Family Small And Medium-sized Enterprises Research Articles

Exploring the impact of family and organisational values on competence diversity reluctance in rural family SMEs

PurposeThis paper aims to examine how organisational values affect diversity in terms of different competencies in rural family Small and Medium-sized Enterprises (SMEs). Recruiting a diverse workforce in rural family SMEs can be particularly difficult due to the prevalence of internal family values and the lack of available local specialised competencies. A deficiency of diversity in employment and competence acquisition and development can create problems, as it often prevents rural family SMEs from recruiting employees with a wide variety of qualifications and skills.Design/methodology/approachThe study takes on a multi-case method of Swedish rural family SMEs, applying a qualitative content analysis approach. In total, 20 in-depth structured interviews are conducted with rural family SME owners and 2 industries were investigated and compared – the tourism and the manufacturing industries.FindingsRural family SMEs lack long-term employment strategies, and competence diversity does not appear to be a priority for rural family SMEs, as they often have prematurely decided who they will hire rather than what competencies are needed for their long-term business development. It is more important to keep the team of employees tight and the family spirit present than to include competence diversity and mixed qualifications in the employment acquisition and development.Originality/valueContrary to prior research, our findings indicate that rural family SMEs apply short-term competence diversity strategies rather than long-term prospects regarding competence acquisition and management, due to their family values and rural setting, which strictly narrows the selection of employees and competencies. Also, a general reluctance towards competence diversity is identified, which originates from the very same family values and rural context.

Digitalization of small and medium-sized family enterprises: The key role of succession

Family small and medium-sized enterprises (SMEs) represent a peculiar context for investigating digitalization since the vital link between the family and the business turns into distinctive approaches to innovation relative to nonfamily firms. Although extant literature acknowledges that all firms are increasingly required to respond to the challenges of the digital economy, the current knowledge about how family SMEs pursue digital innovation and how it impacts the organization is still limited. Similarly, understanding if and how succession plays a role in innovation and digital change development in family firms is a topic that needs further investigation. A qualitative study of six Italian family SMEs currently undergoing their digitalization journeys detected three types of digitalization (molt, turmoil, and clear-cut) that are deeply connected with different succession experiences, different levels of business family support, and various levels of strategic planning. The findings highlight the central role of succession and intergenerational dialogue in fostering digitalization in family firms. The paper contributes to the general literature about digital innovation in family SMEs and mainly speaks to that literature focused on the relationship between technological innovation and succession, offering new and deeper insights into the relationship between the family, the person who is in charge of managing digitalization in these firms and the whole digitalization process. Contributions to practice are also outlined: the three types of digitalization represent a valuable tool to sustain consultants and family firms’ owners in digitalizing these organizations.

Strategic transitions: unraveling the impact of socioemotional wealth and generational cohorts on succession planning in family SMEs

PurposeThe complexity of succession in family firms is multifaceted and can sometimes lead to turbulence. While structured succession strategies offer a roadmap for smoother transitions, intergenerational differences in family small and medium-sized enterprises (SMEs) can lead to varied interpretations of an effective succession blueprint. This study synergizes the strategic entrepreneurship framework with the socioemotional wealth (SEW) perspective to probe into how formalized succession planning impacts performance in family SMEs. Furthermore, it delves into the mediating role of succession satisfaction, especially in family firms characterized by pronounced SEW and helmed by CEOs from different generational cohorts.Design/methodology/approachEmploying a comprehensive dataset from 1,833 global family businesses, this research utilizes bootstrapping regression models to discern the intertwined effects of mediator and moderator variables and their statistical significance.FindingsThe main findings suggest that succession satisfaction does matter for a good succession process and that succession plans work only in family firms with a high degree of SEW and that are led by older family CEOs (e.g. baby boomers).Practical implicationsThe results offer fresh perspectives on succession processes, with a particular focus on how to improve the satisfaction of millennial family CEOs.Originality/valueThe study uniquely combines strategic entrepreneurship and SEW to offer a holistic view of succession planning, highlighting satisfaction’s mediating role and SEW’s moderating influence. Additionally, it pioneers the incorporation of generational cohorts into the succession discourse.

