Goal Setting in Family Firms: Goal Diversity, Social Interactions, and Collective Commitment to Family–Centered Goals

Both the entrepreneurship and the family business fields are reaching their momentum (Melin, Nordqvist, & Sharma, 2014; Venkataraman, Sarasvathy, Dew, & Forster, 2012) and scholars acknowledge the importance of considering not only the family business dimension, but also the individual and family dimensions of entrepreneurship phenomena (e.g., Aldrich & Cliff, 2003; Marchisio, Mazzola, Sciascia, Miles, & Astrachan, 2010; Nordqvist & Zellweger, 2010). The idea of looking at the intersection of the family business and entrepreneurship fields has become relatively common in the early 2000s, thanks to some scholars (e.g., Chrisman, Chua, & Steier, 2003; Habbershon & Pistrui, 2002; Hall, Melin, & Nordqvist, 2001; Rogoff & Heck, 2003; Zahra, Hayton, & Salvato, 2004) whose efforts have encompassed promising new perspectives. While several papers have focused on themes that can be considered as part of the Family Entrepreneurship field, rare are the cases where an explicit definition of Family Entrepreneurship can be found. For example, among the first special issues dedicated to the topic, Rogoff and Heck (2003) compare entrepreneurship and family business research and conclude that families are the oxygen that feed the entrepreneurial fire. In the same issue, Aldrich and Cliff (2003) demonstrate the interrelatedness of family and entrepreneurship by showing how changes in the family have altered the landscape of entrepreneurship. Among the first inspiring contributions, Habbershon, Williams, and MacMillan (2003) define enterprising families as those with a vision forged by the controlling family which “directs the enterprising activities of the family unit, business entity, and individual family members so as to pursue the maximum potential wealth for current and future generations of family members.” This paper was one of the first to introduce also a robust theorizing about transgenerational wealth creation, a concept to which we will return later. A few years later, in their seminal work, Heck and colleagues define Family Entrepreneurship as a phenomenon involving “the underpinnings and interactions of two systems, namely, the family system and the business system” and show how promising could be studying these fields as well as the overlap between them (Heck, Hoy, Poutziouris, & Steier, 2008: 324). Later on, Nordqvist and Melin (2010), contributed by identifying two separate, yet related dimensions – the dimensions of the entrepreneurial family and the entrepreneurial family business. They use the concept of the entrepreneurial family to refer to “the family as an institution, or social structure, that can both drive and constrain entrepreneurial activities,” while they consider the entrepreneurial family business as “a type of organization, or organizational context, with certain characteristicsthat can facilitate or constrain entrepreneurial activities, processes and outcomes” (Nordqvist & Melin, 2010: 214). In the same vein, Uhlaner, Kellermanns, Eddleston, and Hoy (2012), examined the intersection of entrepreneurship and family business and offer a paradigm to explain the entrepreneurial behaviors of family firms. In this case the authors specifically focused on entrepreneuring families, defined as “the subset of business-owning families focused on entrepreneurial objectives or motives” (Uhlaner, Kellermanns, Eddleston, & Hoy, 2012: 2). Thus, in the general literature, the concepts of entrepreneurial families and/ or family businesses seem to be quite common, and perceived as fascinating. For example, Poutziouris, Steier, and Smyrnios (2004) talk about “family business entrepreneurial development” while Campbell calls for more transgressive research that aims at revealing the full entrepreneurial potential of family firms and shifts away from the paradigm of the single, heroic entrepreneur to legitimize approaches that also take into account emotional resources, shared values, and underlie “the integration of head and heart” (2011: 41). A sub-theme − and probably one of the most studied recently − of Family Entrepreneurship is transgenerational entrepreneurship which links entrepreneurship