Family Business Leaders Research Articles

Learning How Family Business Leaders Make Decisions Through Interviews

Learning How Family Business Leaders Make Decisions Through Interviews

Exploring women's initiatives for family business resilience during the COVID-19 pandemic

PurposeFamily businesses have contributed significantly to economic growth in various countries, including Indonesia. The coronavirus disease 2019 (COVID-19) pandemic reduced the world economy and caused economic shocks in various business sectors. Women successors face significant challenges in overcoming family business problems during the COVID-19 pandemic, especially in terms of resilience, which is seen as the organization's prominent ability for sustainability in a turbulent environment. Thus, this study aims to explore women's initiatives and propose a framework for family business resilience during the COVID-19 pandemic in Indonesia.Design/methodology/approachThis study uses a qualitative method with a case study approach to explore women's initiatives in family business resilience during the COVID-19 period. Data were collected through in-depth interviews with five women's successors of family businesses in Indonesia. Triangulation was used to test data validity. Meanwhile, data analysis uses the Miles–Huberman technique: data reduction, data display and conclusion drawing/verification.FindingsThis study found that women have the initiative to deal with the COVID-19 pandemic to develop and implement resilience in the family business. This study proposes a framework for factors that enhance family business resilience, including strategic decision-making (adaptive capacity, strategy renewal and appropriation capacity), strategic factors (successor motivation, successor competence and family support) and successor incremental program. Women have a long-term orientation toward the sustainability of their family businesses and can overcome various conflicts. The stereotypical view of women's leadership in family businesses has experienced a shift in which capability and competence are the main factors in recognizing women's leadership.Originality/valueThis study contributes to understanding women's roles in the resilience of family businesses under extreme stress during the pandemic. This study proposes a framework for family business resilience. In addition, this study adds new insights into the specific context of managing family business systems during the COVID-19 pandemic based on the resource-based view (RBV) and strategic management approach.

Parenting the Successor: It Starts at Home and Leaves an Enduring Impact on the Family Business

Transferring leadership across generations is a defining characteristic of family businesses. Yet many successors underperform, and little is known about why. We extend parental control theory to develop a model of parenting effects in family businesses. Primary dyadic data from successors and subordinates in 119 family businesses, supplemented with 24 interviews with family business leaders, shows that predecessors’ parenting style affects successors’ psychological functioning, which impacts employees’ citizenship and counterproductive behaviors. Among firms that make it to the second generation, the seeds of success are partially sown long before succession takes place, drawing attention to the important role of parenting.

Keberhasilan Transfer Pengetahuan dalam Suksesi Kepemimpinan melalui Pembelajaran Intergenerasional

<p><em>Succession process of the next family business generation becomes an interesting phenomenon </em><em>to be developed together with the process of adapting organizational knowledge. Organizational knowledge transfer is a difficult process in leadership succession. There are many factors that must be prepared in advance so that the business can achieve sustainability. This study uses a qualitative approach through in-depth interviews with several generations of successors in family businesses in Yogyakarta whose business scale is relatively the same. Triangulation of sources and member checks are carried out to ensure the validity of the data from this study. The result is that intergenerational learning has an important role in the succession process of family business leadership. Knowledge transfer in family business succession through intergenerational learning will facilitate the next generation in the process of adaptation to continue the previous leadership</em></p><p> </p>

How family CEOs affect employees’ feelings and behaviors: A study on positive emotions

Research suggests that firms with family CEOs differ from other types of businesses, yet surprisingly little is known about how employees in these firms feel and behave compared to those working in other firms. We draw from family science and management research to suggest that family CEOs, because of their emotion-evoking double role as family members and business leaders, are, on average, more likely to infuse employees with positive emotions, such as enthusiasm and excitement, than hired professional CEOs. We suggest that these emotions spread through firms by way of emotional contagion during interactions with employees, thereby setting the organizational affective tone. In turn, we hypothesize that in firms with family CEOs the voluntary turnover rate is lower. In considering structural features as boundary conditions, we propose that family CEOs have stronger effects in smaller and centralized firms, and weaker effects in formalized firms. Multilevel data from 41,200 employees and 2,246 direct reports of CEOs from 497 firms with and without family CEOs provide support for our model. This research suggests that firms managed by family CEOs, despite often being criticized as nepotistic relics of the past, tend to offer pleasant work environments.