Factors affecting high-quality entrepreneurial performance in small- and medium-sized family firms

Purpose The purpose of this paper is to measure the high-quality entrepreneurial efficiency of family-owned small- and medium-sized enterprises (SMEs) while exploring the potential determinants of their performance. This study places particular emphasis on the firms' technological competencies and internationalization efforts. The authors aim to shed light on the internal and external characteristics that impact the efficiency of family SMEs.Design/methodology/approach This study adopts a two-stage approach. In the first stage, a data envelopment analysis model is utilized to measure the high-quality entrepreneurial efficiency of family SMEs. To achieve this, this study considered as outputs three key quality aspects of entrepreneurship, namely innovativeness, export orientation and turnover rate, while the inputs were the number of employees and the business environment. Then, in the second stage, the efficiency scores are regressed against a set of environmental factors that may affect the efficiency. The proposed efficiency measurement models are utilized with a particularly rich dataset of 1,910 family SMEs from 35 developed countries.Findings The results demonstrated that the efficiency of family SMEs primarily engaged in the production of goods was significantly higher than those providing services. Importantly, the presence of barriers related to innovation and digitalization had a pronounced negative impact on efficiency. Additionally, scale-up firms exhibited higher levels of efficiency. When examining family SMEs within their national context, it was observed that non-EU countries and countries with a higher gross domestic product displayed significantly higher efficiencies.Originality/value The findings of this research provide guidance for the development of entrepreneurship-oriented policies that consider both the internal characteristics of family SMEs and the diverse socioeconomic contexts in which they operate.

Working for a better future: exploring how network capital fosters Laotian migrant workers in Thai family SMEs

PurposeTransnational migration is a key challenge in migrant-sending and host-receiving countries. However, relatively little is known about how migrants use network capital to foster small and medium-sized enterprises (SMEs) in the ASEAN Economic Community (AEC). Therefore, the purpose of this study is to explore how network capital fosters Laotian migrant workers in Thai family SMEs.Design/methodology/approachThis research was conducted using qualitative network analysis (QNA). Referral snowball sampling was used to draw 20 participants from December 2021 to March 2022. Data analysis was performed using Gephi, a software package developed for QNA (coding, network features, measure nodes and network metrics).FindingsThe main findings are the following four emerging themes: chain networks, social networks, human networks and financial networks are associated with network capital for fostering Laotian migrant workers in Thai family SMEs.Originality/valueTo the best of the authors’ knowledge, this study is the first QNA to explore how Laotian migrant workers use network capital in Thai family SMEs.

Knowledge sharing in family SMEs: the role of communities of practice

PurposeThe aim of this paper is to analyse the role of communities of practice (CoP) as knowledge-sharing tools in family small and medium-sized enterprises (SMEs). In this context, CoPs that jointly involve family and non-family members are expected to act as knowledge-sharing tools.Design/methodology/approachThis paper employs a multiple case study methodology, analysing the cases of six small companies in different sectors and countries over a period of 8 years. Both primary and secondary data are used.FindingsThe results show the role CoPs play in involving family and non-family members in empowering knowledge-sharing initiatives. A CoP's role in knowledge sharing depends on the presence (or lack) of a family leader, the leadership approach, the degree of cohesion around shared approaches and values within the CoP, and the presence of multiple generations at work.Originality/valueThis paper contributes to the literature on knowledge sharing in family businesses, by exploring for the first time the role of the CoP as a knowledge-sharing tool, depending on families' involvement in the CoP.

