CONSERVATISM: AN EXPLANATION OF THE FINANCIAL CHOICES OF THE SMALL AND MEDIUM FAMILY ENTERPRISE

The financial behavior of the family firm is a recurring topic in the literature. Hirigoyen's pioneer research (1984) reveals the specificity of the financial behaviors of industrial family medium-sized companies compared to those of the other categories of firms. This type of firms set out effective structures enabling them a better financial management because, on the one hand, they have a long term vision and, on the other hand, are not accountable for short-term results (Dreux, 1990), especially for unquoted firms. In addition, the desire to transmit the firm to the next generations would more encourage the effective management of capital (Gallo and Vilaseca, 1996). Precisely, the long-term horizons of the family firm make it possible to qualify its capital as “patient financial capital” (Reynolds, 1992). Indeed, this capital is invested for long periods without threat of liquidation contrary to “ordinary” financial capital which generally have a due limit corresponding to the end of investment (Dobrzynski, 1993). The firms having this type of capital would be able to pursue more creative and innovating strategies. Besides, family firms, of small and medium size especially, are characterized by the lack of financial resources. Ward (1987) observes that poverty in capital which is necessary to finance the needs of the family and the business is a factor which inhibits growth. Two explanations justify the lack of financial resources in SME. The first makes responsible the financial markets. Indeed, investors would be very hesitant as for investing in these firms (Mahérault and Lyagoubi, 2002). Many family firms SME are not able to meet the necessary conditions, or sometimes unwilling to set up the adequate organizational answers, to facilitate their access to the external capital (Davis and ali., 2000). The second explanation is about internal obstacles. To achieve its goal of durability, the family firm tries to evolve in a more or less hermetic universe. Accordingly, external financial intervention is avoided because it can deteriorate the independence of the firm. The small and medium family enterprise is characterized by a strong conservative attitude. How does conservative orientation influence the financial choices of the small and medium family enterprise? This theoretical contribution tries to answer this question. For Kreiser and ali. (2002), the family firm in general adopts a strategy of a conservative growth dedicating the “living company” model. Such a company consecrates long-term survival instead of financial performance as the main objective to be pursued. Accordingly, highly aware of its identity, it privileges financial conservatism and maintains a narrow control on strategic decisions in family hands. The analyzes of Hirigoyen (1985) join this idea since the author emphasizes that the industrial family SME does not furnish a true effort to increase its market share because it is mainly preoccupied by controlled growth. The analysis will be done in two steps. After pointing out the main dimensions of the financial conservatism of family SME: internal financing and avoidance of the external financial involvement, the analysis will explain the manifestations of conservatism and its sources. The paper will be concluded by reflections as for the strategies enabling to avoid, limit or even eliminate the impacts of conservatism.

The internationalization of family SME

Purpose – Owing to its specificities, the family small and medium enterprise (SME) shows a particular behavior as for the creation, development, sharing, protection and transmission of knowledge. The purpose of this paper is to study the specificities of the processes of knowledge creation and development in family firms. Design/methodology/approach – Through a questionnaire, hypotheses of the model were tested. The study is based on 118 firms belonging to various industries. After evaluating the reliability and validity of the items through exploratory and confirmatory factor analysis, the model was tested through structural equation modeling (LISREL). Findings – The model retained induces the following conclusions. Internationalization knowledge positively influences internationalization degree of the firm. The conservatism of family SME does not directly influence the level of internationalization knowledge. The influence of conservatism on internationalization knowledge is exerted only through the decisional dimension of independence orientation. The independence orientation of family SME, then with its two dimensions simultaneously (decisional and resource independence), does not significantly influence internationalization knowledge. Contrary to decisional independence which influences indirectly the degree of internationalization (through the intermediation of internationalization knowledge), resource independence influences directly the dependant variable. The mediation of internationalization knowledge is thus not totally proven. Social networking positively influences the amount of internationalization knowledge. Research limitations/implications – A major weakness is the absence of a synchronic approach as the dependent and independent variables are measured at the same moment. A more longitudinal approach would be valuable to analyze the causal relationships between the independent variables and internationalization knowledge and internationalization degree. A second limitation is that the characteristics of the sample may limit the generalizability of the results.Family firms, Small to medium-sized enterprises, Globalization, Learning organizations, Knowledge management

Organizational Learning and Knowledge DevelopmentPeculiarities in Small and Medium Family Enterprises