Role of socioemotional wealth (SEW) in the internationalisation of family firms

PurposeFamily firms' desire to preserve and uphold socioemotional wealth (SEW) makes their internationalisation a complex phenomenon. Despite the significance of SEW in guiding family firms' internationalisation decisions, the literature in the underlying research stream is still scant and inconclusive. Thus, the purpose of the study is to gain preliminary insights about various dimensions of SEW and its impact on family firms' degree of internationalisation.Design/methodology/approachThe study employs the multi-case study research design. The multidimensional SEW scale developed by Berrone et al. (2012) is used to calculate the SEW scores for four prominent Indian family businesses through the content analysis of Chairman's Statements for a period of 13 years (2007–08 to 2019–20). Further, the study examines the relationship between SEW and family firms' degree of internationalisation through two non-parametric tests: Somers' D and Kendall-Theil regression.FindingsThe results reveal the prevalence of various dimensions of SEW in family businesses. They also indicate that different FIBER dimensions are prioritised differently in family businesses. Finally, the authors observe that there exists a negative relationship between SEW and internationalisation of family businesses, indicating that SEW hinders the internationalisation of family firms.Research limitations/implicationsThe study lends to the readers, the understanding that SEW plays a significant role in the internationalisation of family firms; thus, some modification might be needed in the existing international business theories in order to explain the role of peculiar family characteristics in the internationalisation decisions of family firms. Further, since SEW hinders the internationalisation of family firms, it raises a question for researchers and family business leaders: Do family firms need to work on their socioemotional ties to avoid making suboptimal decisions?Originality/valueThe study is a response to the call by Cleary et al. (2019) to utilise the results of content analysis of SEW in determining its impact on the family firms' external events. Majority of the studies are still using univariate measures (e.g. percentage of family ownership) to capture SEW. However, this study attempts to calculate the SEW scores of the family firms along these FIBER dimensions through content analysis. This helps in scrupulously capturing the impact of SEW in the internationalisation of family firms.

Tradition or innovation? Cafe Galavis, a brand with an international vision

Research methodology An interview was conducted with the general manager and semi-structured interviews with Likert scale to the main clients, collaborators and suppliers to establish the key competencies of the firm. Secondary information was collected through the organization’s historical and strategic documents. Learning outcomes At the end of the case study, students will be able to learn international marketing, innovation, strategic management, international business strategy; analyze the brand equity construct through the associative neural network model for decision-making; determine the internationalization strategy using the dual pressures model and sources of competitive advantage for international marketing management; and propose the innovation of a product by applying creativity techniques or innovation models to enter international markets. Case overview/synopsis Café Galavis is a family business leader in the production and commercialization of roasted and ground coffee for 103 years in Colombia. The new chief executive officer recovered the financial stability during his management during the period from 2015 to 2019, implementing internationalization processes. However, the sanitary crisis caused by the COVID-19 pandemic in 2020 in Colombia, generated an economic recession, which led to a decrease in coffee consumption. How to innovate in the development of a product or service in times of pandemic? What internationalization strategy implement? These are the challenges that the new management and its collaborators will confront. Complexity academic level The teaching case is aimed at students of postgraduate academic programs in areas Management or MBA. In the modules of Marketing the case allows the orientation of the concepts of brand equity or branding. Likewise, in the modules of International Management, the definition of the internationalization strategy through the analysis of dual pressures and sources of competitive advantage. Finally, in the modules of Innovation different methodologies or techniques for innovation can be applied such as: SCAMPER, Design thinking or the Stage Gate Model. Supplementary materials Teaching notes are available for educators only. Subject code CSS 5: International Business

Meaningful Work and Moral Exemplarity: The Perspective of Family Business Leaders

Fondée sur 20 études de cas construites à partir d’entretiens autobiographiques menés auprès de dirigeants d’entreprises familiales françaises, cette étude donne un éclairage sur la notion d’exemplarité morale. Comment les dirigeants s’appuient-ils sur l’exemplarité morale pour donner un sens à leur activité de leadership et créer un environnement propice au sens au travail? Nous montrons que les dirigeants d’entreprises familiales trouvent du sens dans leur activité de leadership en maintenant une cohérence interne entre leurs valeurs et leurs comportements éthiques, et une cohérence externe entre leurs pratiques de dirigeant et les pratiques de leurs employés. Nous montrons que l’exemplarité morale ne consiste pas à établir une norme de comportement imitable en tant que modèle de rôle; elle est plutôt une invitation à exprimer ses valeurs et à agir conformément à ses propres valeurs.

