Contextualizing Family Firms in the Arab World

 

Logo Rodrigo fondo transparente1st International Academic Conference

7th and 8th March 2018

 Call for papers:  “Contextualizing Family Firms in the Arab World”

Arab family firms cannot be fully understood without considering the context in which families and firms exist. While contexts determine organizational behavior (Johns, 2006), the footprints of family firms recursively manifest themselves in regional socio-economic contexts (Basco, 2015). Therefore, to fully understand the Arab family firm phenomenon, scholars must go beyond its boundaries by recognizing and exploring the multiple embeddedness of family firms in general. We must consider the micro-context of the family, the meso-context of the industry, and the macro-context of the country/region, all of which are characterized by paradoxes of conflict and peace, stability and instability, certainty and uncertainty, and modernity and tradition (Basco, 2017).

In the Arab World, socio-economic activities have traditionally been embedded in kinship relationships in Bedouin, rural, and urban societies. Families are the dominant institutions through which individuals transmit their culture, legacy, religion, expectations, and traditions and interact in society (Barakat, 1993) by creating their own identity. In this context, Arab families act as a filter absorbing changes caused by contemporary economies, social and economic globalization forces, societal conflicts, political transformations, the influence of the recent colonial past, and cultural pressures from Western and Eastern cultures.

Even though the family business field has gained external legitimacy (Chrisman, Chua, & Steier, 2003; Perez Rodriguez & Basco, 2011), the lack of an overall family business theory is mainly due to the shortage of studies integrating contextual dimensions. A theory of family firms “must explain and predict not only the interaction between family and business systems at the individual and family firm levels but also the interaction between family firms and the environment at the aggregate level” (Basco, 2015, p. 260). In this sense, contextualizing the family firm in the Arab World could help clarify firm familiness (Gomez-Mejia, Cruz, Berrone, & De Castro, 2011; Habbershon & Williams, 1999), which focuses on the effect family has on firm behavior and performance, and regional familiness (Stough, Welter, Block, Wennberg, & Basco, 2015), which focuses on the family firm’s effect on regional development.

The aim of this conference is to advance previous efforts to contextualize the family firm phenomenon in different institutional and cultural environments (e.g., Gupta, Levenburg, Moore, Motwani, & Schwarz, 2008), particularly in the Arab World (e.g., Bizri, 2016; Fahed-Sreih & Djoundourian, 2006; Welsh & Raven, 2006).

We invite submissions to the conference titled “Conceptualizing Family Firms in the Arab World.” The purpose of the conference is to gather researchers who are investigating the family firm phenomenon in the Arab World. We expect that contextualizing family firms in the Arab World will shed new light on the nuances of family firms in terms of their phenomenological perspectives and theoretical development.

Submission Guidelines and deadline

We encourage scholars, especially PhD students and young researchers, whose research focuses directly or indirectly on family businesses in the Arab World to submit their works in progress at different stages. Abstract submission should be one document with a cover page (title, author’s name, affiliation, email) and a two-page abstract (topic of research, theories, method, results, contributions)

Abstract submission should be sent electronically to rbasco@aus.edu

Deadline Abstract by 30/11/2017

Authors Notification by 31/12/2017

Final papers (final submission) by 31/01/2018

 

Conference Highlights

Travel Research Grants

The Sheikh Saoud bin Khalid bin Khalid Al-Qassimi Chair in Family Business offers six scholarships for PhD students from the Arab World to travel to and attend the conference. Potential candidates who would like to apply for a travel/accommodation grant should send their application letter and CV with their abstract submission by 30/11/2017.

Career Academy

We have designed a special event for PhD students and young scholars called the Career Academy Workshop to discuss the challenges of developing an academic career in the Arab World. Topics will include matters related to earning a PhD, building an academic career, publishing research, and building local and international networks.

Special Issue

In collaboration with Journal Family Business Strategy, papers presented at the conference will be eligible for a special topic section, “Contextualizing Family Firms in the Arab World.”

Registration

There is no registration fee.

