Family Businesses and Adaptation: A Dynamic Capabilities Approach

The main objective of this research was to propose a framework centred on the dynamic capabilities approach, and to be applied in the context of family businesses’ adaption to their changing business environment. Data were gathered through interviews with ten FBs operating in Western Australia. Based on the findings, the clusters of activities, sensing, seizing, and transforming emerged as key factors for firms’ adaptation, and were reinforced by firms’ open culture, signature processes, idiosyncratic knowledge, and valuable, rare, inimitable and non-substitutable attributes. Thus, the usefulness of the proposed framework was confirmed. Implications and future research opportunities are presented. © 2018, The Author(s)

Defining family business: a closer look at definitional heterogeneity

Researchers have used a myriad of different definitions in seeking to explain the heterogeneity of family firms and their unique behavior; however, no widely-accepted definition exists today. Definitional clarity in any field is essential to provide (a) the basis for the analysis of performance both spatially and temporally and (b) the foundation upon which theories, frameworks and models are developed. We provide a comprehensive analysis of prior research and identify and classify 82 definitions of family business. We then review and evaluate five key theoretical perspectives in family business to identify how these have shaped and informed the definitions employed in the field and duly explain family firm heterogeneity. Finally, we provide a conceptual diagram to inform the choice of definition in different research settings

Family ownership, financing constraints and investment decisions

This article provides an empirical answer to the question of how the unique incentives of founding families influence investment decisions. Contrary to theoretical considerations, the results indicate that family firms are not more susceptible to external financing constraints. When compared to companies of similar size and dividend payout ratio, the investment outlays of family firms are consistently less sensitive to internal cash flows. Family businesses are more responsive to their investment opportunities and seem to invest irrespective of cash flow availability. The findings suggest that founding family ownership is associated with lower agency costs and can help to diminish information asymmetries with external suppliers of finance.family firms, ownership structure, investment policy, corporate governance,