Understanding the relevance of family business, gender and value chains for SMEs' innovation in the context of COVID-19

PurposeIn this paper, the authors present an empirical framework that incorporates different factors of the impact of COVID-19 on small- and medium-sized enterprises (SMEs) in La Rioja, Spain, in relation to the value chain, gender and family business and allows the evaluation of these impacts on the SMEs' outcomes.Design/methodology/approachThe authors conduct exploratory research based on phone interviews with 329 business managers from SMEs in La Rioja (Spain), from June 1 to June 30 2021, using ordinary least squares linear regression and matching procedures to test the study hypotheses.FindingsThe results show that the impact of COVID-19 related to primary activities in adding value, such as inbound logistics, operations and marketing, have a positive influence on innovation outcomes in SMEs, as do female managers. Family SMEs present poorer innovation outcomes.Practical implicationsAt the organizational level, this paper may be of interest to management, and at the national and regional levels to policymakers, since it could help to develop policies that support SMEs' sourcing, operations and marketing in order to prepare for potential value chain disruptions. Additionally, this research may help decision-makers to foster and promote innovation in SMEs as a way of ensuring their resilience.Originality/valueIn this paper, the authors provide novel evidence about the effect of COVID-19 in SMEs. Moreover, it has been shown that the COVID-19 pandemic has triggered the redefinition of supply chains at the organizational level.

The impact of board of directors’ characteristics on the internationalization of family SMEs

Family small and medium-sized enterprises (SMEs) face both general bounded rationality challenges and a unique expression of bounded rationality in their internationalization process: the bifurcation bias, a concept aligned with modern transaction cost theory (TCT). We argue that efficient governance in family SMEs, and especially features of the Board of Directors’ composition, can help alleviate bounded rationality. Complementing TCT with upper echelons theory (UET), we investigate which Board characteristics in family SMEs contribute to efficient governance and the ensuing strategy decisions. We focus specifically on strategy decisions in the internationalization sphere. Our empirical analysis of survey data from 328 Belgian family SMEs, operating out of a small open economy, reveals that family SMEs internationalize more if their Boards are ‘open’, ‘inclusive’, ‘experienced’ and ‘active’. These Board characteristics, all reflective of efficient governance, i.e., providing the Board with the capacity to alleviate bounded rationality constraints, positively contribute to internationalization, especially (and perhaps paradoxically) when the family SME is managed by a CEO who is also a family member.

Iot-based architecture to improve workflow in bricks manufacturing

For thousands of years, bricks have been considered as one of the most important and indispensable materials for most construction projects. Nevertheless, bricks manufacturing is mainly composed of small and medium sized enterprises (SMEs) that still need to make greater efforts to adopt automation and digitized solutions to face the difficulties that face the industry and create improvements related to efficiency, quality, and wastes and cost reduction. This article proposes an internet of things (IoT)-based platform to improve workflow in bricks production. The platform aims to detect the number of stoppages in the production process, report these stoppages, and identify the sources for variability and inconsistency in the workflow. The article explains the development of the platform and its different components, its use in a family SME in the north of France, and the faced challenges during the use of this platform.

A selection model for innovation strategies in family SMEs

Under the dual pressure of the new generation of information technology and COVID-19, it has become necessary for family small and medium-sized enterprises (SMEs) to implement management innovation. However, family SMEs seem to be inexperienced and unthought-out in their innovation strategy selection, so that implementing management innovation is like a gamble, with some successes and some failures. Therefore, we consider a uniqueness of family businesses that family members have many opportunities and power to influence innovation activities to investigate how family businesses choose innovation strategies, and then propose a selection model. In order to better capture family member behavior in management innovation, from the perspective of social emotional wealth (SEW), this paper builds this selection model based on evolutionary game theory to analyze the impact of family member behavior on management innovation, and on this basis, introduces the concept of innovation characteristics, thereby increasing the reliability and explanatory validity of the model. Further, this paper analyzes 8 cases in the evolutionary game model through simulation analysis and addresses the question of whether and how family SMEs can successfully implement management innovation, thus providing reference for the selection of innovation strategy of family businesses. This model demonstrates the impact of SEW preferences and innovation characteristics on management innovation, illustrating the evolutionary paths and possible outcomes of innovation practices in different cases. Noteworthily, the proposed selection model can be used to simulate and predict the development and outcome of innovation practices in a real-world situation, and then innovation strategies are carefully selected by inspired managers.