Successful family business succession: Utilizing peer groups for critical leadership skills development

PurposeThe current study explores the necessary leadership skills required for leadership succession in family businesses as well as best development activities for each skill. The current study provides suggestions for best practices in developing and utilizing peer groups as a leadership development method.Design/methodology/approachA needs assessment was conducted by surveying 150 family-business leaders. Leaders were asked, “What are your most pressing leadership development needs for your organization as you move toward succession? A follow-up question was then asked: “For each of these skills, what method would best help develop this skill for family business leaders?” The responses were content analyzed, placed into themes, and rank ordered.FindingsHigh agreement amongst business leaders was found as eight leadership skills were cited by high percentages of family-business leaders. Leaders overwhelmingly reported peer developmental activities as being the best method for developing these skills.Originality/valueSuccession planning in family-businesses is critical as many family business fail to make it past the first or second generation. However, little research explores what specific leadership skills are necessary for optimal succession. As well, many leaders in public organizations seek individual methods of development, such as executive coaching, whereas family business leaders seek group activities to learn with/through their peers.

How Women Family Business Leaders Are Thriving in Morocco

How Women Family Business Leaders Are Thriving in Morocco

Informational efficiency and governance in restricted share settings: boosting family business leaders' financing decisions

PurposeVolume-based liquidity ratios suffer from potential measurement bias due to share restriction and may misrepresent actual liquidity. To address this issue, the authors develop two modified metrics, the free-float liquidity and the alternative free-float illiquidity ratios. These measures are well suited to estimate liquidity in the presence of trading constraints, as can be found in closely held/state-owned entities, IPOs/SEOs with lockup restrictions, dual-class share structures and family-owned businesses.Design/methodology/approachThe authors modify the turnover illiquidity ratio, where the number of outstanding shares is scaled by the public free float, and use natural log transformation to normalize free-float liquidity. Our dataset is composed of daily observations for US stocks included in the S&P 500 index over the 2015–2018 period. To test the validity of free-float (il)liquidity ratios, the authors perform a correlation analysis for various liquidity metrics. To examine their empirical efficiency, the authors employ pooled OLS regression models for family firms as a subsample of liquidity-constrained entities, relying on five different identifiers of family-owned businesses.FindingsThe authors’ empirical testing indicates that the proposed free-float (il)liquidity ratios compare favorably with other volume-based methods, such as Amihud's ratio, liquidity ratio and turnover ratio. For the subsample of family organizations as a restricted-share setting, the authors report significant coefficients for our free-float measures across all the family firm identifiers used. In particular, as free-float decreases with progressive family influence, the advanced ratios capture an increase (decrease) in perceived liquidity (illiquidity) that is absent in the other benchmarks.Originality/valueThis study allows the authors to inform the ongoing debate on the management and governance of publicly listed companies with various impediments to trade. Traditional measures understate illiquidity (overstate liquidity) as the fraction of free trading shares is limited by design or circumstances. The authors’ proposed free-float metrics offer informational gains for family leaders to aid in their financing decisions and for non-family outsiders to guide their investment choice. As a constrained free float inhibits price discovery processes, the authors discuss how restricted stock issuers may alleviate the attendant negative effects on governance and information opacity.

System‐Spanning Values Work and Entrepreneurial Growth in Family Firms

AbstractCulture and values are key drivers of corporate entrepreneurship in early stages of family firm development, but value conflicts often arise over time that progressively inhibit their entrepreneurial efforts. How can family firms reconcile conflicting values to sustain corporate entrepreneurship over time? Our 45‐year longitudinal case study of a large global family firm shows that family business leaders’ practices of invoking and flexibly using family and business values were crucial to achieve sustained entrepreneurial behaviour and growth over an extended period of time. We theorize these efforts as system‐spanning values work enfolding through specific family, business, and temporal mechanisms. By identifying and elucidating three types of values work (i.e., rooting, revitalizing, and spreading), our study advances current understanding of the micro‐foundations underpinning the relationship between values and entrepreneurship in family firms.

Family Members Can be Valuable Mentors

Entrepreneur, philanthropist and author Simran Mohinani has great role models among her family members. She talks about balancing the family and mentor relationships and offers advice for future family business leaders and women.

