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.

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Listening to the Heart or the Head? Exploring the “Willingness Versus Ability” Succession Dilemma

[We’re pleased to welcome authors Melanie Richards of University of Bath, Nadine Kammerlander of WHU–Otto Beisheim School of Management, and Thomas Zellweger of the University of St. Gallen. They recently published an article in the Family Business Review entitled “Listening to the Heart or the Head? Exploring the “Willingness Versus Ability” Succession Dilemma,” which is currently free to read for a limited time. Below, they reflect on the influences and possible impact of this research:]

What motivated you to pursue this research?

When talking to entrepreneurs, we increasingly realized that finding a willing and able successor from the family was often a challenge. Often, the incumbents reported about very capable children who were, however, not willing to take over the business but wanted to start a different career. In other cases the successors showed willingness, but lacked the ability, according to their parents. Thus, we started to wonder whether willingness or ability was more important to the incumbents.

Were there any specific external events—political, social, or economic—that influenced your decision to pursue this research?

In the year 2019, succession is generally not considered a “hot topic” – neither in academia nor in the public press. Yet it is of utmost relevance. Each year, tenthousands of small- and medium-sized (family) business are up for succession in Germany and Switzerland only. Those businesses are the backbone of our economy, they provide a large number of job positions and trainee jobs. Hence, keeping them up and alive should be of interest not only for incumbents, but also for politicians and basically everyone interested in the continued prosperity of the economy. As such, I find it particularly important to understand how successor decisions and succession decisions are made. I hope that our study on successor preferences makes it clear that there are many important research gaps left in the field of succession and that they are worth being closed.

In what ways is your research innovative, and how do you think it will impact the field?

In this study, we provided a scenario – or case vignette – to the respondents of our study. That is, we describe a specific retirement situation and availability of succession candidates to them and ask them whom they would choose. Such survey based “policy capturing” has several advantages over traditional, questionnaire-based research asking for past successions or asking for intentions. The big advantage is that we can really learn about preferences here, which are undistorted by the specific situation of the entrepreneur. Thus, they help us to build up a better conceptualization and theorizing of how the entrepreneurs make sense and decide.

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The Enigma of the Family Successor–Firm Performance Relationship

[We’re pleased to welcome authors Jan-Philipp Ahrens of the University of Mannheim, Andrea Calabrò of IPAG Business School, Jolien Huybrechts of Maastricht University, Michael Woywode of the University of Mannheim and the Centre of European Economic Research. They recently published an article in Entrepreneurship Theory and Practice entitled “The Enigma of the Family Successor–Firm Performance Relationship: A Methodological Reflection and Reconciliation Attempt,” which is currently free to read for a limited time. Below, they briefly describe the motivation and impact of their research.]

What motivated you to pursue this research?

The vast majority of firms on the planet are family firms. Often they are the institutionalized ‘Gestalt’ of the family’s or founder’s work, identity, and vision – and are typically managed for the long run so that a unique social constellation wrought by social capital, a vivid culture and a mutual commitment emerges over time. In essence, this includes an aspiration of an intergenerational continuity in family leadership and values, as well as in obligations and in the reciprocity that this entails. Interestingly, this peculiar long run horizon that is very difficult to imitate for non-family firms – as they cannot offer the same continuity in relationships and are more short term oriented – has been found to be a source of competitive advantage. At the same time, quite paradoxically, extant research has frequently documented that choosing a family successor is detrimental to firm performance. Thus – especially because several of us have a family firm background – we thought that there might be more to discover that could help to explain this enigma.

In what ways is your research innovative, and how do you think it will impact the field?

Our article takes a fresh and reconciliatory perspective by re-conceptualizing succession in family firms and, in particular, by making the social individual, i.e. the family successor in his/her social context and the reciprocal human interactions that constitute this group, the unit of analysis. Relying on social exchange theory and its core concepts of generalized exchange, the norm of reciprocity, and extended credit, we develop a new framework that can explain how social capital, values, and identity can be perpetuated across generations which – we argue – is of singular advantage to family successors. And indeed, when we isolate and separate important economic forces on the successor level, we observe that a “family member attribute” of the successor – understood as a CEO attribute – is performance enhancing or put differently: All other attributes equal, the family successor is the superior successor. That in itself has a series of implications for family firm theory. Of course, that is only the cocktail-party-version here, the full arguments are inside the article, which we highly recommend, especially to practitioners. The bottom line is that there is often value in the continuity of family leadership, as garnered social capital, identity, and values are retained.

What is the most important/ influential piece of scholarship you’ve read in the last year?

