Italian Family Business Research Articles

Building an Outward-Oriented Social Family Legacy: Rhetorical History in Family Business Foundations

Scholars have recently paid growing attention to the transfer of family legacies across generations, but existing work has been mainly focused on an inward-oriented, intra-family, perspective. In this article, we seek to understand how family firms engage in rhetorical history to transfer their social family legacy to external stakeholders, what we call “outward-oriented social legacy.” By carrying out a 12-months field study in three Italian family business foundations, our findings unveil three distinctive narrative practices— founder foreshadowing, emplacing the legacy within the broader community, and weaving family history with macro—history—that contribute to transferring outward-oriented social legacies.

Working with(in) kinship: value in Italian family businesses

In Italy, living close to or even within a place of business is not in and of itself unusual. Forms of housing in Italy are similar to many other European countries in that people primarily live in mixed-use spaces. It is common to have an apartment above cafés, bars, and bakeries. In this article, I examine how this form of mixed-use residence shapes market practices, decision-making, and labour relations among owners and workers. I argue that the spaces in which employees participate in the market economy also mirror their commitments to family. By examining workspaces across two food certifications in Milan, Italy – a Made in Italy certification (Food Italy) and a halal certification (Halal Italia) – I argue that Italian kinship networks structure how workers in each business operate. This intervention contributes to a larger literature on the cultural dimensions of capitalism.

The localization choices of Italian family businesses in China: is there an agglomeration effect?

Purpose of the paper: Based on the socioemotional wealth theory, the objective of this work is to investigate the existence of different motivations influencing the localisation choice of the FBs’ investments. We want to explore if FBs agglomerate with other FBs or, more generally, if FBs follow a different pattern rather than NFBs. Methodology: The study was carried out using the mixed method following an exploratory sequential design. The quantitative analysis was conducted starting from a sample of 2,958 FDIs made by Italian FBs and NFBs in China, while the qualitative analysis was carried out by performing an in-depth interview with the Marketing Manager of the Italy-China Foundation and by triangulating the information with written reports. Findings: The results are consistent with the traditional literature that identifies the main drivers of localization choices in the economic-strategic, political and institutional factors. Any different motivations from NFBs due to SEW were not confirmed. Research limitations: A first limitation is that, in the quantitative analysis, we considered only FDIs in China and only by Italian companies. A second limitation is that, again in the quantitative analysis, the measure used to identify and distinguish FBs from NFBs is a dichotomous variable. Implications: From a managerial point of view, what this study implies is that family companies and all the other types locate their FDIs following similar logics and so there is no difference in the strategies of localization that can be traced back to the family or non-family nature. Originality of the paper: to date, very limited knowledge exists about the strategic location choice of FBs and particularly, the agglomeration effect in FBs compared to NFBs.

Introduction to the Special Issue

Introduction to the Special Issue

Family business succession and external advisors: the relevance of ‘soft’ issues

ABSTRACTThis paper focuses on family businesses’ opinions and perspectives concerning soft issues raised by the succession process and their willingness to involve an external advisor. An empirical research study based on multiple case studies was carried out. Through 25 direct interviews with the incumbent and/or successor, 15 Italian family businesses were analysed that have experienced or are going through a succession process and have involved, or have chosen not to involve, external advisors. Results underline that many family businesses are aware of the relevance of soft issues for a successful outcome of succession. However, this awareness does not always turn into a real request for advice. Family businesses often consider succession planning a private affair and prefer not to share it with external subjects. Instead, family businesses that have asked for external advisors have often complained, saying that they are mainly focused on hard issues and forget that managing soft issues is often the real key to effective succession.

Tradition and innovation in Italian wine family businesses

Purpose – The purpose of this paper is to analyse how a strategy based on the combination of tradition and innovation can offer a competitive advantage to a medium-sized family firm operating in the wine sector. Design/methodology/approach – This research focuses on one case study. The subject of the case study under analysis is Pio Cesare, an internationally recognized fine wine Italian company. Findings – Pio Cesare is characterized by a strong combination of tradition and innovation in terms of products and processes. Innovation and tradition are not opposites; on the contrary, a blend of the two has been crucial in achieving and maintaining a sustainable competitive advantage. Research limitations/implications – The formalization of an effective blend of tradition and innovation, especially in a family business, and an effective dissemination of the company philosophy to future generations, calls for a more in-depth study. This study has some limitations, which determined by the applied methodology. Multiple case study method would be useful. In relation to the interview technique, the authors would set out to increase the number of interviews, by also questioning managers and employees working, as opposed to family members. Practical implications – Practical implications relate to different groups of stakeholders: for owners and management, for investors, for organizations and institutions working on a territory promotion and in the tourism sector, and for politicians and local authorities. Originality/value – It identifies which business model a family winery business could be adopted in order to manage such strategies of innovation in respect to traditions, filling the gap in the literature.

Italian Family Business and Multinationals in the Eighties of the 20 th Century: Invernizzi/Kraft and Galbani/Danone

Cet article analyse l’évolution de certaines marques italiennes dans le secteur laitier pendant les années 1980 (de la structuration d’un portefeuille de produits et la présence sur différents marchés). À la fin du XIX e siècle, la production laitière était une activité agricole marginale, à l’exception de la vallée du Pô où les fermiers produisaient du fromage destiné à la vente. Par la suite, au début du XX e siècle, la production laitière est devenue une activité industrielle, les entreprises familiales devenant plus grandes et augmentant leur production au cours du siècle. Dans le secteur laitier, pendant les années 1980, l’acquisition d’Invernizzi (fondée en 1908) par l’entreprise américaine Kraft (1985) et celle de Galbani (fondée en 1920) par le groupe Ifil-Danone (1989) furent les deux événements les plus importants. Ifil était une entreprise holding possédée par la famille Agnelli (Fiat), qui avait diversifié ses investissements dans de nombreuses firmes, dont les entreprises alimentaires. Au début des années 1960, Locatelli, une autre marque historique italienne fondée à la fin du XIX e siècle, entra dans la sphère de Nestlé.

