Showing papers in "Family Business Review in 2003"

Family Businesses’ Contribution to the U.S. Economy: A Closer Look:

Abstract: In 1995, we were commissioned to conduct research on the impact of family businesses on the U.S. economy. A search of all relevant research led to the conclusion that the majority of existing data ...

Succession Planning as Planned Behavior: Some Empirical Results

Abstract: This paper uses the theory of planned behavior to hypothesize the influence of the incumbent's desire to keep the business in the family, the family's commitment to the business, and the propensity of a trusted successor to take over on the extent to which family firms engage in succession planning activities. We test these hypotheses using data collected from presidents in 118 family firms. The results show that the propensity of a trusted successor to take over significantly affects the incidence of all succession-planning-related activities. Succession planning may, then, be the result of push by the successor more than of pull by the incumbent. Such a view has negative implications for the succession process that the family firms in our sample follow.

Succession and Nonsuccession Concerns of Family Firms and Agency Relationship with Nonfamily Managers

Abstract: This article consists of two parts. The first part reports findings from a survey of the issues facing top executives in 272 Canadian family firms. Results show that succession is their No. 1 concern, thus supporting the predominant focus of family business researchers on succession issues. Results also show that concern about relationships with nonfamily managers is a close second in importance. The second part of the article uses Agency Theory to explain why relationships with nonfamily managers are so important. Empirical results show that both the extent and the criticality of a firm's dependence on nonfamily managers are statistically significant determinants of the importance. This study implies that relationships with nonfamily managers is a neglected research topic and points to a new direction for research in family business management.

Women's Role Involvement in Family Businesses, Business Tensions, and Business Success:

Abstract: This paper is based on a study of 391 family-business-owning couples where the husband is the business owner. The purpose of the study was to examine the work involvement of the wife in the business, the business tensions, and the impact of those tensions on family business success. Fifty-seven percent of wives worked in the business, 47% of whom were paid. Forty-two percent of wives were considered major decision makers. Having more than one decision maker in the business impacted certain types of inclusion tension. Business and family success outcomes varied by level of tensions. There was initial evidence of a threshold where business tensions begin to affect business success negatively.

The Succession Transition Process: A Longitudinal Perspective

Abstract: Based on longitudinal case study analysis, this paper provides a metaview of the succession process as it unfolds during the generational transition periods in family enterprise systems. The result...

Conflicting Generations: A New Theory of Family Business Rivalry

Abstract: Anthropologist Rene Girard's theory of triangular desire and modeling makes a major contribution to the theory of family business rivalry, especially when understood within the context of Ivan Lansberg's theory of succession planning and mentoring. In Girard's theory, human desire is always dependent on the desire of an envied model. The dependent nature of desire inevitably leads to the double bind conflict between parent-child and employer-employee, making succession planning particularly troublesome. Lansberg's theory of mentoring provides a practical solution to this timeless conflict. Imitation is natural to man from childhood, one of his advantages over the lower animals being this, that he is the most imitative creature in the world and learns first by imitation. Aristotle What you have inherited, you must earn to possess. Goethe

Work-Family Conflict: A Study of American and Australian Family Businesses

Abstract: This study examines causal pathwayslinkingwork strain to anxiety among Australian and American family business owners. To date, there has been no empirical test of strain-based, work-family conflict models on family businesses; nor have there been comparisons made between Australian and American business owners. This paper suggests a specific causal model and provides country-specific and comparative evidence for that model. The suggested model includes mediation and moderation mechanisms that link work strain and anxiety from the perspective of business owners. Data for the research were obtained through the administration of essentially identical questionnaires in the two countries in 1999. Results show that the proposed model fits the data reasonably well, regardless of the type of firm and country.

The Dynamics of Succession in Family Businesses in Western European Countries

Abstract: Family businesses represent a major economic factor in -western economies. This paper illustrates the significance of and problems involved with succession in family businesses on the basis of empirical data on Austria and Germany. The paper presents a number of ideas on the systems of the family and the business from both interdisciplinary and dynamic perspectives and sheds light on generation changes in detail. Finally, a number of recommendations are made for future dynamic/systemic research on succession.