Tentative Program 

Academic Conference: 7th of March, 2018 – Keynote speakers – Plenary sessions

Business Family Conference: 8th of March, 2018 – Keynote speakers and panel sessions

Venue

American University of Sharjah, Sharjah, United Arab Emirates

Organizers

Rodrigo Basco (American University of Sharjah), Alreem Al Ammari (American University of Sharjah), and Farida El Agamy (Tharawat Family Business Forum)

 

 Aus logo (colour)                                                             JFBS

  TFBF Logo - original - 2017                                Sheraa

References

Barakat, H. (1993). The Arab World. Society, culture, and state. Berkeley, California: University of California Press.

Basco, R. (2015). Family business and regional development-A theoretical model of regional familiness. Journal of Family Business Strategy, 6(4), 259–271.

Basco, R. (2017). The multiple embeddedness of family firms in Arab World. In S. Basly, P.-L. Saunier, & A. Marouane (Eds.), Family Businesses in the Arab World – Governance, Strategy, and Financing (p. forthcoming).

Bizri, R. (2016). Succession in the family business: drivers and pathways. International Journal of Entrepreneurial Behavior & Research, 22(1), 133–154.

Chrisman, J. J., Chua, J. H., & Steier, L. P. (2003). An introduction to theories of family business. Journal of Business Venturing, 18(4), 441–448.

Fahed-Sreih, J., & Djoundourian, S. (2006). Determinants of longevity and success in Lebanese family businesses: An exploratory study. Family Business Review, 19(3), 225–234.

Gomez-Mejia, L. R., Cruz, C., Berrone, P., & De Castro, J. (2011). The Bind that Ties: Socioemotional Wealth Preservation in Family Firms. Academy of Management Annals, 5(1), 653–707.

Gupta, V., Levenburg, N., Moore, L., Motwani, J., & Schwarz, T. V. (2008). Culturally-sensitive models of family business in Germanic Europe. Hyderabad, India: ICFA University Press.

Habbershon, T. G., & Williams, M. L. (1999). A Resource-Based Framework for Assessing the Strategic Advantages of Family Firms. Family Business Review, 12(1), 1–25.

Johns, G. (2006). The Essential Impact of Context on Organizational Behavior. Academy of Management Review, 31(2), 386–408.

Perez Rodriguez, M. J., & Basco, R. (2011). The cognitive legitimacy of the family business field. Family Business Review, 24(4).

Stough, R., Welter, F., Block, J., Wennberg, K., & Basco, R. (2015). Family business and regional science: “Bridging the gap.” Journal of Family Business Strategy, 6(4), 208–218.

Welsh, D. H. B., & Raven, P. (2006). Family business in the Middle East: An exploratory study of retail management in Kuwait and Lebanon. Family Business Review, 19(1), 29–48.

Advertisements

Quilmes – A beer with a German flavour and family tradition

By Rodrigo Basco, Ph.D.

Saturday. I had set my mind on visiting a German city. The fact that I live in small town but have the chance to visit the rest of Europe by train is really wonderful. My eye rested on the city of Cologne. After reviewing its history and checking out its cultural life, I decided to start on a search for the spirit of Otto.

Argentines are very close to the Germans. The German culture is part of our identity (la argentinidad al palo as the song says – the spirit of being an Argentine). Every Argentine, at one time or another, has tasted a Quilmes Beer on a hot summer, and we all remember the beer commercials where Quilmes is the official sponsor for the Argentine soccer team. It’s not surprising that a German immigrant inspired us with his entrepreneurial culture and a true passion for beer (and sometimes we inspired them with our football). My intention isn’t to refer extensively to the passion for beer (either football), even if my German friends would agree to do so. What I really want to stress is the entrepreneurial vision of Otto Bemberg and his family saga. But the story doesn’t have a happy ending. Quilmes is no longer an Argentine company, much less a family business. Otto’s last descendants sold the company to the Belgian -Brazilian conglomerate.

