Corporate governance (CG) is a system by which firms are directed and controlled. Through its mechanisms, it ensures optimal levels of efficiency, exploits opportunities, and prevents conflicts of ...interest between directors, shareholders, and stakeholders. The studies do show a positive relationship between CG and performance, but they are conducted in developed countries with stable legal and economic environments. Thus, CG contributes to the value creation (VC) of the firms. But in family firms, the concentration of power resulting from the overlapping of its subsystems (family, business, and ownership) influences the functioning of CG, and probably, VC. Setting goals, monitoring results, or controlling performance can be some of its forms. But we do not know the influence in emerging countries.The aim of the study is to empirically analyze the financial contribution of CG mechanisms to the VC of listed family firms in a Latin American economy. The results show the importance of the size of the board of directors, the participation of independent directors, and the duality of the chief executive officer. All the latter are important, considering the high representation of the family firms, their traditional concentration of power, the level of legal or regulatory weakness level, the uncertainty and instability of market conditions. The study is relevant due to the lack of evidence in emerging markets.
While research tends to focus on how family members respond to and manage crises arising in family businesses, nonfamily members play important roles as well. In this qualitative study, we ...demonstrate how nonfamily actors—employees, customers, and vendors—engage in institutional preservation work to save a family business. We develop a theoretical model of how a diffuse constellation of low-power individuals can come to identify and act as agents of institutional preservation and identify the three subprocesses comprising preservation work: intensifying and harnessing emotions, building collective identity, and articulating shared interests. This model offers insight into how nonfamily members can come to exert control over family businesses and contributes to emerging literature on the role of emotional escalation and social media in institutional and family business research.
Purpose Mergers and acquisitions (M&As) are a critical time for organizations and their consumers. For the company, there are many financial and non-financial risks. For customers, it requires ...deciding whether or not to continue the relationship that they had with the previous firm. This paper explores the extent to which communicating the family business (FB) brand, and the previous reputation of the acquirer affects customer perceptions and intentions after an M&A event. Design/methodology/approach Data for this study were collected from 159 Italian participants. We used a 2 (Communication of FB brand: Yes vs. No) by 3 (Reputation: positive, neutral, negative) between subjects' experiment to test how the communication of the FB brand and the reputation of the acquirer affected perceived trustworthiness and service quality, and how this, in turn, influenced customer purchase intentions. Findings We find that communicating the FB brand does not influence consumer perceptions and intentions toward the acquired company. However, the previous reputation of the acquiring firm is critical in influencing consumer perceptions and intentions to buy. Originality/value Our study continues the growing research on M&A in family firms. It also increases our understanding of the boundary conditions of the FB brand effects, and the relevance that the previous reputation of a family firm can have in M&A scenarios. Finally, our study introduces the "Halo" and "Velcro" effects into the FB literature.
This study investigates the effect of both family-centered goals and family board representation (family member representation on the board of directors) on family firm capital structure. Based on a ...sample of 327 Belgian family SMEs, our findings show that family-centered goals indirectly affect the total debt rate through family board representation. More specifically, the results indicate that this mediating effect holds primarily for the short-term (vs. long-term) debt rate and for the financial (vs. nonfinancial) debt rate. Taken together, our findings suggest that the socioemotional wealth (SEW) perspective is relevant and fruitful to explain debt decisions in family firms. Our findings contribute to family business literature and enable scholars and practitioners to gain a better understanding of family firm capital struc ture decisions.
In this article we focus on the study of history through the use of narratives, within the context of the prevalent form of organization worldwide: the family business. Specifically we consider the ...dilemma of the impossible gift of succession using Nietzsche’s discussion of the burden of history and paralleling the story of a family business succession with that of Shakespeare’s King Lear. This way, we seek to make a contribution to organizational studies by answering recent calls to engage more with history in studies of business organizations. By implication, the study also initiates an integration of family business studies into organization studies.
