Medium-sized Family Firms Research Articles

Navigating change: examining the influence of COVID-19 on knowledge-sharing dynamics in family firms within the restaurant and fast-food industry

PurposeThis study aims to examine the impact of the COVID-19 pandemic on knowledge-sharing drivers in small- and medium-sized family firms within the restaurant and fast-food industry. The pandemic has led to significant changes in business culture and consumer behaviour, accelerating digital transformation, disruptions in global supply chains and emerging new business opportunities. These changes have also influenced knowledge sharing (KS) and its underlying drivers.Design/methodology/approachTo address the research objectives, a two-phase study was conducted. In the first phase, an exploratory analysis using the Delphi method was used to identify the essential drivers and factors of KS in family businesses (FBs). This phase aimed to establish a conceptual model for the study. In the second phase, confirmatory factor analysis was conducted to analyse the impact of the COVID-19 pandemic on the identified knowledge-sharing drivers. The study examined both the pre-pandemic and post-pandemic periods to capture the shifts in attitudes towards KS.FindingsThe findings indicate a significant shift in attitudes towards knowledge-sharing drivers. Before the pandemic, organisational drivers played a central role in KS. However, after the emergence of the pandemic, technological drivers became more prominent. This shift highlights the impact of the COVID-19 pandemic on KS within FB.Originality/valueThe research contributes to understanding knowledge-sharing in the context of FBs and sheds light on the specific effects of the COVID-19 pandemic on knowledge-sharing drivers. The insights gained from this study can inform strategies and practices aimed at enhancing KS in similar organisational settings.

Revealing the moderating impact of spatial context on the relationship between intellectual capital efficiency and the sustained success of family SMEs

This study investigates the behavioral patterns of Small and Medium-Sized Family Firms (SMFFs) in terms of translating intellectual capital efficiency into economic performance while considering their geographical location. The findings underscore the paramount importance of effective intellectual capital management in driving business performance, particularly for SMFFs, drawing upon the knowledge-based perspective. In line with behavioral theory, this study also provides empirical evidence demonstrating that SMFFs located in rural areas adeptly navigate locational challenges by effectively translating their Added Value Intellectual Coefficient (VAIC) into sustainable performance, thereby outperforming their urban counterparts. This phenomenon, referred to as SMFF heterogeneity, can be attributed to their profound emotional connection and deep-rooted bonds with their local communities, intensifying their commitment to the regional milieu. Consequently, their success becomes intricately linked with the spatial context they inhabit. In this regard, this research offers significant practical and theoretical contributions to the understanding of SMFFs, shedding light on the interplay between intellectual capital, geographic location, and sustainable performance in the intricate landscape of family firms

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.

Disentangling family firm heterogeneity: Evidence from a cross-country analysis

The existing typologies, classifications that identify types of family firms based on specific characteristics, aim to enhance our understanding of the heterogeneity of family businesses. However, these typologies fall short in thoroughly exploring and predicting behavioural and performance consequences associated with being categorized within specific classifications. Furthermore, the majority of the existing analyses have been empirically tested in one single country. To address these two research gaps, we use a sample of 814 small- and medium-sized family firms operating in 21 countries, collected by the STEP Project Global Consortium. This sample is employed to classify family firms based on their corporate governance similarities and explore their behavioural and performance patterns. Building on the principles of the configurative approach, we find that each of the four family firm configuration—group of family firms with related corporate governance mechanisms—has a unique yet similar combination of patterns in terms of transgenerational entrepreneurship practices, non-economic goals, and firm performance. Additionally, expanding on the isomorphic effect, we find evidence indicating that certain world macroregions exhibit a greater propensity for specific corporate governance configurations compared to others.

Without friction, no shine: how dynamic managerial capabilities combine for family firms’ digital transformation

Research shows that digital transformation (DT) of small and medium-sized family firms is a major challenge, where family dynamics introduce idiosyncrasies in how managers sense, seize, and orchestrate DT. In this study, we focus on those dynamic managerial capabilities that are closely related to individual cognitive traits - sensing and seizing – to understand how they operate at the individual level and how they interact at the team level in such a transformation process. We draw on an in-depth case study of the digital transformation of a family business, the largest independent fashion retailer in the Netherlands. Our microfoundational lens sheds light on the mechanisms through which familiness underpins dynamic managerial capabilities for DT. Specifically, we identify purposeful friction as an interpersonal capability that modifies individual managers’ sensing and contributes to the bridge between sensing and seizing. To complete the model, we identify collaborative value-based decision making and experimental implementation as team-level capabilities that underpin DT seizing. Our theoretical model contributes to the current literature by unraveling the microfoundations of how team-level interaction enhances individual managers’ sensing and seizing capabilities for digital transformation in the context of family firms.

