Role Of Family Firms Research Articles

The Hidden Work of Women in Small Family Firms in Southern Spain

Women have historically played an important hidden role in family firms, and a great deal of research is now shedding light on this role. In spite of the more formal nature of female work at the present day, still a considerable volume of women’s contributions in family firms is unregistered and unpaid, even in developed regions. A questionnaire was administered to 396 women working in small and medium-sized family firms located in Andalucia, a southern European region, characterized by familialism and an important informal economy. Our results confirm the persistence of subordinate forms of unpaid family collaboration due to the neutrality assigned to female contributions under the traditional gendered division of work. But also this study shows how some of the women voluntarily embrace subordinate roles as a temporary way to gain professional experience, useful for their future work inside or outside the family firm.

Is there any room for family business into European Union 2020 Strategy? Family business and regional public policy

The role of family firms within economic growth and development has been neglected, and family business dimensions have been overlooked in regional intervention policy. That is, while family firms seem to play a significant role in the construction of the European Union, family firms are omitted from public policy beyond direct action related to tax benefits or advice about ownership and management succession. Therefore, the aim of this article is to provoke a debate on the importance of the family business dimension for developing and implementing regional public policy. Specifically, this article addresses the question of whether the family firm matters for regional development and, if so, how the family business dimensions can be included in regional policy strategies. We built our arguments following the regional familiness model and considering that family businesses’ effect on regional development can occur at the firm and regional levels. Our main conclusion is that any public policy intervention should consider the regional familiness characteristics of the regional productive structure because it may boost or hinder regional competitiveness and affect economic growth and development.

Moving forward or running to standstill? Exploring the nature and the role of family firms’ strategic orientation

Significant deficiencies still persist in the literature regarding how family firms approach exploration and exploitation, and how the unique characteristics of such firms affect their ability to balance the two strategic orientations. This article aims to contribute to the debate by (1) providing a conceptualization of exploration and exploitation within long-lived family firms, (2) analyzing the role and the temporal dynamics of exploration and exploitation within long-lived family firms, and (3) identifying the characteristics of family businesses that facilitate the equilibrium between exploration and exploitation. We used a cross-case study, with an in-depth analysis of 24 firms belonging to an Italian association of historical family firms. Based on our findings, we argue that exploration and exploitation are independent and not opposing forces, which are balanced over time, and not at any point of time. This balance is almost naturally reached, thanks to specific features of family businesses that need to be evaluated considering the family level of analysis besides the organization one.

GOVERNANCE WITH COMPLEX STRUCTURES: EVIDENCE FROM WESTERN EUROPEAN COUNTRIES

This paper investigates if the existence of complex structures plays an important role in corporate governance. It uses GMM estimation on a panel of Western European firms. We find that the presence of a second and third large shareholder has a significant positive effect on firm value. This study underlines the importance of the number of blockholders as a determinant of firm value, when taken as a moderator of the contestability effect. It shows that the legal context and company-specific characteristics play a crucial moderating role for contestability. In contrast to previous research, we find that contestability plays a less relevant role in family firms. We also find that this last result does not vary significantly with the identity of the remaining elements of the coalition. Also, our study suggests that contestability is less important in companies led by majority shareholders.

Technology strategy in family business: a new avenue for research

While studies of technology strategy and family business have to a great extent developed independently, there are some clues that they are now moving closer to each other. The purpose of this special issue is to contribute to a growing scholarly interest in research that integrates the fields of technology strategy and family business. We begin this introductory article by providing a brief overview of some theoretical reasons underlying the distinctive behaviour of family firms as regards technology strategy. We then propose a framework for addressing the role of family firms in technology strategy that highlights the input-activities-output-performance nature of technology strategy in family business. We conclude by introducing the seven papers that are included in this special issue using the framework developed to position the papers and thereby to reveal their respective contributions and their advancement of existing knowledge.

The Growth of Family Firms: An Innovative Model Based on Public-Private Partnership

The crucial role of Family Firms in supporting the economic development of a territory has stimulated the flourish of a variety of Public Policies, such as tax benefits, special funds, guarantees and expertise development. Nevertheless, in a global economy, given the growing importance of factors such as integration, internationalization and innovation, it is necessary to redesign the public intervention. This study proposes a new model of intervention suitable for financing the growth of Family Firms and investigates its expected effects. The model is based on a Public-Private Partnership (PPP) capable to enable an enterprise network of Family Firms supported by a special financial vehicle.Given the positive correlation between Family Firms development and territorial development, the Public Sector can benefit from this new policy to achieve socio-economical goals. This study shows that, as promoter of the initiative, the role of the Public Sector should be to enhance the creation of favorable conditions for the development of the enterprise network, acting as facilitator and integrator of the system. Moreover, it should be responsible for the creation and monitoring of the activities of the financial vehicle in which co-exist private resources brought by Pension Funds and Mezzanine Funds. At the same time, the study supplies the Public Sector with an integrated scorecard in order to measure both socio-economical and financial performances.A systematic classification of existing Public Policies shows that this model would maximize the benefits of all actors involved.The dynamism of firms financed by risk capital and the worsening of credit conditions, highlight the need of financing the enterprise network through equity. Nevertheless, Family Firms are resistant to lose control. Considering that the purpose of this study is the growth of Family Firms, this model requires the financing of the firms’ network not only through equity but also through a hybrid instrument, the Mezzanine finance. This type of instrument, in contrast with the traditional debt capital, is suitable for financing the expansion projects of Family Firms thanks to its flexibility and long-term orientation. The intervention of private investors in the partnership program is carried out not only through a contribution of financial resources, but also with the provision of expertise which absence could, indeed, undermine the survival of firms.This innovative form of intervention could be significantly implemented in an area characterized by the intensive presence of Family Firms. The Italian territory represents a potential area of applicability of this new policy because its economic system mostly relies on Small and Family Firms.

