Family Business Research Articles

Leaders of Family Businesses and Their Team Roles

Leaders of Family Businesses and Their Team Roles

The Success of Transition Process: Founder vs. Successor Perspective – Case of Croatia

Family business is the most common form of business worldwide. Despite the acknowledged importance of family business in the Croatian economy, there are still no formal and reliable statistics on the national level available regarding the prevalence and impact of this ownership structure. However, it is assumed that family businesses in Croatia employ over half of the total workforce and that the majority of small companies are family-owned. Most of the family-owned companies are still first-generation family firms, owned and managed by the founders but transition processes are taking root. Since the very survival of a family business, continuity, and success depend on the transition process, a substantial body of literature focuses on the transition process and factors that will facilitate a successful transition. Therefore, this paper aims to contribute to the existing body of literature by providing a deeper understanding of the transition process specificities in Croatian family-owned companies. In this paper, we analyze differences in the perception of factors relevant to the success of the transition process on the convenience sample of Croatian family-owned companies. The sample included first-generation and second-generation owners and a questionnaire was used as the primary data collection instrument. The results of the statistical analysis show that there are significant differences in the perception of factors relevant to the success of the transition process from the founders' and successors' point of view.

An Investigation of Factors Towards Family Business Sustainability: Perspective from India, a Developing Economy

An Investigation of Factors Towards Family Business Sustainability: Perspective from India, a Developing Economy

Navigating Generational Change: The Role of Leadership Skills in Sustaining Family Businesses in Indonesia

A 2014 PwC survey reported that 60% of the next generation is involved in senior executive roles within family businesses, and 27% are present in the company but not as senior executives. The survey also indicated that 37% of family businesses extend up to the second generation, and 33% reach the third generation. This highlights a phenomenon in Indonesia—the lack of sustainability of family businesses across multiple generations. While acknowledging the importance of accounting, management, and internal control, effective leadership in the succeeding generation can further ensure the sustainability of a family business. Therefore, it is crucial for the preceding generation to engage in efforts to acquire or prepare for such leadership. The paradox concerning the importance of the next generation in family businesses is seen as a fundamental phenomenon for developing specific hypotheses with reference to the relationship between leadership, organizational change capability, and the sustainability of family businesses. This enables these businesses to continue thriving and expanding. This study aims to identify and analyze the rules and relationships between skills, the capability of change, and the economic sustainability of family businesses in Indonesia. Utilizing a quantitative approach with an explanatory study design, the research concludes that the impact of leadership skills on the economic sustainability of family businesses, the effect of change capability on economic sustainability, and the moderating role of change capability on the relationship between leadership skills and economic sustainability are all significant, albeit at varying levels of significance. The indirect influence of leadership skills on economic sustainability through change capability is also significant, though minimal. When change capability acts as a moderator, it is proven to strengthen the relationship between economic sustainability and leadership skills.

The Effectiveness of the Inclusion of Governance as a Part of the Binding Articles of Association

This study investigates the efficacy of introducing governance as binding articles in the Articles of Association (AOA) of family businesses in Saudi Arabia, given the legislative reforms provided by the new Saudi Companies Law of 2022. The research points out that advantages will be brought by such enhanced transparency, accountability, and professional management practices, bringing family businesses up to international standards. Despite challenges such as resistance from family members, implementation complexity, and balancing traditional values with modern governance, the reforms provide substantial advantages. The case study of Saudi stock market companies illustrates the positive impact of phased governance reforms. Recommendations for successful implementation include engaging family members, leveraging external advisors, developing clear governance articles, providing training, and continuous monitoring. In all, these reforms serve as a giant stride toward ensuring that there is a strong, transparent, and sustainable business environment. This guarantees the long-term success and competitiveness of family businesses in Saudi Arabia.

