It’s not just the relations that make family businesses different from their counterparts. Forced to consider the extensive long-term in a way that’s not conventionally thought of, Dr. Todd Moss sought to discover if this planning and consistency aided in performance of family businesses in his recent article with Family Business Review titled Strategic Consistency of Exploration and Exploitation in Family Businesses
The topic for the article grew out of my dissertation research, which examined exploration and exploitation across a number of organizations. My background is in mechanical engineering, which naturally led me to wonder about how companies can explore new ideas for future growth and exploit their current ideas. While collecting data specifically for my dissertation, I went beyond my immediate need and spent time gathering additional data as well (like any good Ph.D. student is taught to do). Family businesses are well-known for managing for the long term, so examining exploration and exploitation in family businesses provided a context that we hoped would be interesting to other scholars.
The dataset used for gauging exploration and exploitation was management and discussion sections (MD&A) of firm annual reports, so we were essentially measuring the emphasis that a management team placed on exploration and/or exploitation in the MD&A sections over time. One finding that surprised us was the extent to which family businesses were consistent over time–and how that consistency was related to increased performance–much more so than in non-family businesses. We hope to explore this dataset further to see how other constructs emphasized by the firms’ management teams could be related to additional organizational outcomes.