The Use of the Guttman Scale in Development of a Family Business Index

The purpose of this paper is to introduce a new approach for operationalising family-business variables. It is consistent with multidimensional definitions of family business such as the F-PEC scale. This paper demonstrates the use of the Guttman-scaling procedure, on a random sample of 885 Dutch SMEs. More specifically, the research question is as follows: Can various indicators of family business be validly combined using a Guttman scale? After reviewing the different definitions dealt with in the family business research literature, the paper presents the results of an analysis of various items available for this particular dataset. In particular, the index assigns a value of family-relatedness to a company depending upon the criteria that it meets. The study uses a series of statistical procedures, including factor analysis and cross-tabulations, to identify a potential ordering of criteria varying in difficulty. The least difficult criterion, that one or more of the management team is drawn from the family that owns the business, is met by 77.6% of the responding firms. The most difficult of the criteria, met by only 26% of the firms, is that current management plans to transfer the enterprise to the next generation. 85% of the sample can be classified properly according to this Guttman scale: If a company meets one of the more difficult criteria, it also meets all the easier criteria. In the second part of the paper, the proposed Guttman Scale is compared with the individual criteria making up the scale as well as other family business variables to predict self-perceptions of family business. In particular, the scale is positively correlated with the outcome of the question, 'Would you consider your firm a family business?' In addition, a multiple regression of the individual criteria on the dependent variable is compared with the use of the index. The paper sums up with further discussion of the possible advantages and disadvantages of the Guttman scale technique, both for theoretical and empirical development in family business research.

Post-Materialism: A Cultural Factor influencing Total Entrepreneurial Activity across Nations

The study of predictors of entrepreneurial activity at the country level has been dominated by economic influences. However, the relative stability of differences in entrepreneurial activity across countries suggests that other forces such as institutional and/or cultural factors are at play. The objective of this paper is to explore more specifically how post-materialism may help to explain differences in total entrepreneurial activity across countries.�Data from 28 countries, world-wide, are used to test the hypotheses, based on intersecting data available from the Global Entrepreneurship Monitor, World Values Survey and other published sources. Findings confirm the significance of post-materialism in predicting total entrepreneurial activity even when controlling for these other factors.

The relationship between family orientation, organization context, organization structure and firm performance

This study focuses on the prediction of three firm performance indicators, sales growth, innovation performance and profitability, on a sample of small and medium-sized firms in the Netherlands. Predictions from agency theory and the resource based view of organizations lead to alternate hypotheses regarding the direct and indirect effects of family ownership and management on firm performance. Other variables in the analysis include various organization structure variables including standardization, self coordination, team coordination, decentralization, departmentalization and specialization, and control variables such as firm size and age. Results suggest a direct effect of family orientation on innovation performance, even when controlled for other variables. The effect of family orientation on the other two dependent variables is quite limited.

Family Orientation, Strategic Orientation and Innovation Performance in SMEs: A Test of Lagged Effects

Past research suggests a negative effect of family orientation on innovation performance. However, many past studies have certain limitations that this study is designed to overcome. In particular,this study estimates lagged effects of family orientation on innovation performance while controlling for organization context variables and the mediating effect of strategic orientation. It also uses a multidimensional approach to measure family orientation while testing for common method bias. This study makes use of a sample of 343 Dutch small and medium size firms. Innovation performance, being the dependent variable, was collected in 2005. All independent variables, i.e. strategy, family orientation and context variables, are collected in previous time periods, with lags ranging between 3 and 4 years. Family orientation is measured according to five independent dimensions including family power, family culture,overlap of ownership and management and intentions to keep the firm in the family.

Post-Materialism as a Cultural Factor Influencing Entrepreneurial Activity across Nations

The study of the determinants of entrepreneurship at the country level has been domi-nated by economic influences. The relative stability of differences in levels of entrepreneurship across countries suggests that other forces such as certain institutional and/or cultural factors are at play. The objective of this paper is to explore how post-materialism explains differences in entrepreneurial activity across countries. Entrepreneurial activity is defined as the percent of a country's population that is self-employed, using a broad definition that also includes CEOs of both unincorporated and legally incorporated establishments. The measure for post-materialism is based upon Inglehart's four-item post-materialism index. Because of the known interactions between economic and cultural factors found in previous research, a set of economic and cultural factors is included to provide a clearer picture of the independent role post-materialism plays in prediction of self-employment levels. In particular, education, life satisfaction, church attendance and political (left or right) extremism are used as control variables in our analyses using data of 14 OECD countries over in recent period. Findings confirm the significance of post-materialism in predicting self-employment even when controlling for economic and cultural factors. However, strong co-variation between post-materialism and other cultural factors makes it difficult to clearly discriminate between the effects.