This would be Marcus Aurelius’ “Meditations” (Roman Emperor 161-180). Not only does it directly and in their core reveal the views on the world of the most powerful person of the time, which is entirely breathtaking and inspiring to read, but it is a towering literary monument to governing and human precepts of service and duty.

We hope that our work encourages future researchers to continue to find ways to examine other factors at the individual level that influences family firm outcomes. Only through the continued pursuit of future research at multiple levels within the family firm can we come to a better understanding of why the family firm is the unique environment that it is.

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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)

Reviewing Family Firm Succession Literature with a Social Exchange Perspective

[We’re pleased to welcome Joshua Daspit of Mississippi State University. Dr. Daspit recently published an article in Family Business Review with co-authors James J. Chrisman, Daniel T. Holt, and Rebbeca G. Long of Mississippi State University, entitled “Examining Family Firm Succession from a Social Exchange Perspective: A Multi-Phase, Multi-Stakeholder Review.”]

  • What inspired you to be interested in this topic?

Family firms represent a vast majority of firms in the United States and across the world, and a successful succession process is vital for the family firm to endure across generations.   Despite the importance of succession, however, the majority of familyFBR_C1_revised authors color.indd firms will not survive their first transition of power, making succession one of the most critical issues for the family firm. The study of succession is essential to the long-term succession and generation of socioemotional wealth. Therefore, to take an account of what we know as researchers and what we need to know to advance the field, we reviewed the current state of family firm succession research.

  • Were there findings that were surprising to you?

To examine the status of research as it relates to the succession process in family firms, we examined research across three phases of succession (ground rules and first steps, development of the successor, and transition of power). Further, we used a social exchange perspective to examine how various relationships within the family firm affect the phases of succession. Specifically, we examined relational exchanges (a) between incumbent and successor, (b) within the family boundary, and (c) across the family boundary. In all, we examine the nature of each type of exchange within each phase of succession.

Our investigation notes that the majority of research on family firm succession examines exchanges within the family boundary in the first phase of succession (ground rules and first steps). Interestingly, we found no primary research contributions that examine exchange across the family boundary within phase two (development of the successor) and phase three (transition of power) of the succession process. This insight suggest that more research is needed to examine how the relationships among family members and nonfamily members (or other nonfamily stakeholders like suppliers, advisors, etc.) affect the later phases of the succession process within the family firm.

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

The purpose of this manuscript is to provide a comprehensive review of family firm succession literature. We reviewed contributions from 34 journals and found 88 articles that quantitatively examined succession. Using a social exchange perspective, we sorted the contributions according to the primary nature of exchange examined and the primary phase of succession noted. For each level of exchange across each phase of succession, we highlighted insights gained from our review of the literature, and we proposed future extensions needed to advance the field. Overall, this article may be helpful for researchers and managers interested in understanding more about the nature of succession within the family firm.

You can read “Examining Family Firm Succession from a Social Exchange Perspective: A Multi-Phase, Multi-Stakeholder Review” from Family Business Review free for the next two weeks by clicking here. Want to know more about the latest research from Family Business ReviewClick here to sign up for e-alerts!

Podcast Microphone

You can also listen to Dr. Daspit and Dr. Chrisman speak about “Examining Family Firm Succession from a Social Exchange Perspective: A Multi-Phase, Multi-Stakeholder Review” in a new Family Business Review podcast, which you can listen to here, or download here. Want to hear more? Click here to browse more podcasts from Family Business Review and here to subscribe to the SAGE Management and Business podcast channel on iTunes.


 

Josh DaspitJoshua J. Daspit is an Assistant Professor of Management at Mississippi State University. His research interests include examining firm capabilities and innovation with a primary focus on absorptive capacity and family business. Prior to joining academia, he worked as a senior consultant for an international consulting firm and served as Director of Community Affairs for a member of Congress.

Daniel T. Holt

Daniel T. Holt is an Associate Professor of Management in the College of Business at Mississippi State University. He received his PhD in management from Auburn University. Prior to joining the faculty at Mississippi State University, he served in the U.S. Air Force, serving as an engineer in Central America, Asia, and Middle East. Daniel’s research interests include family business, entrepreneurship, measurement methods, and organizational change.

James J. ChrismanJames J. Chrisman is the Julia Bennett Rouse Professor of Management, Head of the Department of Management and Information Systems, and Director of the Center of Family Enterprise Research at Mississippi State University. He also holds a joint appointment as Senior Research Fellow with the Centre for Entrepreneurship and Family Enterprise at the University of Alberta, School of Business.

