The Routledge Companion to Family Business

Franz Kellermanns, Frank Hoy, Franz Kellermanns, Frank Hoy, Franz W. Kellermanns, Frank Hoy

• Publisher: Routledge
• Year: 2016
• eBook ISBN: 9781317419983
• Topic: Business
• Subtopic: Small Business
• Index: Business

The Routledge Companion to Family Business offers a definitive survey of a field that has seen rapid growth in research in recent years. Edited by leading scholars with contributions from the top minds in family business from around the world, this volume provides researchers and scholars with a comprehensive understanding of the state of the discipline.

Over 25 chapters address a wide variety of subjects, providing readers with a thorough review of the key research themes in the modern family firm, such as corporate social responsibility and bank debt rationing. International examples cover a wide range of economies including China, Europe, and Latin America.

The book will appeal to undergraduates, postgraduates and business instructors seeking a definitive view of the issues and solutions that affect and support family business.

1
INTRODUCTION TO THE FAMILY BUSINESS COMPANION

Franz W. Kellermanns and Frank Hoy

Family firm research has seen an exponential growth in output, quality and topics studies (e.g., Debicki, Matherne, Kellermanns, & Chrisman, 2009). Despite the youth of the field, growing academic interest has been documented through the publication of annotated bibliographies (e.g, De Massis, Sharma, Chua, & Chrisman, 2012; Hoy & Laffranchini, 2014), reflection pieces (Sharma, Chrisman, & E. Gersick, 2012), literature reviews (e.g., Gedajlovic, Carney, Chrisman, & Kellermanns, 2012), meta-analyses (e.g., Carney, Essen, Gedajlovic, & Heugens, 2014; O’Boyle, Pollack, & Rutherford, 2012) and edited volumes (e.g., Melin, Nordqvist, & Sharma, 2013).

The Routledge Companion to Family Business is an edited volume that builds on the growing body of knowledge and the wealth of recent research with the intent to add substantial value to the field. To achieve this objective, we utilized a tri-pronged approach. First, we organized the volume based on general areas. The chapters are grouped based on their wider affiliation to the strategic management, entrepreneurship, organizational behavior, and family science. In addition, we added a special topics area, which reviews country or regional aspects of the family firm literature. Second, while choosing the aforementioned topics, we have strongly emphasized areas that were under-researched, or that are not easily accessible to research. For example, while the interest in family science related work is growing (e.g., Morris & Kellermanns, 2013), this type of research has yet to fully inform mainstream family firm literature. Similarly, research in organizational behavior in family firms, maybe with the exception of family firm conflict (e.g., Kellermanns & Eddleston, 2004), is under-researched as the family firm literature developed from a strategic management perspective (Sharma, Chrisman, & Chua, 1997). In addition, some chapters summarize the literature published in “non-English publications.” These chapters can provide both new research ideas, as well as highlight differences in cultural and research traditions. Lastly, we chose to provide a mix of papers that provides reviews of current research as well as new and innovative trajectories for future research, trying to make The Routledge Companion to Family Business a true companion for both researchers and practitioners. Below we discuss the individual sections in more detail and summarize the individual chapters.

Part I: Strategic Management

The strategic management literature served as the birth place of the wider entrepreneurship literature and also more specifically the field of family business. Considering this early origin, it is not surprising that much of the family firm literature is dominated by strategy oriented research even today.

Yet, such a focus is not surprising, as strategy permeates wide areas of interest in family firm research. From succession to financial and non-financial goals and the various family firm-specific characteristics have led themselves to compare process between family and non-family firms as well as resulted in a more differentiated understanding of the potential heterogeneity of family firms themselves.

This first section provides a mix of papers focusing on classical strategic management theories and topics (e.g., upper echelons, agency theory). In addition to review oriented pieces, new foci in the field of family business are also discussed (e.g, socio-emotional wealth, finance). As such these papers provide not only good overviews of key research areas in the realm strategic family firm research, but also offer insightful agendas for future research.

Below we summarize the nine chapters in this section.

Chapter 2: Decker, Heinrichs, Jaskiewicz, Rau

This chapter focuses on a key topic of family firm research, namely family firm succession. It provides a rigorous analysis of the literature and provides significant value by classifying the studies based on succession process stages (i.e., preparation, successor choice, exploration and implementation, incumbent’s withdrawal and post succession success) as well as highlighting the level of analysis (i.e., individual, organizational, environmental). This comprehensive approach then allows the authors to identify research gaps in each of the identified succession stages as well as to do general future research, advocating a holistic framework for studying family firm succession.