The Prenuptial Agreement of Business Spouses: Guarantees of Respect for Mutual Interests and Protection of the Rights of the Parties

Introduction: in the light of modern socio-economic realities, an urgent problem is the effective protection of the property interests and rights of spouses who own a family business. The conclusion of a prenuptial agreement provides spouses who have a family business and are parties to the prenuptial agreement with the opportunity to reduce financial risks and provide themselves with additional legal protection in the event of termination of the marital relationship. The inclusion of legally verified contractual structures in a prenuptial agreement is very effective in preventing future conflicts between spouses who own a joint business. Purpose: to reveal the legal content of the prenuptial agreement concluded between spouses who own a joint business in the system of contractual structures and to develop recommendations for improving the contractual regulation. Objectives: to identify conflicts related to the legal guarantees of respect for mutual interests of spouses who have a family business and are parties to a prenuptial agreement; to identify contractual structures used to minimize conflicts between the subjects of a prenuptial agreement; and to develop a conceptual model for concluding a prenuptial agreement between spouses who own a joint business remotely via the Internet. Methods: the methodological framework for the research is based on the general scientific methods: systematic analysis, abstraction, and the dialectical method, as well as a set of specific scientific methods: structural and functional, formal legal, comparative law, forecasting, and modeling. Results: it is proposed to amend Art. 11 of Federal Law No. 193-FZ dated July 27, 2010, “On an Alternative Dispute Settlement Procedure with the Participation of an Intermediary (Mediation Procedure),” supplementing its paragraph 8; in the context of the effective implementation of the concept of “Electronic State,” the Federal Notary Chamber it is proposed to develop, test, and implement a virtual assistant based on artificial intelligence technologies, which will function not only on the Federal Notary Chamber website but also on the online resources of the notary chambers of the constituent entities of the Russian Federation. Conclusions: it is recommended to normalize the mediation procedure for spouses who have a family business and are parties to a prenuptial agreement through information and communication technologies; as part of the implementation of the concept of “Electronic State,” the Federal Notary Chamber should develop, test, and implement a virtual assistant (“chatbot”) based on artificial intelligence, which will be available not only on the Federal Notary Chamber website but also on the websites of notary chambers of the constituent entities of the Russian Federation, and at the request of users, including spouses who have a joint family business, it will perform an advisory function when drafting a prenuptial agreement.

The power of women in the success of business family: A case study of Kosovo, Albania and North Macedonia

The main objective of this research is to emphasize the significant role women hold in leading family businesses in transitional countries such as Kosovo, North Macedonia, and Albania. It aims to demonstrate how women’s leadership can positively influence business performance, economic advancement and social development in these regions where traditional gender norms are shifting. Additionally, this study explores how empowering women in leadership roles can foster innovation, strengthen resilience, and ensure long-term sustainability for family-owned businesses ultimately contributing to the broader economic progress of these transitioning economies. This research aims to analyze family support, cultural factors and the influence of education on the advancement of women in leadership positions with a particular focus on family businesses. In this empirical research, 490 women from the countries above were included and the sample was randomly selected due to a lack of formal data. The results of the analyses were presented through descriptive analysis, Pearson correlation, Ordinary Least Squares (OLS) and T-test. The results indicate that family support has already a significant impacted advancement. Similarly, cultural factors have a positive influence. These factors have changed and are no longer obstacles to women's advancement as in the past, although in some rural countries this is still seen as an obstacle. Another important factor is education where women prioritize before taking leadership positions and continue with various training even after taking positions to be fully prepared to achieve their business objectives.

The power of people in family firms

ABSTRACT Family business scholars have long sought a comprehensive theory on the family firm. A nascent but still-developing aspect of this theory involves understanding the unique challenges of the people who constitute these firms. Our introduction to the Theories of Family Enterprise special collection discusses the literature on human capital and related issues in family firms and then reviews, integrates, and extends the contributions of the five articles in this special collection. These five papers contribute to a better understanding of the indelible social dynamics that are associated with managing family firms and the uniqueness of the people who inhabit them. By bringing a clearer focus on the people who constitute family businesses, these articles collectively contribute to a more comprehensive theory of the family firm and offer several directions for future research.

