What is good for your family firm is good for you!

PhotoWhat is good for your family firm is good for you, but the other way around is not true,” said Sheikh Sultan Al Qassemi in the Guest Lecture Series hosted by Prof. Rodrigo Basco. “Family is about emotions and how to manage them for continuity.”

In the interactive session, titled “The Experience from Two Generations,” Sheikh Sultan Sooud Al-Qassemi and his nephew, Sheikh Saud Majid Al Qassimi, emphasized the importance of emotional intelligence and strategic dialogue when communicating with family members in a professional arena.

Drawing on their own experiences, the guest lecturers explained the importance for new-generation family business members to listen and to learn but to not directly confront the generation in charge. Finding alternative solutions to convince family members to implement family and/or business changes is the best way to strategically manage family businesses in the Arab world. The lesson they transmitted was “adapt your strategies to the cultural context of the Arab world. Respect tradition without confrontation, but look for opportunities to introduce changes necessary to keep your family united and the business working.” “The key to cohesion and efficiency,” Sheikh Sultan Sooud Al-Qassemi said, “is understanding the essence of those you’re working with.”

Saud Al Qassemi spoke about the uncertainty he experienced after graduating from university. He had assumed that he would be included within his family business after merely a few months of training. “I was wrong,” he said with a laugh. “When I asked my uncle if I could join, he simply said no.” Instead, Saud Al Qassimi spent the next couple years learning and gaining experience working in numerous banks in the United Arab Emirates and Singapore. It was only after having spent a considerable amount of time abroad that he joined his family’s business.

However, his experience, extensive as it might have seemed, was not enough to prepare him for working alongside his family. “I found out that working in a bank is a completely different experience,” he said. “Working in a family business is something else entirely. I don’t think it’s something you can actually prepare for.”

Photo 3Sheikh Sultan Sooud Al-Qassemi and Sheikh Saud Majid Al Qassimi’s session is one of the initiatives headed by Dr. Rodrigo Basco, Chairholder of the 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 businesses in the UAE, GCC, and MENA regions.

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ENTREPRENEURIAL FAMILIES IN BUSINESS ACROSS GENERATIONS, CONTEXTS AND CULTURES

CALL FOR PAPERS – Journal of Family Business Management

SPECIAL ISSUE ON: “ENTREPRENEURIAL FAMILIES IN BUSINESS ACROSS GENERATIONS, CONTEXTS AND CULTURES”

Guest Editors:

Albert James, Rowe School of Business, Dalhousie University, Canada

Elias Hadjielias, University of Central Lancashire, Cyprus

Maribel Guerrero, Northumbria University, UK

Allan Discua Cruz, Lancaster University Management School, UK

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

Families in business are an essential component of the socioeconomic landscape of towns, cities and regions around the world (Basco & Bartkeviciute, 2016; Guerrero et al., 2013; Howorth, Rose, Hamilton, & Westhead, 2010; Seaman, 2015). Entrepreneurial families in business can be broadly interpreted as a phenomenon where several members of a family create and develop one or more business enterprises over time (Hamilton, Discua Cruz, & Jack, 2017; Nordqvist & Melin, 2010). Our understanding of families in business to date is supported by the acknowledgement that entrepreneurship is inextricably linked to family (Aldrich & Cliff, 2003; Heck et al., 2006; Olson et al., 2003; Williams, Zorn, Russell Crook, & Combs, 2013). However, context and time have been scarcely integrated to frame the study of entrepreneurial families in business.

Time is a dimension that affects individual behavior and, consequently, those institutions, such as family and business, in which they are embedded. The objective interpretation of time, as a linear and regular pattern which is irreversible, could be used to explore and explain the start-up, development and exit of entrepreneurial economic activities of families (Drakopoulou Dodd, Anderson, & Jack, 2013) which may impact on management complexity, portfolios or spin offs and further entrepreneurial activities. Time is important because of its subjective intepretation, grounded on the meaning that cultures associate to it (Ancona, Okhuysen, & Perlow, 2001), which may alter the interpretation of the entrepreneurship phenomenon itself as well as the perception and subsequent entrepreneurial behaviour across cultures at the individual, group, and firm level. Scholars are called to understand the dynamics that motivate a family to keep a busines under family control over time (Tucker, 2011) often developing tailored managerial forms of control (Botero, Gomez Betancourt, Betancourt Ramirez, & Lopez Vergara, 2015), often challenging long standing ideologies within their firms (Johannisson & Huse, 2000). Similarly scholars are called to understant the effect of entrepreneurship on families and the desire to maintain control of their business (Jennings, Breitkreuz, & James, 2013).