Italian Family Business Cultures Involved in the Generational Change

In family firms, the business and the family are two arenas in which processes significantly overlap and influence management. The present paper investigates the overlap of the family system and the business through the use of culture. Adopting an idiographic approach and recognising the unique psychodynamic process of family business (FB), this study aims to identify the cultural patterns within the FB, starting from what families define as a) family, b) business and, c) the generational change. Twenty-five family firms were considered during the generational change. The results show how and when this overlap takes shape pointing out how the role of family tradition can became a critical or success factor for the business.

Internal determinants of competitive advantage in Polish and Italian family businesses in the time of knowledge-based economycomparative analysis

Internal determinants of competitive advantage in Polish and Italian family businesses in the time of knowledge-based economycomparative analysis

Family business foundations: theoretical and empirical investigation

Abstract The paper examines family business foundations as connectors between the firm and the family from which they originate, adopting a coevolution approach that considers family and business as two subsystems which coevolve in creating a different species, the family business. Foundations are seen as coevolution facilitators supporting the coevolution process, outlining a specific grow path for family firms, and ensuring family business sustainability. An empirical analysis on Italian family business foundations is developed. The Italian context is taken into consideration because family firms are the backbone of the Italian economy, and the largest family foundations are those created by the most important entrepreneurial families. Data bring to light the structural role played by family business foundations in Italy and their involvement in the field of culture and art, research and training, health care, and territorial responsibility. The analysis shows the growth of family business foundations in recent years and their connection with long-lived companies with whom a close connection is maintained, leading to a lasting intergenerational sustainability.

Informational approach of family spin-offs in the funding process of innovative projects: an empirical verification

Abstract In recent years, the increase in competitiveness, as a result of the economic globalization and crisis, has caused the bankruptcy of many Italian small family businesses working in traditional industries. Meanwhile, family firms that have been working in a perspective of process and product innovation have been able to maintain a durable competitive advantage. In particular, enterprises that have shown a particular vitality are spin-offs, founded by an innovator entrepreneur with an academic background: these have often found their funding in self-financing and family and public resources in the pre-seed and seed stages of the project. However, these spin-offs often have difficulty financing the start-up phase of the project with external resources due to risk and informational opacity related to innovative processes. The literature grounded on innovation funding has highlighted the informative opacity problem mainly caused by family entrepreneurs' difficulty to communicate innovation characteristics and commercial potential to financial markets and by the inability to identify individuals who are more available to finance innovative investments. Therefore, it is particularly difficult for investors to assess family small- and medium-sized enterprises' economic feasibility of innovative projects. These difficulties have increased in recent years partly due to the economic crisis that, on the one hand, has made venture capitalists more risk averse and, on the other, has contributed to a gradual hardening of enterprises' creditworthiness system adopted by financial brokers. The research focuses on the analysis of the information problem that hinders the external financing aimed at innovation in family academic spin-offs. In particular, the authors intend to investigate the information dynamics between the innovator entrepreneur and external financiers. So, this research is useful to better identify what informative gaps impede innovative investments in Italy among innovator entrepreneurs and founders through venture capital and debt capital.

Boards of Directors in Family Firms: An Exploratory Study of Structure and Group Process

Offering an integrated approach, this study examines the relationship between board composition and board processes in Italian family businesses. The potential beneficial effects of outside board members on board processes such as effort norms, cohesiveness, and use of knowledge and skills are highlighted. Using a sample of 90 family business directors, it was found that boards with outside directors are perceived as more committed to the board’s tasks (i.e., higher effort norms) and more cohesive. Boards of older companies with outside directors are percevied as more capable of using knowledge and skills.

East Meets West: Innovative Forms of Foreign Trade Finance Between Italian Family Enterprises and Emerging SMEs in Romania

The collapse of the USSR has created an opportunity for the rebirth of entrepreneurship and family business. Unfortunately, the transition economies of the former Soviet Bloc often lack the financial resources required to upgrade operations. This paper examines how an innovative form of finance, with historical roots in East-West European trade, helps drive the expansion of transition enterprises in the emerging markets of Eastern Europe, and at the same time provides export-led growth particularly for family-based small and medium-sized enterprises (SMEs) in the more developed nations of Western Europe. The technique, called forfaiting, allows businesses to control some of the risks that are inherent in dealing with emerging markets. We present a forfaiting model that demonstrates the way in which these singular transactions divide localized (transaction-oriented) risks from those risks that are associated with political instability, macroeconomic changes, environmental volatility, and force majeure. We follow this with presentations of actual examples of how forfaiting is being used between Italian family businesses and newly emerging private enterprises in Romania.

Boards of Directors in Italian Family Businesses

This paper presents some of the early results of an international research project conducted in Italy and coordinated by Prof. Miguel Angel Gallo. The research project involved Spain, Portugal, Italy, Brazil, Argentina, and the U.S. The authors of this paper are responsible for the Italian part of the project. The project aims to further the understanding of the role of the board of directors in family businesses, and how the board functions.

MFR SRL Rome: The Italian Family Business Affair

The MFR case shows a typical small size company in the growing small business sector of Italy and how it has developed over the past seven years. From a family business which produced and marketed wallpaper in a traditional manner, Massimo Frasca has moved to develop a leading business which both supplies the wallpaper market and has diversified into the sunblind sector. Raises the important issues of how a family business is run.