Family-owned Businesses Research Articles

Succession and real earnings management in family businesses: is socioemotional wealth a predictor for Cooking the Books?

PurposeEarnings management is a practice that is detrimental to future business viability. For family businesses, viability in the form of succession, continues to be difficult. The motivation to use earnings management is different in family businesses as they have unique pressures and characteristics. The purpose of this paper is to identify if the level of socioemotional wealth in a family business impacts real earnings management behavior during succession. The goal is to better understand what impacts the use of real earnings management for family businesses so that it can be curtailed, enhancing future business viability and successful generational transfer.Design/methodology/approachA sample of 200 small and medium size business owners participated in an experiment. Binary logistic regression was used to identify any relationship between SEW, succession and REM.FindingsThis study finds that socioemotional wealth and succession impact real earnings management behavior in family firms. When succession is not present, the study finds that companies with high socioemotional wealth are less likely to engage in real earnings management than low socioemotional wealth companies. However, when succession is present, the engagement in REM for companies with low socioemotional wealth drops significantly while the behavior of those with high socioemotional does not materially change.Practical implicationsUnderstanding how to position a family business for succession realization is important. We do not know exactly what factors impact the failure rate but identifying how facets of the businesses (SEW and succession) might impact REM and ultimately financial performance will be important to small and medium-sized family business owners in the US as they begin their succession journey.Originality/valueThe study’s experimental design using participants in a US family business, offers an opportunity to better understand this critical portion of the economy and the variables that potentially impact real earnings management decisions. It contributes to the literature by offering potential reasons behind the conflicting findings on REM in family businesses and the impact of SEW on earnings management. It offers a unique view of behavior within different family businesses as opposed to a comparison often found in the literature between family and non-family firms. It also contributes to a gap in literature for US small to medium family businesses.

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.

ESG Risk and Audit Firm Reputation

Purpose: The importance of ESG continues to grow day by day, and ESG risk management has become crucial for corporate sustainability. Understanding ESG risk management is an urgent and crucial issue that cannot be delayed any longer. This study aims to examine the relationship between ESG risk management and audit firms’ reputation. Design/methodology/approach: This study investigates the correlation between the reputational effect of audit firms and ESG risk management, using companies listed on the TWSE and the TPEx in 2023 as the target population. We further develop two research models: first, a regression model (1) to examine whether the brand reputation effects of Big4 and non-Big4 audit firms are associated with corporate ESG risk management scores and set up an Ordered Probit model (2) to investigate how the reputation effect of Big4 and non-Big4 audit firms is related to corporate ESG risk ratings. Finding: The empirical results show that companies audited by the Big 4 audit firms have better ESG risk management performance than those audited by non-Big 4 audit firms, and that companies’ ESG risk management performance varies depending on the specific Big 4 audit firm engaged. Furthermore, the association between ESG risk management performance and the reputation effect of audit firms depends on the firm’s business model and corporate governance structure. The family-owned business model and strong corporate governance environment synergistically enhance the reputation effect of audit firms, thereby contributing to the improvement of ESG risk management performance. Finally, the choice of earnings management strategy affects the relationship between ESG risk management performance and the reputation effect of audit firms. Risk-averse companies that adopt conservative earnings management strategies benefit from the positive impact of the Big 4 audit firm reputation effect on ESG risk management performance. Research limitations/implications: The research limitations of this study stem from the difficulty in accessing ESG information, which constrains the sample size. Originality/value: First, this study provides a comprehensive examination of the ESG risk management performance of listed companies in Taiwan, contributing to a deeper understanding of the current status of ESG strategy development and implementation among Taiwanese companies. Second, by examining corporate ESG risk management, the study explores the impact of audit firms’ reputation on corporate ESG risk management performance. Third, our findings contribute to academic research on ESG issues by incorporating the potential impact of audit firms’ reputation into the analysis.