Transmission of entrepreneurial values in enterprising families: a systematic literature review

PurposeThe purpose of this article is to systematically review existing literature concerning the transmission of entrepreneurial values within the context of family entrepreneurship. Specifically, the study aims to address two primary inquiries: First, which entrepreneurial values transferred across generations have been discerned in family entrepreneurship literature? Second, what mechanisms for the transmission of these values have been identified within family entrepreneurship literature?Design/methodology/approachWe utilized the Web of Science database to identify relevant articles. We employed a broad set of Boolean search terms related to family, entrepreneurship and values. Ultimately, 77 articles were selected for detailed analysis based on their relevance to the topic.FindingsOur review identified a diverse array of entrepreneurial values that can be categorized into three themes: family values, family business values and societal entrepreneurial values. Furthermore, mechanisms facilitating the transmission of these values were classified into eight distinct types, i.e. relational embeddedness, vicarious learning, explicit communication, imprinting, educating, parenting styles, community-zeitgeist and genetics. The paper concludes with an agenda for future research on entrepreneurial value transmission in enterprising families.Practical implicationsUnderstanding how entrepreneurial values are transmitted within family firms can inform practices such as succession planning, leadership development and fostering a culture of entrepreneurship across generations.Originality/valueThis paper contributes to the theoretical development of family entrepreneurship by consolidating and synthesizing existing knowledge on entrepreneurial value transmission. It provides a comprehensive overview that can guide future empirical and conceptual investigations in this field.

Family CEO and radical innovation: A stewardship perspective

This article integrates the literature on radical innovation, the stewardship perspective, and family business research to develop and test a model examining the influence of a family CEO and the CEO's generational stage on radical innovation, considering different types of family CEOs as distinct manifestations of strategic leaders' stewardship behavior. Furthermore, building on the notion of “doing more with less”, we propose and empirically test the notion of “doing better with less”—specifically, whether the presence of a family CEO enhances the pursuit of radical innovation under resource constraints (i.e., with lower R&D intensity). Using longitudinal data over an 11-year period from 227 listed firms in the automotive and pharma/biotech industries from 29 countries, we find that firms led by a family CEO, especially those led by descendants, excel at radical innovation. Descendant-led firms are also better at radical innovation with lower R&D intensity, suggesting they do better with less. That is, our study shows that family CEOs at a later generational stage serve as catalysts for radical innovation, even under resource constraints. In addition to implications for theory and practice, our findings offer a more advanced understanding of the strategic leadership-innovation relationship in terms of distinct manifestations of stewardship behavior for radical innovation in firms with family leadership.

Business concentration, ownership structure and business group performance: An S-shaped hypothesis

Abstract Drawing on resource-based and agency theories, this study examines the effects of business concentration and ownership structure on business group performance. On the basis of panel data (2004–2018) from the top 100 Taiwanese business groups investing globally, this study finds an S-shaped relationship between business concentration and business group performance with the interaction of advantages and costs at different levels. Performance increases when there is little business concentration, decreases when there is a moderate amount and increases again when there is a high level of business concentration. In addition, this study hypothesizes that ownership structure has a different moderating effect on this relationship. The family business group has a positive moderating effect; however, outsider direct and manager ownership have no significant moderating role. These findings have important theoretical and managerial implications for business groups.

Analisis Laba Usaha UMKM Warung Seblak Teh Idah di Desa Pancakarya Kecamatan Tempuran

This research focuses on the UMKM of the Seblak Teh Idah stall in Pancakarya Village, Tempuran District, Karawang Regency. This research is to analyze the business profits of Seblak Teh Idah UMKM which have survived for 10 years from starting in 2013 until 2022. The method used in the research is descriptive quantitative, research activities at Seblak Teh Idah UMKM for 3 months, starting from 1 september 2023 to January 31 2024. The researcher's aim is to analyze operating profits at the Seblak Teh Idah UMKM stall and to analyze the development of profit results. business at the Seblak Teh Idah stall. Because there is one of the problems in the Idah seblak tea business, how to manage profits from sales revenue well, because the seblak business still survives today and is growing. Research result show that Seblak Teh Idah UMKM have experienced developments in their business such as more comfortable facilities, additional cooking utensils, eating utensils and additions to the menu. The profits from the seblak Teh Idah stall business have brought changes to the family's business and economy and have started to show very good development.

To Conceal or to Reveal? Antecedents of Ethnic Minority Family Businesses’ Use of Ethnic Branding

The family business branding literature identifies numerous benefits to communicating family ownership. However, existing studies have omitted ethnic minority family businesses (EMFB), which present unique identity and cultural considerations. We examine potential antecedents to EMFB use of ethnic branding, which features their ethnicity within marketing communications. The study establishes a significant positive relationship between EMFB owners’ ethnic identification and socioemotional wealth (SEW), and between EMFB owners’ SEW and ethnic branding usage. Product ethnicity moderates the latter relationship such that a match between product ethnicity and EMFB ethnicity increases the likelihood of ethnic branding. Managerial and theoretical implications are further discussed.

