EURAM 2017 – Family Business in Emerging, Developing, and Transitional Economies

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To submit your paper to the EURAM 2017 Conference – Deadline 10th January 2017

Best Paper Award sponsored by International Journal of Emerging Markets

Fang, H. (Missouri University of Science and Technology)
Vershinina, N. (University of Birmingham, UK)
Wale-Oshinowo, B (University of Lagos, Nigeria)
Welter, F. (Institut für Mittelstandsforschung Universityof Siegen, Germany
Chua, J. (University of Calgary, Canada – Lancaster University, UK Zhejiang University, China)
Ramachandran, K. (Indian School of Business, India)
Discua Cruz, A. (Lancaster University, UK)
Basco, R. (American University of Sharjah – Sheikh Saoud binKhalidbinKhalidAl-Qassimi ChairinFamilyBusiness,UAE)

Family business as a field of research has grown considerably over the last two decades and its legitimacy has been bolstered by the interdisciplinary connection with management, entrepreneurship, economics, psychology, and sociology (Perez Rodriguez & Basco, 2011). Recent development in the literature starts to recognize that family firms are heterogeneous in terms of behavior and performance (Chua, Chrisman, Steier, & Rau, 2012). This heterogeneity has been investigated in terms of many intra-organizational sources such as age, size, founder or successor CEO, family generation in control, founder gender, family or non-family CEO, family ownership dispersion, intention for intra-family succession, among many others (e.g., Basco & Calabrò, 2016; Fang, Memili, Van de Graaff Randolph & Chrisman, 2016; Nordqvist, Sharma, & Chirico, 2014). In comparison, extra-organizational sources have received significantly less attention (Gupta, Levenburg, Moore, Motwani, & Schwarz, 2008).

One critical extra-organizational source is the historical, institutional, spatial, and social context in which family firms exist and operate, as it could influence the genesis, development, and continuity of family firms (Stough, Welter, Block, Wennberg, & Basco, 2015; Wright, Chrisman, Chua, & Steier, 2014). Among the many variations in contexts, a very important one is that between developed economies and transitional, developing, or emerging economies (Welter, 2011). Thus, examining how the multidimensionality of the particular context in developing economies and the intersectionality of the contextual elements affect family firm behaviour and performance will contextualizing our theories of the family firm (Whetten, 2009) and lead to a deeper and more generalizable understanding of the family firm as a globally ubiquitous form of organization.

Indeed, the extant literature’s focus on economically developed countries, limits our understanding of the phenomenon because the institutional and cultural contexts where family firms are founded, developed, and operated differ substantially around the world. Therefore, the generalizability of extant theories may be questioned. While recent studies have attempted to address this issue by examining cultural and geographical factors as one driving forces of family firm heterogeneity (Discua Cruz, Hamilton, & Jack, 2012; Gupta & Levenburg, 2010; Basco, 2015; Memili, Fang, Chrisman, & De Massis, 2015), we still know little about family businesses in developing, emerging, and transitional economies.

Therefore, we propose to develop a special track on Topics about Family Business in Emerging, Developing, and Transition Economies (the definition of such economies to be based on that used by the International Monetary Fund). Through studies about how the specific economic and institutional environments of such economies influence family firm behavior and performance, the special track will help expand our understanding of family business through the researchers’ findings about the applicability of extant theories and empirical evidence from developed economies to family firms in transitional, developing, and emerging economies. In addition, this special track can help us develop newly grounded theories to achieve a better understanding of the “contextual effect” on family business behaviors and performances.

