Family-Enterprise Management
Transcript of Family-Enterprise Management
Family-Enterprise Management
Is family influence an asset or a liability?
1
Basco Rodrigo PhD
Witten/Herdecke University
Witten Institute for Family Business
3
Family business field
Relativity, 1953M. C. Escher
5
Family business field
Academic Journals
Family Business InstitutesResearch Centers Family Business Chairs
Conferences
How has family business knowledge been created?
How has family business knowledge evolved ?
Researchers
Practitioners
Family Owners
Family Managers
6
Family business field
Procedure – Literature review
» Journals: ETP, JBV, and FBR
» 2000-2009
» 235 articles
» Organization of papers:
- Descriptive characteristics: topic, theory, future research, academic limitations, recommendations and general conclusions.
- Internal and external elements/knowledge
» Classification:
- Borrowing and replicating
- Borrowing and extending
- Inverse contribution
7
Family business field
Future research lines – theoretical/methodological
» Literature review for topics such as governance, management, firm performance. To analyze to what extent these three steps (bringing knowledge from the main stream, adding and developing new knowledge, and bringing back knowledge) can be recognized in different topics.
» Trap on the ontological view of Family Business Field. This is a limitation for developing a real theory of family firm which incorporates the family as well as the firm perspective.
» Methods: general statistical methods and specific methods to incorporate the family dimensions into the general research.
• CEO Alfred Ritter of Ritter Sport: ‘We do not think in years, but rather generations’
• CEO Dr Karsten Ottenberg of Gieseck & Devrient: ‘We do not think in producing good figures in the next quarter. We are more concerned with sustainability over generations’
• CEO Angel Añaños of AJEGORUP: ‘Family participates actively in relevant business decisions and if there isn’t unanimity within the family there are two alternatives: either to convince those who don’t agree or let themselves be convinced by those of a different opinion’.
Family-Business Relationship
• How to measure the family influence on firm behavior?
• Does family influence on firm affect firm performance?
• Does the fit between family-business interaction and strategic position economically matter?
FirmFamily
Family-Business Relationship
It is known that: family business behave differently
How to measure the family-business relationship?
Where can family-business relationship be captured?
Decision-making
Family-Business Relationship
Methodology
» Scale development (questionnaire)
» Sample design and data collection (representative sample)
- Spain
- +700 small and medium family firms
- Firm size: 50 to 500 employees
- Family business definition: 50% capital in family members / at least 2 family members TMT.
» Data analysis
- Descriptive analysis
- Factorial analysis (underline structure of the data)
- Discriminant analysis
- Confirmatory factorial analysis (construct validity: reliability, convergent validity, discriminant
validity, nomological validity)
Family-Business Relationship
Family-oriented decisions Business-oriented decisions
How is an organization governed and managed?
Family involvement
SUCCESSIONSTRATEGIC PROCESSBOARD OF DIRECTORS
HUMAN RESOURCES
Family-Business Relationship
• Family participation is a necessary condition …… but not sufficient to understand how family firms work.
• It is not the family participation itself what makes family firm
different, but the way the family affects decision-making.
Family-Business Relationship
Future research lines – theoretical/methodological
» How to integrate this result into the system theory?
» Heterogeneity of family firms: how do family firms combine family-oriented and business-oriented positions? What is the effect on firm performance?
Family-Business Relationship
Heterogeneity of family firms
System theory Configurative approach
» Regularity, rules and patterns
» Holistic view
» Goal Orientation
» Equifinality – Multifinality
» Circular causality
» Homoestasis and heterostasis
Configurative approach
» ‘Multidimensional constellation of conceptually distinct characteristics that commonly
occurs together’
Heterogeneity of family firms
Business-oriented decisions
Fam
ily-o
rien
ted
dec
isio
ns Family-enterprise first
firmsFamily-first firms
Business-first firmsMarginal type of firms
Are family firms a homogeneous group?
Heterogeneity of family firms
Family-oriented decisions Business-oriented decisions
Family-first firms Family-enterprise first firms Business-first firms
Business performanceFamily Performance
EquifinalityEquifinality
How does the family-business relationship affect family firm performance?
Methodology
» Scale development (questionnaire)
- Performance (subjective measure based on degree of goal achievement)
» Sample design and data collection (representative sample)
» Data analysis
- Descriptive analysis
- Cluster analysis (underline structure of the sample – group)
- Discriminant analysis
- Ideal profile of firm – Euclidean distance
- Configurative approach procedure (heterogeneity – equifinality - performance)
Heterogeneity of family firms
Heterogeneity of family firms
• Heterogeneity based on behavioural elements
• Family firms can achieve successful business results by using a combination of family and business orientations in their decision-
making
Future research lines – theoretical/methodological
» How to integrate this result into the strategic literature?
» Heterogeneity of family firms: how do family firms integrate family-orientation / business orientation with strategic position (strategic behavior)?
Heterogeneity of family firms
Strategic position of family firms
How do family firms fit together their family and business oriented decision-making and strategic behaviour in order to produce superior performance?
Methodology
» Scale development (questionnaire)
- Strategic behavior (how does the firm compete – Porter’s scale: cost-leadership and differentiation
leadership)
» Sample design and data collection (representative sample)
» Data analysis
- Descriptive analysis
- Configurative approach procedure (heterogeneity – performance) – Factorial analysis
– Cluster analysis
– Euclidian distance
– Regression and correlation
Strategic position of family firms
• Decision-making and strategic behaviours are not independently important, but they are important when they complement each
other
• Consistency in the direction of decision-making and strategic behaviour helps firms achieve a higher level of performance
Strategic position of family firms
Future steps Family-Enterprise Management
• Practical aspects: Family-Enterprise Management » Report - Family-Enterprise Management (practical perspective about family-enterprise
management)
» Book – Theoretical model about Family-Enterprise Management and case studies.
» Blog to spread these ideas
» Teaching seminar/course
• Research aspects: Family-enterprise management » Extending this research to other contexts
» Case studies:• Improve the scale• Introduce the connection between individual level and firm level• Context (cultural context) as relevant aspect to understand
Future stepsResearch – Working papers
• Special Issue: Family Business and Regional development (Basco, R.; Block, J.; Stough, R.; Welter, F.; Wennberg, K.)
• The role of the family firms in the regional development (Basco, R.)
• Opportunity-oriented and family-oriented founder owner-managers. Do they behave differently? (Basco, R.)
• Determinants of family and non-family member nomination in the succession of privately-owned family firm (Basco, R. & Calabró, A.)
• Family-enterprise decision-making, a behavioral economic perspective (Bartolami, F. & Basco, R)
• An exploratory study of family firm objectives (Basco, R.; Pieper, T. )
• Board of directors and firm performance in private family firms: a test of the demographic versus behavioral approach (Basco, R.; Voordeckers, W.)
• The role of board of directors during financial crisis in family firms (Fynn-Willem Lohe, Calabro A. & Basco, R.)
• Board composition in family firms: Its effect on firm performance (Vecchiarini, M: Calabro, A: & Basco, R.).
• Who should sit here and who should sit there? Effects of family-oriented objectives on board composition (Basco, R. & Calabro, A.)
• Search breadth and innovation in family firms: evidence from a natural-resource based cluster in Chile (Basco, R.; De Massis, A. Kotlar, J.)