Board Structure in Publicly-Listed Family-Controlled Firms: Mitigating or Exacerbating Agency Issues?

Using an agency theory perspective, this paper examines the influence of family control on the board size and board independence of Indonesian listed firms. Further, the study also seeks to investigate whether family control explains the association between board structure and firm value. This study is expected to enhance our understanding of the role of family firms’ boards in mitigating or exacerbating agency problems, using the setting of an emerging market with a high level of ownership concentration and family control. Indonesia is among economies that adopt a two-tier board system, where corporations are required to have a supervisory board and a management board. Employing a panel data set of Indonesian listed firms from the period of 2005-2007, we report limited evidence that family control has a negative impact on board size. However, family-controlled firms are likely to mitigate agency issues by employing smaller boards. Further, board independence is found to demonstrate no significance in either mitigating or exacerbating agency issues.

Peculiarities Of Financial Management In Family Firms

The majority of firms in market-oriented countries are family-owned. Despite their significant economic importance for these countries, research focusing on family firms is a rather young field within business research, having intensified starting only in the late 1980s. Research regarding the peculiarities of financial management in family firms is especially scarce. Hence, this paper seeks to synthesize existing research and to theoretically analyze the finance and accounting practices and resources of, as well as the role of financial managers in family firms. Using agency theory, stewardship theory, and the resource-based view of the firm, this paper suggests that finance and accounting practices should be adapted to the controlling familys needs. The paper further suggests that family firms are likely to use fewer short-term-oriented financial-management practices than non-family firms. Moreover, compared to non-family firms, financial managers should play a more traditional role in family firms, focusing on core financial management tasks and on advising the controlling family, while not themselves holding strategic decision-making power. The paper concludes with concrete avenues for further research.

Innovation in family firms: an empirical analysis linking organizational and managerial innovation to corporate success

Family firms play a significant role in national economies worldwide, accounting e.g. for 85% of all enterprises in the OECD countries as well as for the majority of companies in Central Europe. Previous scholarly research on family firms has mostly focused on the question of how they differ from public corporations, describing family firms as being more conservative, less risk-raking, or reluctant to grow—in sum, as being less entrepreneurial than their non-family counterparts. Similarly, the existing literature often criticizes the lack of innovation in family firms. But since innovation has long been discovered as one of the key drivers to company success, it is surprising that its role in family firms has been mostly neglected in existing academic research so far. The aim of this article is therefore to study the role of (managerial and organizational) innovation in family firms compared to non-family firms on the basis of an empirical survey of 533 companies from Finland, using structural equation modelling (MPlus) for the statistical analyses.

WOMEN, GLASS CEILING, AND PROFESSIONALIZATION IN FAMILY SMEs: A MISSED LINK

Literature and practical evidence on the glass ceiling have showed that women's presence in ownership does not ensure that they can significantly influence firm decisional processes. Similarly women's presence in governance roles does not entail glass ceiling removal, even in family firms, which are expected to be a more favorable context. Moreover, literature on women's role in family firms has focused mostly on women's expectations, values, and objectives, on the decision-making processes led by women, on their leadership styles and so on. Very few studies have dealt with women's contribution in strategy formulation, organizational structure design, implementing and using managerial mechanisms. This article focuses on two main topics: the role of women in family firms and the professionalization of the company. It aims at understanding both women's involvement in governance and managerial roles, and the relationship with the family firms' professionalization. The findings reveal, on one hand, that family SMEs are a more favorable context for the removal of the glass ceiling only with regard to the roles of member of board of directors and functional director. On the other hand, they show that some managerial mechanisms, such as incentives and managerial reporting systems, are more relevant when women are involved in governance and managerial roles.

Fifty years of organisational change in container shipping: regional shift and the role of family firms

Spectacular growth has marked the industry initiated by Malcolm McLean with the sailing of the Ideal-X in 1956. While the growth of container shipping has been typically seen in terms of technological advances, increasing vessel capacity, traffic growth, financial performance and competitiveness, it has been shaped also by organisational transformations. This paper provides an overview of the major companies that make up the container shipping industry, tracing the rapid adoption of containerisation by American carriers to its diffusion to Europe and then Asia. While several carriers belong to business conglomerates, the most dynamic in recent years have been those that are those that possess a family structure. About 12 of the present top 20 carriers are largely family controlled, including 4 out of the top 5. Unlike other capital intensive industries, where the power has shifted towards corporate governance, the container shipping industry retains a strong individualistic entrepreneurial character. At a time when North American ownership in container shipping is no more, the spirit of innovation began 50 years ago by an American visionary is still evident in the entrepreneurial dynamism of many of the industry leaders.

The Family Firm in Industrial Capitalism: International Perspectives on Hypotheses and History

This comparative analysis of the international literature on family firms takes A.D. Chandler's concept of ‘personal capitalism’, presented in Scale and Scope, as the theoretical frame of reference. The article focuses principally on Britain, particularly the thesis that large family firms were probably major contributors to national economic decline during the first half of the twentieth century. However, comparisons drawn between the characteristics and role of family firms in the United States, Germany and Japan suggest that it is not possible to describe them in a way which transcends either chronological or geographical boundaries. Comparisons of the behaviour and performance of family firms and managerial enterprises suggest that, contrary to Chandler's view, as a concept the family firm offers a limited understanding of the differential industrial performance of competing national economies before World War II. National and corporate cultural differences are seen to have been more important influen...