and family business theory (Nordqvist & Zellweger, 2010) and is defined as “the processes through which a family uses and develops entrepreneurial mindsets and family-influenced resources and capabilities to create new streams of entrepreneurial, financial and social value across generations” (Habbershon, Nordqvist, & Zellweger, 2010: 1). In this vein, to explore the entrepreneurial process within business families across the globe both qualitatively and quantitatively, the STEP (Successful Transgenerational Entrepreneurship Practices) project has been founded and involves now more than 30 countries and 125 researchers. Kraus and colleagues (2012: 135) similarly to the works mentioned above, do not define Family Entrepreneurship explicitly but stress that family business and entrepreneurship are not contradictory or exact synonyms. For the authors, “family businesses are entrepreneurial . . . they just go about it differently by leveraging their distinct familiness (Habbershon et al., 2003).” As Kraus and colleagues (2012) note, family firms are a unique form of ownership which relies heavily on the overlap among family, business, and ownership systems (Gersick, Davis, McCollom, & Lansberg, 1997). These authors implicitly talk about Family Entrepreneurship by stressing that successful family firms are the ones that are able to keep the entrepreneurial spirit alive and vigorous for the next generations. Recently, Fayolle and Begin (Begin & Fayolle A., 2014; Fayolle & Begin, 2009) have focused their attention on the family dimension of individual and organizational entrepreneurial behaviors and the entrepreneurial dimension of family businesses. Building on and extending this perspective, in this volume we define Family Entrepreneurship as the research field that studies entrepreneurial behaviors of family, family members, and family businesses (Bettinelli, Fayolle, & Randerson, 2014). We accompany this definition with two visual frameworks that (hopefully) help us offer a clearer view of the concept (Figure I.1). This conceptualization (represented in Figure I.1) presents three loci (i.e., individual, family, and family business) and identifies the main nexus, between the individual and the family, between the family and the family business, and between the individual and the family business. Each nexus – represented by the arrows – symbolizes the influences on the entrepreneurial behaviors of each loci.With the framework illustrated in Figure I.1 we aim at adopting a holistic view and to take into consideration that not only entrepreneurial behaviors of an individual are in most of the cases rooted in the family context, the sustainability of the family firm depends on individual and/or collective entrepreneurial behaviors. Additionally, family firms are qualified as such by virtue of family ownership, management, or participation in an entrepreneurial firm. Finally, both entrepreneurial behaviors and the success or failure of the family firm impact the family unit (Bettinelli, Fayolle, & Randerson, 2014). This broad definition allows us to incorporate the previously mentioned concepts and to integrate them into a framework that should help scholars systematize knowledge on the topic. By focusing on behaviors, this definition takes into proper consideration the dynamic nature of Family Entrepreneurship, additionally by considering different loci (i.e., the individual, the family, and family business) it allows us to disentangle the intrinsic complexity of the phenomena under study (Bettinelli, Fayolle, & Randerson, 2014). While previous research has tended to focus on entrepreneurial phenomena that occur where family and family business overlap, this conceptualization underscores the importance of Family Entrepreneurship as a holistic phenomenon that affects, and is affected by, the three different loci above identified. Thus, not only the family and the family firms are considered, but also the individual, and circular effects are presented in the figure (e.g., family firms are affected by the family but also the family can be affected by family firms’ behaviors, individuals’ behaviors affect family firms, and vice versa, and so on). This is in line with research that has acknowledged that a large part of

