Variations in Strategic Choices Concerning Firm Growth – a Conceptual Framework and Its Application to the Context of Family Businesses

Abstract

Attempting to explain the observed variations in family firm growth, I aim to first develop a general understanding of the potential origins of variations in firm growth (both among FBs and between FBs and NFBs). To do so, a closer examination of the complex relationship between family ownership and firm growth is required. Building on the suggestions of Carney and associates, I consider a firm’s strategic choices to be a central factor mediating this relationship. Since the vital influence of this kind of choices on growth performance is also confirmed by the general management literature, they form the central focus of this investigation. In a first step, based on these insights, a dedicated conceptual framework that centers on the processes that underlie the formation of strategic growth decisions was developed. Combining the relevant insights and components of two well established and renowned theories in the field of growth research, the upper echelon theory (UET) and the theory of planned behavior (TPB), it constitutes: a model of individual growth intentions and their respective influence on strategic choices concerning firm growth. Through its explicit focus on chief executive officers (CEOs) as the central unit of analysis, this model represents a general theoretical framework that indicates how the strategic growth decisions of organizations are shaped by their respective chief executives. In a subsequent step, this framework was applied to the specific context of FBs (i.e., FBs versus other FBs and versus NFBs). Overall, the propositions developed in this regard indicate that depending on the idiosyncrasies of the respective CEO in charge – more precisely his individual growth intentions and degree of managerial discretion – there might be variations in the strategic choices regarding firm growth, both among FBs, and between FBs and NFBs. The theoretical contributions of this first part of my dissertation and avenues for future research are discussed.