scholarly journals Change in Illiquidity of Family Firms with Institutional Pressure: Evidence from India

2021 ◽  
Vol 24 (2) ◽  
pp. 173-197
Author(s):  
Amit Chakrabarti ◽  
Kaveri Krishnan
Keyword(s):  
Panel Data ◽  
Multiple Regression ◽  
Family Business ◽  
Family Firms ◽  
Emerging Market ◽  
Family Businesses ◽  
Regulatory Changes ◽  
Institutional Pressure ◽  
The Family ◽  
The Impact

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.

scholarly journals My Forty Years in Studying and Helping Family Businesses

2021 ◽  
Vol 11 (1) ◽  
Author(s):  
Gibb Dyer
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Businesses ◽  
Theory And Practice ◽  
The Past ◽  
Family Capital ◽  
The Family ◽  
The Impact

This article will describe the trends in the field of family business over the past forty years in terms of theory and practice. Topics such as succession, consulting with family businesses, the effectiveness of family firms, the role of socio-emotional wealth in family firms, heterogeneity in family businesses, and the impact of family capital on the business and the family will be discussed.

The effect of institutional transition on entrepreneurial orientation of family businesses

2018 ◽  
Vol 26 (1) ◽  
pp. 76-97
Author(s):  
Amit Baran Chakrabarti ◽  
Arindam Mondal
Keyword(s):  
Family Business ◽  
Entrepreneurial Orientation ◽  
Family Firms ◽  
Emerging Market ◽  
Family Businesses ◽  
Least Square ◽  
Family Ownership ◽  
Content Type ◽  
Institutional Transition ◽  
The Impact

Purpose The purpose of this paper is to ascertain the impact of family ownership on the entrepreneurial orientation (EO) of firms in an emerging market and the contingencies under which it is likely to be affected. Design/methodology/approach The paper adopted a panel data multiple regression using ordinary least square methodology on a sample of 51,972 observations belonging to 12,250 firms from India. Findings The study finds that family businesses have higher EO than non-family firms. However, it is likely to be affected during institutional transition due to environmental uncertainty. Furthermore, during institutional transition, there will be differences in the EO of family business groups and stand-alone family firms due to the former’s ubiquitous network-level resource advantages. Research limitations/implications This paper contributes to the literature on family business by reconciling the positive and negative views on the effect of family ownership on EO by arguing that the risk-taking behavior of family firms is contingent on the environmental conditions and the resource position of the firm. Practical implications This study will enable managers and other stakeholders to predict the entrepreneurial attitude of family-owned firms during environmentally stable as well as turbulent times. Social implications This study highlights the implication of institutional transition through reforms on a vital part of the economy. Policy makers have to be sensitive to repercussions on family business due to environmental turbulence. Originality/value This is one of the first papers that investigate the influence of institutional transition and the resource position of Indian family firms on their EO.

The innovation and internationalisation processes of family businesses

2017 ◽  
Vol 27 (2) ◽  
pp. 231-247 ◽  
Author(s):  
Vitor Braga ◽  
Aldina Correia ◽  
Alexandra Braga ◽  
Sofia Lemos
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Businesses ◽  
Family Management ◽  
Multivariate Statistic ◽  
Content Type ◽  
Business Innovation ◽  
The Family ◽  
Internationalisation Strategies ◽  
Innovation Processes

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.

Inside an African family business estate: the founder’s legacy and the successor’s dilemma

2017 ◽  
Vol 7 (3) ◽  
pp. 1-28 ◽  
Author(s):  
Zubaida Muhumed ◽  
Virginia Bodolica ◽  
Martin Spraggon
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Management Practices ◽  
Emerging Market ◽  
Strategic Decision ◽  
Eastern Region ◽  
Ripple Effect ◽  
Strategic Choices ◽  
Content Type ◽  
The Family