Even though family firms are characterized by an overlap between the family and business systems, family business research has focused separately on how family firms compete (i. e., strategic behavior) and how families are involved their firms (i. e., types of family orientation). With the aim of closing this research gap, we draw on the heterogeneity principle of family firms and the equifinality principle of the configurative approach to conjecture that family firms can successfully adjust their strategic behavior and family business orientation in a variety of ways to enhance their likelihood of survival. We follow a sample of Spanish family firms over an 11-year period (2004–2015) to test our model. Based on the Kaplan–Meier survival estimator and the Cox proportional hazard model, we find that survival likelihood is higher when firms combine a differentiation strategy with a business-first or a family-enterprise-first orientation or when firms follow a low-cost strategy with a family-first orientation.

Academy of Management Learning & EducationVol. 14, No. 3 Books & Resource ReviewsThe SAGE Handbook of Family BusinessJennifer E. Jennings, Trish Reay and Lloyd P. SteierJennifer E. JenningsUniversity of Alberta School of Business, Canada, Trish ReayUniversity of Alberta School of Business, Canada and Lloyd P. SteierUniversity of Alberta School of Business, CanadaPublished Online:8 Jul 2015https://doi.org/10.5465/amle.2014.0247AboutSectionsView articleView Full TextPDF/EPUB ToolsDownload CitationsAdd to favoritesTrack Citations ShareShare onFacebookTwitterLinkedInRedditEmail View articleREFERENCESFriedman M. 1970. The social responsibility of business is to increase its profits. The New York Times Magazine, September 13. Google ScholarFrost P. J.Taylor M. S. (Eds.). 1996. Rhythms of academic life. Thousand Oaks, CA: Sage. Google ScholarGagné M., Sharma P., De Massis A. 2014. The study of organizational behavior in family business. European Journal of Work and Organizational Psychology, 23(5): 643–656. Google ScholarJames A. E., Jennings J. E., Breitkreuz R. S. 2012. Worlds apart?: Rebridging the distance between family science and family business research. Family Business Review, 25(1): 87–108. Google ScholarKotlar J., De Massis A. 2013. Goal setting in family firms: Goal diversity, social interactions, and collective commitment to family-centered goals. Entrepreneurship Theory and Practice, 37: 1263–1288. Google ScholarMarques P., Presas P., Simon A. 2014. The heterogeneity of family firms in CSR engagement: The role of values. Family Business Review, 27(3): 206–227. Google ScholarMelin L., Nordqvist M., Shama P. 2010. Sage Handbook of Family Business Proposal. Google ScholarMitchell T. R. 2007. The academic life: Realistic changes needed for business school students and faculty. Academy of Management Learning & Education, 6(2): 236–251.Link , Google ScholarPoutziouris P. Z., Smyrios K. X., Klein S. B. 2006. Handbook of research on family business. Cheltenham/Northampton: Edward Elgar. Google ScholarPukall T. J., Calabrò A. 2014. The internationalization of family firms: A critical review and integrative model. Family Business Review, 27(2): 103–125. Google ScholarSharma P., Salvato C., Reay T. 2014. Temporal dimensions of family enterprise research. Family Business Review, 27(1): 10–19. Google ScholarSmyrios K. X., Poutziouris P. Z., Goel S. 2013. Handbook of research on family business, (2nd ed.). Cheltenham/Northampton: Edward Elgar. Google ScholarSteier L. P., Ward J. L. 2006. If theories of family enterprise really do matter, so does change in management education. Entrepreneurship Theory and Practice, 30(6): 887–895. Google ScholarFiguresReferencesRelatedDetails Vol. 14, No. 3 Permissions Metrics in the past 12 months History Published online 8 July 2015 Published in print 1 September 2015 Information© Academy of Management Learning & EducationDownload PDF

Kotlar and De Massis found that membership assortment and the number of organizational members, as well as the imminence of succession, influence goal diversity in family firms. They also showed that goal diversity can be managed and family–centered goals can be stabilized through professional and familial social interactions, driving the formation of collective commitment to family–centered goals (CCFG). Using this research as a point of departure, we propose that CCFG may impact family firm economic and noneconomic performance. Furthermore, we introduce to the family firm literature the organizational psychological capital (OPC), consisting of hope, efficacy, resilience, and optimism. We also suggest that OPC may be more prevalent in family firms than in nonfamily firms. Moreover, OPC of family firms may play an important role in the link between CCFG and economic as well as noneconomic performance.

Our interest in family businesses derives from not only participation in family firms but also by what we have observed over the years. It is also heavily influenced by our passion for understanding entrepreneurs (Carsrud and Brannback 2009) and the subsequent firms they create which often start out as family ventures. While what we have observed is often positive, the horror tales are frequent and legend. It seems that the structure inherent in a successful business is often in a “degree of tension” with those which characterize a harmonious family. It is this “conflict” that is at the heart of the uniqueness of family business. This book is an attempt to address unique issues that arise from this tension between the family system and the business system.