The main goal of the Family Business in Emerging, Developing, and Transition Economies track is to encourage the presentation of studies about family firms in such unique contexts related, but not limited, to:

  • Traditional strategy research topics (such as internationalization, corporate entrepreneurship, cooperation, competitive dynamics, economic and non-economic performance, among others) but contextualized for family business in emerging, developing, and transition economies.
  • Traditional family business research topics (such as succession, corporate governance, inter-generational entrepreneurship, management practices among other) but contextualized in emerging, developing and transition economies.
  • Cultural aspects that frame family and family business values, norms, and ethics in emerging, developing, and transition economies.
  • Historical, sociological and anthropological perspectives to study family businesses, family business groups and family elites in emerging, developing, and transition economies.
  • The role of government policies in the start-up, development, or death of family businesses in emerging, developing, and transition economies.
  • Strategies adopted by family businesses to counteract/compromise/comply with institutional isomorphism in emerging, developing and transition economies.
  • The economic and social impact of family businesses in emerging, developing, and transition economies.
  • Comparative studies considering differences and similarities between family businesses in developed and developing countries or among developing countries.

We expect the track “Family Business in Emerging, Developing, and Transition Economies” to contribute to family business research in different ways. First, replication studies in new contexts would enable the generalization and potential expansion of current knowledge and research findings. Second, by emphasizing the importance of environment, studies would contextualize the relationship between family and firm and enrich our understanding of the family business phenomenon. The aim is to shed some light on how and why some theories would be more dominant than others in specific contexts.

A workshop about “contextualizing family firms” will take place in EURAM 2017. The objectives of this workshop will focus on awareness, theories, methods and existing works that highlight the relevance of context in the study of family firms.

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Family Entrepreneurship: “Whose Dream Is It Anyway?” – Farida El Agamy

By Jinan Aldameary

untitled1One of the many challenges that characterizes the realm of family entrepreneurship is the way in which business is passed on from one generation to the next. Riddled with responsibilities and standards by which they are expected to abide, family entrepreneurs often struggle to find their own path as they carry on the entrepreneurial legacy of the family.

The Sheikh Saoud bin Khalid bin Khalid Al Qassimi Chair in Family Business at the American University of Sharjah recently organized an open discussion facilitated by Farida El Agamy, the general manager of the non-profit family business forum, Tharawat, addressing some of the most common challenges facing family businesses – creating, developing, and nourishing entrepreneurship orientation across generations.

The interactive session, hosted by Sheraa, was titled “Whose Dream Is It Anyway?”, and highlighted the challenge of discerning an entrepreneur’s personal impact in the grander scheme of things, and the way in which one’s individuality can be strategically navigated.

El Agamy acknowledged the “mind-game” often undergone by many entrepreneurs upon their initial partaking in a family business.

“What does it do to your drive when you feel like you have to fulfill someone else’s vision?” El Agamy asked an audience comprising of individuals who were either interested in – or part of – family businesses. “What about your vision? How can you fulfill your own dreams when you’re working on someone else’s?”

Drawing on her own experiences, El Agamy explained the importance of pinpointing what it is that makes every individual entrepreneur “tick” – that is, what one is most passionate about and skilled at. She highlighted the importance of integrating one’s own skillset within the greater context of the family business at hand.  By doing so, a family entrepreneur can maintain their individuality and cater to their own career goals all the while working as a member of a cohesive enterprise.

“You are a growth generator as part of a family enterprise,” El Agamy told her audience. “You’re bigger than just the business you have with your family. You have an impact.”

untitledIn her final remarks on how to effectively mesh one’s individuality within the greater entrepreneurial legacy of the family, El Agamy emphasized the importance of strategic action. “Use your individuality, but don’t overpower people. Be strategic with how you use it.”

El Agamy’s session is one of the initiatives headed by Dr. Rodrigo Basco, Chairholder Sheikh Saoud bin Khalid bin Khalid Al Qassimi Chair in Family Business, aiming to disseminate new knowledge to the student community, and to further develop the future leaders of family business in the UAE, GCC, and MENA regions.

 

 

 

BIO

Farida F. El Agamy has been running the Tharawat Family Business Forum, the non-profit, private sector knowledge resource and networking hub for family-owned companies in the Middle East and North Africa, since 2008. With her professional background as a lawyer, she joined the founders of the Tharawat Family Business Forum with a vision to support and foster the sustainability, innovation, and growth of family firms. She is currently also Editor-at-Large of the Tharawat magazine, and a Director at Target Developments LLC, her family’s firm in Switzerland.

