we still know very little regarding the use of governance mechanisms in small and medium (SME) family firms in Latin America, nor do we know whether the use of governance mech-anisms impacts financial performance. To address these gaps, this paper presents the results of a survey completed by 2287 representatives of family business SMEs from 24 Latin American countries. Participants indicated the like-lihood of their using different governance mechanisms and responded to questions concerning their businesses. Our results indicate that the small and medium Latin American family firms in our study were not very likely to use formal business and family governance mechanisms, however, the use of formal business governance mechanisms was related to financial performance. The implications of these results for research and practice are discussed.

Determinants of family meetings in private family businesses

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Akif Cicek ◽  
Rüveyda Kelleci ◽  
Pieter Vandekerkhof
Keyword(s):  
Systems Theory ◽  
Family Firms ◽  
Social Systems ◽  
Governance Mechanisms ◽  
Social Systems Theory ◽  
Content Type ◽  
Family Governance ◽  
Family Meetings ◽  
The Social ◽  
The Family

PurposeFamily governance mechanisms serve to govern and strengthen relations between the family and the business, as well as the relationships between the members of the business family itself. However, despite agreement on the importance of adopting family governance structures, explicit research on the determinants of family governance mechanisms is currently missing. Therefore, the purpose of this study is to uncover the determinants of family meetings. In order to do so, the social systems theory is used to unravel several determining factors of this crucial form of family governance mechanisms in private family firms.Design/methodology/approachThe authors perform a qualitative study by conducting semi-structured interviews in eight Belgian private family firms in order to discover the antecedents of the implementation of family meetings. The authors use a pattern-matching technique as an analytical strategy.FindingsThe findings of the study highlight the importance of “soft,” relational, qualitative issues as antecedents of family meetings as opposed to previous research on family governance, which predominantly focused on “hard,” quantitative measures (e.g. family ownership). The findings of the study also provide novel insights into the origins of the family component (i.e. family meetings) of family business governance.Originality/valueWhile the current literature has only focused on describing the different types of family governance and their positive consequences for the family firm, the authors take a step back to explain why family meetings, as a form of family governance, are adopted in the first place. Second, the authors demonstrate the instrumentality of the social systems theory in understanding the family's needs that necessitate the implementation of family governance mechanisms.

scholarly journals President interlocking, family firms and performance during turbulent times: Evidence from Latin America

2016 ◽  
Vol 6 (2) ◽  
Author(s):  
Karen Watkins-Fassler ◽  
Virginia Fernández-Pérez ◽  
Lázaro Rodríguez-Ariza
Keyword(s):  
Latin America ◽  
Financial Performance ◽  
Latin American ◽  
Family Firms ◽  
Annual Data ◽  
Minority Shareholders ◽  
Return On Assets ◽  
Publicly Traded Companies ◽  
Turbulent Times ◽  
And Performance

n Latin America, company ownership is typically concentrated in the hands of controlling families, who build powerful business groups which facilitate interlocking practices. The purpose of this study is to examine how President interlocking relates with financial performance in Latin American firms, under uncertainty circumstances. Using regression analysis (panel least squares), the association between return on assets and President interlocking during turbulent times is analyzed. For the latter, annual data (2009–2010) from non-financial publicly traded companies in Chile (243 firms) and Mexico (89 firms) is employed. It is documented that President interlocking in Latin American firms is positively associated with financial performance. However, this effect is higher in Chile than in Mexico, where minority shareholders and other stakeholders are better protected against expropriation. This study increases the understanding of the strengths of President interlocks in stormy times, by introducing the Latin American context.

What hampers innovation in Mexican family firms?

2016 ◽  
Vol 29 (3) ◽  
pp. 255-278 ◽  
Author(s):  
María Concepción López-Fernández ◽  
Ana María Serrano-Bedia ◽  
Manuel Palma-Ruiz
Keyword(s):  
Latin America ◽  
Family Business ◽  
Family Firms ◽  
Management Control ◽  
Innovation Activity ◽  
Family Management ◽  
Content Type ◽  
The Family ◽  
Mexican Family ◽  
Market Factors