Family firm entrepreneurial orientation: the effects of socio-emotional wealth, professionalization and bifurcation bias

PurposeThis paper aims to examine the effects of socio-emotional wealth importance (SEWi) in family firms and family firm-specific HR practices, namely professionalization and bifurcation bias, on their entrepreneurial orientation (EO).Design/methodology/approachThe paper surveyed 133 small and medium-sized family firms in the USA. The respondents were recruited through Prolific Academic.FindingsWhen SEWi is low, a family firm becomes more similar to a non-family firm, thereby enjoying the benefits associated with EO. When SEWi is high, a family firm leverages the unique resources and capabilities specific to family firms. Moderate SEWi levels are associated with lower EO levels. Additionally, the results support the argument that professionalization (involving non-family managers, formalization and decentralization) fosters EO, while bifurcation bias hinders its development.Originality/valueUnlike previous studies, this paper posits a non-linear, U-shaped relationship between SEWi and EO. It contributes to the field by empirically investigating the effects of professionalization and bifurcation bias on EO in family firms.

Artificial intelligence in small and medium-sized family firms: An empirical study on the impact of family influence.

Artificial intelligence (AI) is one of the most important technologies of the future (Crew, 2020). So far, however, AI has been insufficiently deployed. This applies not only to family businesses, but especially to them. In terms of decision-making, these companies have a number of specific characteristics which mean that they find AI less relevant and may also be skeptical. The article discusses specifics of AI use in family businesses on the basis of a German empirical study. The paper shows that family businesses use AI less frequently and are also less open to the technology than non-family businesses. Socioemotional wealth (SEW) (Gómez-Mejia et al., 2007) serves as the theoretical basis. Based on the SEW, it is argued that although family businesses are aware of the need to apply new theories, they have so far underestimated the potentials and tend to be rather skeptical about applying these technologies. This view is supported by the empirical study. In addition, some differences between small and medium-sized enterprises (SMEs) and large companies are also discussed in the paper.

Who I am affects what I do: how does director diversity influence board roles in medium-sized family firms

Who I am affects what I do: how does director diversity influence board roles in medium-sized family firms

Who I am affects what I do: how does director diversity influence board roles in medium-sized family firms

Who I am affects what I do: how does director diversity influence board roles in medium-sized family firms

How Relational Conflict Harms Family Firm Performance: The Mediating Role of Family Social Capital and the Moderating Role of Family Ownership.

While many researchers suggest that relational conflict has adverse performance effects in family firms, the exact mechanisms through which conflict harms performance are rarely empirically investigated. This paper explores the role of family social capital in the relationship between relational conflict and family firm performance. We hypothesize that the negative relationship between relational conflict and family firm performance is partially mediated by family social capital, while family ownership moderates the relationship between relational conflict and family social capital. In a sample of 175 U.S.-based small and medium-sized family firms recruited through Prolific Academic, we find that relational conflict harms firm performance indirectly through the erosion of family social capital. However, no evidence of a direct negative effect of relational conflict on performance is found. Our results also indicate that the negative relationship between relational conflict and family social capital is intensified by family ownership. We discuss the implications and contributions and present relevant directions for future research.

Internationalization and Family Firms: The Influence of Family Involvement on Exports

Family firms show specific behavior in their internationalization because of the affective ties derived from the family’s influence in the business. The desire to achieve business and family objectives determines the strategic decision making of family members in governance and management, affecting the internationalization strategy. This research intends to determine the factors related to family influence in the internationalization of family firms. Thus, using a sample of 254 Spanish small- and medium-sized family firms, we analyze how family-related factors affect exports. The results confirm that family ownership and the generation in charge of the firm have positive effects on the export intensity of family firms. However, the results are not conclusive when assessing the relationship between family involvement in the board of directors and exports.