Farida read law in Switzerland and the UK and qualified as a barrister at the Swiss bar. She practiced administrative, corporate and contract law in a Swiss law firm, and worked for several federal government agencies. Her previous professional experience also include positions as associate lawyer at the United Nations in Geneva.

Speaking six languages, Farida’s Dutch and Egyptian family backgrounds and international upbringing have shaped her global understanding and her active social engagement, pushing for a better understanding between regions and people.

Does SIZE really matter? – Family business and regional development

By Rodrigo Basco and Ramsha S. Khan

This is an interview with Dr. Marco Cucculelli of Università Politecnica delle Marche, Department of Economics and Social Science. Dr. Cucculelli published an article in the Journal of Family Business Strategy in collaboration with Dr. Dimitri Storai entitled: “Family firms and industrial districts: Evidence from the Italian manufacturing industry

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What has inspired you to write about the topic of family businesses and industrial districts?

Since the ‘50s, family firms and industrial districts have been the driving factors of the Italian economic development. They are still landmark features of the Italian manufacturing industry, and major sources of its international competitiveness. Yet, the interplay between family ownership and the districtual organization of the economic activity has been mostly overlooked, or discarded as an outcome of old organizational forms that would be sources of decline or retard in the stages of mature development.

The aim of the research was to fill this gap by analyzing the joint influence of the family ownership and the districtual localization on firm performance. The rationale behind this approach lies on the need to reconnect the variability of firm performance to the heterogeneity of firms’ characteristics, as described by their ownership structure and geographical localization. The impact of these two components on heterogeneity passes through the evolution of the firm size over time. To cope with the changing profile of the competition, firms in industrial districts have started to adopt new strategies, many of them only available to larger firms. Successful medium sized enterprises have been doing particularly well in developing a modern entrepreneurial culture, in order to overcome the limits of traditional manufacturing localism and serve highly differentiated international demand. Today, they are able to manage effectively scale-sensitive strategic actions and competence-intensive activities targeted to larger markets. For doing this, they have leveraged their competitive advantages based on the family ownership: long term orientation, reputation, commitment to local producers and to the local labour market, shared social capital, values and norms, and a general networking ability which favours business alliances. Because of these connections, the family–district nexus is an unavoidable step to explore in order to understand the perspectives of economies based on a significant share of SMEs.

What are the main results of the article published in the Special Issue?

In addition to confirming the positive and sizeable effect of family ownership on firm profitability, the empirical results shows two additional findings.

Firstly, the impact of the districtual affiliation on firm performance is positive, but weaker than the family ownership advantage. The ‘‘district effect’’ however is still significant for non-family firms: to these firms, the districtual affiliation provides a set of positive externalities usually associated with family ownership. Therefore, family ownership and districtual localisation come out as alternative supporting mechanisms of the firm competitiveness.

Secondly, and most noteworthy, the interplay between the ‘‘district effect’’ and the ‘‘family effect’’ changes significantly across the firm size distribution. While these two effects are substitutes in smaller size firms, they are complements in medium-size firms. When firm size is small, family ownership replaces trust-based connections that are missing in non-districtual areas, thus lowering transaction costs and helping performance. Conversely, in medium and large-size companies, the involvement of the family in the business allows firms to exploits the family stewardship ability and the capacity to forge relationship with suppliers and buyers through family social capital. In this scenario, medium size firms come out as the organizational form that optimally leverages the benefits of the family governance with the efficiency features of the districtual organization.

What is the theoretical application of your research? What are the future lines of research of this topic?

The paper contributes to the literature on family firms and economic development. Therefore, it could be of interest to both policy-makers and international agencies dealing with the local economic development, especially in developing countries.

One crucial implication of the findings is that the positive influence of the family ownership changes according to nature of the external environments. In districtual areas, family firms provide superior networking abilities and commitment to local economy; in non-districtual areas, family ownership provides district-type assets by generating social capital, trust and reputational capital that reduces transaction costs and improves labour market relations. This double-link between family ownership and the business environment should be a reference point in the policy agenda on local economic development.