Chapter 3: Madison, Li, Holt

Madison, Li and Holt provide a review of 67 empirically grounded agency theory studies in the realm of family firms. This chapter provides a detailed summary table of the analyzed studies. The paper discusses both agency problems, which are abundant in family firms, due to the involvement of the family in the firm. Further, governance related issues are discussed, detailing remedies for agency problems and their potential for enhancing family firm performance. The resulting analysis concludes in discussion of future research opportunities.

Chapter 4: Chandler, Zachary, Brigham, Payne

Long-term orientation is of high interest for family firm researchers, as it may explain why family firms behave differently than non-family firms. It further offers complementary insights to some of the chapters in this book (e.g., agency, succession). This chapter provides a comprehensive review of the construct. Their review of the construct covers both the roots of the construct in the non-business literature and highlights its development in the business and economic field, before turning to long-term orientation in the family firm literature. The review provides an overview of definitions and operationalizations as well as detailed suggestions for future research.

Chapter 5: Tretbar, Reimer, Schäffer

Tretbar, Reimer and Schäffer contribute to the ongoing debate on the effect of family involvement on performance. Their chapter provides a detailed literature review on family involvement in the top management team (TMT) and its implications for family firm performance drawing on the upper echelon literature. It does not only provide an excellent template for literature reviews but provides a comprehensive discussion of strategic processes affected by family involvement in the TMT. The tables in this chapter provide a key resource for authors interested in this topic, and the future research section highlights a multitude of research ideas on TMT processes, and family values and the family as “supra TMT.”

Chapter 6: Sluhan

The chapter by Sluhan provides a review on family firm internationalization. It extends prior research, particularly recent reviews, and meta-analyses, which have concluded that family ownership is not related to the degree of internationalization. This chapter instead focuses on how the internationalization process is different for family firms. The paper first reviews the motivations and capabilities necessary for internationalization before elaborating on specific equity and non-equity modes of internationalization. In addition to comprehensive literature review tables, the chapter also advances areas for future research.

Chapter 7: Neacsu, Martin, Gómez-Mejía

The chapter by Neacsu Martin and Gómez-Mejía discusses socio-emotional wealth (SEW), a topic of strong interest in the recent family firm literature that has experienced exponential growth in recent years. Their focus, however, is not solely the positive aspects that were widely associated with the discussion of SEW. Instead, the paper provides a balanced assessment of value creation and destroying processes of the effects of SEW loss aversion. The resulting Table 7.1, provides a comprehensive summary of both positive and negative aspects of SEW. Yet, the authors conclude that family ownership has at worst neutral effect and at best a positive performance relationship.

Chapter 8: Ring, Brown, Matherne

Family firm research often exclusively focuses on family members and their goals and resulting utilities. Not surprisingly, the chapter by Ring, Brown and Matherne, which discusses stakeholders in relation to family firms, devotes a significant part of the paper to the analysis of family members’ interests. It goes further by also discussing additional internal stakeholder groups in family firms as well as the external stakeholder. The paper further provides an exhibit of the 20 most cited articles on stakeholder definitional and salience issues, as well as a list of the most influential articles on descriptive, instrumental and normative approach. Thus, providing a useful guide for readers interested in the topic area. The article concludes with implications for practice as well as extensive suggestions for future research.

Chapter 9: Steijvers and Voordeckers

While the finance literature has discovered the family firm context as a useful context, particularly related to agency literature, the topics of finance (and accounting) have also entered main-stream family firm research. Steijvers and Voordeckers, which are part of the latter growing research stream, discuss the phenomenon of credit rationing. Their sample of 1000 Belgian SMEs shows that 35.3 percent of family firms vs. 23 percent of non-family firms experience more long-term than short-term credit rationing. This study highlights the juxtaposition of the desire of long-term debt that family firms prefer, as it does not dilute equity and the potential lack of supply of such debt.

Chapter 10: Decker

Families who have created wealth through business ownership face decisions regarding conserving and growing the wealth for future generations, and applying the wealth in ways that adhere to family values. One strategy has been the formation of family offices. These are organizational entities designed for multiple purposes, e.g., to nurture coordination, continuity, and even harmony among family members; to provide advice on wealth management, taxation and investment; and, more and more, to create value for individuals and families in different national environments. Decker examines the business model formation of multi-family offices and the evolution of their global standardization, leading to propositions for future research.