Context is what is beyond the phenomenon itself, and the demarcation between them is composed of both a physical and cognitive aspects (Basco, 2015). While context has traditionally represented the formal and informal institutions that shape the phenomenon of entrepreneurial families in business (North, 1990; Scott, 1995), recent work suggests that there are multiple and overlapping embedded contexts (Basco, 2017), which may influence the practice of entrepreneurship in entrepreneurial families in business (Welter, 2011). Recently, in a study of a rural cooperative comprised of family businesses, Hadjielias & Poutziouris (2015) explored the dynamics bringing together families in business from diffferent business contexts. Their findings underscore that context is important for entrepreneurial families to engage in entrepreneurial activities collectively. Contexts such as industrial districts (Johannisson et al., 2007) and entrepreneurial environments (Guerrero et al., 2013), as well as endogenous, exogenous and temporal aspects (Wright, Chrisman, Chua, & Steier, 2014) merit close attention. Further studies around context and its physical/cognitive as well as formal/informal demarcations can help develop theories of entrepreneurial families in business and contextualise the phenomenon.

A focus on entrepreneurial families in business underscores a family perspective on entrepreneurship by considering three levels of analysis: individual, group and firm (Discua Cruz & Basco, 2017). Each level calls for interdisciplinary studies with different dimensions and relationships to be explored through time and within contexts. For example, at the individual level, the influence of family in entrepreneurship has been discussed by Aldrich and Cliff (2003) (2003), yet more work is needed to unpack how family dynamics influence the initial steps in an entrepreneurial process in particular contexts and time. Further works at the group level approach could help contextualize the interactions of family members as building blocks for creating collective rules, patterns, goals and expectations that influence a family group/team dynamics when creating or pursuing business opportunities (Discua Cruz, Hadjielias, & Howorth, 2017; Discua Cruz, Howorth, & Hamilton, 2013). Finally, at firm level, the interaction between family firm and corporate entrepreneurship needs more research in order to better understand the cross-family and cross-cultural differences that may affect corporate venturing, renewal strategies, and innovation.

In theorizing entrepreneurial families in business around time and context we attempt to advance our understanding around recent calls to explore further the link between family, context, time and entrepreneurship (Drakopoulou Dodd et al., 2013; Randerson, Bettinelli, Dosena, & Fayolle, 2015; Seaman, 2015; Welter, 2011). Thus, a special focus on generations, context, and culture for studying entrepreneurial families in business around the world is warranted. To advance understanding around entrepreneurial families in business this special issue aims to consider conceptual, qualitative and quantitative empirical studies from around the world. Theoretical and conceptual research contributions are also welcomed. As the study of entrepreneurial families in business is multidisciplinary, we encourage cross-disciplinary approaches to advance our understanding. Questions and themes that can be submitted and developed for this special issue include, yet are not limited to:

Entrepreneurial families in business

  • What are the entrepreneurial features of families in business?
  • How do entrepreneurial families in business influence a transgenerational entrepreneurship behavior?
  • What kind of family identities and goals do entrepreneurial families embrace?
  • How does the entrepreneurial behaviour of families in business influence firm performance?
  • How and why do entrepreneurial families in business engage in habitual entrepreneurship behaviour?
  • Why do certain entrepreneurial families in business prefer to cooperate with other families in business?

Time

  • How does family life cycles influence entrepreneurial families in business?
  • How business life and product life cycle affect entrepreneurial families in business?
  • How and why some families in business are more entrepreneurial than others?
  • What kind of cognitive processes do entrepreneurial families develop in order to discover and exploit opportuities?
  • How do families in business develop and sustain entrepreneurial opportunities across generations?
  • How does the perception of time by entrepreneurial families affect the dimensions of firm entrepreneurial behavior?
  • How do entrepreneurial families in business address succession processes in family business?
  • How do entrepreneurial families in business influence local, regional institutions over time?
  • How does family life-cycle affect a family’s entrepreneurial activity?