Entrepreneurship and economic performance: a macro perspective

The present paper provides a theoretical framework of the relationship between the rate of entrepreneurship and national economic performance. The first part deals with some aspects of the recent economics literature on the relation between entrepreneurship and small business on the one hand, and economic growth on the other. In particular, it gives a summary of some work of the EIM/CASBEC research group in The Netherlands. In the second part, a framework is presented linking entrepreneurship and growth�to different levels of aggregation. The last part of the paper illustrates the framework with some historical case studies. The present paper supplements Wennekers, Uhlaner and Thurik (2002)�and is concerned with the causes of the rate of entrepreneurship.

Family orientation, strategy and organizational learning as predictors of knowledge management in Dutch SMEs

Knowledge management (KM) is becoming a growing concern in management research and practice because of its role in determining firm innovation capability and in enhancing working life quality of knowledge workers. Although research and policy interest in KM is beginning to grow for small and medium-sized suppliers, still relatively limited attention has been paid to understand the specifics of KM issues of SMEs in particular. Previous studies rely on either qualitative case studies or very small samples. In this study, we will investigate KM among SMEs using empirical data from about 2000 SMEs. The aim of this study is to investigate the prevalence of different KM techniques and the determinants of KM. We found that SMEs are most likely to acquire knowledge by staying in touch with professionals and experts outside the company. Also, SMEs are most likely to share knowledge and experience by talking to each other and to store knowledge in formal repositories. Furthermore, we found a significant positive relationship between organizational learning and strategy and knowledge management, as well as a significant negative relationship between family orientation and knowledge management. In conclusion, knowledge management practices are not independent from other resources and processes inside SMEs. Therefore, there is no all-in-one knowledge management practices package for all types of SMEs across industries.

Business accomplishments, gender and entrepreneurial self-image

Drawing on Bem's psychological theory of self-perception, this paper presents and tests a model that examines the impact of business accomplishments and gender on entrepreneurial self-image and explores the definition of entrepreneurship according to Vesper's Entrepreneurial Typology.

The link between family orientation, strategy and innovation in Dutch SMEs: a longitudinal study

This study aimed at identifying some of the factors determining innovation performance in the SME. Based on a sample of 388 Dutch SME's, hypotheses were tested in particular regarding the main effects of strategy, and the direct and indirect efects of family orientation on firm performance. The results clearly support a relationship between different components of strategy and strategic process and innovation performance, even on a longitudinal basis of�up to four years.�

Professional HRM practices in family owned-managed enterprises

The primary purpose of this study is to examine and explain differences in the professional HRM practices between family and non-family owned and managed firms. We present a model concerning direct and indirect effects of family firm characteristics on the use of professional HRM practices. We find that, based on our sample and model, family firms are less likely to use professional HRM practices than their counterparts. This family firm effect occurs not only indirectly (since family businesses tend to be smaller, and/or less complex than non-family businesses, where complexity stimulates the application of professional HRM practices), but also directly. The direct effects are consistent with predictions consistent with agency theory, which predict less monitoring in the family firm. On the other hand, the results cannot rule out other interpretations offered by organization control theory and/or institutional theory. Furthermore, the indirect family firm effect is consistent with predictions based on the resource-based view although once again, alternative interpretations of the findings cannot be ruled out. We have not examined whether it is actually better or worse for family firms to rely upon less professional HRM practices. Lacking performance data, it is still possible to argue that family firms rely less heavily on professional HRM practices because it is unnecessary to do so, especially in many of the small firms within this study. Thus, future research is needed to examine relations between the use of professional HRM practices and performance for small firms, using family firm as a contingency variable.