Rebecca G. Long

Rebecca G. Long (PhD, Louisiana State University) is a Professor of Management andAssociate Dean of the Graduate School at Mississippi State University. She serves on the editorial review board of Family Business Review and her research has appeared in academic journals such as Organizational Research Methods, Journal of Management, Human Relations, Academy of Management Journal, Business Ethics Quarterly and Entrepreneurship Theory & Practice. Her research interests revolve around social exchange and the development of social capital within entrepreneurial and family firms.

 

The ‘Arena’ of Top Management Selection

Editor’s note: We are pleased to welcome Claartje J. Vinkenburg of VU University in Amsterdam. Her paper “Arena: A Critical Conceptual Framework of Top Management Selection,” co-authored by Paul G. W. Jansen of VU Amsterdam, Nicky Dries of KU Leuven, and Roland Pepermans of VU Brussels, is forthcoming in Group & Organization Management and now available in the journal’s OnlineFirst section.

pullquoteAs a scholar of diversity and careers, I have long been fascinated by pathways to the top and how the labyrinth appears to be much less complicated to navigate for White, fit, 40-something men than others in practically any type of organization or profession. Over the years I have shifted focus from the individual to perceptions to the system in terms of trying to explain this phenomenon. The selection process by which some people end up in top positions and others do not is largely uncharted territory, even if it resonates with academics and practitioners alike. Conceptualizing that process as an arena and bringing together relevant theories and empirical findings from different fields was a major challenge, but a journey I much enjoyed.

GOM_72ppiRGB_150pixwThe largest surprise to me was that there was indeed very little to go on in terms of empirical evidence on top management selection, even if there is a lot of experience on this topic among management development professionals and executive searchers as well as numerous career stories from incumbents of top management positions as evidenced in biographies, movies, and other popular sources. The main reason for the lack of research on top management selection I think is because this is a very small and very inaccessible population to study, with accounts of selection decisions only available in retrospect rather than in vivo.

I hope our conceptualization of top management selection as an arena, which is inherently different from regular selection at lower organizational levels, with its own unique structural conditions, situational components, and cognitive features, inspires further qualitative and even ethnographic research on how this type of selection plays out across different contexts and that insights thus gained may lead to an improved, more inclusive selection process for top managers.

Read the paper, “Arena: A Critical Conceptual Framework of Top Management Selection,” online in Group & Organization Management.

Claartje Vinkenburg is associate professor of organizational behavior at the Amsterdam Center for Career Research, VU University. Claartje’s research focuses on (gender) diversity in careers, especially in science and in professional service firms. She has published in the Journal of Social Issues and Leadership Quarterly, and edited a book on “Top potentials” for the Dutch Foundation for Management Development with Roland Pepermans.

Paul Jansen is full professor of industrial psychology at VU University, and gradu – ated, cum laude, in 1979, in Mathematical Psychology at the University of Nijmegen. His research interests are in management development, careers, assessment, and performance management. Paul Jansen has published in the Journal of Applied Psychology, Journal of Organizational Behavior, Journal of Vocational Behavior, and Journal of Management Studies.

Nicky Dries is a research professor at KU Leuven. She was a visiting scholar at VU Amsterdam, Tilburg University, WU Vienna, Reykjavik University, and Boston University. Nicky is on the editorial board of Journal of Vocational Behavior and European Journal of Work and Organizational Psychology. Her research interests are talent, human potential, and subjective success. She is an active member of the 5C and the Career Adaptability/Life Design project.

Roland Pepermans is full professor at the Vrije Universiteit Brussel, work & organizational psychology. He teaches Organizational Behavior, Managerial Psychology and Human Resource Management. His research relates to social exchange processes at work in profit and non-profit organizations, with applications to high-potential management as well as to volunteering.

Advancing Family Business Research Through Narrative Analysis

Alexandra Dawson, Concordia University, and Daniel Hjorth, Copenhagen Business School, published “Advancing Family Business Research Through Narrative Analysis” on September 19th, 2011 in the OnlineFirst section of Family Business Review. Other articles that are available in the OnlineFirst collection can be found here.

The Abstract:

Despite advances in family business research, the field would benefit from greater methodological rigor. However, rigor does not mean convergence of methodologies. In this article, the authors adopt a novel approach, based on narrative analysis, to address the succession process in a family business. This interpretive perspective is appropriate for family business studies, which address multifaceted and complex social constructs that are performed by different actors in multiple contexts. The analysis highlights five key themes centering on leadership style and succession, trust and communication, balance between agents, history and identity, and fear of losing one’s identity and social standing through the succession process.

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