Context

  • Do features of entrepreneurial families in business vary across cultures? What kind of feature differences in terms of managerial philosophy, identities, and family goals can we find across cultures?
  • Is there any link between entrepreneurial institutions and entrepreneurial families?
  • To what extent do particular contextual dimensions (e.g formal/informal, physical/cognitive) affect entrepreneurial families?
  • What are the origins and evolution of entrepreneurial families in business families across contexts?
  • What do concepts of what family is (extent, membership, responsibilities, relationships, etc.) mean for family entrepreneurial activity?
  • How do cooperatives become contexts for the collective practice of entrepreneurship between families in business?

We invite submissions to a special issue of Journal of Family Business Management around the topic of “Entrepreneurial families in business across generations, contexts and cultures”. All papers will be subject to the usual review process and must meet the publication standards of the journal.

This special issue is a collaboration with Family Enterprise Research Conference (FERC), which will be hold in Mexico in June 2018: Family Traditions & Culture: Values and legacy in Entrepreneurial Families.

Additional Information

Authors should follow the guidelines as stated in the Information for Contributors of Manuscripts. Manuscripts should be submitted to https://mc.manuscriptcentral.com/jfbm no later than September 15, 2018. Authors should indicate “Special Issue” as the manuscript type and should specify that the submission is for the special issue on “ENTREPRENEURIAL FAMILIES IN BUSINESS ACROSS GENERATIONS AND CULTURES” in their cover letter. Please contact Albert James (Albert.James@Dal.Ca), Elias Hadjielias (ehadjielias@uclan.ac.uk), Maribel Guerrero (maribel.guerrero@northumbria.ac.uk), Allan Discua Cruz (a.discuacruz@lancaster.ac.uk), Rodrigo Basco (bascorodrigo@gmail.com) if you have any questions about the special issue.

 

REFERENCES

Aldrich, H. E., & Cliff, J. E. (2003). The pervasive effects of family on entrepreneurship: toward a family embeddedness perspective. Journal of Business Venturing, 18(5), 573–596.

Ancona, D. G., Okhuysen, G. A., & Perlow, L. A. (2001). Taking Time to Integrate Temporal Research. The Academy of Management Review, 26(4), 512–529.

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). Epilogue: Multiple embeddedness contexts for entrepreneurship. In M. Ramírez-Pasillas, E. Brundin, & M. Markowska (Eds.), Contextualizing Entrepreneurship in developing and emerging economies (pp. 329–336). London: Edward Edgar.

Basco, R., & Bartkeviciute, I. (2016). Is there any room form family business into European Union 2020 Strategy? Family business and regional public policy. Local Economy, 31(6), 709–732.

Botero, I. C., Gomez Betancourt, G., Betancourt Ramirez, J. B., & Lopez Vergara, M. P. (2015). Family protocols as governance tools: Understanding why and how family protocols are important in family firms. Journal of Family Business Management, 5(2), 218–237.

Discua Cruz, A., & Basco, R. (2017). A family perspective on Entrepreneurship. In N. Turcan R & Fraser (Ed.), A Handbook of Multidisciplinary Perspectives on Entrepreneurship (p. forthcoming). Palgrave.

Discua Cruz, A., Hadjielias, E., & Howorth, C. (2017). Family entrepreneurial teams. In C. Ben-hafaiedh & T. Cooney (Eds.), Research Handbook on Entrepreneurial Teams: Theory and Practice (C. Ben-Haf). UK: Edward Edgar.

Discua Cruz, A., Howorth, C., & Hamilton, E. (2013). Intrafamily Entrepreneurship: The Formation and Membership of Family Entrepreneurial Teams. Entrepreneurship Theory and Practice, 37(1), 17–46.

Drakopoulou Dodd, S., Anderson, A., & Jack, S. (2013). Being in time and the family owned firm. Scandinavian Journal of Management, 29(1), 35–47.

Guerrero, M., Peña-Legazkue, I., Marshall, A., Gras, G., Mira, I., & Coduras, A. (2013). Entrepreneurial activity and regional development: an introduction to this special issue. Investigaciones Regionales, 26, 5–15.

