Toward a Family Science Perspective on Executive Compensation in Family Firms: A Review and Research Agenda

In family firms, the family often plays a central role in the strategic decisions of the business. However, until recently, research has primarily focused on exploring the role that business factors play in firm decision-making, with less attention given to the role of the family system. This article reviews the research on executive compensation in family firms to understand whether and how the family system has been considered within this work. Guided by the application of family science theories, we provide a framework to explain why it is important to incorporate the family system in the future study of executive compensation in family firms. We conclude by discussing a research agenda outlining how elements of the family system can be integrated into future executive compensation research to inspire scholars to think differently about this important research topic.

Willing and Able? The Screening and Adoption of Habitual Family Venture Opportunities

This article develops a two-part theoretical framework synthesizing the socioemotional wealth (SEW) perspective with image theory to explain the ways in which family decision makers screen and potentially adopt habitual new venture opportunities. The model theorizes that opportunities are initially screened according to their ability to preserve SEW and fit with the family’s value images and subsequently explains how SEW willingness interacts with the family entrepreneur’s trajectory and strategic images to predict whether the venture will be pursued as a serial or portfolio opportunity. Theoretical implications and directions for future research are also discussed.

The Effect of Ownership Structure on Disclosure Quality and Credit Ratings in Family Firms: The Moderating Role of Auditor Choice

Despite the substantial degree of heterogeneity within family firms, little is known about how their heterogeneity affects firm behavior and the implication for the shareholder–debtholder agency problem. Our study contributes to the literature by examining whether family firms with a higher level of control-ownership divergence would disclose less information and whether Big 4 auditors play a moderating role in mitigating the negative impact of control-ownership divergence on disclosure quality resulting in improved credit ratings. Using data from the emerging economy of Taiwan, we provide support for our three hypotheses. Our contributions will interest family firm owners, researchers, auditors, and policymakers.

“Over My Dead Body”: Wives’ Influence in Family Business Succession

The family business literature barely addresses wives’ influence in family business succession. Where it does so, the result is often tokenistic, stereotypical, and imprecise. Drawing on 34 in-depth interviews, this article makes three contributions. First, it identifies wives’ critical influence in family business succession through socialization across the life span of the family business; specifically, through normative, interactive, and experiential socialization. Second, it demonstrates the diverse dynamics and impact of wives’ influence on family business continuity. Third, it highlights the particular significance of experiential socialization, whereby changing expectations of marriage and family life have amplified wives’ influence in succession outcomes.

Celebrity Couples as Business Families: A Social Network Perspective

We depict Hollywood celebrity couples as business families who participate in the project-based movie production industry, which is a temporary and disaggregated form of organization where skilled individuals are linked to one another through contractual and social relationships. Appearing in Hollywood movies generates celebrity capital, which can be converted into economic capital through involvement in endorsements and other rent-generating activities. Finding projects is facilitated by membership in high-quality social networks, and we consider celebrity marriage as a means of merging two individuals’ social networks, which can be mutually beneficial for both parties. We develop and test three hypotheses about the quality of social networks prior to and after marriage and analyze their impact upon celebrities’ postmarriage career performance. We contribute to the family business literature by exploring hybridized and adaptive forms of business family in contemporary project industries, which has the potential to enlarge family business scholars’ research horizons.

Out of the Comfort Zone! Family Leaders’ Subsidiary Ownership Choices and the Role of Vulnerabilities

Based on the socioemotional wealth approach and a sample of 3,904 subsidiary ownership choices made by 586 family firms, this study shows that family-managed firms (i.e., those family firms with a family member in a leadership position) prefer wholly owned subsidies over joint ventures when entering foreign markets. Family-managed firms are also more likely to revise their subsidiary ownership choices and form joint ventures when in vulnerability conditions, that is, when they experience performance below aspirations and when entering a culturally distant market.

Endogeneity Issues in Family Business Research: Current Status and Future Recommendations

Although the family business research field and related disciplines are paying increasing attention to improvements in methodology, there is still insufficient attention being paid to endogeneity issues. We therefore raise awareness of endogeneity and suggest ways to reduce biased results in family business studies. We review publications in the family business literature in terms of (1) the consideration of endogeneity issues, (2) sources of endogeneity for different research topics, and (3) various methods that researchers have used to control for endogeneity. We discuss important lessons learned from the review and offer methodologically oriented recommendations for future family business studies.

Entry Timing as a Mixed Gamble in Cross-border Acquisition Waves: A study of Family Firms

We draw upon the mixed gamble perspective to investigate the entry timing decisions made by family firms in the context of cross-border acquisition (CBA) waves. We argue that family-controlled firms trade-off short-term SEW and financial losses in favor of long-term SEW and financial gains, while moving early in CBA waves. Findings suggest that family-controlled firms have a higher preference for early movement compared with nonfamily-controlled firms. Further, we show that founder’s presence on the board and acquirer’s superior performance amplifies the mixed gamble trade-offs, thereby strengthening the relationship between family control and early movement within CBA waves.

The Psychological Foundations of Management in Family Firms: Emotions, Memories, and Experiences

Exploring the psychological foundations of management in family firms is necessary to understand why they formulate and implement strategies differently from nonfamily firms, and why and how family firm behavior varies across different family firms. Picone et al. (2021. The psychological foundations of management in family firms: Values, biases, and heuristics. Family Business Review, 34(1), 12-32) have proposed a conceptual framework for the psychological foundations of management in family business, examining how the values, biases, and heuristics of family firm members affect strategic decision-making and family firm outcomes. Drawing on this framework, we examine emotions, memories, and experiences in family firms, disentangling “what we know” from “what we should know”, and offering some relevant questions to advance the field.