This paper challenges the prevalent notion that family-owned firms are more risk averse than publicly owned firms. Using behavioral theory, we argue that for family firms, the primary reference point is the loss of their socioemotional wealth, and to avoid those losses, family firms are willing to accept a significant risk to their performance; yet at the same time, they avoid risky business decisions that might aggravate that risk. Thus, we propose that the predictions of behavioral theory differ depending on family ownership. We confirm our hypotheses using a population of 1,237 family-owned olive oil mills in Southern Spain who faced the choice during a 54-year period of becoming a member of a cooperative, a decision associated with loss of family control but lower business risk, or remaining independent, which preserves the family's socioemotional wealth but greatly increases its performance hazard. As shown in this study, family firms may be risk willing and risk averse at the same time.

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Socioemotional Wealth and Business Risks in Family-controlled Firms: Evidence from Spanish Olive Oil Mills

This article uses Ajzen's theory of planned behavior to build an entrepreneurial intention questionnaire (EIQ) and analyzes its psychometric properties. The entrepreneurial intention model is then ...

https://papers.ssrn.com/sol3/Delivery.cfm/etap_318.pdf?abstractid=1396448&mirid=5

Development and Cross-Cultural Application of a Specific Instrument to Measure Entrepreneurial Intentions

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

The appropriate resources are necessary but insufficient to achieve a competitive advantage. Resources must also be managed effectively. Herein, we develop a resource management process model composed of three components that can lead to a competitive advantage. These components include the resource inventory (evaluating, adding, and shedding), resource bundling, and resource leveraging. We examine resource management in family firms and thus explore the unique characteristics of five resources and attributes of family firms that provide potential advantages over nonfamily firms. The resources are human capital, social capital, patient capital, survivability capital, along with the governance structure attribute.

Managing Resources: Linking Unique Resources, Management and Wealth Creation in Family Firms

The Resource-Based View (RBV) of competitive advantage provides a theoretical framework from the field of strategic management for assessing the competitive advantages of family firms. The RBV isolates idiosyncratic resources that are complex, intangible, and dynamic within a particular firm. The bundle of resources that are distinctive to a firm as a result of family involvement are identified as the “familiness” of the firm. This approach provides a research and practice method for assessing the specific behavioral and social phenomena within a firm that provide an advantage. Using a familiness model for assessing competitive advantage overcomes many of the problems associated with the generic claim that family companies have an advantage over nonfamily companies. It also provides a unified systems perspective of family firm performance.

A Resource-Based Framework for Assessing the Strategic Advantages of Family Firms

The OODA Loop: A New Strategic Management Approach for Family Business

This special issue ends with a comprehensive review article by Zellweger and Astrachan focused on understanding what we know about the ways in which family influence affects firm performance. Their literature review is organized along the dimensions of power, experience, and culture, through which a family can exert influence on a firm (Astrachan, Klein, Smyrnios 2002; Klein, Astrachan, Smyrnios 2005). Andre Hoffmann's commentary shares how the Hoffmann family has exercised its influence on the world's third largest pharmaceutical company, Roche Pharmaceuticals, for over a century. A combination of family involvement in ownership and governance of the firm has enabled the Hoffmann family to support the “Roche way of doing business”.

Online-Only-Appendix: Performance of Family Firms: A Literature Review and Guidance for Future Research

Generic Models for Family Business Boards of Directors

Craig E. Aronoff shares his experiences in setting up and managing the Family Business Forum, an innovative institution devoted to educating family business members about family business issues. It achieves this through a regular schedule of presentations by national experts, presentations by sponsor organizations, newsletters, and through promoting interaction and informal learning among members.

Joseph H. Astrachan

Papers

The OODA Loop: A New Strategic Management Approach for Family Business

Online-Only-Appendix: Performance of Family Firms: A Literature Review and Guidance for Future Research

Generic Models for Family Business Boards of Directors

at Interview with Craig E. Aronoff, Founder of the Kennesaw State College Family Business Forum:

Arthur mass mutual American family business survey 1995 and 1997