Purpose The purpose of this paper is to explore to what extent different obstacles (financial, knowledge, market, and perception) affect the propensity of Mexican family firms to engage in innovation activity. Second, it examines whether the perception of these obstacles differs between two subgroups of family firms, considering levels of ownership and family management control. Design/methodology/approach Information was gathered through a CIS methodology-based questionnaire applied to 161 CEOs of Mexican family firms. Binomial logistic regressions were performed identifying obstacles that were truly relevant for the family firm subgroups in the sample. Findings For subgroup 1, knowledge and market factors were significant and negatively related to the propensity to engage in innovation activities; for subgroup 2, only market factors were relevant. The results also show how the tenure of the CEO, the number of generations involved, and the family involvement in management and non-management positions affect the results obtained. Practical implications Implications for family business scholars embrace the assessment criteria of different family business definitions. While the implications for managers and policy makers include the recognition of the factors that affect innovation in Mexican family firms in order to design and implement adequate strategies to overcome them. Originality/value This study addresses some of the raised demands in the literature. First, to the best of the authors’ knowledge, it is the first attempt to explore the factors hampering innovation in family firms in Latin America. Second, this study was undertaken in response to the call for exploring variations in innovation behavior across different family business types in regards to ownership and family management control. Moreover, this study responds to the call to analyze financial and non-financial factors separately and to expand the geographical areas, sectors, and sizes of family firms, more specifically in Latin America.

Family firms in Ibero-America: an introduction

2016 ◽  
Vol 29 (3) ◽  
pp. 219-230 ◽  
Author(s):  
Maria José Parada ◽  
Claudio Müller ◽  
Alberto Gimeno
Keyword(s):  
Family Business ◽  
Design Methodology ◽  
Family Firms ◽  
Content Type ◽  
Family Governance ◽  
Economic Context ◽  
The Family ◽  
Business Dynamics ◽  
And Behavior

Purpose This paper highlights the importance of understanding family firms in different contexts. The purpose of this paper is to reflect on the characteristics and behavior of family firms in Ibero-America, and their contribution and fit to the broader field of research. Based on the five articles in this special issue, this paper attempts to give an overview of their main contributions. Design/methodology/approach This paper explains in a contextual and analytical way the contributions of five papers that focus their attention on Ibero-American family firms, by linking them to the current research in the field and finding their fit within the broader field of family business. Tackling different topics, these five papers discuss about the comparison between family vs non-family businesses, innovation in family firms, and governance in family firms Findings Findings suggest that there is a need to stimulate research in family business in Ibero-America, especially Latin America, regarding family business dynamics, the different roles of the family within the enterprise, family governance, and the role of women. With regards to innovation the cultural and economic context play an important role in how they perform innovative activities. Originality/value This paper contributes to further understanding family firms by discussing the importance of the context and by linking all five papers with the broader literature in family business. The introduction also discusses topics worth to be further researched in Ibero-America.

scholarly journals Family Business and Financial Performance: What are the Effects of Tax Cut Policy on Them in Uzbekistan?

2020 ◽  
Vol 6 (4) ◽  
pp. 27-45
Author(s):  
Yusupov Jasurbek ◽  
Sakata Kei
Keyword(s):  
Financial Performance ◽  
Family Business ◽  
Family Firms ◽  
The Family ◽  
The Difference ◽  
The Impact ◽  
The Relationship ◽  
Unbalanced Panel Data ◽  
Business Study

This study is the first comprehensive empirical study to examine the relationship between the family business and the firm’s performance in Uzbekistan. In this research, we investigate the relationship between family firms and financial performance using enough extensive unbalanced panel data from 2012 through 2015 on 3148 non-banking/non-government firms. Moreover, we analyze the impact of tax cut policy on SMEs, including family firms from a case study of Uzbekistan by using the difference-in-difference estimator. These two will be a major contribution to the family business study field in Uzbekistan.

Limits to psychological ownership in the family business

2018 ◽  
Vol 8 (2) ◽  
pp. 196-216 ◽  
Author(s):  
Wouter Broekaert ◽  
Bart Henssen ◽  
Johan Lambrecht ◽  
Koenraad Debackere ◽  
Petra Andries
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Strategic Decision ◽  
Psychological Ownership ◽  
Operational Control ◽  
Negative Effects ◽  
Additional Insight ◽  
Content Type ◽  
The Family ◽  
And Control

