Growth Of Family Businesses Research Articles

Genetic Elements of a Long-Standing Family Business: An Analysis of Five Century-Old Family Businesses Based on Grounded Theory

Succession is a major threat to the sustainable growth of family businesses. This study proposes that the growth of a family business is a co-evolutionary process involving multiple memes, and a family business undergoes succession through memes. To address this exploratory question, the author analyzes entrepreneurial behavior in five well-known century-old Western family enterprises based on grounded theory, and constructs a deoxyribonucleic acid model of the family business. The model not only reveals the most prominent memes in the complex meme system of a family business, but also illustrates the connectivity of different strengths among the organizational memes. The implications and recommendations derived from this study indicate that family businesses should develop specialization and succession capabilities through memes, and explore different means of innovation and adaptation to realize cross-generational growth.

DIGITАL ЕСОNОMY АS А FАСTОR IN IMPRОVING THЕ STАNDАRD ОF LIVING THRОUGH SMАLL BUSINЕSS АND FАMILY ЕNTRЕPRЕNЕURSHIP

The article focuses on the development of family entrepreneurship in the context of Uzbekistan's digital economy. It discusses key legal acts and strategies aimed at supporting small businesses, creating jobs, reducing poverty, and improving living standards. The article also provides an analysis of statistical data on the growth of family businesses and their contribution to the country's industrial output. Recommendations are made for further development of family businesses using digital technologies.

The growth potential of Palestinian family businesses: immigrant versus home-country entrepreneurship

PurposeThis project aims to examine how entrepreneurial orientation and succession planning among Palestinian family businesses positively affects their associated growth potential, considering the mediating role of innovation and the moderation effect of geographic location. Leveraging ethnic entrepreneurship theory, the authors compare these types of enterprises in the USA with their counterparts in Palestine.Design/methodology/approachThis cross-sectional quantitative research analyzes data collected from October through December 2022. 180 Palestinian family-owned firms completed a survey; 90 companies were located in Palestine, while the other 90 were in the USA. Structural equation modeling analysis was conducted using Smart-PLS4. The interrelations of the conceptual framework were examined via path analysis and bootstrapping techniques.FindingsThe authors found a statistically significant positive effect of entrepreneurial orientation on Palestinian family business growth; the authors’ results concurrently indicated succession planning did not affect growth within the authors’ selected population. The authors also discovered innovation mediates the relationship between orientation and growth, and business location appears to moderate this relationship. The authors’ research indicates geography appears to favor Palestinian family-owned companies in the USA, where the authors found opportunity-driven immigrant entrepreneurs benefit from the structured business systems in a highly-developed country.Originality/valueGiven the current situation in Palestine, it is essential to understand the potential contribution that Palestinian family-owned businesses globally can make to reconstruct the country’s local economy. The next few years will be critical in figuring out how innovative thinking can boost the region’s recovery and increase Palestinian-based family companies’ ability to engage in sustainable entrepreneurship with reinvestment support from its diaspora. Therefore, it is important to have research that identifies factors that could improve these businesses’ continued performance and growth potential. This study also aids in further understanding the defining characteristics of Palestinian-owned family firms, enhancing general theories related to entrepreneurship among ethnic and diasporic groups.

Debt financing and growth of Ghanaian family-owned businesses: The dual role of family values

ABSTRACT This study investigates how family values can create finance and growth challenges for family-owned businesses in emerging economies. Specifically, it explores the interplay between family values, debt financing, and firm growth, while also considering the moderating role of self-enhancement and self-transcendence in this relationship. The paper uses Schwartz’s theory of human values to illustrate how incorporating indigenous ontologies based on Ubuntu can lead to sustainable growth in family businesses in Ghana and the African continent. A sample of 295 Small and Medium-sized family businesses in Accra, Ghana, was selected using purposive sampling, and multiple regression modeling was used to test the study’s hypotheses. The study employed Cronbach’s alpha and factor analysis to assess the reliability, validity, and variations between observed and correlated variables. The results suggest that family businesses with conservation, openness-to-change, and self-enhancement values may not be inclined to utilize debt financing, and conservation values have a negative effect on family business growth. The study also found that self-enhancement, conservation, and self-transcendence values positively moderated the relationship between debt financing and family business growth, with self-transcendence values playing a more significant role. These findings contribute to a better understanding of the complex relationship among family values, debt finance, and business growth in emerging economies, and lay a foundation for future research.

