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

Determinants of off‐balance sheet usage in private banks

Purpose: The purpose of this paper is to analyze the off‐balance sheet (OBS) behavior of a sample of small commercial banks in the USA in 2006. In particular, it aims to study the impact that monitoring intensity has on bank OBS usage. Design/methodology/approach: The paper uses a two‐stage least squares regression methodology and splits the sample by supervisory bank ratings to ascertain the impact that monitoring intensity has on OBS activity. Findings: Certain board characteristics and executive compensation schemes do influence the extent of OBS usage in banks only when the bank is poorly rated. When the bank is strong and monitoring is less extreme, these variables have limited relationship with OBS usage. Research limitations/implications: Findings are consistent with the idea that monitoring intensity increases when ratings decline and this leads to more risk‐averse behavior on the part of bank managers. Practical implications: These results lend support to the argument of stronger regulation in the banking industry since monitoring does impact on bank management behavior and decision making. Originality/value: Because of the current financial crisis, research on OBS usage is extremely relevant and important. Here, the paper looks at small private commercial banks that engage in OBS activity. This phenomenon is not as well studied or understood

Insights from Canadian case studies on succession and knowledge transfer in family firms

This study investigated firstly whether the family business succession process differs from non-family business succession, secondly the nature of knowledge transfer and specifically about the nature of tacit and explicit knowledge transfer between the founder and successors and thirdly the impact of the degree and nature of trust between the founder and successor is considered along with the issue of whether the level of perceived trust differs depending on the length of the relationship between the firm founder and successor. Finally the impact of the successor's gender on the tacit knowledge transfer process is noted. The contribution of this research to the founders of family business, their successors and their advisors are highlighted, the study's limitations and directions for future research are noted

The board advisory tasks in small firms and the event of crises

In this article we examine what affects the board of directors’ involvement in the advice to management, with emphasis on the influence of crises on the board advisory tasks performance. Based on a survey of 881 small Norwegian firms, we analyse responses from CEOs in order to determine whether and to what extent the board is actively involved in the governance process during crises through providing advice. The study has two major contributions to board research in general and research of into small firms in particular. The first is the go beyond the “usual suspects” of board size, CEO duality, and board independence when looking for determinants of board involvement in advice. The second contribution is a clearer understanding of board involvement during crises. Our results show that board member diversity becomes particularly important during crises, since this provides the CEO and firm access to a more diverse pool of competences and experiences. We also find that crises moderate the effects of incentive on the board’s involvement in advice. This evidence sheds new light on the determinants of directors’ involvement in board tasks, suggesting that directors’ incentive to perform certain board tasks vary according to the contingent situation the firm is experiencing. Copyright Springer Science+Business Media, LLC 2007Boards of directors, Board tasks performance, Crisis, Small firms,