The Influence of the Business Name on the Economic Performance of Family Firms: An Analysis According to the Generational Stage

A family identity of a firm, exhibited by the presence of the family name in the business name, can influence the value of economic profitability. The present analysis also explores if this relationship varies depending on the size and the generation running the business. The sample used to conduct this study comprises a panel data set of 21,149 Spanish family firms containing information from 2003 to 2015, which translates into a balanced database including 274,937 observations. For analysis purposes, the firms are classified into small, medium-sized and large ones. Contrary to the competitive advantages brought about by the family identity of the businesses highlighted by previous research, the current study suggests its negative effects on the profitability of small and medium-sized family firms. This effect is more acute when the company is managed by its founding generation. The findings in the case of large family firms indicate that the company name does not have an impact upon economic profitability.

Openness to knowledge: does corporate social responsibility mediate the relationship between familiness and absorptive capacity?

Being open to absorb external knowledge is a key competitive advantage for small- and medium-sized family firms. In this study, we propose and test a model in which corporate social responsibility is the key feature linking family-specific resources (i.e., familiness) to the family firm’s ability to absorb external knowledge. By integrating different theoretical perspectives, we argue that family firms use corporate social responsibility activities as signals to build trust and long-term relationships with internal and external stakeholders, incentivizing these groups to share their knowledge with the family firm. The empirical analysis is based on data from 327 German small- and medium-sized family firms. The results of the analyses support our main hypotheses that the relationship between familiness and absorptive capacity is positively mediated by employee- and customer-oriented corporate social responsibility activities. Although hypothesized, we find no mediation effect of community-oriented corporate social responsibility activities. In sum, the study contributes to the understanding of how and why family firms employ their family-specific resources to establish corporate social responsibility activities, which, in turn, are used as a strategic instrument to strengthen their dynamic capabilities.

DO DYNAMIC CAPABILITIES FACILITATE BUSINESS MODEL INNOVATION IN SMALL AND MEDIUM-SIZED CHINESE FAMILY COMPANIES?

This study investigates whether small- and medium-sized enterprises (SMEs) under family influence (FI) can achieve business model innovation (BMI) through dynamic capabilities (DCs) as promoted by prior research. Overall, 259 small and medium-sized family firms in Southeastern China were examined and analysed using the partial least squares structural equation modelling (PLS-SEM) method. The findings showed a direct negative link between FI-DCs (sensing, seizing, and transforming capabilities), sensing capabilities—value capture, transforming capabilities—value proposition/value creation, and a positive link between seizing capabilities—value creation. Additionally, the negative moderation effect of environment dynamism was found between sensing capabilities—value capture, seizing capabilities—value creation, and transforming capabilities—value proposition. This research provides various new insights for practitioners and researchers in small and medium-sized family firms to achieve BMI through DCs. It develops an empirical, multi-dimensional hypothetical model from a micro perspective that includes the moderating role of the influencing relationship.

Dispersion of Family Ownership and Innovation Input in Family Firms

Innovation is an investment in future growth and development, and it is critical for family businesses to maintain a competitive advantage. Different types of innovation inputs have different uncertainties, advantages, and risks. Product innovation and process innovation are two distinct types of innovation that necessitate significantly different organizational resource allocation and risk taking. Ownership is the source of decision-making authority, and the dispersion of intra-family ownership influence goal preferences, risk taking, and resource allocation. We investigate the effect of intra-family ownership dispersion on the decision preferences of two unique types of innovation inputs by distinguishing between product and process innovations. The greater the concentration of ownership within the family, the more likely it is that the proportion of product innovation input is higher than the proportion of process innovation input. We further discuss the moderating effects of both the proportion of family directors and collective decision-making mode on the different innovation input decisions by family firms. Using a sample of 882 Chinese small- and medium-sized family firms from the 2015 All-China Federation of Industry and Commerce, we find support for these proposed relationships. The implications of these findings extend to both family business and innovation research.

Managing Knowledge Resources in Family Firms: Opportunity or Challenge?

The purpose of this study was to explore the specificities of the relationship between knowledge management (KM) processes and the potential and realized absorptive capacities in the context of a knowledge-based view. The paper advances our understanding of the contributions of knowledge management processes and the potential and realized absorptive capacities in small- and medium-sized family firms. We draw on case studies of two small- and medium-sized family businesses operating in different industries. Our results show that the choice of the KM approach and the family business characteristics determine the extent to which a family firm is successful in managing its knowledge processes and absorptive capacity. Moreover, the results indicate that family businesses are impacted by their own characteristics, such as the fact that they do not dissociate between the personalities of the owners and the business, and are context-specific. Since the focus of this research was limited to KM processes and absorptive capacity, it would be beneficial for future research to investigate the mechanisms that enable firms to manage their potential and realized absorptive capacities and the extent to which they generate dynamic capabilities through KM processes. Further studies of the impacts of family business characteristics on the firm’s success in managing knowledge resources are also recommended.