Effect of Family Management Style on Family Business Growth of UPI Tasikmalaya Students

Family businesses play an important role in a global economy that is full of challenges in achieving sustainable growth. One factor that continues to be studied in this context is the family management style that includes decision making, resource management, and business strategy development, so as to achieve sustainable growth. The purpose of this study was to determine the description of the influence of family management style and family business growth, and to determine the influence of family management style on family business growth. This research uses quantitative methods with a descriptive verification approach to collect and analyze data. Quantitative data were obtained through questionnaires with a population of 200 students and 48 samples of students whose families own and run businesses. The object of this research is family companies owned by the families of Entrepreneurship Students of Universitas Pendidikan Indonesia. The results of this study indicate that there is an influence of management style on the growth of the family business of students of the Universitas Pendidikan Indonesia Kampus Tasikmalaya. The results of this study provide valuable knowledge on how families can improve their business growth through the right management style.

The Role of Family Ownership on Internationalization Strategies

The present study examines the impact of family ownership and control on the internationalization strategies of Portuguese manufacturing firms. The study contributes to the existing literature by providing evidence that different forms of international market presence are asymmetrically influenced by family control and by underscoring the importance of innovative strategies. The analysis includes a sample of 25,533 firms observed from 2018 to 2021. Econometric models address the role of ownership in alternative internationalization endeavors, demonstrating that these firms differ from their non-family counterparts. By comparing the export propensity, intensity, and reach of family businesses to non-family businesses, the research sheds light on the challenges faced by family-owned firms and the significance of structural characteristics such as technological regimes and regional competitive advantages. The findings emphasize the negative impact of family presence on internationalization while highlighting the importance of innovation and ecosystem support. Additionally, the study contributes to the empirical refinement of firm classification by proposing a more reliable segmentation method. It also presents alternative econometric methods to appraise internationalization strategies better. Future research directions are suggested, particularly regarding the use of additional information related to innovation and human capital, offering insights for enhancing the global engagement of family businesses in global markets. This research provides valuable empirical evidence and practical implications for policymakers and practitioners seeking to support the required actions to promote the growth and internationalization of family businesses in the context of the Portuguese manufacturing industry.

Apprenticeships and sustainable growth of family businesses: A regional assessment

A practical government policy on apprenticeship is a requirement to continuously advance and encourage the company toward top performance and adaptability for a long-term sustainability. In Nigeria, which has a significant young unemployment problem, apprenticeship has emerged as a key to reducing youth unemployment. Thus, sustainability of family businesses is a source of employment, and continuing apprenticeship practices have also raised the likelihood that an individual will obtain employment in the southern regions of Nigeria. This study aimed to examine how job creation, vocational and technical training, and apprentice competences aid in sustaining family business growth in southern Nigeria. The study adopted a cross-sectional survey and stratified sampling technique; a sample included 329 apprentices in 48 SMEs in southern regions of Nigeria. Using a five-point Likert scale questionnaire, data were analyzed using a normality test, linearity test, and multicollinearity test to ascertain the adequacy of the data. Correlation analysis was used to test the hypotheses. Findings revealed that job creation is related to sustainable family business growth; however, the strength of the correlation, though weak (30.0%), was statistically significant; a significant degree of association also existed between apprentice vocational training and sustainable family business growth; lastly, apprentice competences relate significantly to sustainable family business growth (72.1%, p < 0.05). The study concluded that continuous apprenticeship practices influence the objective of business growth as a pivot for socioeconomic development and a long-term sustainability of family businesses. Acknowledgment The authors would like to sincerely appreciate the Editor-in-Chief and Reviewer(s) for their helpful comments that, in our view, have helped significantly to improve the quality of the manuscript.

The succession of power and its relationship with the growth of family businesses in Peru

Es habitual que las empresas se encuentren preocupadas por sus problemas operativos, comerciales, estratégicos, entre otros, pero las empresas familiares que en su mayoría pertenecen al rango denominado Pyme en Perú, tienen problemas adicionales que se originan por su propia naturaleza como por ejemplo la consanguinidad de los socios, la dificultad en la toma de decisiones, la visión de futuro, los planes de sucesión de poder, entre otros. Por tanto, es objetivo describir y luego relacionar los factores que pueden influir en que una empresa familiar perdure en el tiempo, pero en particular se aborda una variable relevante y particular: la sucesión de poder. En la presente investigación se identifica si es que las empresas familiares de la región Tacna poseen planes de sucesión debidamente comunicados, si es que han sido ejecutados en algún momento, se evalúa la gestión del sucedido para determinar si es que contar con un plan contribuye a que la empresa genere crecimiento en ventas, activos, entre otros, o si es que dicha herramienta de gestión no influye de manera significativa en el desarrollo de la organización. La recopilación de la información se hizo a través de un muestreo no probabilístico por conveniencia, aplicando la técnica de entrevista a las empresas familiares más representativas de la región Tacna, Perú para indagar sobre su crecimiento, planes, metas y cómo han afrontado o afrontarán el proceso de sucesión de poder. Finalmente, se determina que en la presente zona geográfica la existencia de una sucesión planificada no tiene una influencia relevante en el desarrollo de las empresas estudiadas.