The aim of this theoretical contribution is to analyze the processes of organizational learning and knowledge development within the small and medium sized family firm. Due to its founding characteristics, family SME seems to be a closed, hermetic and rigid organization. Besides, the specificity of mechanisms of learning and knowledge management, in general, within this entity are justified by:- First, the overlapping of "family" and "company" spheres: the family sphere realizes a unique contribution because it constitutes a supplementary source of knowledge inbound to the company compared to a firm without family involvement, - Then, the frequency of the exchanges within the organization: the processes of exchange of piece of information and knowledge take place not only in the organizational context but also and especially in the family context. The family meetings constitute, for example, supplementary occasions for exchange and sharing of knowledge.Schematically, two major characters inherent to this entity constitute obstacles to organizational learning. Indeed, conservatism and independence orientation strongly influence the processes of learning and knowledge development.The literature suggests that the family system attempts to create and maintain a cohesiveness that supports the family "paradigm" which is described as the core assumptions, beliefs, and convictions that the family holds in relation to its environment. Information that is not consistent with this paradigm is resisted or ignored (Davis, 1983). The search for security, conformism and tradition are characteristic of conservative organizations. Particularly to the family firm, the conservative posture could be studied through three dimensions (Miller and ali., 2003). First, on the governance level, the conservatism is exhibited by the plateauing and the growing rigidity of the owner-manager and by the inefficacy of the board of directors. Second, on the strategy level, conservative family SME favorites its actual markets, customers and products and globally is unwilling to change and adopt new paradigms. Then, on the organizational and cultural levels, this entity tends to be closed and introvert. These three components have an impact on knowledge development as the conservatism tends to limit the variation and the exposition to new environments. In short, within this entity the level of organizational knowledge would be weak.The second variable influencing the processes of development of knowledge within family SME is the independence orientation. This orientation is a consequence of the family long-term commitment to the business. Paradoxically, this commitment has two contradictory effects on growth. First, it implies the pursuit of future development and continuity of the firm to make sure that the family heritage is passed on to the following generations. On the other hand, commitment implies a strategy of conservation of the heritage which passes by a strong seek for the independence. Aiming to guarantee its continuity, the (small and medium-sized) family firm establishes an independence orientation of three different types. First, from the financial point of view, it avoids as much as possible turning to outside partners (Hirigoyen, 1985). Then, on the human plan, it would be favorable to the appointment of family members or individuals belonging to the close relational circle to the posts of direction and would be reluctant to the recruitment of professional directors. Finally, to maintain the decision-making in hands of the family, the family firm tends to avoid the inter-organizational relations, cooperative investments, and tries to limit the sharing of the control of its investments. The contribution of outsiders (financiers, directors or partner organizations) can, however, be precious to the company. And the introversion would be a major obstacle to the perpetuity of the firm because it inhibits growth. As a consequence, independence orientation limits the accumulation of knowledge because, on one hand, the horizons of the company will be limited and little varied, and on the other hand, the potential valuable knowledge contribution of outsiders is excluded.The study of these variables raises questions about the efficacy of the organizational memory within the family firm. This organization runs particular risks because of the peculiarity of its knowledge management mechanisms. Because of its founding natural characteristics, the family firm nurtures mechanisms which reinforce the causal ambiguity (Nelson and Winter, 1982) by strengthening the voluntary effort to avoid either a too fast imitation or the loss of knowledge-based resources if the individual or the group holding it leaves the organization (Arrégle, 1995). In short, family firms show an inclination to concentrate the processes of knowledge management around its tacit dimension by encouraging its formation contrarily to the explicit component. However the weak externalization of knowledge coupled with the avoidance of sharing outside the family causes serious risks. First, an obvious risk of deterioration is present because of the weak importance of the organizational protection mechanisms and the strong reliance on individual memory. Moreover, we suggest a risk of erosion of knowledge due to the fragmentation caused by successions that do not preserve the unity of the firm. There is risk of "fragmentation" of the strategic knowledge if the company is shared between the potential successors. This risk would be less pronounced if a prior sharing of knowledge with outside directors had been engaged.Another particularity of family firms is about the intergenerational transmission and transfer of knowledge (Cabrera-Suarez and ali., 2001). Mechanisms inciting to intergenerational transfer of knowledge must be set up because of the negative impact of conservatism and independence on organizational knowledge and due to the fragility of family firm organizational memory.Organizational knowledge, family business, conservatism, independence orientation

Conservatism: An Explanation of the Financial Choices of the Small and Medium Family Enterprise