Acquiring a Family Firm: A Case Study

Abstract: Several choices are available to family firms when intergenerational succession is not an option. One alternative is to explore merger and acquisition (M&A) opportunities. This paper addresses two research questions: (a) What are the key differences between typical M&As and those involving a family firm? and (b) What are the key success factors for the post-acquisition integration process, and what is the impact on this process when the acquired company is a family firm? Results from an acquired family firm case study suggest that these M&A processes differ along structure, motivation, and culture dimensions. The case study also suggests post-acquisition considerations for M&As involving family firms.

Management Capabilities and Environmental Characteristics in the Critical Operational Phase of Entrepreneurship—A Comparison of Finnish Family and Nonfamily Firms

Abstract: This study seeks to clarify which factors associated with the start-up and critical operational phase of family and nonfamily firms influence the ability of those firms to survive over the critical first three years of their existence. In search of potential differences in the structural characteristics between these two types of firms, this study compares owners of Finnish family and nonfamily businesses in motives for founding the firm, characteristics of the local environment, changes in strategic factors, changes in networks, and differences in style of management. The findings revealed marked differences in individuals’ motives for founding a business: for family business owners, the presence of negative situational factors were the more important motivating and precipitating factors in creating a new business. With respect to style of management, in a typical family enterprise, ownership, management, and family are combined in a single entity. In the surviving nonfamily firms, entrepreneurial teams were found to be important in bringing the skills needed for the strategy-development process. Finally, family firms were most commonly located in the capital area, although some were also found in rural areas, whereas nonfamily firms were most commonly found in service center regions.

Understanding the Contesting Ideologies of Family Business: Challenge for Leadership and Professional Services

Abstract: This paper examines how a family business system serves as the ideological arena of three cultural forces—entrepreneurialism, managerialism, and paternalism—that are, to a great extent, contesting ideologies based on different rationalities, or schools of thought. Furthermore, it reinforces the view that a family business system is the combination of three interacting subsystems (management, ownership, and family life)—a form of business that is challenging both for leaders and professional service providers. The approach of the study is conceptual and cultural. It bases its theoretical background on the developments of Johannisson and Huse (2000) and Tagiuri and Davis (1996). A summary of the key results appear in the synthesis of ideological tensions and are further developed in the suggested C 3 -model, emphasizing the need for balance among creation, caring, and control.

Family Angels vs. Other Informal Investors

Abstract: This study investigates the differences between family angels and other informal investors in Norway. We employ a portfolio framework as the vehicle for comparison, along with an ad hoc component of involvement. The underlying thesis is that the actual behavior of the investors in Norway should reflect their investment philosophy—at least on a differential basis. The results suggest that family angels differ from other informal investors on several grounds. Family angels have different investment behaviors than other informal investors and they differ somewhat in their exit preferences.

Educational Needs of Family Businesses: Perceptions of University Directors

Abstract: Universities have developed family business centers during the past two decades as they and others realized the importance and complexity of family businesses. However, there has been no comprehensive investigation of the unique educational needs of family businesses. The purpose of this study is to explore this subject and to suggest particular areas in family business education that require attention. The study measures the perceptions of university-based family business program directors about educational issues relevant to family businesses. It also provides important insights and information about the current state of family business education.

Organizational Performance and Conceptual Capability: The Relationship Between Organizational Performance and Successors’ Capability in a Family-Owned Firm:

Abstract: A small percentage of family businesses survive succession. Jaques (1996) suggests that conceptual capability is a significant determiner of business performance and thus, by inference, successful transition. This research tested the hypothesis that business performance following succession is in part attributable to differences between predecessors and successors on this measure.

The Expectation of Partial Retirement Among Family Business Owners

Abstract: Decisions that the family business owner makes about retirement and succession are critical and could affect a large proportion of the work force. Compared to employees, family business owners may have more of an opportunity to retire partially, i.e., reduce the number of hours worked. The purpose of this study was to determine the characteristics of family business owners who expect to retire partially. Data on 1,155 family business owners from the 1998 Survey of Consumer Finances reveals that family business owners with more education and more income, who work more hours per week, and who have tax-deferred retirement accounts expect to retire partially. There is a direct correlation between age and those choosing partial retirement, suggesting that many family business owners expect to retire partially. Married family business owners were less likely to expect to retire partially; instead, they would retire fully. The equity in the business, type of ownership, and involvement of other family members did not affect the expectation of partial retirement.