Purpose The purpose of this paper is to analyze how the sense of control, psychological ownership and motivation of both family owners and non-family managers in family firms are interrelated. This paper analyzes the limits set by family owners when delegating control to their non-family managers and the resulting potential for conflict and demotivation of the non-family managers. Design/methodology/approach Building on the existing literature, first, an overview of the literature on psychological ownership and control is presented. Second, the paper analyzes the insights gained from interviews with 15 family owners and non-family managers in five family firms. Findings This study finds that motivating non-family managers is not merely a matter of promoting a sense of psychological ownership throughout the company. A strong sense of psychological ownership may facilitate but also hinder the cooperation between family and non-family. Family owners are often only willing to delegate operational control, while non-family managers also feel entitled to participate in strategic decision making. This leads to the proposition that non-family managers’ psychological ownership in family firms’ conflicts with family owners’ desire to maintain control. Originality/value This study answers the calls to seek additional insight in how non-family managers function within family firms. By shedding light on the complex relationship between control, psychological ownership and motivation in family firms, the study responds to the calls for more empirical validation of the psychological ownership framework and for more research into the potential negative effects of psychological ownership in the family business.

scholarly journals Towards the construct of paternalism to investigate control in family business governance

2013 ◽  
Vol 10 (4) ◽  
pp. 317-328
Author(s):  
Mariavittoria Cicellin ◽  
Donata Mussolino ◽  
Marcello Martinez ◽  
Mario Pezzillo Iacono
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Research Field ◽  
Business Research ◽  
Starting Point ◽  
The Family ◽  
Research Stream ◽  
And Control ◽  
Succession Processes ◽  
Conceptual Work

The aim of this study is to adopt the construct of paternalism to understand control in family business governance. In particular, we want to investigate the concept of paternalism as mechanism of control in family firms. The theoretical reflections we here present first try to challenge the main theories used in family business literature, with a discussion about their limitations and boundaries of validity. Then, we present the construct of paternalism as a mechanism of governance and control that influences the decision making process, and in particular the succession processes. The construct of paternalism still needs sound methodological as well conceptual work, but we argue that it may be a starting point for building a rigorous and relevant research stream. This endeavour may help the family business research field to gain legitimacy in the broader academic arena.

Making gender visible in family business: past and present

2012 ◽  
Vol 13 (1) ◽  
Author(s):  
Paloma Fernández Pérez ◽  
Eleanor Hamilton
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Business Leadership ◽  
Legal Rules ◽  
Developed Economies ◽  
The Family ◽  
Interdisciplinary Synthesis ◽  
Complex Forms ◽  
Rules Of The Game

This  study  contributes  to  developing  our understanding of gender and family business. It draws on studies from the business history and management literatures and provides an interdisciplinary synthesis. It illuminates the role of women and their participation in the entrepreneurial practices of the family and the business. Leadership is introduced as a concept to examine the roles of women and men in family firms, arguing that concepts used  by  historians or economists like ownership and management have served to make women ‘invisible’, at least in western developed economies in which owners and managers have been historically due to legal rules  of  the  game  men,  and  minoritarily women. Finally, it explores gender relations and  the  notion  that  leadership  in  family business  may  take  complex  forms  crafte within constantly changing relationships.

Epidemiology of Hypertension and Diabetes Mellitus in Latin America

2020 ◽  
Vol 16 ◽  
Author(s):  
Patricio Lopez-Jaramillo ◽  
Jose Lopez-Lopez ◽  
Daniel Cohen ◽  
Natalia Alarcon-Ariza ◽  
Margarita Mogollon-Zehr
Keyword(s):  
Diabetes Mellitus ◽  
Type 2 Diabetes ◽  
Type 2 Diabetes Mellitus ◽  
Latin America ◽  
Cardiovascular Diseases ◽  
Latin American ◽  
Premature Mortality ◽  
Increased Risk ◽  
And Control

: Hypertension and type 2 diabetes mellitus are two important risk factors that contribute to cardiovascular diseases worldwide. In Latin America hypertension prevalence varies from 30 to 50%. Moreover, the proportion of awareness, treatment and control of hypertension is very low. The prevalence of type 2 diabetes mellitus varies from 8 to 13% and near to 40% are unaware of their condition. In addition, the prevalence of prediabetes varies from 6 to 14% and this condition has been also associated with increased risk of cardiovascular diseases. The principal factors linked to a higher risk of hypertension in Latin America are increased adiposity, low muscle strength, unhealthy diet, low physical activity and low education. Besides being chronic conditions, leading causes of cardiovascular mortality, both hypertension and type 2 diabetes mellitus represent a substantial cost for the weak health systems of Latin American countries. Therefore, is necessary to implement and reinforce public health programs to improve awareness, treatment and control of hypertension and type 2 diabetes mellitus, in order to reach the mandate of the Unit Nations of decrease the premature mortality for CVD.

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.

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