Halal Purchasing Strategies of MSEs in the Malaysian Food Industry: An Exploratory Study on the Potential Use of CAQDAS in the Qualitative Evaluation of Multiple Case Studies

This paper explores the potential of computer-assisted qualitative data analysis software (CAQDAS), specifically Nvivo 14, in facilitating the qualitative evaluation of multiple case studies. The focus is on halal purchasing strategies within micro and small enterprises (MSEs) in the food industry, a critical issue from a Shariah perspective that ensures halal integrity from source to consumer. The issue highlights that MSE leaders in Malaysia’s food industry failed to optimize halal purchasing in their management practices, which undermines their ability to increase probability. The objective is to explore the strategies for optimizing halal purchasing performance of MSEs in Malaysia’s food industry, on how these businesses navigate the requirements of halal compliance in their operational practices. Through an exploratory study, 10 MSEs were examined to investigate their halal purchasing structures, involving interviews with key stakeholders such as brand owners, company directors, halal executives, and CEOs. In-depth, semi-structured interviews provided insights into company structures, challenges, and halal purchasing strategies. Thematic analysis was employed, using an inductive pattern coding approach where codes emerged organically from the data and were categorized into themes and sub-themes. Findings revealed a variety of business types, with six individually owned companies and four family-run businesses, highlighting differences in employee numbers, business longevity, and owner demographics. The study also suggests a trend of generational succession in family-owned businesses. This research demonstrates the utility of CAQDAS in managing and analyzing complex qualitative data in case study research.

Effect of Succession Planning on the Sustainability of Family Owned Businesses Evidence From Plateau State, Nigeria

The study examines the impact of succession planning (SP) on the sustainability of family-owned businesses (FOBs) within Plateau State, Nigeria. A quantitative research methodology was employed utilizing a survey design. Data were gathered from 293 FOBs in Plateau State through structured questionnaires. Multiple regression analysis was used to examine the variables and validate the hypotheses. The findings indicated that the engagement of successors in business management (β = .378, t = 2.081, p = 0.038), the training of successors (β = .378, t = 3.520, p = 0.001), and organizational culture (β = .367, t = 3.813, p = 0.000) exhibit a positive association with the sustainability of FOBs. Conversely, internal recruitment (β = .024, t = .213, p = .813) and the successor's work fit (β = - .089, t = - 801, p = .424) do not show a significant positive relationship with the sustainability of FOBs. This research contributes to the existing body of literature by providing empirical evidence regarding the efficacy of succession planning in promoting the sustainability of FOBs in Nigeria through the frameworks of generational theory and socio-emotional wealth theories. The results substantiate the generational theory's assertion that family enterprises prioritize legacy and continuity across generations. Additionally, the socio-emotional wealth theory is supported, as FOBs value non-economic aims, encompassing family harmony and the integrity of their business reputation.

Navigating in Turbulent Times: Using Social Media to Examine Small and family-Owned Business Topics and Sentiments during the COVID-19 Crisis

Navigating in Turbulent Times: Using Social Media to Examine Small and family-Owned Business Topics and Sentiments during the COVID-19 Crisis

Succession planning practices and succession success in family-owned businesses: the role of leadership style as internal branding mechanism

PurposeAlthough leadership style plays a critical role in succession planning practices and succession success, empirical examination of its influence on the relationship between succession planning and success of succession in family-owned SMEs has received little attention in the literature. This study examines the interactive effect of the various types of leadership styles as internal branding mechanisms on the success of succession in family-owned SMEs.Design/methodology/approachWe analyzed the data from 124 managers/CEOs of family-owned SMEs that have at least transitioned beyond one incumbent leader using SPSS Version 29.FindingsThe result shows that succession planning practices are positively associated with succession success. It further shows that leaders who brand themselves as transformational and participatory leaders have a positive, significant interactive effect on the relationship between succession planning activities and succession success. The positive relationship between succession planning activities and succession success is dampened when managers rely too heavily on a transactional leadership style. Both autocratic and laissez-faire types of leadership have no significant interactive effect on the relationship.Originality/valueThe study is distinct from past studies. Until now, knowledge about the interactive effect of the various leadership styles as internal branding mechanisms on the relationship between succession planning practices like coaching, mentoring, job rotation and training and succession success in family-owned businesses remains limited. Theoretically, the study is pioneering in the sense that it is among the first studies that extends internal branding to succession planning in family-owned businesses. The study enlightened our understanding of how the various leadership styles and internal branding mechanism influence succession success in family-owned SMEs.

