Organization Studies Special Issue on Family Business

[Editor’s Note: We’re pleased to welcome Trish Reay, Editor-in-Chief, Organization Studies]

Organization Studies has just published a Special Issue on Family Business. I invite everyone to download and read this interesting and engaging set of articles about family-controlled firms. Many people don’t know that family firms are the most widespread form of business organization, but it’s true!  In addition, the dynamics between a controlling family and other aspects of the organization reveal many opportunities for interesting research. Articles in this special issue of Organization Studies address the following topics:

  • Cultural reproduction and status maintenance in Japanese family firms,
  • Institutional pressures and corporate philanthropy in China
  • Family firm identity maintenance by non-family members
  • Institutional preservation work at a family business in crisis

The guest editors (Carlo Salvato, Francesco Chirico, Leif Melin and David Seidl) provide an excellent overview and introduction to the Special Issue.  All articles are free to download for a limited period of time. I encourage everyone to check them out.

Below is a list of the fascinating articles in this issue:

Why I Wrote, “Stewardship Theory: Realism, Relevance, and Family Firm Governance,” An Unapologetic Confession

[We’re pleased to welcome author James J. Chrisman of Mississippi State University and the University of Alberta. He recently published an article in Entrepreneurship Theory and Practice entitled “Stewardship Theory: Realism, Relevance, and Family Firm Governance,” which is currently free to read for a limited time. Below, he briefly describes the motivation and impact of his research.]

Given stewardship theory’s popularity, especially in family business, some might be surprised that anyone would dare to critique it. However, there are some issues associated with stewardship theory that need to be aired and resolved. That’s what I attempted to accomplish in my editorial. My basic position is that in spite of its positive features, stewardship theory is too extreme in its depiction of human nature and is missing several elements that are necessary for it to be realistic and relevant. Since much of my research is devoted to family business studies, and since stewardship theory is frequently used in that literature, I thought it appropriate to comment on the limits of stewardship theory as it is currently conceived, and to make some suggestions on how the realism and relevance of the theory could be improved. What follows is a brief summary of some of the issues that I have with stewardship theory that are discussed in my editorial, and my unapologetic confession of what led me to buck the conventional wisdom that stewardship theory is good and agency theory is bad.

My Confession

First, I admit that I believe that most individuals behave as stewards some or even most of the time and in this sense stewardship theory makes an important contribution to knowledge. However, I strongly dispute any inferences that all people can be induced to behave as stewards all of the time. I also take issue with the idea that people are not inherently self-interested, or that self-interest is a bad thing.

Second, I have serious doubts that an effective governance structure for an organization can be designed that does not include systems for monitoring and incentivizing the behaviors of individuals. Indeed, I do not believe an organization can long function without such systems since these are primary means for communicating goals and strategies and coordinating actions.

Third, in my view, perhaps the most important factors overlooked by stewardship theory are how to ensure that an organization will attract qualified individuals who will fit its goals and culture (potential stewards, if you will) and how to screen out unqualified or ill-fitting individuals before they become part of the organization (potential opportunistic agents, so to speak).

Postscript

Finally, it is important to acknowledge that when working on my editorial I noticed that several of my concerns about stewardship theory were already discussed by the two main conceptual works on the topic. Although I attempted to take the discussion a step further, it did not escape my attention that the qualifications they made to their arguments seem to have been lost over the years. In my experience, this is not uncommon in the literature, whether in respect to stewardship theory or some other subject. Indeed, a lesson that (junior) scholars can learn from my editorial is that focusing too much on ideal types can cause one to lose sight of reality in the attempt to simplify it.

Stay up-to-date with the latest research from the journal and sign up for email alerts today through the homepage!

It’s All About the Emotions

[We’re pleased to welcome authors Alexandra Bertschi-Michel of the University of Bern, Nadine Kammerlander of WHU – Otto Beisheim School of Management, and Vanessa M. Strike of the University of British Columbia. They recently published an article in Entrepreneurship Theory and Practice entitled “Unearthing and Alleviating Emotions in Family Business Successions,” which is currently free to read for a limited time. Below, they briefly describe the motivation and impact of their research.]