A New Era for EJFB

How does faith matter in today's business world? Family businesses are the dominant organizational form globally. Yet, religion in family firms has been under-researched for many years, with only limited articles published in the past two decades. While our study focused on the Christian faith, we recognize the contributions of other religions to family businesses. The significant influence of faith needs to be better understood by Christians and others alike to promote harmonious relationships within and between faith groups. In a qualitative study, we examine the utilization of faith-led values among the owners of 15 U.S. multigenerational family firms, using a grounded theory approach and the theoretical lens of family systems theory. We analyzed the reported perceptions of 33 family firm owner-manager and family-manager respondents, focusing on the impact of faith on relationships with stakeholders, including, but not limited to family members, employees, and customers. These perceptions were based on the respondents' faith, their practice of prayer at work, prayer for the business, and the acknowledgment of God's power. Therefore, we propose that a faith system is central for such family firm leaders in addition to the family, business, and ownership systems. We depict the faith system as the hub of a wheel with spokes representing the family, business, and ownership systems driving the family firm. We summarize our findings with six propositions.

PurposeThis paper brings together research on advertising, family business, and the resource-based view (RBV) of the firm to examine performance differences between publicly traded US family vs non-family firms. The purpose of this paper is to understand the heterogeneity of family vs non-family firm advertising after such firms become publicly traded.Design/methodology/approachThe authors draw on the RBV of the firm, as well as on extensive empirical literature in family business and advertising research to empirically examine the differences between family and non-family firms in terms of performance.FindingsUsing panel data from over 2,000 companies across ten years, this research demonstrates that family businesses have higher advertising intensity than competitors, and achieve higher performance returns on their advertising investments, relative to non-family competitors. The results suggest that the “familiness” of public family firms is an intangible resource that, when combined with their advertising investments, affords family businesses a relative advantage compared to non-family businesses.Research limitations/implicationsFamily involvement in publicly traded firms may contribute toward a richer resource endowment and result in creating synergistic effects between firm “familiness” and the public status of the firm. The paper contributes toward the RBV of the firm and the advertising literature. Limitations include the lack of qualitative data to ground the findings and potential moderating effects.Practical implicationsUnderstanding how family firms’ advertising spending influences their consequent performance provides new information to family firms’ owners and management, as well as investors. The authors suggest that the “familiness” of public family firms may provide a significant advantage over their non-family-owned competitors.Social implicationsThe implications for society include that the family firm as an organizational form does not need to be relegated to a second-class citizen status in the business world: indeed, combining family firms’ characteristics within a publicly traded platform may provide firm performance benefits which benefit the founding family and other stakeholders.Originality/valueThis study contributes by highlighting the important influence of family involvement on advertising investment in the public family firm, a topic which has received limited attention. Second, it also integrates public ownership in family firms with the family involvement–advertising–firm performance relationship. As such, it uncovers a new pathway through which the family effect is leveraged to increase firm performance. Third, this study also contributes to the advertising and resource building literatures by identifying advertising as an additional resource which magnifies the impact of the bundle of resources available to the public family firm. Fourth, the use of an extensive panel data set allows for a more complex empirical investigation of the inherently dynamic relationships in the data and thus provides a contribution to the empirical stream of research in family business.

Researchers use various definitions to describe the family firm. The characteristics of family firms that are stressed in each of these definitions are somehow related to family control. All characteristics together reflect a spectrum of family firm types along one core dimension: family involvement in the firm. However, it is more helpful to distinguish among family firms by using their precise type. Each particular family firm type is characterised by a set of agency relations within and between the family system, ownership system and the business system. This paper is a first attempt to apply the insights from agency theory on a highly simplified (reference) family firm situation where the father is full owner and the daughter manager of the family firm. Agency theory establishes the foundation for the optimal contract conditions between father and daughter. While real life is often characterised by bounded rationality and incomplete information, future research should help identify the “optimal contract” be‐tween the family/shareholders and management in various family firm types under these circumstances.