Otto was born in the German city of Cologne in 1827, but he emigrated to Argentina in the 50s, where he married Ms. Ocampo. From the beginning, Otto showed his entrepreneurial streak with a import-export company in the field of textiles and cereals. In 1860 he founded the French-Argentine distillery and in 1988 he founded the corporation that was later called ‘Cerveza Quilmes’ – Quilmes Beer. His son Otto Sebastian was part of this story. He specialized in the manufacture of beer in Munich. Back in Argentina, Otto Sebastian took care of the business growth. In the first third of the last century, the company developed a growth strategy based on expansion, modernization and development of its plants and infrastructure.

The city of Quilmes (in the province of Buenos Aires) gets its name from the indigenous people from the northern region of Tucuman (The Quilmes), who were transferred to Buenos Aires on an excursion organized by the Spanish at the time of the Conquest (which wasn’t exactly a shopping tour as you can imagine). Few centuries later, this city experienced a remarkable growth and development thanks to the company that shares its name (Quilmes Beer). However, in the 1940s and 50s, the troubled political life in Argentina -troubled even today- expropriated property owners and nationalized the company. These properties were returned to their rightful owners by the late 50s.

In the 1980s and 90s, the company managed to be back at the forefront of technology with a quality product and acceptance in the domestic market. Quilmes Brewery and Malting began the new century in full swing and consolidation in all its product lines. But in 2002, the holding Quinsa was divided and sold, and it included the legendary brand Quilmes. This process ended in 2006 when the rumors around Buenos Aires were confirmed: the company founded by Otto and subsequently directed by different generations, whose star product is Quilmes beer, the official sponsor for the Argentine soccer team, was no longer a family or even a local business. The break stemmed from disagreements in the family, and Carlos Miguens, the director of the company at the time, was in the minority group.

What reasons may move a family to sell their century old-company, their emblem business? Why did the heirs decide to forsake family tradition? What are the emotional boundaries that may make an owner stay committed to the brand and the family tradition? Can someone teach responsibility for an active and committed property? What are the steps that should be taken to keep the family shareholders together when the company is growing?

An issue of ‘Gender’ in Family Business

By Rodrigo Basco, Ph.D.

I thought I could share some thoughts about the role of women in family business succession. This is not only a complicated issue to discuss, but also a delicate one, since it may slide into sensitive territory. In fact, it is a topic that must be understood in the specific cultural and historical context.

I will make myself clear …

Tony Buddenbrooks would not be considered as the successor of her family business company ‘House Buddenbrook’ (in T.Mann novel). This restriction cannot be judged as good or bad, we should try to understand women’s role in the specific context like 19th century in Germany. But we shouldn’t look so long ago: even 40 years ago a father would not think of his daughter as a potential successor to the family business. Although this may seem absurd to us, women are not regarded as likely candidates to take up business leadership in many countries-cultures.

A while ago I heard a businessman said: ‘My daughters are too dumb to take any position in the company’, even when his daughters seemed to show more entrepreneurial spirit than their father. I thought ‘if this businessman had a son, he would say ‘my son is the perfect candidate to succeed me – but after my death –of course’, even if the child were a “spoiled kid with a cool pick-up truck”. In contrast, in a context with Anglo-Saxon roots, I heard an entrepreneur names his youngest daughter as his future successor because she had shown charisma and preparation to face the challenge to consolidate the firm around all family branches making up the capital.

These examples illustrate the extremes about how women can be considered in the family business (the reader can imagine multiple grey areas in between). But it is undeniable that the role of women as future leaders or successors in a firm depends on the family that owns and manages the firm. Family values are the reflection of what their members consider as the right status of women within family firm, i.e. allowing women to be part of the firm or not. I do not wish to criticize or praise the ways women are considered in the family and the business context. The above mentioned examples show the extreme positions that allow us to understand gender issues.

Even though we are on the way to build equal culture in the twenty-first century, the succession of the family firm is led by founders-successors who have created or taken command of the firm in the 1970s and 80s and who still perpetuate the idea that ‘a woman cannot take the leadership of the firm’ or have some favouritism to male heirs. There is a clear paradox in companies with these features: a culture within the firm (male chauvinist position) and another culture outside the firm (gender equality). These contrasting situations are likely to create problems sooner or later.

