Family governance and strategic orientation of family firms in China: an institutional logics perspective

Abstract

ABSTRACT Family firms have attracted significant attention, prompting a surge of inquiry into their strategic choices. Drawing on institutional logics theory, we view the strategic choices of family firms as the interactive outcome of the dualistic system and the institutional environment. Empirical research conducted on listed family firms in China reveals that as family control increases, these firms tend to adopt conservative strategies. However, this relationship is influenced by the institutional environment. Specifically, the positive association is strengthened as marketization progresses but weakened as religious culture intensifies. These findings shed light on how the behavioural characteristics and strategic decisions of family firms, as an integral part of Chinese culture, are shaped and influenced by regional cultural institutions. We contend that during the process of marketization transformation, it is crucial to establish an internal culture within family firms that can reconcile the contradictions of internal logics. Additionally, significant importance should be placed on adapting to and leveraging the external institutional environment.