Negotiating the female successor–leader role within family business succession in China

This article explores the approaches of identity construction used by Chinese daughters while negotiating the successor–leader role within family businesses. A qualitative interpretivist approach was adopted to understand daughter views on gender, family business leadership and succession, as well as the approaches adopted to negotiate the role of female successor/leader in the Chinese family business. Twenty semi-structured interviews were conducted with both actual and potential female successors. Three approaches of identity construction emerged based on the degree of conformity to traditional gender roles and Confucian family values: first, to abide by conventional gender expectations and perceive themselves as a temporary leader; second, to act as the ‘second leader’ and remain involved in decision making and third, to challenge conventional gender roles and strive to be an independent leader. This article contributes to debates on women in family business and gendered identity construction of daughters in family business in the Chinese context.

Life After Death: Implications of Bereavement for the Post-Succession Process in Family Businesses

In this study, we explore how a family event - the death of a family business leader - affects the way a family business is managed by the family successor during the post-succession stage. When a family business leader passes away, the family has to deal with grief, while at the same time reorganize the business. The death of a family business leader is a stressful event. Family successors need to adapt to their new role and adjust the business to the new reality, while simultaneously dealing with the loss of a loved one. Exploratory, qualitative research among six family businesses shows how the interplay between the process of coping with bereavement and the succession process proceeds through four stages. Firstly, family successors put their grief aside and focus strongly on continuation of the business. Subsequently, they experience tension between the past and present until a turning point, after which they start reorganizing the business. The analysis also identified several boundary conditions that reduce tensions between the family and business role. By elucidating the dynamics of this process, we contribute to research pertaining to succession and the family system.

Increased Innovation Performance through Transgenerational Rejuvenation in Family Firms

Although family firms invest less in innovation, evidence suggests that they generate a relatively higher innovation performance (per unit of investment) than non-family firms. Despite this important difference between family and non-family firms, relatively little remains known about the drivers of the vast innovation performance differences among family firms. Drawing on temporality research, we theorize that transgenerational control intentions increase family business leaders’ willingness to enhance the firms’ innovation performance to rejuvenate the family business for the next generation. Moreover, we theorize that family successors’ (1) past childhood involvement and (2) current leadership involvement reduce family business leaders’ uncertainty regarding the feasibility of transgenerational control, further fueling their motivation to enhance innovation performance to rejuvenate the firm. Hypotheses tests using a multi-respondent, multi-time period survey of 190 family leaders and potential successors in 95 private German family businesses support our theoretical framework. A key insight is that the involvement of the next generation in the family business reduces the uncertainty of senior leaders’ transgenerational intentions, thereby fueling their energy to work with the designated successor and innovate to rejuvenate the business.

Becoming a Successor and Leader: Daughters’ Identity Construction within Family Business Succession

This paper explores how daughters comply with and/or resist familial expectations and social gender norms, while negotiating the successor-leader role within family businesses in China. In order to achieve this, a qualitative interpretivist approach was adopted to understand daughters’ views on issues relating to gender, family business leadership and succession, as well as the strategies adopted in order to negotiate the role of female successor/leader in the Chinese family business. In so doing, twenty face-to-face semi- structured interviews were conducted with both actual and potential female successors. Three strategies of identity construction emerged based on the degree of conformity to traditional Chinese gender roles and Confucian family values. First - to abide by conventional gender expectations and perceive themselves as a temporary leader. Second - to act as the “second leader” and remain involved in decision-making. Third - to challenge conventional gender roles and strive to be an independent leader. This paper contributes to debates on women in family business and daughters’ gendered identity construction in family businesses in an Asian context.