For example, a problem arises when the woman or women in the family are aware that they have been removed from the ownership and management of the firm, which in turn has been distributed among male heirs. These women are likely to believe that this situation is demeaning and causes not only economic but also moral injustice. This, in turn, may result in a wide gap between the different perceptions of reality in the members of the family, causing friction and emotional distance.

While one group in the family takes cultural tradition as a given fact (men inside) and avoids recognizing that cultural and affective circumstances have changed (because that would also mean sharing power and ownership with women), the other group (women) ends up feeling injustice and inequity. It is a difficult situation to deal with, but it a circumstance that transitional societies should handle: women need to realize that the role they play is not as mere spectators of what men decide in the family firm context, but as active participants in economic and business decisions, despite the fact that it could take a long time and effort to persuade other family members to accept the situation as customary and inevitable.

We cannot change the past but we can change the future. Families who are immersed in such a dynamic should reprogram the way their members interact and how they communicate with each other. Communication is the element that the family and the business systems use to reproduce themselves. In order to have changes, we need to face the past and set the new values that should prevail in the future. Without communication there is no understanding, and without understanding the only possible ending is the disintegration of the family or the family branches and, of course, the firm.

Intergenerational Learning

By Rodrigo Basco, Ph.D.

The need to internationalize our company was not an alternative, it was a necessary step in a market we perceived saturated‘. These are the words of a family business CEO at an interview, referring to the future of the family saga in his company. The corporate vision is a characteristic of a good entrepreneur as it involves anticipating the path the company should take in order to avoid stagnation in the future.

The internationalization of a firm can be understood as a process that has different stages and constitutes a learning process in itself.

The interview with the CEO continued with amusing anecdotes about the internationalization process. I refer to them as ‘funny’ because past stories mixed with selective memory and time result in legends that will surely make us smile.

The company had been internationalized in his father’s time. ‘Of course,’ he said, ‘at our first attempt at internationalization everything went wrong’. He told us about a series of mishaps that made this first international experience of the business a total failure: they were scammed by their partners from the foreign country, foreign banks charged them a ridiculously high interest rate, all the shipments arrived late … there seemed to be an endless list of mistakes. And the story, quixotic, to say the least.

‘How can you go wrong in a process of internationalization?’, I thought. If you read a book on business administration, you know that the first thing to do is to plan, to minimize the problems that may cause the venture to fail. But reality is far from what the books portray as ‘technical’ when in fact they are prescriptive. Firstly, when an opportunity arises, more often than not, there is not much time for planning. Secondly, a small to medium size firm may not have enough resources, specifically human resources, to know all necessary knowledge for a new business venture (such as internationalization).

But just like an orchestra conductor, the businessman/entrepreneur has a specific ability to organize firm resources. This includes the ability to visualize where the firm should go, the ability to recognize a good opportunity, and the ability to create learning opportunities out of past mistakes and errors in the strategic implementation. Perhaps this last feature is what makes family businesses have greater resilience than the company which is non-family based.

Many entrepreneurs are able to visualize the future and recognize different opportunities, but at their first experience with failure, they leave the organization. The difference they have with a family businesses and family entrepreneurs lies in generational learning. In the family business, learning experiences between generations implicitly occurs because of interrelationships and interactions. The relationship between young and old in formal settings (such as a company meeting) and/or in informal meetings (such as a family meal) enables communication of experiences and transference knowledge through stories and anecdotes. That kind of learning, which is not regulated and is not learned in any classroom, is the one that allows the family business transcend through time.

In the interviewee’s opinion, the failure of the first international experience led by his father has become their main business asset: knowledge. That knowledge is an intangible resource that is embedded in the genetic code of the family members. The experience has been transmitted through formal and informal channels in family reunions, at business meetings, in different anecdotes… Their business is now successful at internationalization and growth, since past mistakes have not been committed again, and they know now how to proceed.

Knowledge and knowledge transfer are key aspects to the continuity of the family business.

%d bloggers like this: