Private Equity Minority Investments in Large Family Firms: What Influences the Attitude of Family Firm Owners?

This paper extends research in the field of private equity investments in family firms. It contributes to the literature by fundamentally analyzing the decision criteria of family firm owners for using minority investments of private equity investors. This type of financing might be of great interest to family firms, as the family firm owner is able to secure majority ownership and control over the family business. Likewise, minority investments might be attractive for private equity investors, as they are mostly not leveraged and therefore independent from capital market turbulences. Using data from 21 case studies, we identify challenges induced by the family or the business that lead to the phenomenon of private equity minority investments in family firms. We find that perceived benefits and drawbacks of private equity investments are influenced by business and family characteristics. Based on pecking-order theory, resource-based view and the strategy paradigm, propositions as well as a conceptual framework are developed

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

Entrepreneurial Orientation in Family Firms

This paper addresses the connection between corporate entrepreneurship and family businesses, with a particular focus on the construct of entrepreneurial orientation (EO). The main argument is that family firms represent organizational contexts that have specific characteristics with impact on EO. The article includes a review of key literature on EO that is used to define and discuss the family firm as context for entrepreneurial activities. Key themes emerging in the literature review are the roles of culture, dualities and resources as well as the importance of distinguishing between different types of family firms. It is also argued that it is relevant to look further into how “enterprising families” that strive for trans-generational wealth creation attempt to develop and nurture a “family entrepreneurial orientation” (FEO), a construct that addresses the entrepreneurial orientation of a family unit rather than that of a business unit. The article closes with a future research agenda

Unternehmerische Ausrichtung in Familienunternehmen

This paper addresses the connection between corporate entrepreneurship and family businesses, with a particular focus on the construct of entrepreneurial orientation (EO). The main argument is that family firms represent organizational contexts that have specific characteristics with impact on EO. The article includes a review of key literature on EO that is used to define and discuss the family firm as context for entrepreneurial activities. Key themes emerging in the literature review are the roles of culture, dualities and resources as well as the importance of distinguishing between different types of family firms. It is also argued that it is relevant to look further into how “enterprising families“ that strive for trans-generational wealth creation attempt to develop and nurture a “family entrepreneurial orientation“ (FEO), a construct that addresses the entrepreneurial orientation of a family unit rather than that of a business unit. The article closes with a future research agenda

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