Abstract

The family firm management literature underrates corporate governance issues both because in family firms the entrepreneur/owner tends to concentrate in his hands almost all the decision power and because the concept of family business is associated with that of small business. On the other hand, the ‘family’ character over firm governance has been traditionally analysed in terms of institutional overlap (family versus business) that causes processes of instability, conflicts, divisions and crisis, both inside the family and between owners and managers. Our paper, after a summary of the literature, aims at proposing a different point of view on the corporate governance dynamics in family business and a different path to understand the change processes into these organizations adopting a Situationist View of the Organizations (SVO) that is focused on the continuous work of two processes: action and institutionalization, that build, break and rebuild social reality. Under this point of view some topics – institutional processes, coalitional games and power dynamics – suggest different considerations about the processes of governance and power. The concept of actor (or strategic actor) is of particular relevance. It refers to an individual (human actor) or, more often, a coalition of individuals able to act strategically for the protection of their specific interests. The concept of strategic actor goes far beyond the organizational boundaries, as often a coalition is composed by both internal and external members

Highlights

  • Both family business and corporate governance issues are deeply explored in management literature

  • The first stage of a research program that aims to build a model that interconnects two focal drivers in the dynamics of corporate governance change in family firms: the degree of institutionalization (DI) and, its logical opposite, the degree of action (DA)

  • The first stage of the research program – the results of which are presented here – focuses on defining a set of hypotheses to be validated through further empirical activities planned for the steps. We defined these set of hypotheses starting from the key assumptions of the Situationist View of the Organizations (SVO), as above presented, and thanks to some informal talks with some key players, family and non-family members, owners and managers, all belonging to the pro-tempore dominant coalition in their organizations. The purpose of these informal talks was twofold: - collecting the perceptions of key players about the concepts of degree of action (DA) and degree of institutionalization (DI), previously exposed and shared with them; - building together a conceptual map about the key concepts of the model to be used for the definition of research hypotheses

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Summary

INTRODUCTION

Both family business and corporate governance issues are deeply explored in management literature. This paper does not aim to recap these fields of studies. We can argument that since in family firms the entrepreneur/owner tends to concentrate in his hands almost all the decision power, the corporate governance structures is not considered a key success factor. One of the reasons for this underestimation of corporate governance issues in family firm management literature is, perhaps, the idea of associating the concept of family business with that of small business. If it is true that almost always a small business is a family business, the opposite is not (Table 1)

Tata Sons Ltd
THE DOMINANT PARADIGM IN CORPORATE GOVERNANCE APPROACHES
THE SITUATIONIST VIEW OF THE ORGANIZATIONS
CONNECTING ACTION AND INSTITUTIONALIZATION
CONCLUSION
Findings
LIMITATIONS AND IMPLICATIONS
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