Family involvement and proactive tax management behaviour in private family SMEs

PurposeThis paper investigates whether board composition, a family chief executive officer (CEO) and the firm's managerial capabilities affect proactive tax management in family small and medium-sized enterprises (SMEs). The main statement is that the professionalisation of corporate government and management practices explains the difference in tax avoidance behaviour in closely held family SMEs.Design/methodology/approachUsing the 2012 Spanish thin-capitalisation rule as a quasi-experiment, the authors estimate panel regressions with firm fixed effects and robust standard errors. This model represents a triple difference-in-differences combined with propensity score matching (PSM-DID).FindingsAnalysis shows that having a high proportion of non-family board members and a high endowment of managerial capabilities lead to tax liability optimisation in family SMEs. Conversely, familial boards and family SMEs with low managerial capabilities lack enough expertise to weigh the costs of tax avoidance over the benefits, resulting in a reluctance to engage in tax optimisation behaviours. Alike, results show no significant relation between CEO's family affiliation and tax management behaviour.Practical implicationsWhen implementing fiscal policies, the specific needs of family SMEs should be considered, and how these needs interact with corporate governance and managerial mechanisms. Moreover, policymakers need a deeper understanding of family SMEs in order to develop policies appropriate to their characteristics. A more comprehensive knowledge of how family firm heterogeneity affects corporate decisions, such as indebtedness and fiscal decisions, may improve public policies.Originality/valueThis study addresses the issue of tax behaviour in family SMEs in a particular event that implies a specific logic to weigh the pros and cons of each alternative: reducing debt or paying more taxes. This study’s conclusions are based on a model that deals with potential endogeneity problems, which avoids bias in the findings.

Exploring Performance Management in China's Family SMEs Based on Structural Equation Modelling and Back-Propagation Neural Network

Because of the growing competition and challenges within the global business environment, understanding performance management has become essential to small- and medium-sized enterprises (SMEs) as they have traditionally dominated the Chinese economy. In recognition of the limited studies with a specific focus on Chinese family SMEs, this study modelled and tested performance management by analysing four factors and eighteen indicators using structural equation modelling (SEM) and back-propagation neural network (BPNN). Secondary data from the Chinese Stock Market and Accounting Research (CSMAR) database were collected for this study. The results provide a better understanding of the proposed relationships between these variables through a review of their impact and correlations. This study suggested that four factors, including financial performance, external environment, internal environment, and enterprise development potential, will significantly impact performance management.

Online branding strategies of family SME wineries: a Hungarian-German comparative study

PurposeBoth Hungary and Germany belong to the old-world wine-producing countries and have long winemaking traditions. This paper aims at exploring and comparing online branding strategies of family SME (small and medium sized enterprises) wineries at Lake Balaton (Hungary) and Lake Constance (Germany), as two wine regions with similar geographic characteristics.Design/methodology/approachThis paper, based on a total sample of 37 family wineries, 15 at Lake Balaton and 22 at Lake Constance, investigates the differences in brand identity on the website, brand image in social media and online communication channels deployed in both wine regions. The study applies a qualitative methodology using MaxQDA software for conducting content analysis of texts in websites and social media. Descriptive statistics and t-test were conducted to compare the usage of different communication channels and determine statistical significance.FindingsAt Lake Balaton, the vineyard, the winery and the family, while at Lake Constance, the lake itself and the grape are highlighted regarding family winery brand identity. The customer-based brand image of Hungarian family wineries emphasizes wine, food and service, with the predominant use of Facebook. In the German family wineries, the focus of brand identity is on wine, friendliness and taste and includes more extensive usage of websites.Originality/valueThe paper deploys a novel methodology, both in terms of tools used as well as geographic focus to uncover online branding patterns of family wineries, thereby providing implications for wine and tourism industries at lake regions. It compares the share of selected most-used words in the overall text in websites and in social media, and presents the key findings from this innovative approach.