Another implication concerns the extension of the results to areas outside the Italian industrial districts. The European Cluster Observatory shows that localized organizational models of economic development are widespread in Europe. They include almost all medium and low-tech sectors of the manufacturing sector, that account for the larger share of employment and a significant part of the continental value added. These sectors typically exploit a district-type organization of the industry, where family ownership and management emerge as the best form of governance of the market relations. If family ownership and firm localisation impact on innovation, technology, firm growth, investment, risk attitude, labour market, finance and other variables, as a large literature shows, then also the smart-specialisation strategy should consider the family-district link when the issue of the competitiveness of Europe and European countries is addressed.

Finally, the paper supports the hypothesis that the structure of the productive sector matters for economic development. If the positive impact of family ownership is larger in environments with a prevalence of localised SMEs, the family-district link will probably become even more important if globalization intensifies. The response to the increased pace of internationalisation in the last decades has led to a significant revival of ‘‘small scale production’’ in the industrial system, and a growing share of SMEs in the economic system. Similarly, the geographical concentration of productive activities has increased, especially in low-tech industries, thanks to a district-type structure of the industrial organization. Taken together, these two factors will probably continue to provide fertile ground for the participation of the family in the business to support country competitiveness.

Migrant and Diaspora Entrepreneurs in International Entrepreneurship

Journal of International Entrepreneurship

Guest Editors:

Maria Elo3
University of Turku, Institute of Migration, Finland

Susanne Sandberg
Linnaeus University, Sweden

Per Servais
University of Southern Denmark, Denmark

Rodrigo Basco
American University of Sharjah – Sheikh Saoud bin Khalid bin Khalid Al-Qassimi Chair in Family Business, UAE

Allan Discua Cruz
Lancaster University, UK

Liesl Riddle
George Washington University, USA

Florian Täube
Université libre de Bruxelles, Belgium

 

Background and Topic:

The broad theme of this special issue is on migrant and diaspora entrepreneurs in international entrepreneurship (IE) and their entrepreneurial internationalization (EI) as well as the ways they bridge international contexts and mobilize diverse entrepreneurial resources supporting internationalization processes (e.g., Jones & Coviello, 2005; Dana, 2007; Brinkerhoff, 2009; Terjesen & Elam, 2009; Emontspool & Servais, 2016). These entrepreneurs face complexities regarding business contexts, borders, transnationalism, and in-between dimensions that create theoretical and analytical challenges. The objective of this issue is to theoretically and empirically contribute to IE by exploring whether, how, and why the IE activities of migrant and diaspora entrepreneurs differ from other internationally oriented entrepreneurs (cf. Etemad, 2004; Jones & Coviello, 2005; Jones et al., 2011).

The contextualization of entrepreneurial internationalization processes deserves particular attention. A significant body of research has addressed immigrant entrepreneurship and ethnic entrepreneurship with a focus on the host country context, while research on transnational entrepreneurship, transnational diaspora entrepreneurship, and cross-border entrepreneurship primarily examine the international dimensions between entrepreneurs’ home and host countries (Brinkerhoff, 2009; Çavusgil et al. 2011; Riddle & Brinkerhoff, 2011; Nkongolo- Bakenda & Chrysostome, 2013; Elo & Freiling, 2015; Smart & Hsu, 2004; Emontspool & Servais, 2016). Research on transnational entrepreneurship has shifted the interest from migrants’ economic adaptation to the host country toward their international entrepreneurial activities for opportunity development in dual social fields (Drori, Honig and Wright, 2009). Still, research on internationalization beyond this duality remains underdeveloped, and very little is known about locational dynamics, mechanisms, and processes that contemporary migrants and diasporans employ in international entrepreneurship and international business (cf. Tung, 2008; Brinkerhoff, 2016).

