Small Family Firms: How Knowledge is Shared

One could imagine that every small family firm has their particular habits when knowledge sharing, especially when the success (or failure) of the business relies on effective communication.

A recent study published in Family Business Review analyzes the different leadership approaches to knowledge sharing, and we are pleased to welcome one of the authors, James Cunningham, who reflects on the foundation and findings of the research. The paper, entitled “Perceptions of Knowledge Sharing Amongst Small Family Firm Leaders–A Structural Equation Model,” is co-authored by Claire Seaman and David McGuire. From Cunningham:]

Family firms are known for the unique ways in which they view and run their business. This has led many to believe that firms with a family influence behave differeFBR_72ppiRGB_powerpoint.jpgntly to their non-family counterparts. While a lot of research focuses on the many implications of this difference for the economic impact family firms, in terms of strategi
c direction, longevity, etc., we were more curious to know how the influence of family impacts what it is like inside the firm.

In this respect, knowledge is increasingly becoming the most important internal resource for a competitive organisation in the contemporary business environment. Integrating and exploiting the knowledge of people in the business has become one of the key activities of the modern business leader. The impact of leadership on how the firm manages knowledge is long established in the broader management literature, but our instincts would tell us that family firms will have their own way of approaching and managing knowledge. In this article, we uncover the different leadership behaviours played out in small family firms and how these behaviours are related to the leader’s perception of knowledge sharing in the firm. Essentially, we ask the question, does family influence help or hinder the development of a knowledge resource?

Unsurprisingly, we found a variety of leadership behaviours employed by family firm leaders. We present a choice in how the family firm views its knowledge resource. We suggest that a greater level of family influence implies more guidance-based leadership when it comes to knowledge. Knowledge here is considered a quality the family leaders have, which must be ‘distilled’ to other organisational members. While, the alternative is a participative approach to knowledge in the firm, one more accepting of input from others, but with the potential to reduce family control.

This choice of leadership approach is important for family business leaders to consider, as there are important implications for the development of their knowledge resource. We see these findings as part of a research direction which moves away from viewing family firms as a homogenous group, subject to the overbearing influence of family. Instead, we present the behaviours inside these organisation as choices, and these choices at the most basic level represent the business intentions of family firm leaders.

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Incumbents’ Attitude Toward Intrafamily Succession

[We’re pleased to welcome author Alfredo De Massis of Free University of Bozen-Bolzano, who recently published an article in Family Business Review entitled “Incumbents’ Attitude Toward Intrafamily Succession: An Investigation of Its Antecedents,” co-authored by  Philipp Sieger, Jess H. Chua, and Silvio Vismara. From De Massis:]

  • WFBR_72ppiRGB_powerpoint.jpghat inspired you to be interested in this topic?

This study examines how family firm incumbent leaders’ attitude toward intra-family
succession is influenced by family traits, firm characteristics, and incumbent leader attribute.Two considerations played an important role when we decided to investigate the incumbent leaders’ attitude toward intra-family succession and designed a survey targeted to Italian family firm incumbents: (i) the family firm intra-family succession process is largely under incumbents’ control; and (ii) without incumbents’ positive attitude, the process is less likely to even begin.

So a clear understanding of the antecedents of the incumbent leaders’ attitude toward intra-family succession is important in order to ensure transfer of leadership from one generation to the next.

  • Were there findings that were surprising to you?

One of the most surprising findings is that, contrary to our hypothesis, our data show that incumbents’ attitude toward intra-family succession is negatively affected by the combination of family ownership duration and firm economic performance. This unexpected finding supports the argument that better economic performance leads to higher firm financial value, which favors the immediate benefits of selling the business over the long-term ones of intra-family succession, while duration of ownership, through professionalization, may make the higher value business more liquid.

  • How do you see this study influencing future research and/or practice?

Next-generation members’ intention for intra-family succession has received considerable scholarly attention, but researchers have so far overlooked that of the incumbents despite recent literature reviews calling for research on intra-family succession intention from incumbents’ perspective. Indeed, most prior studies examining family business succession from incumbents’ perspective have focused on the actual behavior (i.e., intra-family succession) and dealt with the issues and challenges during the succession process, with none of them taking a step back to focus on the intention toward such behavior.

To the best of our knowledge, the only empirical study explicitly focusing on the intention for intra-family succession is the exploratory one by Chua et al. (1999). That study did not probe deeper into the antecedents of intra-family succession intention, so we lack rigorous, systematic, and empirical investigations of the factors affecting this important determinant of family firm behavior.

One of the most important determinants of the intention for intra-family succession is attitude toward intra-family succession. Our study examines how family firm incumbent leaders’ attitude toward intra-family succession is influenced by family traits, firm characteristics, and incumbent leader attribute.

Theoretically, our study contributes toward a more complete understanding of family business succession and, practically, provides suggestions about how to influence incumbents’ attitude toward intra-family succession.

 

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Succession is Key: Studying Successor Team Dynamics in Family Firms

6862116590_53e60358e7_z[We’re pleased to welcome Jim Cater of The University of Texas at Tyler. Jim recently published an article in Family Business Review with co-authors Roland E. Kidwell and Kerri M. Camp entitled “Successor Team Dynamics in Family Firms.” From Jim:]

  • What inspired you to be interested in this topic?

My work in family business studies is inspired by my experience as a third generation successor in our family’s business.  My grandfather and my father worked their entire careers in our retail furniture company in south Florida.  Reportedly, at my birth, my grandfather happily exclaimed, “Now, we have someone to run the business for another generation.”

Family businesses ran from father to son in a straight line or so I thought.  After entering our family business, I found that our competitors in south Florida were mostly family businesses.  Two of the largest competitors had multiple family Current Issue Covermembers involved in each generation.  They had plenty of family members to manage multiple stores, while we had to rely on non-family managers, which proved to be problematic for us.

As the furniture business became more and more competitive, my parents decided to sell our stores so that they could retire and so that I could pursue an academic career.  I felt driven to write my dissertation on successors in family businesses. Here again I encountered large families with teams of successors who were able to share responsibilities and work harmoniously together.

The Successor Team paper is the culmination of years of experience, thought, and observation.

The abstract for the paper:

In a qualitative study of 19 family businesses, we examine the dynamics of successor teams, using insights from the family dynamics and succession literature and teams and conflict theory in family business. In-depth interviews with family firm leaders identified two major successor team performance outcomes, a positive track leading to team commitment and a negative track resulting in dissolution of the team and potentially the family firm. Our findings are encapsulated by 10 propositions and a model of successor team dynamics.

You can read “Successor Team Dynamics in Family Firms,” published in Family Business Review, free for the next two weeks by clicking here. Want to stay current on all of the latest research published by Family Business ReviewClick here to sign up for e-alerts!

*Image attributed to Stefano Lubiana (CC)

New Podcast: Employees’ Innovative Work Involvement in Family Firms

Podcast MicrophoneIn the latest podcast from Family Business Review, Assistant Editor Karen Vinton interviews author Yannick Bammens of Maastricht University. Yannick published an article with co-authors Guy Notelaers and Anita Van Gils entitled “Implications of Family Business Employment for Employees’ Innovative Work Involvement,” which earned a honorable mention for Family Business Review‘s 2016 Best Paper award.

The abstract for the paper:

This study builds on the idea that family businesses perform particularly well in the domain of exploitative innovations and explores a possible source of this strength, namely their employees’ spontaneous involvement in informal innovation activity. Specifically, we develop a mediation model on the FBR_v26n1_72ppiRGB_150pixWinterrelationship between family business employment and employees’ innovative work involvement. Analyses are based on a sample of 893 Belgian employees using structural equation modeling. Results suggest that family business employment is positively associated with employees’ innovative work involvement, and that part of this relationship can be attributed to their heightened perceptions of organizational support and work motivation.

You can listen to the podcast with Karen Vinton and author Yannick Bammens by clicking here. Want to hear more content from Family Business Review? Click here to search the full list of podcasts from the journal.

The article, “Implications of Family Business Employment for Employees’ Innovative Work Involvement” from Family Business Review will be free to read for the next two weeks–click here to read it! Want to stay up to date on all of the latest research from Family Business ReviewClick here to sign up for e-alerts!


YannickYannick Bammens, PhD, is an assistant professor of management at Maastricht University, the Netherlands. His current research centers on innovation management and corporate governance in the setting of founder- and family-led enterprises. His research has been published in journals such as Journal of Management, International Journal of Management Reviews, Small Business Economics, Journal of Business Ethics, and Journal of Small Business Management.

https://managementink.files.wordpress.com/2015/07/karen_vinton1.jpg?w=91&h=100Karen L. Vinton, Ph.D., is assistant editor of FBR and a 1999 Barbara Hollander Award winner and Professor Emeritus of Business at the College of Business at Montana State University, where she founded the University’s Family Business Program. An FFI Fellow, she has served on its Board of Directors and chaired the Body of Knowledge committee.

Does Family Management Inhibit the Technological Innovation of Family Firms?

9595272759_0f40945def_z[We’re pleased to welcome Julio Diéguez Soto of Universidad de Málaga. Julio recently published an article in the September 2016 issue of Family Business Review with co-authors Montserrat Manzaneque and  Alfonso A. Rojo-Ramírez, entitled Technological Innovation Inputs, Outputs and Performance: the Moderating Role of Family Involvement in Management.”]

  • What inspired you to be interested in this topic?

The enormous impact of innovation on economic growth and job creation worldwide and their particular importance for family SMEs.

  • Were there findings that were surprising to you?

Family management reduces the efficiency in converting R&D into technological innovation outcome. However, Current Issue Coverfamily management more effectively leverages technological innovation, thereby increasing long-term performance.

  • How do you see this study influencing future research and/or practice?

Given the importance of R&D to firm performance, family managers should understand the potential pitfalls that attempting to protect their socio-emotional wealth can have on technological innovation outcomes. Simultaneously, family businesses should consider the competitive advantages associated to family managers, who are more efficient in exploiting their given technological innovation outputs, which in turn increases long term performance.

Although this study considers family-managed firms as a particular group, future research should take into account that there is heterogeneity among them and should evaluate the differences among family-managed firms with regard to long-term innovation strategies.

The abstract for the article:

The aim of this research is to study the moderating role of family management in the relationships between the intensity of research and development and the occurrence of continuous technological innovation and between the existence of technological innovation outcomes and long-term firm performance. The results show that family management reduces efficiency in the conversion of research and development expenses into technological innovation outcomes over time. Our findings also suggest that the influence of family management significantly contributes to improving the effect of the achievement of technological innovation on long-term performance.

You can read “Technological Innovation Inputs, Outputs and Performance: the Moderating Role of Family Involvement in Management” from Family Business Review free for the next two weeks by clicking here. There’s also still time for you to read Family Business Review‘s inaugural review issue, which closes at the end of August–click here to read it!

Want to keep current on all of the latest research published by Family Business ReviewClick here to sign up for e-alerts!

*Technology image attributed to Cory M. Grenler (CC)

Does the Birth Order of Descendant CEO Sons Impact Family Firm Performance?

3486432433_413fe29886_zFor most family businesses, the transition of leadership from one generation to the next can be a complex period to navigate. For family business researchers, generational transitions present a multi-faceted research subject with a clear impact on family firm performance. In a recent paper published by Family Business Review entitled “Not All Created Equal: Examining the Impact of Birth Order and Role Identity Among Descendant CEO Sons on Family Firm Performance”, authors Mark T. Schenkel, Sean Sehyun Yoo, and Jaemin Kim explore how seemingly small factor, namely the birth order of a descendant CEO, can have a noticeable effect on family firm performance. The abstract for the paper:

This study extends the family firm performance literature by focusing on birth order differences among descendant CEOs. Data collected from a sample of Korean family firms yield three insights. First, descendant birth order is directly associated with differences in the distribution of control through ownership, leadership (i.e., CEO), and the incorporation of outside board participation and governance. Second, descendant birth order also moderates the relationship between outside block Current Issue Coverholdings and firm performance. Third, we find evidence suggesting that because of firm performance differences, first-son descendant CEOs may find themselves more often replaced over time.

You can read “Not All Created Equal: Examining the Impact of Birth Order and Role Identity Among Descendant CEO Sons on Family Firm Performance” from Family Business Review free for the next two weeks by clicking here.

Want to stay up to date on the latest research published by Family Business ReviewClick here to sign up for e-alerts! Interested in submitting your manuscript to Family Business ReviewFind the submission guidelines here!

*Koreatown image attributed to 2ndeye (CC)

Read the March 2016 Review Issue of Family Business Review!

4875652467_2579f7b518_zTo celebrate Family Business Review’s inaugural review issue, the March 2016 review issue will be open for the next month. In the issue’s  editorial, entitled “Oh, the Places We’ll Go! Reviewing Past, Present, and Future Possibilities in Family Business Research,” authors Jeremy C. Short, Pramodita Sharma, G. Thomas Lumpkin, and Allison W. Pearson dive into why this is such an important issue:

You might wonder why we believe now is a particularly promising time to conduct the first review issue of FBR. To understand this question, we would like to backup and take a brief look at the places this research stream has been. While there were only 111 peer-reviewed articles on family business before January 1, 1970, the pace of knowledge creation in this field accelerated in the 1990s yielding over 2,000 articles Current Issue Cover(Sharma, 2015). In the past 5 years between 2010 and 2014, over 4,000 family business articles were added to the knowledge pool. At this rate, the current decade will likely yield over 8,000 new peer-reviewed journal articles on family business. The increased interest in this field has also yielded returns in the quality of research output. Craig, Moores, Howorth, and Poutziouris (2009) observe that family business research is at a “tipping point” with an unprecedented acceptance in top-tier journals.

With the rapid growth of research in family business across multiple disciplines and outlets, coupled with the growing interest from around the globe (Woolridge, 2015), the field needs a review issue dedicated to unifying the research trends and ideas, looking both historically and toward the future. As the premier journal in family firm research, FBR is uniquely positioned to take that role. While review articles have appeared intermittently over the years, FBR’s 25th anniversary issue published in March (2012) started us along the trajectory of a dedicated review issue to take stock of past research and determine interesting future possibilities for impactful research.

This review issue includes five articles that critically examine 774 scholarly publications to identify the gaps between “what we know” and “what we need to know” concerning key topics and methods of interest to family business scholars. This particular collection of articles places us in the center of the family business research universe because of the breadth and relevance of topics reviewed.

Click here to access the Table of Contents of the December issue of Family Business Review, which will be free to access for the next month. Want to know about all the latest from Family Business Review? Click here to sigh up for e-alerts!

*Reading image attributed to Sebastien Wiertz (CC)