Subject area Family business. Study level/applicability Specialized undergraduate courses, Elective MBA courses. Case overview This case study uncovers the remarkable story of the relentless growth and sporadic weakening of Nurul Ain (NA) Limited, a family business conglomerate with major operations in the Eastern region of Africa. The case provides an opportunity to follow the different stages of development of this family-owned organization through a sequence of strategic events and family dynamics that led to its recurrent success, decline and rejuvenation. Despite the numerous successes of NA Limited since its establishment in the early 1990s, the ambiguous relationship between family, ownership and management systems has caused a ripple effect of strategic, structural and governance challenges that threaten the sustainability of the family business. Nowadays, the founder faces the pressing challenge of ensuring his legacy remains intact and is passed over to his chosen successor, who, in turn, is confronted with the dilemma of joining the family business or pursing an independent career outside NA Limited. Shedding light on the complexity of today’s family-run organizations, the case allows examining the effectiveness of strategic decision-making in an emerging market context by applying a variety of family business principles, theories and frameworks. Expected learning outcomes Discuss the sources of competitive advantage and the typical challenges that family firms face in the context of emerging markets. Perform a comprehensive corporate diagnosis and examine the specificities of strategic management process in family businesses. Assess the succession management practices in family-run organizations and design a profile of successful successor. Discuss the effectiveness of various corporate governance mechanisms in the context of family-owned enterprises. Evaluate the strategic choices of the top management team and offer recommendations for securing the family business longevity. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 11: Strategy.

scholarly journals Strategic and Organizational Change

2020 ◽  
Vol 10 (1) ◽  
Author(s):  
Katiuska Cabrera Suarez ◽  
Elena Rivo-López ◽  
Santiago Lago-Peñas ◽  
Santiago Lago-Peñas
Keyword(s):  
Organizational Change ◽  
Family Business ◽  
Family Firms ◽  
Health Sector ◽  
Family Businesses ◽  
Future Research ◽  
Strategic Orientations ◽  
The Family ◽  
Private Health Sector ◽  
Responsible Ownership