The Application of Selected Supervised Machine Learning Methods in the Classification of Family Businesses in the Context of Cluster Formation

The Application of Selected Supervised Machine Learning Methods in the Classification of Family Businesses in the Context of Cluster Formation

EXAMINING MARKET ACCEPTANCE

This research endeavors to ascertain whether family businesses employ new product development as a strategy that is well received by the market. This qualitative research examined the food and beverage family business in Surabaya. Data was collected from credentialed persons or expertise via the use of purposive sampling. Interviews served as the primary method of data collection. The present study examines the experiences of family business proprietors in the food and beverage industry who, in response to ineffective marketing strategies, initiated the creation of innovative products. This study emphasizes sensory enjoyment, economic value, and brand trust in product development.

Key Success Factors in Entrepreneurial Development among Women Micro-Entrepreneurs in Malaysia

This study explores factors influencing entrepreneurial development among women microentrepreneurs in Malaysia. Using self-administered questionnaires distributed to 50 participants, the research examined four key factors: family support, business prospects, sociocultural factors, and government support, with entrepreneurial development as the dependent variable and perception of success as a mediator. The data was analyzed using SmartPLS software. Results indicated that most variables had reliable Cronbach Alpha values, though issues with discriminant validity were found. The structural model showed substantial explanatory power, and most path coefficients indicated positive relationships, except for the link between government support and entrepreneurial development. However, only one hypothesis was accepted, revealing that socio-cultural factors significantly influence entrepreneurial development through the perception of success. The study suggests that future research should focus on specific sectors within microenterprises and include a larger sample size for a broader understanding of women’s economic contributions. This research provides valuable insights for policymakers aiming to enhance support for women microentrepreneurs in Malaysia.

Advancing Women Entrepreneurs: A Framework for Small Family Businesses Success within the Sustainable Economy

This article introduces the Holistic Enterprise Success and Sustainability Index (HESSI), a novel framework designed to enhance the success of women-led small family businesses (SFBs) in the context of a sustainable economy. Through a comprehensive literature review and theoretical exploration, this study articulates how women entrepreneurs' perspectives are intricately aligned with both familial values and business imperatives. HESSI employs a robust suite of indicators to measure financial robustness, societal contribution, environmental stewardship, and family solidarity—each meticulously refined to reflect the specificities of women-led SFBs. These indicators transcend traditional, financial-centric metrics, advocating for an expansive evaluation of success that considers economic performance alongside social, environmental, and familial well-being. Crucially, the HESSI framework incorporates women's familial insights, positioning them as a driver of internal cohesion and a pivotal element in integrating Environmental, Social, and Governance (ESG) principles. This broader vision of success metrics includes family unity and the perpetuation of legacy. HESSI promotes an all-encompassing approach to success evaluation that is grounded in gender perspectives, entrepreneurial agility, and a staunch commitment to sustainability principles. The discourse presented is a significant contribution to the fields of gender, entrepreneurship, and sustainable development, providing actionable insights into the vital role of women entrepreneurs in forwarding the sustainability agenda. It underscores the importance of advancing education, reinforcing policy frameworks, and fostering community solidarity to support and extend the reach of women-led SFBs, thus charting a course towards a more equitable and sustainable future in the business landscape.

Gen Z's Motivation and Challenges in Blitar for Running Family Business

This study aims to explore the motivations of Generation Z in Blitar in running a family business. Using a qualitative approach, data were collected through in-depth interviews with 25 respondents involved in family businesses. The results showed that their main motivations included responsibility for family tradition and heritage, the desire to achieve financial independence, and self-development. Despite significant challenges such as financial difficulties and competition, respondents showed resilience and innovation in overcoming obstacles. The strategies implemented included product innovation, digital marketing, and good financial management. These findings provide important insights into the role of Gen Z in family businesses and their implications for local economic development, as well as highlighting the need for support for entrepreneurship education and access to financial resources.

Editorial: Literature reviews as a research methodology in family business management

Editorial: Literature reviews as a research methodology in family business management

Editorial: New contexts in family business research: sport, fitness and lifestyle

Editorial: New contexts in family business research: sport, fitness and lifestyle