Understanding the entrepreneurial internationalization processes and dynamics of migrants and diasporans may illuminate novel aspects for EI (cf. Jones & Coviello, 2005). These entrepreneurs cross borders and explore and effectuate business opportunities internationally often in demanding contexts that connect markets (Emontspool & Servais, 2016; Elo, 2016). This special issue invites exploration of these IE actors and their EI processes and behaviors. It welcomes the analysis of multiple international entrepreneurial activities, inward and outward internationalization, as well as cooperative arrangements (Welch & Luostarinen, 1993).

Conceptualizing the “international entrepreneur” in IE is a fundamental issue for theory development and requires further debating. This “who” question is highly challenging—both theoretically and practically—especially in the era of increased mobility due to globalization, which blurs the distinction between national and international contexts (e.g., Peiris, Akoorie & Sinha, 2012; Jones et al., 2011; Zahra, Korri & Yu, 2005; Etemad, 2004; Dimitratos & Plakoyiannaki, 2003; McDougall & Oviatt, 2000; Dana, Etemad & Wright, 1999). Beyond the complex nature of the entrepreneur-actor, EI is a dynamically adoptive phenomenon (cf. Etemad, 2004). Therefore, EI processes, their context, and their participants need more attention, for example, regarding respective preconditions, sequences, paths, and behaviors (cf. Drori, Honig & Wright, 2009; Elo, 2016). Differences in how these entrepreneurial actors behave when exploring and exploiting opportunities compared to other international entrepreneurs may stem from their market-specific knowledge, culture, or religion (cf. Riddle et al., 2010; Elo & Volovelsky, 2016 forthcoming). Their cultural, linguistic, religious, and other in-group and in-between features represent particular resources and competences for EI (e.g., Brinkerhoff, 2009, 2016).

Still, very little is known about these people and their particular capabilities or about how these capabilities influence EI. However, they appear to be unique and seem to have distinct mechanisms and advantages (cf. Johanson & Vahlne, 1990; Drori et al., 2009; Elo, Harima & Freiling, 2015; Brinkerhoff, 2016).

Capturing the economic potential and the roles of migrants and diasporans as change-making entrepreneurs in international business and economic development deserves research attention (Usher, 2005; Newland & Tanaka, 2010). Their effects for IE and globalization are broader than what has been acknowledged in the literature (Brinkerhoff, 2009; Riddle et al., 2010; Newland & Tanaka, 2010; Riddle & Brinkerhoff, 2011; Nkongolo-Bakenda & Chrysostome, 2013; Elo, 2016; Brinkerhoff, 2016). Engagements in EI and consequent international business are of importance to innovation, economic development, and competitiveness at the firm to the country level (e.g., Tung. 2008; Brinkerhoff, 2016). These connectors and interlocutors— together with their networks—incorporate multi-actor dynamics and embeddedness, which influence internationalization, its speed, and locus and provide opportunities, capabilities, and direct connections (cf. Johanson, & Vahlne, 2009; Coviello & Cox, 2006; Jansson & Sandberg, 2008; Brinkerhoff, 2016). Global and digital diaspora networks appear to foster internationalization and expansion (e.g., Riddle & Brinkerhoff, 2011; Riddle et al., 2010).

Additionally, diasporas and their in-between advantages may cultivate the development of both business clusters and institutions (e.g., Sonderegger & Täube, 2010; Brinkerhoff, 2016).

The organizational forms, resources, and locations employed by these entrepreneurs may inherently differ from those of other international entrepreneurs. They may access diaspora, inter-ethnic, inter-firm, and international resource systems and networks that are often invisible to outsiders, such as Guanxi and Chaebol, but central for their entrepreneurial activities (e.g., Park & Luo, 2001; Ellis, 2011; Manolova, Manev, & Gyoshev, 2010). Moreover, this special issue examines the plurality and collective dimension of these participants and stakeholders as well as their different roles and positions as entrepreneurs, intrapreneurs, family business owners and managers, business owners and managers, venture capitalists, and change makers (e.g., Elo & Riddle, 2016). Research often overlooks the fact that some family businesses, founded by migrants/diasporans and continued by their descendants, grow to become leading firms and expand beyond their countries of residence. These firms often connect back to their countries of origin from their very outset. Such undertakings may involve a collective approach by members of one or several generations of migrant families (Discua Cruz, Howorth & Hamilton, 2013). Further, this process may be strongly supported by hard-to-imitate resources that have been nurtured over a long period of time by migrant/diasporic families anywhere in the world (Sirmon and Hitt, 2003). However, the way in which migrant resources and international entrepreneurship are intertwined may seem unusual at first because of prevailing misconceptions about migrant families in business around the world (Discua Cruz & Basco, 2017), and insights into how such processes occur have been elusive.

