Goal setting for family firm owners: An agency-stewardship perspective

Abstract

Goal setting for family firms is a vital activity since the performance of businesses is measured against their goals. Using prior research on goal-setting in the context of family firms, this narrative literature review paper aims to bring forth, the importance of goal-setting specific to family business owners who straddle family and business. A review of family-business literature indicates that using the three-circle model comprising family, business, and ownership as the base theory, goal setting in family firms has been examined from the perspective of whether they are economic or non-economic and whether they are family-oriented or business-oriented. Both these approaches to family business goal setting are based on the ideology that the unique feature of family businesses is that they aim to satisfy two groups of stakeholders — family members and business members. While family and business perspectives are captured in these two approaches, goal setting from an owner’s perspective has been largely ignored. Rooted in the concept of corporate responsibility, the agency-stewardship framework is emerging as an alternative perspective for family businesses and hence is proposed as a useful dominant logic framework for decisions on goal setting. This conceptual paper based on a narrative literature review aims to present the agency-stewardship framework as a relevant and important lens in the two most important decision contexts of family businesses, i.e., governance and succession. The paper exemplifies how the agency-stewardship continuum can be used for goal setting to nurture next-generation family business leaders and manage family business operations through goal setting in governance policies and succession processes.