While progress has been made in recent years to understand the differences among family firms, insights remain fragmented due, in part, to an incomplete understanding of heterogeneity and the scope ...of differences that exist among family firms. Given this, we offer a definition of and review the literature on family firm heterogeneity. A latent semantic analysis of 781 articles from 33 journals identified nine common themes of family firm heterogeneity. For each theme, we review scholarly progress made and highlight differences among family firms. Additionally, we offer directions for advancing the study of family firm heterogeneity.
We use a social exchange perspective to review family firm succession literature owing to its fit with the multiphase, multistakeholder nature of the process. We searched the history of 34 journals, ...finding 88 published or forthcoming articles that quantitatively examined succession. We consider the primary phases of the management succession process (ground rules, successor development, and transition) and the relevant stakeholder exchanges occurring during each phase, including exchanges between incumbents and successors, within family boundaries, and across family boundaries. We contribute to the family firm succession literature by identifying how a social exchange perspective can help guide future research.
Heterogeneity among family firms has become an important research topic. This special issue of Journal of Business Research contributes to the literature on family firm heterogeneity by specifically ...focusing on variations in governance. In this introductory article, we suggest that governance—particularly family involvement in firm ownership and management, and decisions concerning human resource practices—is a primary source of family firm heterogeneity. Dimensions of family firm governance are discussed, and four empirical studies are featured that focus on how governance influences the international entry, knowledge sharing, financial performance, and human capital of the family firm. We extend the contributions of these studies by exploring research opportunities related to heterogeneity in family firm goals, governance, and resources.
Prior studies find that nonfamily managers enhance family firm performance, yet other studies note that family firms have difficulty attracting high-quality nonfamily managers, often settling for ...average-quality nonfamily managers. Given these findings, how is it possible that average-quality nonfamily managers enhance family firm performance? We address this paradox by theorizing that lower-performing, rather than higher-performing, family firms are more likely to benefit from employing nonfamily managers. Using a sample of 324 small family firms, we find that family firms with below-average performance significantly benefit from employing nonfamily managers, whereas family firms with above-average performance do not experience the same benefit. We attribute the difference to the presence of family-management capacity constraints in lower-performing family firms. For family firms with such constraints, the employment of nonfamily managers is more beneficial than it is for higher-performing family firms, which are not bound by these constraints.
Research Question/Issue
From its inception in the late 1980s and early 1990s, founder‐chief executive officer (CEO) research has garnered significant scholarly attention in the strategy and ...entrepreneurship disciplines, although other fields—such as economics, finance, and family business—have also generated substantial research insight on this topic. Despite this progress, a limited consensus exists on the influence of the founder CEO owing to the fragmented nature of extant research. In this review, we address this fragmentation by reviewing current literature, synthesizing the discipline‐specific findings into an integrated framework, and highlighting promising directions for future founder‐CEO research.
Research Findings/Insights
Using a cross‐disciplinary review of founder‐CEO research based on 221 articles from 24 academic journals, we synthesize current research and provide directions for future research. Our framework organizes current research on the founder CEO into three broad themes. First, we review and synthesize scholarly work on factors related to the founder CEO during the nascent years of the firm. In the second theme, we review research that explores the impact of the founder CEO on strategic choices and firm configurations. In the third theme, we review the performance consequences of the founder CEO.
Theoretical/Academic Implications
This review advances research on the founder CEO by taking stock of insights from various disciplines, highlighting advancements made, and suggesting promising directions for future research on founder CEOs. Additionally, a critical evaluation of current methodological approaches provides opportunities for strengthening the rigor of scholarly inquiry in this area.
Practitioner/Policy Implications
This review provides corporate governance scholars and policymakers with a current, multidisciplinary summary of research findings on founder CEOs and their impact on the firm across various stages of the organizational life cycle.