Family businesses SMEs through Covid-19 Crisis Management

The Covid-19 dilemma has resulted in a slew of restrictions that have had major economic ramifications around the world. Most economic actors are in a difficult condition as a result of the prolonged crisis. Every business, particularly family businesses that play an important role in the global economy, has been impacted by the crisis in some manner. Small and medium-sized enterprises (SME) make up the majority of family businesses, which account for a significant share of the economy. Given the obvious importance of family SMEs, the current crisis necessitates an urgent investigation into the strategic measures that family SMEs employ in order to survive. This research sought to answer the question of what strategic actions Romanian family SMEs are taking to deal with the Covid-19 crisis situation. Qualitative research method was used to carry out this study. Seven Romanian family SMEs in the IT, e-commerce, construction, design, building, education, and sports industries were interviewed in twelve semi-structured in-depth interviews. The findings revealed that in order to deal with the crisis, Romanian family SMEs employ different sets of strategies. The implementation of strategic measures was discovered to be dependent on five key factors: the impact of the crisis on the enterprises, the firms' industry, the particular governmental constraints, the firms' crisis readiness, and the strategic measures' evolution through time. One noteworthy finding was that, despite the challenges of supply chain interruptions, all of the enterprises in the sample profited financially in the long term from the crisis.

The influence of family firm image on access to financial resources in family SMEs: a signaling theory perspective

This study investigates whether a projected family firm image can affect access to financial resources, which is key to providing broader strategic options and meeting short-term financial needs, especially for small and medium-sized enterprises (SMEs). Building on the signaling literature, we consider the family SME leaders’ perspective and conceptually and empirically examine whether they believe a projected family firm image acts as a credible signal to the lender. We also examine additional boundary conditions influencing the family SME’s projected image–access to financial resources relationship, by specifically investigating whether firm age and size alter the degree of the signaling effect. Our unique data on 289 Spanish family SMEs reveal that projected family firm image can act as an attractive signal to lenders, leading to better access to financial resources for SMEs. Furthermore, firm size reinforces the role of the projected family firm image as a positive signal. These findings address an important practical issue in terms of family firm stakeholder perceptions, offering contributions to the corporate branding, family business, and financing literature.

Female Managers and Corruption in SMEs: A Comparison Between Family and Nonfamily SMEs in Vietnam

Empirical evidence, regarding the impacts of female leadership on firm’s corrupt level, is lack of studies in various research context. The objective of this study is to assess whether female managers impact negatively or positively on the corrupt behavior of family SMEs (household business) and nonfamily SMEs (Small and Medium-sized Enterprises). To do that, this paper used regressions, taken from a sample of 1,720 Vietnamese SMEs (based on the survey data of UNU-WIDER), to compare the impact of female percentage in management board in family and nonfamily businesses in reducing the level of corruption of the firms for the period 2011 to 2015.The findings indicated that first, drawing on socioemotional wealth theory and Vietnam context, family SMEs (household businesses) are more likely to engage in corruption. Second, we also found that female participant in management team can promote firms to be less involved in unethical practices such as bribe. However, the positive role of female managers in reducing corruption engagement is moderated by family control. We used upper echelon theory to suggest that female managers tend to have less managerial discretion in family-controlled organizations. This study has practical contributions, especially for policymakers and owners of household businesses.

The impact of family harmony on family SMEs' performance: the mediating role of information technologies

PurposeWith the increasing digitalization processes taking place in different industries, the success of family small and medium-sized enterprises (SMEs) appears to be more under threat than for any other types of organizations, especially when information technologies (ITs) are not adequately used and managed. To grow and increase the chances of survival, family SMEs need more than ever IT. Stemming from agency theory, the aim of this article is to understand whether family harmony impacts the performance of family SMEs and to what extent IT mediates this relationship.Design/methodology/approachThe research follows a quantitative approach, based on a sample of 182 family SMEs. Structured equation modeling, through SmartPLS, was employed to validate the research model.FindingsThis study’s main findings suggest that family harmony positively impacts firm performance and that IT governance and strategy mediate positively this relationship.Research limitations/implicationsFirst, the relatively limited number of respondents limits the degree of representativeness of all family SMEs. Replicating the research with a larger number of respondents could strengthen the findings. Second, this study is limited to French firms and future research could extend the findings by looking at cross-country comparisons.Practical implicationsFamily SMEs are encouraged to link their IT governance with their IT strategy in order to increase their organizational performance. A favorable family harmony will make it easier to choose and implement a richer IT strategy and put in place an adequate IT governance function.Originality/valueThis research offers an enriched knowledge of the roles of family harmony and technological innovation in family SMEs and IT contexts as significant predictors of organizational performance. It contributes to family firm theory through the identification of three determinants of family SMEs' performance.