Diverse perspectives around migrant families’ conceptualizations, family dynamics, long-term intentions, and even succession paths that foster IE may provide a more nuanced understanding of migrant family businesses ( Basco & Rodríguez, 2009; Howorth et al., 2010).

The main purpose of this special issue is to advance IE research on migrant and diaspora entrepreneurs and their entrepreneurial internationalization and on the respective opportunity risk management, directions, motivations, location choices, processes, participants, and critical events. This special issue calls for research on transnational and multi-cultural resources, organizational forms, contextual settings, and actor types that provides novel insights that advance EI theory. For example, according to Riddle and Brinkerhoff (2011, 670) “Diasporans who establish new ventures in their countries of origin comprise a special case of international ethnic entrepreneurship.” To complement our theoretical and empirical understanding on these variants of IE, studies exploring such firm, business-network and industry dynamics, and processes in bifocal and multifocal contexts are invited. Multi- and interdisciplinary approaches are particularly welcome.

In summary, building on the extant literature on the broad theme1, this special issue aims to provide a platform for theory development and for the exploration of these special cases in IE.

The Special Issue Seeks to Accomplish the Following:

  • Explore the diversity of the “who” in IE and the respective roles, effects, and organizational forms.

  • Explore and explain migrant-driven EI in terms of both inward and outward internationalization.
  • Examine the dynamics of entrepreneurial diasporic networks and the “glue” of cooperation in internationalization/international business (Schotter & Abdelzaher, 2013).
  • Increase understanding of the different transnational and supranational contexts in IE beyond the dichotomy of home and host country.
  • Identify special resources—namely, the “talent” (Tung, 2008)—stemming from migration and diaspora.
  • Analyze how networks for migrant and diaspora entrepreneurship are developed and used for internationalization and cooperation.
  • Identify success factors in business models of migrant and diaspora IE.
  • Explore international migrant/diasporic family businesses and the extent to which migrant families in business approach IE based on country of origin networks.
  • Analyze the role of migrant and diaspora entrepreneurs as new “international” Argonauts, (cf. Saxenian, 2007) innovators, and change agents.
  • Explore, map, and analyze the international scope and aggregation of migrant and diaspora entrepreneurship and respective international linkages.
  • Examine the impact of differences in socio-cultural and institutional environments between home and host contexts on migrant and diaspora entrepreneurs.
  • Understand how institutional perspectives and policy frameworks influence migrant and diaspora EI.

Focus Themes:

  •  International and transnational entrepreneurs
  •  Migrant and diaspora entrepreneurship
  •  EI, cross-border entrepreneurship and international business
  •  Diaspora networks in IE and business
  •  Migrant/diasporic families in international business
  •  International and transnational resources and mechanisms
  •  Impacts of geographical scope and mobility factors on EI
  •  Entrepreneurial dynamics and socio-cultural drivers
  •  Diaspora business models and multi-context entrepreneurship
  • Institutional perspectives on bifocal and multifocal contexts

 

Timeline and Submission

All submissions should be uploaded electronically at https://www.editorialmanager.com/jien/default.aspx for this special issue between March 1 and March 31, 2017. See the Journal of International Entrepreneurship website for format, style, instructions, and other requirements:

http://www.springer.com/business+%26+management/entrepreneurship/journal/10843

For queries about the special issue, contact one of the corresponding guest editors: Maria Elo (Maria.elo@utu.fi), Susanne Sandberg (susanne.sandberg@lnu.se), Per Servais (per@sam.sdu.dk), Rodrigo Basco (rbasco@aus.edu), or Allan Discua Cruz (a.discuacruz@lancaster.ac.uk).