Hadjielias, E., & Poutziouris, P. (2015). On the conditions for the cooperative relations between family businesses: the role of trust. International Journal of Entrepreneurial Behavior & Research, 21(6), 867–897.

Hamilton, E., Discua Cruz, A., & Jack, S. (2017). Re-framing the status of narrative in family business research: Towards an understanding of families in business. Journal of Family Business Strategy, 8(1), 3–12.

Heck, R., Danes, S., Fitzgerald, M. A., Haynes, G., Jasper, C., Schrank, H., … Winter, M. (2006). The family’s dynamic role within family business entrepreneurship. In P. Poutziouris, K. Smyrnios, & S. Klein (Eds.), Handbook of Research on Family Business (pp. 80–124). Cheltenham, UK: Edward Elgar.

Howorth, C., Rose, M., Hamilton, E., & Westhead, P. (2010). Family firm diversity and development: An introduction. International Small Business Journal, 28(5), 437–451.

Jennings, J. E., Breitkreuz, R. S., & James, A. E. (2013). When Family Members Are Also Business Owners: Is Entrepreneurship Good for Families? Family Relations, 62(3), 472–489.

Johannisson, B., Caffarena, L. C., Cruz, A. F. D., Epure, M., Pérez, E. H., Kapelko, M., … Bisignano, A. (2007). Interstanding the industrial district: contrasting conceptual images as a road to insight. Entrepreneurship & Regional Development, 19(6), 527–554.

Johannisson, B., & Huse, M. (2000). Recruiting outside board members in the small family business: an ideological challenge. Entrepreneurship & Regional Development, 12(4), 353–378.

Nordqvist, M., & Melin, L. (2010). Entrepreneurial families and family firms. Entrepreneurship and Regional Development, 22(3–4), 211–239.

North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge university press.

Olson, P. D., Zuiker, V. S., Danes, S. M., Stafford, K., Heck, R. K. Z., & Duncan, K. A. (2003). The impact of the family and the business on family business sustainability. Journal of Business Venturing, 18(5), 639–666.

Randerson, K., Bettinelli, C., Dosena, C., & Fayolle, A. (2015). Family Entrepreneurship: Rethinking the research agenda. NY: Routledge.

Scott, W. R. (1995). Institutions and organizations. Thousand Oaks, CA: SAGE.

Seaman, C. (2015). Creating space for the business family: Networks, social capital & family businesses in rural development. Journal of Family Business Management, 5(2), 182–191.

Tucker, J. (2011). Keeping the business in the family and the family in business: “What is the legacy?” Journal of Family Business Management, 1(1), 65–73.

Welter, F. (2011). Contextualizing Entrepreneurship-Conceptual Challenges and Ways Forward. Entrepreneurship Theory and Practice, 35(1), 165–184.

Williams, D. W., Zorn, M. L., Russell Crook, T., & Combs, J. G. (2013). Passing the Torch: Factors Influencing Transgenerational Intent in Family Firms. Family Relations, 62(3), 415–428.

Wright, M., Chrisman, J. J., Chua, J. H., & Steier, L. P. (2014). Family Enterprise and Context. Entrepreneurship Theory and Practice, 38(6), 1247–1260.

 

 

Regional familiness for policy-makers

This is the third piece in a three-part series on family business and regional development. Read part one: “in search of the missing link” and part two “Regional Familiness – The missing link

Part 3: What can policy-makers and family owner-manager do for regional development?

By Rodrigo Basco, Ph.D.

We are arriving at our last stop in this trip arguing that it is not thewordle 2 number of family firms within the geographical space which makes them important, but the quality of their behaviour. The economic participation of family firms can be seen through aggregate numbers such as contribution to GDP or participation on employment rate, but these numbers are just the consequences of what is happening within the region.

Nevertheless, do we know how family firm behaviour affects regional economic development?

To answer this question, in the previous post, I sustained that family firms may alter soft issues such as proximity (physical, cognitive, social, organizational and institutional proximity) that enable regional processes to boost or to hinder economic and social development.

And! So what?

This new lens, regional familiness perspective, to approach the understanding and analysing of family firm and regional development could have two main stakeholders as recipients. First, for policy-makers who are interested in promoting regional policy for economic growth and development and, second, for family firms themselves which are interested in their own image within the geographical space.

