Internationalization of small family firms: the influence of family from a socioemotional wealth perspective

We explore the factors influencing the internationalization of small family firms. Based on interviews with six family firms in Singapore, we highlight the importance of (1) family harmony, (2) trust in external relationships, (3) social and business networks, and (4) organizational resources and capabilities in the internationalization process. We show how the socioemotional wealth factors of trust and harmony affect networking and resources, which in turn affect internationalization. We find that initial internationalization through exports is enabled through trust in family networks, but the typical family characteristics of a desire to maintain family harmony and distrust of outsiders have a negative impact on network creation and resource development, which constrains the extent to which the firm internationalizes beyond exporting. In order to move from the first stage (exports/similar markets) to the second stage (joint ventures/different markets) of internationalization, less emphasis on trust and family harmony accompanied by more emphasis on building external networks and resources may be necessary. We propose a new model of internationalization of family firms based on our findings

Learning through the generations: challenging the myths of family business survival.

Learning through the generations: challenging the myths of family business survival

Critical events and social capital of family businesses

Our study is set to investigate the way critical events influence social capital of family firms. We focus on macro-economic shocks (Hoffman et al., 2001; Ramey, 2016) that can trigger organisational transformation (Fligstein, 1991; Tan & See, 2004). We examine this phenomenon in the context of family-owned SMEs (Gersick et al., 1997; Lansberg, 1999), experiencing and dealing with a financial crisis as an instance of such shock. We consider family businesses as businesses in which the family has a hand-on involvement in the management of the business (Astrachan et al., 2002; Shanker & Astrachan, 1996). We examine social capital at the organisational level, which refers to resources an organisation accumulates as part of relations within and beyond its boundaries (Fischer & Pollock, 2004; Herrero & Hughes, 2019; Zahra, 2010). We consider the structural and relational properties of social capital (Moran, 2005; Nahapiet & Ghoshal, 1998). Structural social capital relates to the configuration of linkages between actors such as individuals and organisations upstream or downstream the value chain (Burt, 1992; Granovetter, 1985). Relational social capital focuses on the normative conditions that drive the relationships between actors in networks (Nahapiet & Ghoshal, 1998). Considering the above, we address the following research question: How do critical events influence a family firm’s structural and relational social capital

The influence of family firms on the sustainability of start-up/nascent enterprises

The influence of family firms on the sustainability of start-up/nascent enterprise

The influence of family firms on the sustainability of start-up/nascent enterprises: a decision-making perspective

We examine the influence of family and family businesses on the sustainability of start-up/nascent enterprises set up by family members. Family firms can expand by setting up new enterprises so that their offspring or siblings can start their own business. This has many advantages for the established and for the new firms. For the established firms funds provided for the start-up can be ring-fenced so the established firm can grow with reduced risk. It also provides family firms with a means of training the younger generation before they take over the whole family business. Sustainability for the start-up can come from the provision of additional resources that they often lack such as additional funding, access to a network of stakeholders such as a skilled workforce, customers, suppliers, and management expertise. However, there may be some disadvantage for the fledgling firm with this arrangement if there is conflict in the decision-making process between a dominant family firm founder and the new CEO of the fledgling business. This raises interesting questions about how decision-making in the start-up/nascent firm will be affected by the family firm and how this in turn affects its sustainability in the longer term

Introduction to The role of context in understanding Asian family firms

Introduction to The role of context in understanding Asian family firm

The influence of family firms on the sustainability of start-up/nascent enterprises

The article examines the influence of family and family businesses on the sustainability (ability to become self-sufficient after initial input from family) of seven start-up/nascent enterprises set up by family members. Family firms can expand by setting up new enterprises so that their offspring or siblings can start their own business and can experiment with novel products or processes. This has many advantages for the established and for the new firms and for society as a whole. For the established firms the funds provided for the start-up can be ring-fenced so the established firm can effectively expand with reduced risk. It also provides family firms with a means of training the younger generation, a form of apprenticeship, before they take over the whole business from the incumbent generation. For new firms it can provide sustainability that would otherwise not be easy. For society family firms can be regarded as the seedbed of larger firms that can add to GDP, generate income tax and employment. Sustainability can come from the provision of additional resources that start-ups/nascent firms often lack such as additional funding, access to its networks of stakeholders such as a skilled workforce, customers, and suppliers, and management expertise. However, there may be some disadvantage for the fledgling firm with this arrangement if there is conflict in the decision-making process between a dominant family firm founder and the new CEO of the fledgling business. Our findings show that family members are involved in the decision-making process of the fledgling firms, they provide not only finance and access to their networks but also advice and emotional support. Most combinations of parent/child have managerial/entrepreneurial mindsets and we propose this will enhance sustainability of new ventures as the parents are effectively performing due diligence on the proposed business ideas and picking the best. Sustainability can be diminished if parents do not understand the new venture and withhold funding. Another key influence on sustainability was timing, that is how close the child entrepreneur was to succeeding the family business. This manifested itself in the form of request to return to the family firms and imposed conditions in return for funding. Path dependence of the child entrepreneur, a child with a managerial mindset, an exclusive reliance on parental networks, no additional team members or partners, or a very dominant child personality could have a negative influence on sustainability. We contribute to the literature on family firms and entrepreneurship and in particular to the little explored area of how family firm foster the creation of new companies

UK family businesses: industrial and geographical context, governance and performance

This report investigates family businesses in the UK and focuses on their incidence, industrial and geographical context and their governance and performance relative to non-family businesses. The sample includes near population UK data for the period 2007 to 2009 of privately held incorporated firms (excluding listed/quoted firms) and analyses around 3 million firm-year observations. The report compares and contrasts family businesses with non-family businesses with reference to governance and performance during the current recession. Family businesses that are structured with 'family trusts/settlements' are considered as an important sub-sample of family businesses in the report. The analysis highlights important differences between family and non-family firms across a number of dimensions of governance and firm performance

Parental behaviors and next-generation engagement in family firms: a social cognitive perspective

Next-generation engagement is a key contributor to the success and continuity of family businesses. It has been recognized that family relationships are an important factor in shaping such engagement. However, we know little as to how this process unfolds especially during the formative years of next-generation members. Using the principles of social cognitive theory and drawing from the literatures of career development, organizational behavior and family business, we propose a conceptual model that examines the psychological mechanisms linking parental behavior and next-generation engagement. We argue that parental behaviors influence next-generation engagement through its effects on next-generation members’ self-efficacy and commitment. We elaborate on this model by presenting contingency factors that moderate the proposed relationships. Lastly, we offer theoretical implications that can open new avenues for future research

Private equity

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