Where Do We Go from Here? Strategic Answers for University-Based Family Business Programs

Abstract: This article argues that family business centers need to align themselves with their universities' missions through strategic planning. It further argues that in most cases this means building the program on an academic base of either teaching or research. Part of establishing that base includes analyzing the balance among teaching, research, and service (i.e., using the “Holistic Model”). Without this approach, the risk of failure greatly increases. The experience discussed throughout this article is that of a small, private, liberal arts university that, using the approach recommended, built its center on the foundation of teaching. Many of these issues warrant further research.

Interview with Dr. William O'Hara

Abstract: Dr. William O’Hara, the executive director of Bryant College’s Institute for Family Enterprise (IFE), answers questions dealing with many aspects of his life. By founding the IFE and continually adapting it to the condition of the marketplace, O’Hara maintains a commitment to expanding the knowledge of the family business community. O’Hara’s new research into the history of family businesses hints at an underlying framework that is still applicable today. He spoke with Paul I. Karofsky, executive director of Northeastern University’s Center for Family Business.

Book Review: Family Business Gathering 2001, The Holistic Model: Destroying Myths and Creating Value in Family Business co-edited by Greg McCann and Nancy B. Upton. DeLand, FL: Stetson University, 2001. 71 pp., $15.00 paper:

Abstract: Introduction This is the second in a series of a collection of readings that emerged from a Gathering of faculty, students, family business experts and owners, and the community at the Stetson University Family Business Center. The title of the collection refers both to the Gathering and to the Holistic Model. The first collection of readings (2000) focuses on rethinking the university-based family business center, which is an excellent resource for anyone developing a family business center or family business program. The purpose for keeping the Holistic Model in the title for this collection is not immediately obvious. The acknowledgments page indicates that the authors wanted to retain the theme of Stetson’s Holistic Model to show how the parts relate to the whole and the whole to the parts. However, the editors did not succeed in making a clear connection between the readings and the holistic concept. Personally, when I think of the Stetson Holistic Model, I think of the excellent model presented in the earlier volume for integrating the three primary functions of a university—research, teaching, and service. The purpose of this Gathering was to shift “the emphasis from what the university should do to help family businesses to what the family business themselves can do” (p. iii). The organizing theme was destroying myths and creating value. Clearly, I think this collection of articles provides much value. However, in some cases, the myths do not seem truly like myths. For example, one of the myths is that family businesses do not plan. Although in my experience, most family businesses do not plan, the readings did little to change my mind. The myths were, however, a useful vehicle in providing an interesting organizational focus for readers. The introduction and summary lend a sense of cohesiveness to the overall volume. The summary is especially helpful. Because this volume is a collection of articles, each is considered separately as a part of this review. Destroying Myths and Creating Value: The Hollis Experience in the Publix Family Business by Michelle DeMoss, Stetson University. Although I do not agree with some of the socalled myths that were debunked in this article, the author provided a meaningful way to summarize major characteristics of Publix. This article gives a good model of a large and successful family business for children desiring to join the management of the business, for family businesses that desire to grow but also to maintain core values and the commitment of employees, and for families that desire to contribute to the community. The article describes Mark Hollis’s goal to become CEO and the developmental plan he followed to achieve that goal. It summarizes the organizational values and some of the strategies used to promote those values, describes Publix’s commitment to employee ownership, and illustrates how Publix has given back to the community. This article would serve as a useful case example for seminars or college courses in family business. The Vital Institution of Family Business: Economic Benefits Hidden in Plan Sight by Ramona K. Z. Heck, Cornell University, Kathryn Stafford, Ohio State University. For those teaching and doing research about family business, this article is a must-read. It is based on the 1997 National Business Survey. The authors add to the national survey data from other sources to demonstrate the staggering impact of family businesses. For example, the authors show that one of 10 households owns at least one business; depending on your definition of a family business, family businesses generated from $1.3 trillion to $10.4 trillion in revenue in 1996; and in 1996, family businesses generated over 50% of U.S. business revenue. The article makes a strong case for giving more attention to family business in education and government institu-