PurposeSince non‐family employees form a large portion of employees in many family firms and they play an important role in the transgenerational survival of those firms, the purpose of this paper is to explore how family influence factors affect non‐family employees' organizational identification and then organizational attachment, which can consequently influence their turnover intentions.Design/methodology/approachIn this conceptual paper, the paper attempts to answer two important research questions: What are the family firm‐specific determinants of nonfamily employees' organizational identification in family firms? How does nonfamily employees' organizational identification affect their tenure in family firms? Thereby, the paper develops a conceptual model linking family influence dimensions (i.e. power, experience, and culture), nonfamily employees' organizational identification, organizational attachment, and turnover intentions within the domain of the stewardship theory.FindingsThe model presented in this paper can help scholars and family business managers better understand the idiosyncratic family influence dimensions that can affect nonfamily employees' perceptions and intentions associated with their tenure in family firms. If family firms can limit the negative effects of family influence factors, make the best use of the positive effects, and integrate key nonfamily employees into the family firm through helping them satisfy their higher‐order needs, they can uninterruptedly move forward toward achieving long‐term competitive advantages and superior performance.Research limitations/implicationsAside from the antecedents of nonfamily employees' organizational identification that are pointed out in this paper, there may be other determinants that are beyond the scope of this paper. The governance structure and strategic orientations are some of the possibilities constituting avenues for future research.Social implicationsFamily firms with great employee care cannot only increase employees' loyalty to their firms, but also help them develop work‐life balance.Originality/valueThis paper is one of the only attempts to use social identity theory to explain non‐family employees' organizational identification and attachment in family firms that can affect their turnover intentions. Not only does this add to our knowledge of family firm human resources management and provide new directions for future research, but it also suggests the usefulness of social identity theory in family business research.

The research on innovation in family firms has become more in-depth. However, the research conclusion of family firms’ innovation is not clear. Although existing studies have shown that inheritance is an important factor affecting innovation in family firms, the conclusions of incorporating inheritance into innovation research in family firms are still conflict. The contradiction of existing research has put forward higher requirements for exploring the innovation mechanism of family firms in the context of intergenerational inheritance. This paper focuses on the different sources of CEO successors in family firms. We hold the opinion that the identity difference of CEO successors in family firms is an important contingency factor influencing the firms’ innovation decision in the context of intergenerational inheritance. This paper tries to focus on the influence of CEO successors on the innovation input in family firms based on the perspective of the lack of legitimacy due to different sources of CEO successors in the succession period, and to explore the influence of the primary evaluator of legitimacy further, that is, to explore the difference in innovation input caused by the strategic difference between second-generation CEOs and professional manager CEOs seeking legitimacy in different types of family firms.Based on the empirical tests of 526 listed family firms from 2004 to 2015, the results show that: （1） Compared with the first-generation of founder CEOs, the second-generation of family CEOs and professional manager CEOs would reduce innovation input. （2） On the one hand, the lower innovation input caused by the lack of legitimacy of second-generation CEOs has been exacerbated in the family firms controlled by multiple founders; on the other hand, the lower innovation input caused by the lack of legitimacy of professional manager CEOs has been exacerbated in the family firms controlled by the single founder. In the further analysis of the succession context, for second-generation CEOs, when first-generation CEOs still stay on as the chairmen of the board, it intensifies their negative commitment to innovation input. For professional managers, when there is no second-generation CEO in family firms, it intensifies their negative commitment to innovation input. This study deepens the research on family firms’ innovation in the context of intergenerational inheritance, which has a certain theoretical significance. Firstly, the research conclusion finds that CEO successors’ need for identity legitimacy is closely related to their innovation input decision in family firms, and second-generation CEOs and professional manager CEOs would lead to the decrease of innovation input in family firms due to the pressure of identity legitimacy during the succession period. Secondly, this paper constructs the mechanism between the legitimacy of different CEO successors and their innovation input behavior, indicating that the legitimacy pressure of second-generation CEOs comes from the family system, and professional manager CEOs are more concerned with their career legitimacy. Finally, this paper makes up for the deficiency that previous research on family firms’ innovation is limited to family homogeneity. This study is also of some practical significance, which has a strong reference value for the managers in family firms to motivate the commitment of innovation input of different CEO successors.

