Law and HRM Challenges in Generational Transition of Family Firms

This chapter examines some of the most relevant HRM problems in generational transition of family firms and proposes a number of legal instruments capable of resolving them. Use of corporations as vehicles to run the family business is examined, also with respect to consequences of this choice in business transition. Definition and “protection” of family roles within the firm are observed. Patrimonial issues are compared to personal issues and their interplay is explained by reference to five different scenarios. Last, the possibility to “select”, so to say, the law applicable to one's succession under Regulation (EU) no 650/2012 of the European Parliament and of the Council of 4 July 2012 is explored. At the end, it is concluded that even if HRM in family business shows informality along with formality in designing business practices, generational transition of family firms requires structuring and needs be planned, appropriately and in detail, in advance.

Organizing Human Resources in Family Firms During Generational Succession

HRM in family firm (FF) research has moved from its narrow focus on selection and succession planning towards studying the broader antecedents, content and outcomes of HRM. Today, HRM is acknowledged as a crucial factor for attracting new talent, improving employee attitude and behavior, enhancing performance, and fostering the long-term competitive advantages. The aim of this study is to identify which tools and practices FFs adopt with HR during succession planning. For example, do they use the replacement table with the aim of providing the firm and its management with a map that allows them to make the most appropriate decisions to replace a person who is no longer available to fill a certain position? Or is it possible to identify other tools? Similar questions help the authors to investigate around the importance regarding people in firms during generational succession.

The Enhancement of HR Systems Through Entrepreneurial Succession in Family SMEs

This chapter aims at shedding light on the “hidden relationship” between the process of entrepreneurial succession in family SMEs and the development of the HR management system in such firms. Starting from a literature review, the authors develop a reflection based on evidence from a sample of Italian family SMEs, collected through a longitudinal qualitative inquiry. They question if and how the change at the helm of the family firm may constitute an opportunity to develop or strengthen the HR management system. The ultimate goal of the chapter is to lay the foundation for building a conceptual framework in which some possible relationships between the variables involved are outlined.

Sustainable Human Resources as the Future of HRM Systems in Family Firms

Issues associated with the fair distribution of resources for both current and future generations are gaining on more importance as a result of broad discussion worldwide relating to the ecological problems. One of the significant elements of these activities is embodied by family firms; hence, the aim of this chapter is an attempt to indicate what an important role in terms of building the future of family firms is played by the adoption of the principles of sustainable management with the participation of the employees and the owners on the basis of the appropriately designed functions of HRM. The chapter includes introductory elements to the significance and foundations of the concept of sustainable development in order for the subsequent sections to contain information on the subject of utilizing the concept of sustainable management in organizations and the departments of HR. The final section of the chapter constitutes indications referring to the creation of sustainable personnel in family firms as a challenge that is facing the departments of HR.

Investigation of Organizational Culture in Family Firms

The goal of the chapter is to provide an in-depth and comparative understanding of the instruments of organizational culture that exist and provide a review of academic research evidence on their performance in family firms. Furthermore, the chapter will provide an additional insight into a novel instrument for diagnosing organizational alignment – Vox Organizationis (the “voice” of the organization). The chapter will provide an introduction to family firms and the challenges and survival; comparative and critical review of existing relevant instruments of organizational culture and assessment of their implementation in measuring organizational culture in family firms and presentation of Vox Organizationis – an instrument based on a novel methodology for measuring organizational alignment, culture, and leadership values; and review of evidence and recommendations on its implementation in family firms. The chapter will provide the reader with an increased understanding of how and with which instruments to measure organizational culture and alignment in family firms.

Value-Based Management and Responsibility in the Management of People

Today's markets require credibility, transparency, and sustainability. This demand obliges organisations to make ever greater advances in the field of management by values. Until recently, value-based management was considered just another management approach to be covered in day-to-day operations. Today, it is considered part of the strategic management of the firms. The paradigm shift began when pressure from the market and society as a whole began to insist that companies should behave like members of the ecosystem, taking full responsibility and employing their capacity to generate change. This implies that value-based management should be deployed throughout the entire organisation. This, in turn, requires companies to identify and commit to certain values that will become the cornerstone of their strategy and management style. The aim of this chapter is to claim that value-based management is a competitive advantage for family business in particular.

Utilizing Technology to Enhance Human Resource Practices

HR management departments are constantly evolving as a result of new technological advancements. For family HR firms, this technological evolution is vital in ensuring that they remain innovative and current with their competitors. Technology has impacted how companies recruit, retain, and evaluate employees. However, in order to ensure that technology is effectively and accurately adopted and integrated, companies need to understand how they can employ technology to enhance their daily operations and implement tools that provide an adequate return on investment for the technology they select. In family firms, a vast majority of employees are able to ensure that funds are invested in appropriate technology-enhanced projects and that they develop a family-like culture with their stakeholders. This chapter will seek to explore these emerging trends in order to present opportunity for family owned firms to function most efficiently and effectively in the modern, technology enhanced workplace.

Friends or Foe?

Scholars have argued that business ethics is a crucial ingredient for the successful recipe of human resource management. However, little is known about the factors that trigger an organizational commitment towards the promotion of an ethical approach in crafting human resource management practices. This is especially true for family firms, whose ethical slant in devising human resource management practices has been under-researched. This chapter intends to push forward our knowledge in the field of business ethics investigating the role of familiness in determining ethically-rooted human resource management practices among small and medium-sized enterprises. More specifically, the authors investigated how awareness of business ethics issues and formalization of human resource management policies and practices affect the SMEs commitment to ethics. Family firms were found to be aware of the ethical challenges that characterize human resource management; however, no evidence was retrieved about the role of familiness in triggering an ethical commitment in managing human resources.

Managing Generational Handover in Family Business

The aim of this chapter is to highlight the peculiarities of the succession in family-owned businesses and to discuss the main difficulties encountered by second and third-generation entrepreneurs during the succession process. By the use of direct interviews, the authors collected information about the specific role played by the multiplicity of stakeholders involved, first of all the HR function and the relationship with non family employees. The case studies analysed consider family firms that are managing their succession process. Two generations coexist in two cases with family members belonging to different branches of the same family. Non-family managers and employees represents a fundamental stakeholder that influence the success and sustainability of the succession process. One aim of the chapter is to analyse how the HR practices have changed during the succession process considering how the successors entered and integrated with non-family managers and employees according to the management for stakeholders approach.

Entrepreneurial Intention in Family Business

The goal of the chapter is to provide a comprehensive understanding of the entrepreneurial intentions in family businesses. Furthermore, the chapter will provide and assess how the role of prior family business background has influence on entrepreneurial intention. The chapter will provide introduction of the term entrepreneurship, entrepreneurial intentions, and the family significant impact on entrepreneurial intentions, and it is important because it studies the effect of the entrepreneurial family background on entrepreneurial intentions in family firms. The chapter will provide the reader with an increased understanding of whether the role of parents has influence over the entrepreneurial intentions of their offspring. The reader will be introduced to the up-to-date scientific research in the area of entrepreneurial intentions in family firms.