Introduction to the Special Issue

Introduction to the Special Issue

Leadership and Innovation in Family Business

Abstract—This research is a basic research that discusses leadership style in family business and innovation. Family business as a phenomenon has been a strong topic of conversation in society since the late 1990s, especially in Indonesia. Family business is one of the factors affecting the current Indonesian economy. Family business is also one of the very big roles in creating employment. The research method used is a qualitative method by interviewing, observing, and analyzing documents to support the validity of the data. Family business is a business that is determined, managed, and regulated by one or more generations of families or family members, where the values, vision, and mission determined by the founder will be strictly guarded. Leadership style and type of company are factors that influence family business. In addition to leadership and innovation styles, how to manage and manage subordinates has an important role in the family business.
 Keywords : leadership style, innovation, family business
 Abstrak— Penelitian ini adalah penelitian dasar yang mengeksplorasi gaya kepemimpinan dalam bisnis keluarga dan inovasinya. Bisnis keluarga sebagai sebuah fenomena telah menjadi topik pembicaraan yang kuat di tingkat masyarakat sejak akhir 1990-an, terutama di Indonesia. Bisnis keluarga adalah salah satu faktor yang mempengaruhi perekonomian Indonesia saat ini. Bisnis keluarga juga menjadi salah satu peran yang sangat besar dalam menciptakan lapangan kerja. Metode penelitian yang digunakan adalah metode kualitatif dengan cara wawancara, observasi, dan analisis dokumen untuk mendukung validitas data. Bisnis keluarga adalah bisnis yang dimiliki, dikelola, dan diatur oleh satu atau lebih generasi keluarga atau anggota keluarga, di mana nilai-nilai, visi, dan misi yang ditetapkan oleh pendiri akan dijaga secara ketat. Gaya kepemimpinan dan jenis perusahaan merupakan faktor yang mempengaruhi inovasi bisnis keluarga. Selain gaya kepemimpinan dan inovasi, cara mengendalikan dan mengelola bawahan memiliki peran penting dalam bisnis keluarga.
 Kata kunci : gaya kepemimpinan, inovasi, bisnis keluarga

X/Y EMBERKÉP HATÁSA A TELJESÍTMÉNYRE VÁLTOZÓ KÖRNYEZETBEN

A vezetési stílus kérdésköre kutatott terület, több elmélet és modell is született az elmúlt évtizedekben, ezek közül az egyik legismertebb a McGregortól származó X/Y elmélet, amely nagy múltra tekint vissza, mégis máig foglalkoztatja a kutatókat. Az utóbbi években számos olyan elemzés is megvalósult, amely a stílusnak a szervezeti teljesítményre gyakorolt hatását vizsgálta objektív vagy szubjektív mutatók használatával. Ebben a munkámban az X/Y elmélet alapjainak, a családi vállalkozások meghatározásának és a teljesítménymérésre tett legutóbbi kísérleteknek a rövid áttekintésén túl családi vállalkozások vezetőinek körében végzett empirikus kutatásomat mutatom be. A kutatási kérdéseimmel (K1, K2) arra kerestem a választ, hogy van-e összefüggés a vezető McGregor-i emberképe és a vállalkozás teljesítménye között. A teljesítmény mérőszámaként korábbi kutatások nyomán objektív számviteli adatot, az értékesítés nettó árbevételét vettem alapul, a 2008-as gazdasági válság idején a vállalkozók vezetői is elsődlegesen ebben – az értékesítési forgalom változásában – mérték a válság hatásait. A korábbi, X/Y emberkép hatásait vizsgáló kutatások a válság lehetséges befolyásoló hatásait nem vették figyelembe, indokolt lehet ilyen tekintetben is elemzéseket végezni, ezért az első kérdésemben (K1) az X/Y emberkép és a 2008/2012 -i teljesítmény közötti összefüggést vizsgáltam, ezzel lehetőségem nyílt a 2008-as gazdasági válság induláskori (2008) és a vezetők előzetes várakozása szerint fellendülést hozó 2012-es év teljesítményének összevetésére. A kapott eredmények a korábbi kutatási eredményekhez hasonló képet mutatnak, az Y elmélet képviselői eredményesebbek, amelyet a kereszttábla-elemzés szignifikáns eredményei is megerősítettek. Második kérdésemben (K1) a gazdasági válság időszakának átugrásával a K1-hez képest más időhorizonton (2008/2017) vizsgáltam meg az X/Y elmélet szerinti lehetséges összefüggést. Ez utóbbi (K2) esetben a K1-től eltérően statisztikailag nincs kimutatható összefüggés a változók között, viszont az arányok arról tanúskodnak, hogy az Y emberképpel rendelkezők ebben az időtávban is sikeresebbek forgalomnövelés tekintetében. Az attitűdök nagyon nehezen formálhatók, viszont az X emberképpel rendelkező vezetőknek érdemes lehet felülvizsgálni az emberekről alkotott vélekedésüket, változtatni a hozzáállásukon, mert az eredményekből kitűnik, hogy mérhetően sikeresebb az, aki Y emberképpel rendelkezik. A vállalkozások többségénél aktuálissá váló generációváltás esetében a kapott eredmények tükrében azt is érdemes megfontolniuk a stafétát átadó vezetőknek, hogy milyen emberképpel rendelkező utódra bízzák a vállalkozás további irányítását.