Sustainability of Taiwanese SME Family Businesses in the Succession Decision-Making Agenda

SME family businesses play a vital role in the world economy as a recognized sustainable contributor to economic growth. Aged owners of Taiwan’s family businesses have become the biggest problem; because of the dramatically changing technology and business environment, many family businesses are faced with an inheritance crisis. This study tries to identify what the priority of influential factors is for the leader’s decision-making of succession. Based on the stakeholder, upper echelons, stewardship, and agency theories, we summarized 27 crucial factors derived from four dimensions (individual, interpersonal, organizational, and the environmental) after reviewing the relevant literature. This study was based on multilevel research and a multidisciplinary perspective. After using the Delphi method and decision-making trial and evaluation laboratory (DEMATEL) method, we applied the importance–performance analysis (IPA) to determine the key factor priority. The results are important for strengthening family business theory and identifying the conditions that best promote the future growth and sustainability of family businesses.

Family Business Literature Overview: Towards Achieving Family Business Growth

Businesses which are predominantly owned and managed by a family are commonly referred to as family businesses. This study’s objectives are to examine the definition and characteristics of family businesses, evaluation of the uniqueness and theoretical framework of family businesses literature and the nature of family business growth. Family businesses are unique from non-family businesses, in how they grow, financial strength, wealth safeguarding and their risk appetite. The most rational perspective is what might be used to emphasize the uniqueness of family businesses and how it connects to stakeholder management’s standpoint. Family businesses have become a significant and vital segment of a country’s economy through their contribution to job creation, poverty alleviation and sustainable development. Family-owned businesses in industrialised economies, on average, outpace other types of businesses, with family-owned businesses involving 80–90% of all businesses in North America and provide jobs for between 50 and 75 percent of the world’s labour force. Evidence from sub –Saharan Africa suggests that more than 90% of businesses which are not owned by the governments are family businesses. Growing a family business is not a one-sided process because it can depend on current business and family concerns. A successful organization and the creation of additional employment possibilities for its members from one generation to the next are both possible outcomes of family company growth. However, some family businesses purposefully avoid expanding out of concern for losing control of the enterprise. The literature review has shown that family businesses grow more slowly than non-family businesses on average due to lack of incorporating new entrants leading to lack of new ideas which is detrimental to a company growth. Other factors for the slower growth of family businesses in comparison to non-family businesses include their traditional strategies, insufficient financial strength, safeguarding of their wealth and risk appetite with a tendency toward risk aversion. According to the studies done in Sweden family businesses, the results from the literature review have also shown that family businesses grow much more slowly than non-family businesses do in both urban and rural areas.

Ahmed Mujtaba Razzak: an immigrant entrepreneur with big dreams

Learning outcomes At the end of the case discussion, students should be able to: ▪ Evaluate the relevance of community and networks to immigrant entrepreneurs. ▪ Appreciate the entrepreneurial journey of immigrant entrepreneurs in the South African context. ▪ Consider the challenges of the socio-economic environment affecting businesses in South Africa. ▪ Make an informed decision regarding how creating a family entrepreneurial ecosystem can mitigate business risk. ▪ Critically evaluate which strategies could exploit any further opportunities and grow the businesses. Case overview/synopsis In April 2022, Ahmed Mujtaba Razzak, director of Montage Interior Solutions, a design, building and construction company based in Mayfair, Johannesburg, was preparing for the official opening of the company’s newly-built Clifton Mall. Ahmed, whose family had immigrated to South Africa from Pakistan in 2004, had big goals for the mall: he wanted it not only to be profitable for his family, but also to help uplift the lives of the shop owners and the members of the surrounding community, many of whom were also from Pakistani immigrant families. Thus, instead of having to rent the units, shop owners were able to buy them under sectional title. The model promised the benefits of unit ownership for the shop owners and a quicker return on investment for Montage. As he prepared for the opening, Ahmed wondered whether he had set everything up for the venture to be able to achieve his goals. The case study provided a deeper understanding of different challenges, approaches and strategies used in immigrant start-ups. The case study included various business and entrepreneurship themes focused on immigrant start-ups, strategy and diversification, family business and business growth. It also considered both individual and contextual factors influencing immigrant entrepreneurship, insofar as family and the business are “inextricably intertwined”, where the effects of social exchange between generations meant that successful enterprising families showed tremendous respect for the sensitive relations between the business and the family. Complexity academic level Postgraduate Diploma, MBA, Masters, Executive Education Supplementary materials Teaching notes are available for educators only. Subject code CSS 3: Entrepreneurship.