 

1 This highly focused and specialized literature was initiated by a special issue of the International Business Review in 2011 on international ethnic entrepreneurship and was followed by a special issue of the Journal of International Management in 2013. The forthcoming special issue of the International Journal of Entrepreneurship and Small Business has further extended the literature. Authors are encouraged to examine these special issues.

“Al Tami Trenches” by Roya Hoodeh

When I arrived in the UAE and started teaching at American University of Sharjah (Sheikh Saoud bin Khalid bin Khalid Al-Qassimi Chair in Family Business), I thought what I could possibly do to engage my students in our Family Business Course beyond the usual tools. One day, I found myself reading “One Thousand and One Nights” to my little daughter Une. It was at that moment when I recognized that in the land of STORYTELLING stories should be an approach to create critical thinking in my classes.

I asked my students to use their imagination, experience, and ideas to create blog posts in order to express their thoughts and use their stories to navigate in my lectures, to generate a debate, and to expand our knowledge.

Here is one story … By Roya Hoodeh

wordleIt was a horrible day for the entire Al Tami family. A 48-year-old father of two was killed in a car accident, shocking the Al Tami’s and sending them into mourning. Little did they know that it was just the beginning of the bitterness of that incident?

The deceased victim, Ali, left his father, his loving wife, his two young sons, and his five siblings with all the wealth he had acquired ever since his working days at the age of 18. Ali had not left any will, and had not chosen a successor for the jewelry business that he ran. Lucky for him though, the family culture, which he came from, condoned collectivistic behavior and his brothers and sisters took it in their hands to look after his widow and orphaned sons after his passing.

Ali’s job was not as easy as he made it seem. He tended to his family, successfully handled his international company, and still had the time to be one of the most popular and influential members of the family.

The fateful accident naturally put the family through hard time, but this period was short-lived and was quickly overtaken by the harmony that resided over the Al Tami family. The first four, five years that the Al Tami family was without Ali was sad, but smooth sailing: Ali’s five brothers had split his work amongst themselves, keeping his business alive, meanwhile working on their own business ventures. All the shares were transferred to the two young sons aged 18 and 21, without their involvement in the work activities as they were still students.

Despite of the family’s constant support, Ali’s family was a little disappointed at the family’s decision, but said nothing in order to keep the peace… The peace that was about to end soon anyway…One eventful day, Ali’s younger brother, Badr, comes home exhausted from work in the diamond company, and gets into an argument with his wife, Mariam.

Frustrated and disheartened, Badr and Mariam attended the annual family gathering at Ali’s house that same evening. Upon their entrance it is when Mariam felt her blood boil at the fetching diamonds Ali’s wife was wearing. It was obviously an expensive designer’s, and moreover, it was much nicer than what Mariam had on. This jealous spouse, already infuriated with Badr because of how much time he spent away from home, began another argument with her husband as soon as they re-entered their home.

In Mariam’s eyes, Badr was out making more money for Ali’s family, than he did for his own. Soon after that, because of Mariam’s influence as an outsider to the Al Tami family, Badr called his brothers and said, “Pretend I’m dead also, like Ali, do the work I would normally do, and pay me my dividends.” This statement completely clashed with the Al Tami culture. The outsider’s influence, Mariam, had begun to destroy the unity of the Al Tami family, and of course, the companies under their control.

Sheikh Saoud bin Khalid bin Khalid Al-Qassimi Chair in Family Business

During the first 6 months since the establishment of the “Sheikh Saoud bin Khalid bin Khalid Al-Qassimi Chair in Family Business” the scope and content of our activities were designed with the major aim to develop a recognized family business knowledge hub on local, national, regional, and international levels.