PROMOTING HANDICRAFT FAMILY BUSINESS THROUGH DIGITAL MARKETING TOWARDS SUSTAINABLE PERFORMANCE

The study aims to determine the dimensions of the adoption intention of digital marketing in handicraft family businesses towards business performance, as well as technological innovation applications in the family business for sustainable development. This study examines the theoretical insights and designs a conceptual framework based on previous studies of handicraft family businesses. In so doing, 290 survey data were collected from handicraft business owners and tourists by using face-to-face interviews through a structured questionnaire with 82.85% valid response rate. Moreover, structural equation modeling (SEM) was used to analyze data and find out the causal relationship among the constructs and hypothesis testing. As per the results of the study, among the 6 hypotheses paths all were supported along wit h 24 relationship path coefficients were noteworthy. The result shows that perceived ease of use, perceived risk, perceived usefulness, social norms, perceived behavioral control, and attitude radically influence to the adoption of digital marketing in han dicraft family businesses. The results of this study will assist the research scholars through theory and theoretical foundation for family business owners in understanding and comprehending the role of digital marketing in sustainable family business performance. Similarly, the legacy of family businesses in handicrafts or small businesses can be maintained and empowered through digital marketing to boost the economy. The study is the foremost one in discovering a sustainable business strategy through the success factors of digital marketing adoption in family businesses.

Causes of Failure Among Family Owned Businesses

The study investigated the causes of failure among family owned businesses in South-East, Nigeria. Specific objectives were to; evaluate major family business enterprises that have failed in South-eastern states, Nigeria; investigate the causes of failure of these family owned business enterprisesidentified in South-eastern states in Nigeria; explore strategies that will help prevent such failures in other family owned business enterprises in Nigeria. The study adopted a qualitative approach in analyzing the causes. Historical analysis of ten indigenous family owned business situated in South-eastern, Nigeria that have gone into extinction, were thoroughly carried out to identify factors that contributed to their extinction. It was found out that; death of founder(s), financial constraint, poor management, market complexity and competitions are the main contributors to family business failures and extinctions in Southeastern, Nigeria. Thus, it was recommended family business owners should be liberal, open-minded, flexible and inclusive in making business decisions that will propel their enterprises to greater height. More so, competent hands, professional business consultants and advisors should be incorporated in managing the business. This will ensure the success and fecundity of the business. Though, the study encountered a slight challenge as regards to the availability of resources, because relevant information that would have enriched the result, were not documented or uploaded on the internet. However, the findings of the study contributed immensely to the body knowledge of family successes, growths and failures in Nigeria.

Challenges and strategies of gamification in family businesses: the moderating effects of supervision and engagement

Purpose This paper aims to unravel how family businesses can harness the power of gamification and to illuminate the hurdles that obstruct this path to success. The research identifies these challenges providing valuable insights into the application of gamification in family businesses and the role of supervision and engagement as moderator variables in this relationship. Design/methodology/approach Using a structural modeling approach in a qualitative research methodology, the authors collected responses from n = 200 participants. The results were analyzed using Spearman’s test and multiple linear regression. Findings The research findings reveal that family businesses need to carefully redefine costs when introducing gamification, considering both fixed and variable expenses. The moderating effects of supervision are crucial for user evolution and the correlation, while user engagement influences user and useability experience. Additionally, a positive attitude enhances engagement. Finally, the five key challenges lead to difficulties when implementing gamification strategies. Practical implications This research provides valuable insights for the literature on gamification and family business and offers practical guidance for family business owners seeking to introduce a tailored value proposition adapted to their unique organizational needs and challenges. Originality/value A novel approach is proposed which, through the integration of gamification strategies with family business dynamics, explores the unique challenges and opportunities that arise within this context. By focusing specifically on family businesses, this study highlights how generational differences, ownership structures and cultural resistance can impact the successful implementation of gamification.