Part II: Entrepreneurship

Much of the early literature on family businesses encouraged the ‘professionalization’ of the firm. The implication was that family-owned enterprises suffer from nepotism in the negative sense of placing incompetent relatives into positions of responsibility. Recommended solutions were typically the education and development of family members to qualify them to be senior executives and the employment of non-family managers with relevant credentials for their positions. The expectation was that the company would transition from the entrepreneurial founder to a team of effective administrators.

In recent years, it has become understood that entrepreneurial behavior is more than launching an enterprise. It can be reflected in a variety of ways, typically in the infusion of innovation, such as new products, new markets, new business models, even spin-offs from the original firm. This represents the concept that entrepreneurship continues as the company grows, matures, and transitions from one generation to the next.

This section of the Companion interrelates entrepreneurship with family business. We find the words innovation and opportunity injected throughout the chapters. The authors investigate a wide variety of approaches to entrepreneurial traits and behaviors. They summarize relevant preceding literature and propose paths for future investigations. The five chapters constituting this section are summarized below.

Chapter 11: Kraiczy and Hack

Kraiczy and Hack extend the earlier work of De Massis, Frattini, and Lichtenthaler (2013) by applying the latter’s Input-Mediation-Output (IMO) framework to the increased and more recent contributions to the family business innovation literature. Kraiczy and Hack then proceed to assess the studies from an ability-willingness perspective. They note that they have taken a broad view of innovation rather than limiting their analyses, as De Massis and colleagues did, to technological innovation. They found evidence, albeit inconsistent, that there are family influences on innovation, and they feel their ability-willingness examination may help resolve some of those inconsistencies. The increased attention to innovation in scholarly studies reflects multiple definitions of innovation, suggesting further analysis of family firms and innovation with more focused definitions of the variables.

Chapter 12: Brinkerink, Van Gils, Bammens, Carree

Trying to ascertain consistencies in studies of family firms is complicated by the heterogeneity of the entities under investigation, as noted by Brinkerink and his colleagues. They thoroughly examine the literature related to open innovation in family firms and acknowledge how industry, size, level of education, participation by non-family executives all influence the desirability and ability of firms to engage in open innovation. The point to the fact that open innovation can entail both inbound and outbound activity. These observations lead them to urge more longitudinal research, especially with attempts to capture life cycle changes. While they avoid reaching subjective judgments in their conclusions, they demonstrate the enormous role of communication in open systems environments that could put firms with closed systems in jeopardy.

Chapter 13: Dibrell, Bettinelli, Randerson

Although entrepreneurial behavior is often associated with venture creation, it can also be reflected through many types of actions in existing businesses. Dibrell, Bettinelli and Randerson address innovativeness as exemplary of entrepreneurial behavior. They specifically focus on the impact the interaction of market orientation and social consciousness may have on family firm innovation. Firm innovativeness in this study is reflected as developing new products, upgrading existing products, introducing specialty products, and innovative market techniques. As the authors point out in their literature review, the integration of family values into strategic behavior by firm leadership has been reflected in samples of family businesses demonstrating greater social responsibility than non-family businesses. This chapter extends our understanding of how family values may translate into behaviors that foster innovativeness by firms. It adds a new dimension to the role that socioemotional wealth may play in promoting entrepreneurial behavior in business performance. The implication that social consciousness may have positive consequences for innovation by businesses should stimulate further research.

Chapter 14: Minola, Campopiano, Brumana, Cassia, Garrett

In the academic discipline of management, family business research is often seen as a sub-field of entrepreneurship. Family business scholars, on the other hand, recognize that the fields overlap, but have distinctly separate characteristics as well. A review of the family business literature suggests that attention to entrepreneurship is relatively recent, with prior research dominated by governance, succession, and finance. A number of studies have drawn from corporate entrepreneurship, but most have focused on how to develop entrepreneurial traits and behaviors in family members as they enter and progress in the firms. Minola and his colleagues provide an in-depth review of how corporate entrepreneurship has been treated in family business studies and find some differences from its application in non-family enterprises. They label their findings as ‘fragmented,’ then offer a model for grasping the role of corporate entrepreneurship in family business with proposals for future research. In particular, they conclude that life cycle models may offer promise for enabling family and business lea...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Figures
• List of Tables
• Notes on Contributors
• 1 Introduction to the Family Business Companion Franz W. Kellermanns and Frank Hoy
• PART I Strategic Management
• Part II Entrepreneurship
• Part III Organizational Behavior
• Part IV Family Science
• Part V Special Topics: Country
• Index