Extant literature offers that the alignment of ownership and controls presumably resolves the agency problem. However, traditional governance mechanisms are limited to resolve agency problems in family firms where interests of family owners and managers are aligned but conflicting with those of other shareholders. Drawing on the principal-principal perspective and the social embeddedness, we develop a theoretical framework to address the agency problems in family firms. Specifically, we theorize different earnings management behaviors between non-family and family firms, and under what conditions family owners and managers engage in earnings management. We also propose a business group, independent board, and dissimilarity in top manager functional backgrounds as governance mechanisms to monitor earnings management in family firms. We investigate the earnings management practices of 570 Korean family and non-family firms from 2002 to 2010. We find that, in general, family firms are less likely to engage in earnings management than non-family firms. However, we also find that the higher the level of family embeddedness through ownership, the more earnings management a family firm will commit. In addition, we confirm that business group affiliations and independent boards attenuate the effect of family embeddedness through ownership on earnings management. Our study contributes to corporate governance and family business research by suggesting governance mechanisms to solve socially embedded agency problems in family firms.

Purpose – The aim of this paper is to provide evidence on the extent and the consequences of the provision of non-audit services (NAS) by statutory auditors to German family firms. Design/methodology/approach – The study analyzes hand collected fee data of 368 listed and private family firms in Germany. It employs univariate tests, ordinary least squares and two-stage least squares regressions to investigate potential threats to perceived auditor independence and knowledge spillovers between jointly provided NAS and audit services. Findings – Incumbent auditors are shown to be a significant source of various types of NAS to family firms. There is weak evidence on threats to perceived auditor independence and support for reciprocal knowledge spillovers between the services. While listed and private family firms do not differ in regard to the proportion of NAS fees, comparative findings suggest that key threats and benefits of jointly provided services are more prevalent among private than among listed family firms. Research limitations/implications – The study suffers from limited data availability and is restricted to the initial year of mandatory audit fee disclosure of private firms in Germany. Particularities of family firms and the German setting, as well as differential results for listed and private family firms, suggest fruitful avenues for future research. Practical implications – The study addresses the current issues in audit regulation. Regulatory bodies should consider that key threats and benefits of auditor-provided NAS decrease with stronger exogenous restrictions. Attempts to restrict jointly provided services in the EU suggest family firms to reconsider their reliance on auditors as a trusted source of NAS. Originality/value – This study is the first to provide evidence on the extent and consequences of auditor-provided NAS in family firms based on fee disclosure. It is also among the few studies that investigate private firms in a code law country and complements prior evidence from Germany that is restricted to listed firms. More generally, it contributes to limited evidence at the intersection of audit and family business research.

Purpose of the paper : In family business research, sustainability has never received as much attention as large corporations despite the relevance of their global economic impact. Thus, the paper’s aim is to investigate this issue by taking two key structures into consideration: longevity and trans-generational value. Methodology : Drawing on systems theory, we developed an exploratory conceptual framework (Trans-generational Sustainability Model - TSM) for family firms. We argue that the three pillars for the creation of trans-generational value, representing a long-standing value for family businesses, are growth, family success and local embeddedness quality. An exploratory case study on a long-lived Italian family firm (Amarelli) belonging to the Henokiens association, has been conducted to investigate some of the hypotheses that have been developed in relation to this preliminary model. Findings : In the case of Amarelli sustainability seems to be the result of the combination of a unique strategic orientation and distinctive competences. The presence of family members in management positions is a major concern for the “enlarged” family and high quality of local embeddedness which are likely to support the creation of trans-generational value. Practical implications : The balance between the three components of family firms’ sustainability may provide directions for entrepreneurs in their family firms management, particularly during the succession phase or other disruptive changes involving their businesses. Originality of paper : This article provides a review of significant trends in the strategic management approach by studying family firms’ sustainability. Its original contribution is twofold: firstly by its accumulating evidence that the creation of “enlarged” trans-generational value may determine family businesses’ longevity and sustainability, and secondly, system theory seems as the leading theoretical perspective.

In transforming emerging economies, the historical origins of family firms can be traced either to the restructuring of SOEs or to direct establishment. Drawing on imprinting theory and intergenerational family governance, this study investigates how restructuring imprints shape green innovation in family firms and under what conditions these effects vary. Based on data from Chinese A-share listed family firms (2007–2022), we find that restructuring imprints—manifested in risk aversion and path dependence—persist long after privatization. Consequently, restructured family firms demonstrate significantly weaker green innovation performance than entrepreneurial family firms. This negative effect is reinforced by founder control but mitigated by second-generation involvement. Overall, this study identifies a critical source of heterogeneity among family firms and contributes to the literature on green innovation within family business research.