Entrepreneurial networks and family firm researchers are testing the limits of current understanding by investigating relationships in a variety of non–Western contexts. We extend Khayesi, George, ...and Antonakis's model of resource accumulation to include the relational dimension of an entrepreneur's social capital network to elaborate more fully entrepreneurial kinship network types. The propensity for moral hazard associated with each network type is explicated, and mechanisms for mitigating the cost/benefit of such dysfunctions are addressed.
Family firm human resource (HR) research focuses largely on examining differences in HR practices between family and nonfamily firms or between family and nonfamily employees within family firms. Few ...studies, however, attempt to explain why these differences emerge. We offer insight into the source of heterogeneous HR practices by investigating attributes of the owning family. We integrate a primary family science perspective, circumplex theory, to describe how an unbalanced family structure leads to unbalanced HR systems in the family firm. An unbalanced HR system is depicted as a form of bifurcation bias, or the asymmetric treatment of family and nonfamily employees via the family firm's HR practices. By integrating and extending circumplex theory into the family firm, insight is offered into how the structure of the family system influences the structure of the family business HR system, thus impacting firm outcomes. Implications for both scholars and practitioners are offered.
•Extends circumplex theory, a prominent family science theory, into the family firm•Examines how and why bifurcated HR practices emerge in the family firm•Proposes that unbalanced family systems create unbalanced HR practices in the firm•Highlights economic and noneconomic performance implications of bifurcation bias
Debate persists regarding the effects of executive pay dispersion on firm performance given that conflicting findings have plagued the literature. We aim to reconcile previous inconsistencies by ...taking a more nuanced approach and exploring the effects of explained and unexplained executive pay dispersion on the firm's short- and long-term performance. Using a longitudinal sample of public firms over a 12-year period, we find that unexplained pay dispersion among executives-indicating pay inequity-negatively affects short-term firm performance while explained pay dispersion-indicating pay inequality-positively affects long-term firm performance. The findings help resolve prior inconsistencies associated with understanding the relationship between executive pay dispersion and firm performance. Accordingly, we advance research by demonstrating the importance of measuring pay dispersion types and accounting for the temporal nature of firm performance.
Familiness, the unique bundle of resources associated with the family’s involvement in the firm, affects firm outcomes; yet, how familiness affects the internal dynamics of the family firm to yield ...outcomes, such as innovation, remains unclear. To this end, we use a dynamic capability perspective to propose that familiness affects absorptive capacity, a knowledge-specific dynamic capability, through which the firm’s innovation outcomes are influenced. Further, we acknowledge how these relationships are altered by the involvement of nonfamily members in the family firm. The conceptual model offered highlights the role of absorptive capacity in understanding how familiness affects innovation outcomes and elucidates the heterogeneity across family firms that results from nonfamily member involvement.
Research Summary
Our study provides novel insights into how women influence SME innovation in emerging markets, despite the resource‐constrained and gender‐restrictive contexts in which they are ...embedded. Building from transactive memory (TM) theory and using data from 741 SMEs in 33 emerging markets, we develop and test a contextualized framework of SME innovation that considers gendered effects in ownership, workforce composition, and communication. Findings indicate that in emerging markets, female‐led SMEs employ more women than male‐led SMEs, and more women in SMEs (even at modest levels) enhance and enable the TM system to deliver more innovation outcomes. Findings also suggest that emerging‐market SMEs can be innovative through differing configurations of women in ownership and workforce composition, underscoring the importance of gendered and contextual considerations in innovation research.
Managerial Summary
Innovation is vital to the social progress and economic development of emerging markets. Even though institutionalized gender bias in emerging markets tends to constrain (rather than empower) women's entrepreneurial activities, our study reveals how women can be an important source of innovation. We find that women in emerging markets are stronger together: women in ownership advocate for and support other women by employing them in their SMEs, and in turn, as women's representation increases in SMEs, women are empowered to collectively share and leverage their endowed resources for innovation. Thus, our study challenges the general perception that men are more innovative than women by revealing that the presence of women in emerging‐market SMEs yields greater innovation outcomes.