Determinants of innovation and its impact on financial performance in South African family and non-family small and medium-sized enterprises

Background: The importance of innovation for enterprises of all sizes is well documented. However, existing research is ambiguous, with several research gaps concerning the role and nature of innovation in the performance of family and non-family small and medium-sized enterprises (SMEs), particularly in a South African context. Aim: The aim of the study was to identify the determinants of innovation output, the types of innovation that are commonly being utilised and the influence thereof on perceived financial performance. Setting : A total of 224 responses from family and non-family SMEs in South Africa were analysed in the study. Methods: The statistical analysis included assessing the validity and reliability of the measuring instrument by using an exploratory factor analysis and Cronbach’s alpha coefficients, respectively. Inferential statistics included calculating the Pearson’s product moment correlations, a t -test, analysis of variance tests and multiple regression analyses. Results: Predictors or determinants of Innovation output amongst family and non-family SMEs in this study are Innovation-orientated organisational culture, Market orientation and response and Risk-orientated entrepreneurial orientation . A significant and positive relationship was also found between Innovation output (which included product, process, organisational and marketing innovation) and Perceived financial performance . No differences were found concerning the innovation practices of family and non-family SMEs in this study. Conclusion: Innovation plays an important role in improving the financial performance of SMEs. In addition, financial and human resources are not necessarily the main determinants of innovation in South African SMEs, but rather the creation of an innovation- and market-orientated organisational culture, together with a risk-orientated entrepreneurial orientation.

Management Development Practices in Family and Non-family Small and Medium-sized Enterprises with Business Growth

This study aims to examine how management development practices in family and non-family small and medium-sized enterprises (SMEs) change with business growth. The data employed to address the research question are drawn from the Business Longitudinal Survey (BLS). There is a statistically significant decline across the SME growth development pathways in the proportion of SMEs which are family-owned. There are also significant positive relationships between working owners and business growth, with an increase in other full-time managers across the growth development pathways. In contrast, family SMEs employ significantly more new managers than moderate and low growth firms, and moderate growth nonfamily SMEs employed significantly more managers than low growth enterprises. This transition towards more professional management appears to begin early in the growth process, as evidenced by a greater significant increase between low and moderate than moderate growth firms. In this context, a strategic approach to manage-ment development is characterized by an increasing degree of commitment of resources to the management development initiatives.

Environmental and Social Goals in Spanish SMEs: The Moderating Effect of Family Influence

Small and medium-sized enterprises (SMEs) are the predominant form of firm in the economy worldwide, so it is becoming increasingly important to understand the role they play in the green transition. It is urgent to understand how SMEs establish their goals that reorient their strategies and activities towards the creation of greater environmental value. From a stakeholder perspective, this study analyzes the environmental and social goals that create value in SMEs. We identify family influence as an important determinant for the establishment of environmental goals in SMEs that has not been sufficiently studied. We tested the hypotheses in a sample of 132 Spanish SMEs. Our findings indicate that setting social goals and having family characteristics have a direct positive effect on the environmental goals of SMEs. In addition, family influence positively moderates the effect of social goals, increasing its effect in the establishment of environmental goals for the creation of value in SMEs. This is due to the desire of family SMEs to increase their socio-emotional wealth and their transgenerational intention by incorporating the requirements of stakeholders. These findings highlight the importance of particularly considering the family characteristics of SMEs when analyzing the role that SMEs play in the green transition and should also be important for policy makers when designing environmental policies.