Understanding Employee Ownership in the Context of French Family Firms

2022 ◽  
pp. 55-75
Author(s):  
Mohamed Ouiakoub ◽  
Sara Elouadi
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Employee Ownership ◽  
Specific Context ◽  
Information Transparency ◽  
It Impacts ◽  
Financial Communication ◽  
Transmission Of Information ◽  
Governance Practices ◽  
French Family

Family firms, in which a family controls a majority stake in the organisation, are often considered characteristically different from non-family firms. However, our understanding of employee ownership in the specific context of family firms suffers from the concerns raised by owners of several family firms about such ownership. The decision to open the capital to its employees goes beyond the question of the ownership of family business. Nevertheless, it impacts the governance of the company and raises several concerns including the transmission of information, transparency, increased formalism, and taxation. This study aims to analyze how family firms benefit from an employee ownership plan and how governance practices impact the mechanism of employee ownership plans. This study examines the financial communication of French family firms in terms of mployee ownership activities.

scholarly journals A Neglected Factor Explaining Family Business Success: Human Resource Practices

1994 ◽  
Vol 7 (3) ◽  
pp. 251-262 ◽  
Author(s):  
Joseph H. Astrachan ◽  
Thomas A. Kolenko
Keyword(s):  
Competitive Advantage ◽  
Human Resource ◽  
Family Business ◽  
Boards Of Directors ◽  
Family Firms ◽  
Business Success ◽  
Hrm Practices ◽  
Governance Practices ◽  
Positive Correlations ◽  
The Impact

Over 600 family firms were involved in this examination of the impact of human resource management (HRM) and professional governance practices on family business success and survival. Our findings identified some of the most prevalent family firm HRM practices and found significant positive correlations among HRM practices, gross firm revenues, and CEO personal income levels. The results support prior arguments for competitive advantage in the marketplace gained through effective use of HRM practices. An interesting additional finding was that while boards of directors, strategic planning, and frequent family meetings were correlated with business longevity over multiple generations, succession planning was not. Such practices are important. for current competitive advantage and may also be crucial to the longevity of the business.

The succession dilemma in family firms: case study of a French company

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olivier Meier ◽  
Anne-Sophie Thelisson
Keyword(s):  
Family Business ◽  
Family Firms ◽  
External Financing ◽  
Employment Policy ◽  
Content Type ◽  
The Family ◽  
French Family ◽  
Policy Risk ◽  
Debt Policy

Purpose The purpose of this paper is to highlight the major difficulties and challenges encountered during the crucial process of family succession. In this study, the authors list and analyze issues encountered by managers or by the CEO of a family business. Design/methodology/approach Using a single longitudinal real-time case study conducted over a period of 10 years in a French family business, this study identifies the challenges encountered during family succession. The authors were allowed to follow, over a long period, the planning of the CEO’s succession. Findings The authors identified six critical points in the succession process: planning succession development; favoring creation of financial value for the shareholders; investment policy, risk taking and time horizon of investments (growth); family employment policy (family private benefit); opening of capital and debt policy (external financing); and financing of capital reduction policy (external financing). Originality/value The paper highlights the difficulties, issues and questions encountered by an SME manager or by the CEO of a family business. The analysis gives insights into the deep nature of the family structure, by involving the notions of culture and organizations serving the performance of family businesses.

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.

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.

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 Beyond agency and stewardship theory: shareholder–manager relationships and governance structures in family firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ann Sophie K. Löhde ◽  
Giovanna Campopiano ◽  
Andrea Calabrò
Keyword(s):  
Social Exchange ◽  
Family Business ◽  
Social Exchange Theory ◽  
Family Firms ◽  
Governance Structure ◽  
Managerial Behavior ◽  
Exchange System ◽  
Content Type ◽  
The One ◽  
Over Time