In Switzerland, where our cases are located, family businesses increasingly fail to solve their own succession challenges. This leads to the fact that frequently such domestic family businesses providing local jobs are sold to large foreign companies that then often just transfer the family businesses specific knowledge while integrating those into their existing business and closing down the local business areas. These external circumstances motivated us doing research on how family businesses can be supported and guided by an external source of advice throughout the succession process in order that they increasingly find internal solutions.

When then observing five family businesses in their succession processes, we initially focused mostly on technical challenges where an advisor can provide support, such as for example, the initiation of the process, the evaluation for a successor, the training of the successor or eventually, the handover of management and ownership responsibility. However, during the different process stages, repeatedly the emotions of the incumbent and successor emerged as the crucial factor determining how both actors feel and whether they continued the process or got stuck. Thus, we shifted our focus from a pure task oriented study to the emotional aspects laying in between. Thereby, we found that aspects related to emotions affect role adjustment appear of the two actors that ultimately fosters individual-level satisfaction. This encouraged us to further investigate how emotions emerge during the process as well as how they can be guided into a positive direction.

We thereby found that an advisor providing an external perspective plays a crucial role. In particular, the advisor needs at several points during the process to unearth latent emotions in order that both actors even become aware of and openly speak about them. In subsequent step, the advisor then has to engage in alleviating mechanisms in order to calm down the emotional tensions that the process can advance. Thus, this iterative process of emotion unearthing and alleviating speeds up role adjustment and fosters satisfaction.

In our opinion, with our research we address the interdisciplinary fields of both, family business research and psychology. We believe that such interdisciplinary studies hold a lot of potential for future research. Especially in the context of family businesses, emotions and thus aspects from psychology seem to be a driving factor explaining various behaviors and processes within family businesses. Hence we encourage researchers to follow up this study by conducting further studies on emotions and emotional processes in family businesses.

Stay up-to-date with the latest research from the journal and sign up for email alerts today through the homepage!

Socioemotional Wealth, Family Control, and the Choice of Business Exit

We’re pleased to welcome authors Francesco Chirico of Jönköping University and Tecnológico de Monterrey, Luis R. Gómez-Mejia of Arizona State University, Karin Hellerstedt of Jönköping University, Michael Withers of Texas A&M University, and Mattias Nordqvist of Jönköping University. They recently published an article in the Journal of Management entitled “To Merge, Sell, or Liquidate? Socioemotional Wealth, Family Control, and the Choice of Business Exit,” which is currently free to read for a limited time. Below, they briefly discuss the significance of this research.]

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Our study provides evidence that family firms exit less than nonfamily firms and tend to endure increased financial distress to avoid losses in the affect-related value embedded in the family firm. Furthermore, when forced to exit, family firms prefer to do so via mergers, liquidation and sale (in that order) while nonfamily firms prefer to exit via sale, liquidation and mergers (in that order). We argue that these different exit behaviors are attributed to family owners’ desire to maintain some of the family legacy (as in mergers) while avoiding losses of family identity (as in a sale). Especially in distressed situations, considering business exit as a way to free up resources for the strategic regeneration of a firm is fundamental. Business exit, for instance in terms of a merger, should be viewed as a way to identify and evaluate new opportunities for owners. Firms—especially family firms—need to balance socioemotional and economic perspectives; otherwise, even when the need for exit is recognized, it may not occur.

Stay up-to-date with the latest research through the homepage!

September Issue of Family Business Review!

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We are pleased to announce the September Issue of Family Business Review (FBR) is now available and free to read through the end of September!

Check out the editorial, in which Senior Associate Editor Donald O. Neubaum discusses the domain of family business research and offers suggestions to future scholars.

Given the fact that FBR is only in its 31st year of publication, the field of family business research is relatively young compared with other disciplines within business. However, interest in family business research is growing at a phenomenal rate as, on average, almost 900 research articles on family business have been published every year since 2010 (which greatly exceeds the 30 and 230 articles written on average, per year, in the 1980’s and 1990’s, respectively). The variety of special issues in journals from disciplines outside of family business is further evidence of the widespread interest of other business scholars in family business phenomena. In fact, our discipline has had a long history of reaching out to scholars in disparate fields, as witnessed by special issues early in FBR’s existence on philanthropy in family foundations (1990), women in family businesses (1990), and international business (1991).

 


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To learn more about the journal, visit FBR’s homepage!

FBR is accepting Special Issue Proposals to be published in 2020!


 

Family photo attributed to Free-Photos.

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=450Karen 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.