International audienceThe financial behavior of the family firm is a recurring topic in the literature. Hirigoyen's pioneer research (1984) reveals the specificity of the financial behaviors of industrial family medium-sized companies compared to those of the other categories of firms. This type of firms set out effective structures enabling them a better financial management because, on the one hand, they have a long term vision and, on the other hand, are not accountable for short-term results (Dreux, 1990), especially for unquoted firms. In addition, the desire to transmit the firm to the next generations would more encourage the effective management of capital (Gallo and Vilaseca, 1996). Precisely, the long-term horizons of the family firm make it possible to qualify its capital as “patient financial capital” (Reynolds, 1992). Indeed, this capital is invested for long periods without threat of liquidation contrary to “ordinary” financial capital which generally have a due limit corresponding to the end of investment (Dobrzynski, 1993). The firms having this type of capital would be able to pursue more creative and innovating strategies. Besides, family firms, of small and medium size especially, are characterized by the lack of financial resources. Ward (1987) observes that poverty in capital which is necessary to finance the needs of the family and the business is a factor which inhibits growth. Two explanations justify the lack of financial resources in SME. The first makes responsible the financial markets. Indeed, investors would be very hesitant as for investing in these firms (Mahérault and Lyagoubi, 2002). Many family firms SME are not able to meet the necessary conditions, or sometimes unwilling to set up the adequate organizational answers, to facilitate their access to the external capital (Davis and ali., 2000). The second explanation is about internal obstacles. To achieve its goal of durability, the family firm tries to evolve in a more or less hermetic universe. Accordingly, external financial intervention is avoided because it can deteriorate the independence of the firm. The small and medium family enterprise is characterized by a strong conservative attitude. How does conservative orientation influence the financial choices of the small and medium family enterprise? This theoretical contribution tries to answer this question. For Kreiser and ali. (2002), the family firm in general adopts a strategy of a conservative growth dedicating the “living company” model. Such a company consecrates long-term survival instead of financial performance as the main objective to be pursued. Accordingly, highly aware of its identity, it privileges financial conservatism and maintains a narrow control on strategic decisions in family hands. The analyzes of Hirigoyen (1985) join this idea since the author emphasizes that the industrial family SME does not furnish a true effort to increase its market share because it is mainly preoccupied by controlled growth. The analysis will be done in two steps. After pointing out the main dimensions of the financial conservatism of family SME: internal financing and avoidance of the external financial involvement, the analysis will explain the manifestations of conservatism and its sources. The paper will be concluded by reflections as for the strategies enabling to avoid, limit or even eliminate the impacts of conservatism

Remote sensing and air quality in urban areas

International audienceThis paper aims at showing the potentialities of the Earth observation (EO) data for the knowledge of the atmospheric pollutants concentration field over metropolitans areas. At present, deterministic modeling and decision support systems only use pollutants maps obtained with mathematical methods. But, given the few scattered stations measuring the pollutants concentrations, an accurate map of the spatial distribution is almost impossible with standard methods. We found a strong correlation between the black smoke (BS) concentrations and data from sensor TM6 of the Landsat satellite. The map derived from the EO data gives errors close to those obtained by standards methods. The representation is nevertheless closer to the real urban environment. In a near future, EO derived products could be treated in near real time in conjunction with pollutants measurements to provide accurate information to decision maker

Satellite data for the air pollution mapping

International audienceThis article investigates the potentials of satellite imagery for the mapping of air quality parameters. Concentrations of black particulates, sulphur dioxide and other pollutants measured in the city of Nantes with ground stations were compared to coincident Landsat TM6 data (thermal infrared band data). The black particulates concentration and the apparent temperature from satellite data are highly correlated. Finally, it is demonstrated that the spatial distribution of the black particulates can be mapped from remotely-sensed data. Possible improvements in precision of the mapping are discussed

Organisational Learning and Internationalization Knowledge: A Comparative Study of Family Firms and Non-Family Firms

This paper aims to contribute to the new stream of literature dealing with knowledge in family firms by analyzing the role of organizational knowledge in the internationalization of this type of firm. First, the study will try to emphasize the specificity of family firms as for double-loop learning, knowledge sharing, knowledge tacitness and emergence of internationalization strategy. Then, the influence of these variables on internationalization organizational knowledge and finally on firms' internationalization degree will be assessed

SAR imagery in urban area

International audienceThis paper deals with the major factors influencing the detection of urban fabrics in ERS-SAR images. Data, in SLC and PRI format, were acquired over the city of Nantes (West of France). The analysis of the data was performed in conjunction with aerial photographs, maps, meteorological data, as well as a field survey. The way urban fabrics and its environment, the data processing techniques, and the weather conditions affect the radar signal was examined and discussed. It was found that large effects originate from the geometry of urban features, as well as their orientation relative to the spacecraft orbit. This investigation adds evidence of the fact that the specular scattering prevails over the diffuse scattering in urban area. Practical conclusions concerning the capabilities and the limitations of ERS-SAR imagery are drawn