Thank all of you for your support with our activities. Final Report February-August 2016

Who is going to create employment in rural areas? – Family Firms

By Rodrigo Basco and Ramsha S. Khan

wordle 2This is an interview with Dr. Mikaela Backman of Jönköping International Business School, Centre for Entrepreneurship and Spatial Economics (CEnSE). Dr. Backman published an article in the Journal of Family Business Strategy in collaboration with Dr. Johanna Palmberg entitled: “Contextualizing small family firms: How does the urban–rural context affect firm employment growth?”

What has inspired you to write about the topic of family businesses and regional-urban areas?

I, Mikaela Backman, has a background in regional economics whereas Johanna Palmberg has mainly focused on corporate governance. When discussing our research interest, we realized that less focus had been given on combining these two topics. We thought this rather surprising as they are both well-established in the literature and of great importance in the field. This has resulted in us working together on the project of contextualizing small family firms.

What are the main results of the article published in the Special Issue?

The result of great importance  we find is that, on a general level, family firms do not differ significantly from non-family firms in terms of firm employment growth. What is notable to observe is that the ownership and control of a firm (i.e., whether the firm is a family firm) do affect employment growth differently across the urban–rural context. We find that family firms located in rural regions show a higher growth rate than nonfamily firms in the same regions.

What is the theoretical application of your research? What are the future lines of research of this topic?

The theoretical aspect that can be used to explain our results is that family firms are more locally embedded within rural regions, due to their historical, social, and cultural connections. These embeddedness characteristics may help family firms to have a competitive advantage in rural regions to create, develop, and allocate tangible and intangible resources (e.g., access to funding, which is more often based on relationship lending in rural areas and so family firms have an advantage).

This study contributes to the field of family business research and regional economics in several ways:

  • First, it represents a first attempt to empirically analyze the growth pattern of family firms from a regional economic perspective by introducing the context as an important dimension.
  • Second, the study extends the knowledge on firm-level growth in family firms by using data from small- and micro-sized family and nonfamily firms.
  • Third, concerning the regional economics literature, this article demonstrates the importance of considering corporate governance issues in relation to the spatial context—specifically speaking, the urban–rural context.

 Family firms and regional context is a novel topic that warrants further analysis.

  • Systematic studies of how different sets of regional categories affect firms could be conducted by dividing the urban–rural context into further subcategories. We know that both urban and rural areas are very heterogeneous and more classifications would be able to capture the differences. Family firms in substantially rural regions might behave differently from firms in rural areas that are more closely connected to economic centers.
  • Another aspect that could be explored in future research is the localization pattern of family fi Thus, an analysis of where and why family firms locate across space could identify whether there exists any systemic variation in the localization pattern in comparison with that of nonfamily firms.

What is the practical application of your research for policy-makers?

Our research has specific practical implications for policy makers highlighting the importance of taking into account the type of firm (family, nonfamily) and location when tailoring business-related public policies in order to intervene in regions to boost economic development. If policy makers target firm employment growth as an important dimension in which to intervene, ownership and management regimes and location matters. Certainly, our results indicate that a one-size–fits-all approach does not seem to be suitable.

Another policy perspective is targeting rural areas that are currently shrinking, in terms of both population and economic activity. The thought-provoking finding that family firms are more successful than nonfamily firms in these regions may have particular implications for local policymakers, as our results indicate that family firms appear to be relatively better suited to the conditions and challenges that exist in rural regions. This issue is of great importance, given the increasing rate of urbanization and the corresponding, negative consequences that many rural areas experience. To understand what happens in regions that do not grow or experience negative economic development is vital, but so too is an innate awareness of the positive developments that exist and how these can be better utilized.

Thus, the results presented in our research could potentially prove useful in future discussions of how to develop rural regional economic policies, and may also be relevant for other stakeholders in the ecosystem. Our findings do not support a “one-size-fits-all” regional policy, as it is clear that the characteristics of urban, rural, and metropolitan types of location differ considerably. Similarly, the particular attributes of family firms compared to those of nonfamily firms – such as attitudes toward independence, risk, financing, and social embeddedness – should be considered as part of the development of rural policy schemes, in order to promote local employment. Finally, for all types of firms, the local business community could support and encourage family firms by, for example, providing education, mentoring, and networking opportunities.

 

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