Entrepreneurial intentions and family business generational transfers: The mediating role of re-organization among small and medium enterprises

PurposeThe study empirically explores the influence of re-organization on entrepreneurial intentions and family business generational transfers among small and medium enterprises (SMEs).Design/methodology/approachUsing multi-group analysis and partial least square structural equation models, data from 252 family-owned businesses were analyzed.FindingsThe results reveal that re-organization partially mediates the relationship between entrepreneurial intentions and family business generational transfers among SMEs.Research limitations/implicationsThe study used a cross-sectional survey approach and focused on Kampala business district. If required and funding permits, a longitudinal study in this field may be conducted.Practical implicationsFamily business owners ought to involve their family members in the management of the business from an early age, including them in the decision-making process, and use social exchange to strike a balance between their personal goals and the objectives of the business. In order to protect the business's goals, the business founder should mentor the next generation through quality family social interactions.Originality/valueIntegrating entrepreneurial intentions and re-organization is likely to improve the survival rate of family business generational transfers among SMEs in Uganda using social exchange theory.

‘Lady Guardians’ of the Royal Society of Horticulture of Portugal, 1898–1906

In the second half of the nineteenth century gardening flourished in Portugal’s public sphere, having considerably expanded beyond the private realms of palaces and villas. Envisioned as a sophisticated branch of knowledge, horticulture became a hub for citizen science, commercial activities, public education, and civic events. This was a context that fostered and advanced women’s involvement and status as gardeners, horticulturists, and educators, a development influenced by popular Portuguese perceptions of women as protectors. The Royal Society of Horticulture of Portugal (founded in Lisbon as “National” in 1898, decreed “Royal” in 1900), instantiated this enmeshment of perception with status by designating women members as ‘Lady Guardians’ while promoting their participation, especially as competitors and jurists in the society’s flower exhibitions. The women of the society offer a window into the more general identities and professional statuses of women horticulturalists as ‘guardians’ in a generalized sense: they included landowners, writers, gardeners, and family business owners, with many assuming greater responsibility in widowhood. At a time when women’s participation in science was highly constricted, horticulture as a field, and the Royal Society of Horticulture as its premier institution, constituted a remarkable opportunity for women to be publicly engaged and recognized for their expertise as amateur botanists alongside their male counterparts. This article’s analysis demonstrates that women horticulturalists in Portugal were a quite heterogenous group, consisting of women from the highest ranks of the nobility, participating alongside women from further social ranks, inclusive of the aristocracy, bourgeoisie, and urban middle classes. Their participation in the society not only afforded them opportunities locally and civically, but also internationally, as will be illustrated by a few careers that reflect how education, travels, and professional engagement demonstrated the broad reach of Portuguese women’s horticultural activities.

Rebooting Bata: The challenges of repositioning a heritage brand

Founded as a family-owned business in 1894, Bata Corp. has grown to become a major player in the footwear sector, with a presence in more than 70 countries. In India, the company established itself as the primary producer of affordable, durable footwear, with the result that the majority of generation X and millennial consumers remember growing up with Bata shoes, having worn them in their school days and often into early adulthood. Unfortunately, childhood memories can be difficult to translate into glamour; as a result, Bata struggled to position itself as a fashionable modern brand. This case study delves deep into the nuances of repositioning a heritage brand, and explores how Bata eventually succeeded in repositioning itself as a premium contemporary brand. The paper highlights the challenges associated with balancing legacy brand associations with desired image. It also shares valuable insights regarding the evolution of India’s fashion and footwear industry, changing consumer behaviour in emerging markets, and the increasing globalisation and democratisation of fashion.