Nowadays, family businesses, the predominant form of business worldwide, face an increasingly changing environment boosted by megatrends such as globalization, digitalization, artificial intelligence, climate change and sustainability. Along with this, are factors that play at a firm level such as stricter rules concerning transparency and compliance or the increasing importance of Corporate Social Responsibil- ity (CSR). Therefore, new strategies and organizational changes are necessary to allow for greater adaptation to the new context. This special issue provides insights on these questions from a variety of perspectives.                                           The work of Hernández-Linares and López-Fernán- dez expands the current thinking on this process of adaptation by exploring the combined effects of three strategic orientations (entrepreneurial, learning, and market orientations) on the family firm ́s performance. The authors provide interesting contributions in terms of highlighting the importance of strategic orientations for value creation in enterprise organizations. They also provide empirical evidence that the family char- acter of the firm determines the relationship between strategic orientations and business performance, and offer some results on the effect of market orientation on firm performance in family firms versus non-family firms.                                                                                                 Those differences in strategies are further ana- lysed within the setting of the business dimension in which financial and economic decisions are made. The contribution by Terrón-Ibáñez, Gómez-Miranda and Rodríguez-Ariza, discusses the influence of that di- mension in their performance, comparing family and non-family firms. This interesting analysis of financial performance provides useful results. The study showsthat, unlike non-family firms, there is an inverted U- shaped relationship between the size of family SMEs and the value of certain economic–financial indicators, such as the return on assets, operating margin and employee productivity. This means that although the increase in the dimension of the family organizations is positively related to its performance, there are lim- its from which the value of certain economic–financial indicators can be negatively affected.                                                                                                                                                           The next paper contributes to the discussion of the family business’s role in the private health sector. Reyes-Santías, Rivo-López and Villanueva-Villar, set out to identify the historical evolution of the family business in this sector, attempting to determine the variation and its contribution to the private health sector during the 1995-2010 period. The findings of this discussion provide family firms with an almost 60% survival level in this sector. Along with this, the au- thors provide some guidelines for future research con- cerning this higher degree of survival, why family firms are leading the concentration process taking place in the sector, as well as their strategies for super-spe- cialization in the services offered especially by family businesses in healthcare.         The effect of family ownership and the character- istics of the board of directors on the implementation level of Enterprise Risk Management is an important topic. The article by Otero-González, Rodríguez-Gil, Durán-Santomil and Tamayo-Herrera certainly adds to the discussion. In particular, their research shows that family businesses are less interested in implementing ERM, except when shareholders have greater control of the company and when professional investors are present in the company. Besides, the importance of a board of directors’ characteristics of in terms of risk taking is confirmed by observing that larger boards en- courage risk managers to be hired.                                                                                                                                                           The paper by Lorenzo-Gómez looks at the barriers to change that are specific to the characteristics of family business, considering both the barriers that af- fect the perception of the need to undertake changes and the availability of resources to face those chang- es, and the barriers to implementing these changes within already consolidated organizations, where new routines are created to replace the existing ones. Thefindings suggest that the factors affecting these barri- ers include the generation at the head of the family business; the influence of interest groups, particularly in terms of the duality between the company and the family; and the participation level of professionals from outside the family.                                                                                         The final contribution by Aragon-Amonarriz and Iturrioz-Landart offers an interesting discussion on how family-responsible ownership practices enhance social responsibility in small and medium family firms. Their results reveal the positive relationships between the elements of family-responsible ownership in terms of succession management, financial resource allocation, professionalism and social responsibility, and ultimate- ly with the socially responsible behaviour of family SMEs.                                                                                                                 The challenges surrounding family business owners and the nuances around strategic and organizational decision making are together an area ripe for future research. The editors look forward to seeing future de- velopments on these topics that pay special attention to the influence of family characteristics and dynamics on the strategic and organizational change of family firms, and that draw on both quantitative and quali- tative research methodologies for the wider develop- ment of the field. Acknowledgements. The papers published in this issue were presented at the “II Workshop of Family Business: Strategic and Organizational Change” at Ourense, Galicia, Spain, June, 13-14, 2019. The conference was organized by GEN group research (http:// infogen.webs.uvigo.es/) and the Chair of Family Business of the University of Vigo, and was sponsored by the AGEF (Galician Family Business Association), Inditex Group, IEF (Spanish Family Firm Institute), and with ECOBAS group as collaborator. Thanks for their invaluable support. We are also very thankful of all other participants at the conference.   Katiuska Cabrera Suárez,  University of Las Palmas Elena Rivo-López, co-director of the Chair of Family Business, University of Vigo Santiago Lago-Peñas, co-director of the Chair of Family Business, University of Vigo    

Strong governance: a result of evolutionary and revolutionary processes

2014 ◽  
Vol 4 (2) ◽  
pp. 99-109 ◽  
Author(s):  
Lorna Collins ◽  
Ken McCracken ◽  
Barbara Murray ◽  
Martin Stepek
Keyword(s):  
Family Business ◽  
Best Practice ◽  
Family Dynamics ◽  
Family Businesses ◽  
Formal Structure ◽  
Governance Mechanisms ◽  
Content Type ◽  
The Family ◽  
The Uk ◽  
The Impact