The Impact of Intergenerational Succession Intention on Family Firm’s Innovation Strategy: Evidence from China

In the development and growth of family businesses, succession is an unsolvable problem, which is also a popular focus of academic research. For a family firm, succession may be a strategic decision but also a long-term and intricate “footrace.” It will have a significant impact on the long-term viability of a family firm if it is not handled appropriately. This study mainly explores the influences of family business owners’ intergenerational succession intention on their family firms’ innovation strategy in China. In addition, this study further examines the moderating role of the institutional environment in the above relationship. Therefore, the data in this article comes from a survey of 271 family businesses in eight different regions of China. Also, this paper can aid the smooth transition of intergenerational transmission of small and medium-sized family businesses in addition to the untroubled development of technological innovation activities. Specifically, the institutional environment plays a negative moderating role in the relationship between family succession, radical succession, technological innovation, and a positive regulating role in the relationship between single equity succession and technological innovation.

Aspects Affecting Growth of Family Businesses

Family businesses form an inseparable part of each national economy. Therefore, it is necessary to pay significant attention to the aspects that will affect their growth and sustainability in the future. The main aim of this paper is to verify the implementation of key aspects within the entrepreneurial practice of family businesses that considerably affect their growth. Those aspects were identified while processing theoretical input data. On the basis of such knowledge, the research assumptions were determined, and their validity was subsequently verified through the Mann–Whitney U test, the non-parametric Kruskal–Wallis test and the χ2 test of independence. Afterwards, we were able to say that key determinants, such as a formal organisational structure, finance, a constituted family council and a proper code of ethics, have a considerable effect on the growth of family businesses in Slovakia. However, proper legislation that would be a fundamental pillar that family businesses may lean on in any of their operations and activities still needs to be enacted and put into practice.

Entrepreneurial orientation and New Zealand family business growth performance: environmental effects

ABSTRACT There has been extensive study in the entrepreneurial orientation domain (EO) from uni-dimensional and multidimensional perspectives and relationships between EO and business growth performance. There has been limited study concerning the EO family and small business relationship and environmental impact from New Zealand perspective. Focusing on family business, this research examined the EO and New Zealand family business growth performance and the environmental effects on the relationship. This research adopted a quantitative method, collected data from 117 participants. Partial least structure and structural equation model analysis were used to test seven hypothesis on the relationship of EO and family business growth performance, the influence of dynamic and hostile environments on the relationship. It was found EO dimension variables were a strong predictor of family business growth performance, EO family business positively related, and that environmental factors strongly mediate the relationship between EO and family growth.

Institutional complexity and family business development: a case study of the Charoen Pokphand group

PurposeWith features of both “family” and “business,” family businesses must seek a balance between the emotional aspect of “family” and the economic aspect of “business” in its organizational and decision-making processes to ensure the sustainability of the family’s entrepreneurship. This study aims to focus on how internal institutional complexity combined evolves alongside the growth of the family business.Design/methodology/approachThe research looks, from the perspective of institutional logic, into the Charoen Pokphand Group, which is an epitome of overseas Chinese family businesses and proceeds to build a model of family business growth in the context of institutional complexity.FindingsThe research finds that as a family business grows, institutional complexity inside the organization would change from aligned period to sustaining period and then to dominant period. Then further elucidates the process of proactive response in different stages of the development of a family business. Attaching equal importance to the cultivation of entrepreneurship and to the continuation of family values and culture is the crucial mechanism by which Chinese family businesses seek a balance between family logic and business logic.Originality/valueThis paper unveils the change of institutional complexity in the evolution of family businesses and the process of action of its agency as an organization, and simultaneously partly reveals the features of entrepreneurship that overseas Chinese family businesses have as they grew, which is of positive significance for exploring and building a path of growth unique to Chinese family businesses.