Cultivating sustainability and resilience in olive heritage

Learning outcomes The case study’s learning objectives, structured according to Bloom’s taxonomy, engage students in higher-order thinking for critical analysis and strategic decision-making. After completion of the case study, students will be able to analyze sustainability practices and evaluate the family’s distribution model for alignment with sustainability and potential expansion strategies; explore adaptive strategies to identify adaptive solutions to challenges such as climate change and economic fluctuations; apply theoretical frameworks to balance exclusivity and growth in the olive oil industry; and assess strategic decisions considering financial viability, environmental responsibility, community engagement and sustainability. Case overview/synopsis The case study centers on the Abi Raad olive farm, a multigenerational family-owned business deeply rooted in olive cultivation traditions in Selfaya village, within Mount Lebanon’s Aley district. Led by Richard Abi Raad, the family specializes in olive cultivation, olive oil production and handmade soap manufacturing within the agriculture sector. In 2023, the organization faces significant challenges such as rising labor costs and the exploration of sustainable labor sources for future growth. Abi Raad, the primary protagonist, grapples with critical decisions regarding maintaining traditional distribution methods versus expanding into broader markets. His choices must balance the preservation of cultural heritage with the need to uphold brand integrity and competitiveness. The case study traces the family’s historical journey in olive farming and explores their contemporary strategic dilemmas, offering insights into sustainable agriculture, entrepreneurship and navigating modern challenges while honoring tradition. Through the narrative of the Abi Raad family-owned business, the case study provides profound lessons in strategic decision-making and ensuring long-term sustainability. Complexity academic level This case study is suitable for students studying master’s in business. Supplementary materials Teaching notes are available for educators only. Subject code CSS 11: Strategy.

The role of inheritance risk management in family enterprises to achieve family businesses sustainability in the middle east

Transferring wealth and ownership in family businesses is a pivotal juncture that can either strengthen the family legacy or dismantle its foundations. However, this paper examines the effect of inheritance risk management and family business practices on family business sustainability. It also discusses the mediating role of regulatory environment in the Middle East. Nevertheless, quantitative analysis was used to investigate the direct and indirect effects of IRM and FBP on the regulatory environment and family business sustainability as well as the mediating role of the regulatory environment using a quantitative approach through a survey design. However, a total of 116 questionnaires were collected through purposive sampling from the responses. The study sample consisted of managers who were contacted through email and social networking sites. Moreover, Smart PLS 4.1.0.1 was used to test the research hypotheses. The findings indicate that IRM and FBP have significant and positive effects on the regulatory environment in terms of the sustainability of family businesses. The result also confirms the mediating effect of the regulatory environment. The results emphasize the importance of a comprehensive approach to managing family businesses both in addressing internal and external challenges as strategic planning, innovation and governance structures appear as key factors affecting the sustainability of family businesses. This study suggests avenues for future research and provides practical implications for decision-makers, policy makers, practitioners and academics seeking to develop family businesses and the long-term resilience of family businesses in the Middle East.

Exploring the role of psychological ownership toward organizational innovation in family businesses

Purpose The purpose of this study is to understand the link between psychological ownership and organizational innovation in family businesses. The research also explored the mediating effect of knowledge transfer alongside the moderating role of governance practices. Design/methodology/approach A total of 116 family businesses across India took part in the study. Data were collected with the help of a structured questionnaire supplied to the seniormost family member of each firm. The data were analyzed by using the moderated mediation model analysis in R. Findings The findings indicate that psychological ownership is a key driver of organizational innovation in family businesses. The transfer of knowledge mediates the relationship between psychological ownership and organizational innovation. Moreover, governance practices of the businesses moderate the association between psychological ownership and knowledge transfer, and its downstream consequences on organizational innovation. Originality/value While previous research has explored various aspects of nurturing innovation, the present study explores the effect of psychological ownership in the context of family businesses in India. This study also gives insights into how knowledge transfer and governance practices work together to influence innovation in these businesses.