Abstract The objective of the article is to identify from the perspective of socio-emotional wealth the key challenges that formal advisors cooperating with family businesses face and the factors ...determining their effective cooperation. The paper has a theoretical character. Using the assumptions of socio-emotional wealth construct the propositions indicating the future research directions were formulated. The main challenge of formal advisors working with family businesses is to understand and accept that socio-emotional wealth is an important point of reference in the process of making strategic decisions. Therefore, one of the most important factors for their effective cooperation is the advisor’s awareness of the importance of SEW for the owners’ family, sources of socio-emotional wealth and the current phase in the life cycle of the family business.
•Family and non-family businesses show different growth patterns, due to the different versatility of their resources and the effect of SEW•Family firms grow less than non-family firms in terms of ...sales but more in terms of employees.•The negative effect of the family nature of the firm on sales growth is more intense when firms are older.•Positive effects of family nature on employment growth is slightly higher in smaller firms than in larger family firms.
Family businesses vary considerably in size, ranging from small entrepreneurial ventures over medium-sized companies to large global corporations. However, we know little about how family businesses grow. Our research analyses differences in growth patterns between family and non-family businesses, considering two dimensions of business growth: sales (performance) and employees (resources). Based on the Penrosean resource-based view of the firm and socioemotional wealth (SEW) perspective, we test and find —using a panel of 2000 Spanish manufacturing companies (2006–2014) —that family businesses tend to grow less than non-family businesses in terms of sales but more in terms of employees. Our research casts doubt on the myth of low growth in family businesses and shows that SEW should complement the Penrosean approach to explain the growth of family businesses.
A considerable proportion of private enterprises in China are family enterprises. Private enterprises represented by family enterprises play an important role in China’s national economy. Family ...business is a group of enterprises that cannot be ignored in China’s economic development. It has made irreplaceable contributions in the prosperity of the market, attracting employment, creating tax revenue and so on. Based on the analysis of status quo and characteristics of Chinese family enterprises, this paper teases out the advantages and disadvantages of family business, analyzes the opportunities and challenges in development of family business. Last but not least, considering those findings above, this paper puts forward relevant proposals for the sustainable development of Chinese family business.
Purpose
Artificial intelligence (AI) and sustainable business represent the irrefutable future of all forward looking businesses in the world today. In this perspective article, the authors explore ...the confluence of these important topics by highlighting the role of family businesses in advancing sustainable brand activism aligned with the United Nations Sustainable Development Goals (UNSDGs), like SDG 1, which emphasises poverty eradication. The authors fall on the transformative potential of artificial intelligence (AI) and online brand communities in family businesses as an anchor for promoting sustainability practices that align with UNSDGs.
Design/methodology/approach
Using literature review, the authors fall on the transformative potential of AI and online brand communities in family businesses as an anchor for promoting sustainability practices that align with UNSDGs.
Findings
Scholarly research on AI-driven sustainability brand activism in family businesses is either limited or nonexistent. Family businesses have a unique opportunity to use AI for eco-friendly operations, personalised brand engagement, eco-friendly product development, global collaborations and education and advocacy in support of the UNSDGs. Future research could look at how family businesses align their values, their long-term effects, how they work across generations, how resilient and flexible they are and how they compare to non-family businesses when it comes to using AI and brand activism as long-term strategies for sustainability and survival.
Originality/value
The authors call for family businesses, governments and stakeholders to take theoretical and practical actions in promoting AI-driven sustainability brand activism aligned with the UNSDGs. It underscores the distinctive role of family businesses in driving sustainability and fostering brand activism through AI in a digital age.
PurposeThis paper aims to explore the past and future impacts of automation on family businesses, with a focus on the opportunities for human capital empowerment.Design/methodology/approachThis paper ...draws upon a contemporary literature search to examine a range of scholarly and practitioner perspectives of the challenges and benefits of automation, exploring the evolvement towards hyperautomation and the empowerment of human capital in family businesses.FindingsAutomation, transforming to hyperautomation, general purpose artificial intelligence (AI) and beyond has the possibility of radically improving productivity. Fear of job obsolescence has been present since the birth of modern automation, and whilst some jobs are at risk of redundancy, a net gain towards higher-skilled labour is already evident. Family business leaders must be prepared to react appropriately to the accelerating war for talent by implementing a strategy for human capital empowerment.Originality/valueThis unique paper synthesises developments in automation and proposes a future perspective centred upon the empowerment of human capital in family businesses.
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