How can family firms cope with growth? Contribution to accelerationism

PurposeAccelerationist thinking needs an organizational lens to progress. This paper explores how family firms cope with growth pressure.Design/methodology/approachFive case studies of French family multinationals, including semi-directive interviews conducted with senior, middle managers and operational employees showed how these allegedly “human-oriented organizations” have handled growth.FindingsFour organizational change initiatives were undertaken: (1) the transition from a functional structure to a matrix model, (2) the formalization of a corporate value system, (3) the centralization of an information and communication system and (4) the involvement of external consultants. Further analyses suggested an empowerment-control tension. In line with previous critical work on business empowerment practices, these organizational initiatives conceal a control reinforcement. This translates into internalization of repression, among family director, manager, and operational employees, both at headquarters and subsidiaries. Thus, one is misguided if turning to family firms to escape from becoming both subject and driver of control as they are submitted to the same market pressures as others, pressure condemned by accelerationists.Practical implicationsAccelerationism thinking aims at a post-capitalist era and is a fertile ground for collective reflection, which should feedback the family organization with a brighter future. The family firm can only acknowledge this compelling phenomenon and fulfill its role of society stakeholder raised to a higher level.Originality/valueFamily businesses, themselves, roll out their own repressive mechanisms due to the market system. This paper connects two literature studies: family business growth and accelerationism thinking.

How do family businesses grow? Differences in growth patterns between family and non-family firms

Family businesses vary considerably in size, ranging from small entrepreneurial ventures over medium-sized companies to large global corporations. However, we know little about how family businesses grow. Our research analyses differences in growth patterns between family and non-family businesses, considering two dimensions of business growth: sales (performance) and employees (resources). Based on the Penrosean resource-based view of the firm and socioemotional wealth (SEW) perspective, we test and find —using a panel of 2000 Spanish manufacturing companies (2006–2014) —that family businesses tend to grow less than non-family businesses in terms of sales but more in terms of employees. Our research casts doubt on the myth of low growth in family businesses and shows that SEW should complement the Penrosean approach to explain the growth of family businesses.

Dynamic familiness capabilities and family business growth: A longitudinal perspective framed within management accounting

This paper examines how dynamic capabilities evolve in relation to familiness resources in order to facilitate family business growth and the way the context underpins dynamic capabilities in the family business. Drawing on an abductive research logic, it explores through a longitudinal in-depth case study and document analysis the way that dynamic capabilities and familiness resources have been deployed by a Greek-owned international shipping company over a twenty-five-year period. The findings highlight the influences exerted by the controlling family on the searching, seizing, and reconfiguring processes within management accounting to enable the reconfiguration of familiness resources in the firm across the dimensions of product strategy, governance, networking and staffing, and financing. These reconfigurations are essential in facilitating company development throughout critical growth junctures. We provide theoretical extensions to the resource-based view (RBV) through an integration of the concept of familiness and dynamic capability view, contextualized theorization, and temporal theorization.

Survival, age and growth of family businesses and non-family businesses: comparing Egypt, Madagascar, Morocco and Turkey

This study examines some of the key differentiating characteristics of family businesses in contrast to their non-family counterparts, namely their survival, age, and growth, and it compares them within the context of several societies. We hypothesise that, first, family businesses not only survive more but also become older than non-family peers; second, growth (i.e., size) in family firms is slower. Third, the relationship between age and size is weaker in family businesses. In other words, as family businesses become mature, the number of employees does not increase as much as that of non-family businesses. Finally, this relationship differs depending on the society context of a business. To make the above-mentioned comparisons, we used a sample of Global Entrepreneurship Monitor (GEM) data on 1919 firms operating in Egypt, Madagascar, Morocco and Turkey. Hierarchical linear models corroborate our hypotheses, and our results confirm the three first hypotheses while they reject the last one.

Growth dynamics and emotions in limited growth and a non-structured family business group: the case of Tunisia

The family business (FB) literature highlights two main factors underlying the issue of limited growth: cognitive and emotional. This study aims to understand better the influence of the emotional dimension on the growth dynamics of FBs over time. Based on the founder centrality, this research uses the growth state approach and the component process model from the appraisal theory of emotion, to understand how discrete emotions impact FB's growth decision-making. A qualitative study of six Tunisian founders of 24 non-structured family business (NSFB) groups who deliberately decided to limit growth was conducted. Findings show that the growth dynamic is based on two transition sequences each lasting more than two decades: from the creation to a high growth state, then from a high growth state to a plateaued growth state. Fear, anger and sadness recognition in transitioning to the plateaued growth state indicate the situations that are causing blockages in the founder's ability to achieve his goals, low coping potential and doubts about the future expectations of the NSFB group.