What Aids or Hinders the Succession Intentions of Daughters of Family Business Owners?

What Aids or Hinders the Succession Intentions of Daughters of Family Business Owners?

Sustainable innovation challenges in wine ecosystem growth: a time-based comparison

Purpose This exploratory study aims to identify and prioritize key sustainable innovation challenges faced by family-owned businesses in the wine ecosystem. It also explores whether the criticality of these challenges differed pre- and post-COVID-19 by comparing the prioritization of these challenges at these two times. Design/methodology/approach Three methodologies were used. First, a systematic literature review identified the key sustainable innovation challenges in the wine ecosystem, which were then summarized into macro-categories (macro-challenges). Second, a panel of experts validated these challenges. Finally, the best-worst method was used using 40 qualitative interviews to prioritize the most critical challenges in two alternative scenarios to explore potential changes in challenge criticality following COVID-19. Findings This study provides evidence that the primary challenge to sustainable innovation (i.e. constraints on businesses because of limited financial resources) was the same pre- and post-COVID-19. In contrast, although the challenge associated with knowledge sharing was identified as a key strategy of wine ecosystem actors, particularly in recent years, it was the least critical factor at both times. Originality/value This exploratory study extends the conceptual boundaries of sustainable innovation by introducing it to the wine ecosystem. It establishes a practical agenda for small and medium-sized enterprises to enable managers who are constrained by limited resources to prioritize challenges. This agenda outlines a path to identifying competitive strategies. This path can also be followed by a range of stakeholders within this ecosystem to achieve resilience and define medium-to-long-term strategies. Furthermore, policymakers and governments can follow this path to formulate more targeted investment management plans and policies, thereby supporting sustainable economic growth in this key sector for many countries.

The Succession Planning of Family-Own Merchandising Business in Davao De Oro: A Multiple Case Study

This qualitative multiple case study aimed to explore strategies that managers/owners of family-owned businesses used to prepare future generations to assume managerial roles in the business. They were chosen through maximum variation sampling. The experiences and coping strategies of the five cases were examined using in-depth interviews. Triangulations of the gathered data was done in each case by interviewing their family members and friends and examination of historical documents. It was analyzed using thematic analysis resulting to five emergent themes on merchandizing business as regards succession planning: business continuity, hands-on training, formal education and coaching, motivational leadership, and job description formulation. The emergent themes for coping mechanism included the following: learning by doing, transparent selection process, and crisis management strategy. The five cases were not generally similar as there were only two cases who have similar declaration on their experiences on merchandizing business as regards to succession planning. As regards their coping strategies, one of the five cases adopted some approaches different from the rest of the cases.

Exploring Key Elements for Achieving Intergenerational Family Business Succession in the Chinese Context

In the rapidly evolving Chinese economy, family-owned businesses, integral to the nation's GDP and innovation, face a significant challenge with an impending wave of intergenerational succession. With over 5.5 million such businesses, less than 20% have identified successors, and only 6% have established succession plans. This study examines intergenerational succession in these businesses, applying Handler's (1989) satisfaction and effectiveness framework, alongside Pyromalis et al. (2006)'s model. The research, conducted through interviews with second-generation owners, aims to uncover factors influencing succession satisfaction and effectiveness. Key findings highlight the unique impact of Chinese cultural values on the succession process. Unlike expectations, the reluctance of incumbents to relinquish control isn't a source of frustration for successors, reflecting the cultural emphasis on respect and deference to elders. The study broadens its scope beyond family dynamics to stakeholder relationships, acknowledging their importance in succession. This research merges theoretical and empirical analyses, adapting a Greek-tested model to the Chinese context, thus enhancing its global relevance. It provides insights into Chinese family business succession, shaped by cultural norms, and demonstrates the versatility of Western models in diverse cultural landscapes, enriching the understanding of global family business succession.