PurposeChallenging the static view of family business governance, we propose a model of owner–manager relationships derived from the configurational analysis of managerial behavior and change in governance structure.Design/methodology/approachStemming from social exchange theory and building on the 4C model proposed by Miller and Le Breton-Miller (2005), we consider the evolving owner–manager relationship in four main configurations. On the one hand, we account for family businesses shifting from a generalized to a restricted exchange system, and vice versa, according to whether a family manager misbehaves in a stewardship-oriented governance structure or a nonfamily manager succeeds in building a trusting relationship in an agency-oriented governance structure. On the other hand, we consider that family firms will strengthen a generalized exchange system, rather than a restricted one, according to whether a family manager contributes to the stewardship-oriented culture in the business or a nonfamily manager proves to be driven by extrinsic rewards. Four scenarios are analyzed in terms of the managerial behavior and governance structure that characterize the phases of the relationship between owners and managers.FindingsVarious factors trigger managerial behavior, making the firm deviate from or further build on what is assumed by stewardship and agency theories (i.e. proorganizational versus opportunistic behavior, respectively), which determine the governance structure over time. Workplace deviance, asymmetric altruism and patriarchy on the one hand, and proorganizational behavior, relationship building and long-term commitment on the other, are found to determine how the manager behaves and thus characterize the owner's reactions in terms of governance mechanisms. This enables us to present a dynamic view of governance structures, which adapt to the actual attitudes and behaviors of employed managers.Research limitations/implicationsAs time is a relevant dimension affecting individual behavior and triggering change in an organization, one must consider family business governance as being dynamic in nature. Moreover, it is not family membership that determines the most appropriate governance structure but the owner–manager relationship that evolves over time, thus contributing to the 4C model.Originality/valueThe proposed model integrates social exchange theory and the 4C model to predict changes in governance structure, as summarized in the final framework we propose.

“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.

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.

scholarly journals Entrepreneurial orientation in family firms – management and intercultural development

2014 ◽  
Vol 6 (4-1) ◽  
pp. 181-190 ◽  
Author(s):  
Wioletta Czemiel-Grzybowska
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family System ◽  
Open Systems ◽  
Family Businesses ◽  
Intercultural Development ◽  
System Perspective ◽  
Business Context ◽  
Systems Perspective ◽  
Business System

AbstractThis paper has taken an insight to the systemic models of family business from the open systems perspective. I focus on family business system models and on the subsystems content of family system and ownership system in family business context. The paper claim that the open system perspective on intercultural family businesses has both theoretical and empirical implications on family business research. Family businesses have many reasons, including family conflicts over money, nepotism leading to wrong management, and infighting over the succession of power from one generation to the other. Regulating the family’s roles as shareholders, board members, and managers is very important because it can help avoid these pitfalls. This paper will discuss the importance of the openness of the company through five the attributes of enduring family businesses: ownership, family, business and portfolio governance, wealth management, foundation. Dimension of attributes success have taken family business like five jewelers.

scholarly journals The Determinants of Tax Aggressiveness in Family Firms: An Investigation of Italian Private Family Firms

2021 ◽  
Vol 13 (14) ◽  
pp. 7654
Author(s):  
Giulia Flamini ◽  
Paola Vola ◽  
Lucrezia Songini ◽  
Luca Gnan
Keyword(s):  
Family Involvement ◽  
Family Business ◽  
Family Firms ◽  
Tax Planning ◽  
Agency Conflicts ◽  
Managerial Control ◽  
Public Companies ◽  
Tax Aggressiveness ◽  
Research Findings ◽  
Antecedents And Consequences

A recent stream of research has focused on tax aggressiveness, the downward management of taxable income through tax planning activities, and has analyzed its antecedents and consequences, mainly on public companies. Only very few studies, however, have been carried out in the context of private family business and have investigated whether some family firms are more tax aggressive than others, considering some specific features of family firms, such as their distinctive agency conflicts and socioemotional wealth. In this paper, we investigate the antecedents of tax aggressiveness in a sample of private Italian family firms. Our research findings show that tax aggressiveness is positively associated with ownership concentration, the presence of independent members in the board, and the adoption of reporting mechanisms. Instead, we found a negative relation between tax aggressiveness and the use of both strategic planning and a combination of managerial control systems (both planning and reporting mechanisms). We did not find any relation between family CEO and tax aggressiveness. In summary, overall, our findings show that family involvement in ownership, an independent board. and managerialization (the use of managerial mechanisms) are relevant antecedents of tax aggressiveness in private family businesses.

Sign in / Sign up

Export Citation Format

Share Document