Employee Silence and Entrepreneurial Orientation in Small and Medium-Sized Family Firms

This paper aims to assess differences between employees of family and non-family firms regarding their levels of employee silence and their perceptions of the company’s entrepreneurial orientation. Moreover, focusing on family firms, we assess the relationship between the levels of employees’ silence and their perceptions of the firm’s entrepreneurial orientation. The empirical evidence is provided by a sample of 245 Portuguese employees, 117 employees of family firms, and 128 of non-family firms, who responded to a questionnaire that included employee silence and entrepreneurial orientation measures. Results reveal that family firms’ employees show higher levels of employee silence but perceive their companies as less entrepreneurially oriented than employees of non-family companies. In addition, our results do not support the idea that there is a relationship between the levels of employee silence and the employee’s perception of the company’s entrepreneurial orientation. This paper offers initial insights into the debate on the relationship between the levels of employee silence and the employee’s perception of the company’s entrepreneurial orientation in family firms.

The effect of COVID 19 on risk-taking of small and medium-sized, family and non-family firms

PurposeThis study aims to assess the effect of the COVID 19 on small and medium-sized family firms’ risk-taking in Iraq.Design/methodology/approachData was collected by distributing the questioners. The statistical population consists of 600 employers and small and medium-sized family and non-family firm managers. Hypothesis analysis was carried out after evaluating the questionnaire’s validity and reliability using the structural equation method.FindingsThe results indicate that COVID 19 influences small and medium-size family and non-family firms’ risk-taking.Originality/valueSince no study carried out so far on the effect of COVID 19 on risk-taking of family and non-family Iraqi small- and medium-enterprise firms and since the political-economic condition of Iraq has been affected recently due to the presence of ISIS, its effects, as well as the civil war that taken place before COVID 19, assessing such a topic can contribute to the development of science and knowledge in this field.

TOWARDS A CLASSIFICATION OF FAMILY-OWNED CONSTRUCTION FIRMS IN GHANA

The Ghanaian construction industry predominated by family-owned construction firms has established its dominant impact on economic development, albeit unstructured. This literature review is to dissect extant literature bringing out the uniqueness of the sector and attempt a classification for family-owned construction firms in Ghana. Anchored in a value-free axiological tradition in which the classification criteria of family-owned construction firms can be obtained by objective means set out in the framework, this study was undertaken by an extensive literature review from journals databases, textbooks, and relevant reports and citations. The review began with searches using “AND” and “OR” operators to search abstracts, titles, and a keyword with no restriction placed on the article's date of publication. Content analysis was done of the articles and with lots of information on family-owned businesses, very few on family-owned construction firms. Existing frameworks on the classification of family-owned businesses formed the basis of this framework. The key findings indicate that small and medium-sized family firms predominate the construction industry. The physiognomies of family-owned construction firms also contribute to their proliferation and overarching importance within the sector. The novelty of this study is that it merges information from the general business and construction industry and carves criteria for which family-owned construction firms can be identified and classified. For academia, the paper contributes to the stream of knowledge on what constitutes family-owned construction firms whilst exposing the lack of research in this constituency. It also serves as the foundation upon which future research can be conducted in the field of family-owned construction firms. For practitioners and policymakers, the paper offers insights into how to identify family-owned construction firms to be able to distinguish them for targeted support to grow the economy. Future research should be targeted at examining the growth and sustainability of family-owned construction firms. 
 
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The impact of family-external business succession on digitalization: exploring management buy-ins

Digitalization in small- and medium-sized (SME) family firms and processes of family-external business succession within these firms are under-researched areas. As SME and their future viability are important for many economies around the world, we aim to study the effects of succession processes on those companies’ digitalization activities. Utilizing a unique data set comprising of around 340 pages of transcribed interviews within a multiple case study involving four family firms in the DACH region of Europe, we perform exploratory research of this matter. Our findings indicate that incumbent and new owner-managers focus on efficiency-related digitalization activities during succession processes. More long-term issues such as changes to business models or the exploitation of external opportunities through digitalization are underrated and postponed. Our findings contribute to both digitalization and family firm literature and we provide suggestions for future research in this regard.