Purpose – This paper is the first in a regular series of articles in JFBM that will share “a conversation with” thought leaders who are active in the family business space. The world of family business is, like many other arenas, constantly evolving and as the authors learn more about how and why families “do business” the approaches and tools for working with them also evolve. The purpose of this paper is to stimulate further new research in areas that practically affect family businesses and to “open the door” to practical insights that will excite researchers and provide impetus for new and exciting study. The specific purpose of this paper is to explore “what is strong governance.” There has been much interest in governance lately yet there is a tendency to treat governance in a formulaic way such that, at the moment, the notion that every family business must have a family council or a formal structure in order to be considered “effective” and “successful” predominates. The authors’ panel challenges and discusses this notion drawing on the experience and knowledge as family business advisors, consultants and owners. Design/methodology/approach – The impetus for this particular conversation is a result of a brainstorming conversation that Lorna Collins and Barbara Murray held in February 2014 where they focussed on “how JFBM can encourage and stimulate researchers to engage in aspects of research that makes a difference to the family business in a practical way.” This paper reports a conversation between Barbara Murray (Barbara), Ken McCracken (Ken) and Martin Stepek (Martin), three leading lights in the UK family business advising space, all of whom have been involved in running or advising family businesses for more than three decades, held in August 2015. The conversation was held via telephone and lasted just over 60 minutes. Lorna Collins acted as moderator. Findings – Strong governance is not just about instituting a “family council” or embedding formal governance mechanisms in a family business. Evolutionary adaption by family members usually prevails such that any mechanism is changed and adapted over time to suit and fit the needs of the family business. Many successful family businesses do not have recognized “formal” governance mechanisms but, it is contended, they are still highly successful and effective. Future areas of research in governance are also suggested. Originality/value – This paper contributes to the family business discourse because the debate it reports challenges the basic assumptions upon which much consulting and advisory practice is conducted. It also challenges the notion of “best practice” and what is “new best practice” and how is it that any “best practice” is determined to be “best.” Furthermore, the panel provides insights in to the “impact of family dynamics on governance” and “the impact of family dynamics on advisors.” The paper content is original in that it provides an authentic and timely narrative between active family business practitioners who are also scholars and owners.

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.

scholarly journals An Investigation Of Family Culture In Family Firms’ Performance In Retailer-Vendor Strategic Partnerships

2021 ◽  
Author(s):  
Leonardo Amado Godoy
Keyword(s):  
Family Business ◽  
Positive Relationship ◽  
Family Firms ◽  
Strategic Partnerships ◽  
Family Culture ◽  
The Family ◽  
Relationship Value ◽  
And Performance ◽  
The Impact ◽  
Group Family

This research proposes a model to measure the effect of family culture on firm performance in family business retailer-vendor strategic partnerships. Prior research that has contributed to the development of the discourse on family culture, organizational culture, family and relationship value, commitment, and trust will be analyzed. Eight hypotheses are presented, four of which are an extension of prior research. The model ratifies a positive relationship between family culture and performance, especially when considering the successor generation. Since the founders of the firm are the personification of the family culture itself, for this group, family culture does not positively influence performance. The outcome of this research will illustrate not only the effects of family culture in family firms’ performance, but also the impact of relationship and behavioral factors in business.

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
Keyword(s):  
Social Capital ◽  
Cultural Context ◽  
Family Firms ◽  
Emerging Market ◽  
Family Businesses ◽  
Three Dimensions ◽  
Governance Mechanisms ◽  
Governance System ◽  
Family Social Capital ◽  
The Family

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

scholarly journals The impact of intra-group processes on family business success

2011 ◽  
Vol 14 (1) ◽  
pp. 8-23
Author(s):  
Shelley Farrington ◽  
Christo Boshoff ◽  
Elmarie Venter
Keyword(s):  
Family Business ◽  
Group Processes ◽  
Primary Objective ◽  
Family Businesses ◽  
Sibling Relationship ◽  
Psychological Climate ◽  
Business Success ◽  
Snowball Sampling ◽  
The Family ◽  
The Impact

Interpersonal ties and intra-group processes influence the ability of people to work together effectively as teams. In the context of the family business team, intra-group processes describe the interaction that takes place between the family members and the resultant psychological climate that exists in the family business. Given the increasing number of sibling teams among family businesses, as well as the challenges they face as team members, this study focuses on sibling teams in family businesses and the intra-group processes that influence their success. Consequently, the primary objective of this study is to identify and empirically test the intra-group processes influencing the effectiveness of sibling partnerships. A structured questionnaire was distributed to 1323 sibling partner respondents. The respondents were identified by means of a convenience snowball sampling technique, and the data were collected from 371 usable questionnaires. The empirical findings of this study show that the sibling relationship and fairness are important determinants of sibling team effectiveness.

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