Policy-makers are strongly convinced that they can intervene in economic and social spheres to reduce regional inequality. Policies at the local, regional, national, or supranational level have targeted phenomena such as entrepreneurship, innovation, and internationalization among others without considering the composition of firms within their local productive structures. Familiness characteristics have been omitted from the analysis for tailoring regional policies. Without knowing who receives support and how they interact within the environment, there is an increase in the likelihood that political interventions may fail. Family and non-family firms react differently to political incentives because family firms have different underlying motivations, goals, and aspirations affecting their decision making.

But supporting family firms is not about reducing taxes as a consequence of lobby actions of huge family firms and wealthy families as the main European political policy is doing to favour family businesses. Policy-makers, by doing their job, have to recognize the family business role in the economic and social environment to tailor policies to increase the positive side of family businesses while reducing the negative ones. What regions and family businesses need in Bavaria, Andalucía, Central America and Bangalore is completely different and it is not related to reducing taxes. For instance, Can the long tradition of family firms recover the economic dynamic of North Rhine-Westphalia (Germany) beyond the coal and steel industry and the complacency of having hidden champions? Can the new generation of family members in the North Rhine-Westphalia region maintain the leadership of their firms as their fathers and mothers have been able to do so far? Are members or wealthy family firms agents of innovation or just mere wealth managers of their fortune?

On the other hand, family members cannot avoid their link between family name and firm as an identity footprint that requires caring for the family business image. It is not the philanthropic actions which make family firms socially responsible, but how family firms economically and socially interact with other actors within geographic places to leverage regional processes such as social interactions, learning processes, and information exchange. By doing this, family firms contribute to the improvement of the economic and social conditions favouring positive externalities such as innovation, entrepreneurship, efficiency and internationalization. Therefore, the best family firms can do for sustaining regional development is playing their linking role among family, market, and society. When one of these links is broken, family firms lose their intrinsic sense as it happened in some Latino American countries where family businesses extend their network into the political arena with the intention to sustain monopolies avoiding free market, competence, and innovation.

There is no magic recipe for owner-managers and policy-makers to tell them what to do to foster economic growth and development, but we start knowing that we have to be aware of who family firms are, what they are doing in our close environment, and how they are interacting with other players and institutions. Family firms are not the next miracle for economic growth but they have been and they will continue to be part of our economic and social life.

Family Business in Emerging, Developing, and Transitional Economies. The relevance of context

The aim of this special track is to increase the understanding of family firms in developing, emerging, and transitional economies.


Welter, F. (Institut für Mittelstandsforschung, Germany)

Ramachandran, K.  (Indian School of Business, India)

Discua Cruz, A. (Lancaster University, UK)

Fang, H. (Mississippi State University, USA)

Basco, R. (Witten/Herdecke University, Germany)

Currently, the vast majority of family business studies have mostly focused on developed economies (e.g. North America and Europe). Moreover, theories in the family business literature are often developed based on particular points of view (e.g. Anglo-American) and tested in developed economies. This limits our understanding of family firms around the world as the contexts where they have been founded, developed and operated may differ substantially. Therefore the validity, reliability and applicability of existing theories may be questioned. While recent studies have attempted to resolve this issue by focusing on culture in terms of its effects on family entrepreneurial behavior and family firm heterogeneity, (e.g. Discua Cruz and Howorth, 2008; Gupta and Levenburg, 2010; Rosa et al., 2014) and by relating family firms and their geographical context (Basco, 2015), we still know little about family businesses in developing, emerging and transitional economies.

Family firms are ubiquitous and yet unique (Howorth et al., 2010). They are heterogeneous in terms of behavior and performance (Basco, 2013). Yet, the diverse and often complex contexts in which they dwell are largely overlooked (Gupta et al., 2008). Recent studies prompt researchers to look closely at the heterogeneous nature of context (e.g. historical, institutional, spatial, and social contexts) in which family firms dwell, as it influences the genesis, development and continuity of family firms (Wright et al., 2014). There is a need to concentrate on contextualizing theory (theories in context) and/or theorize about context (theories of context) (Whetten, 2009) in family business research. Studies that acknowledge and explore unique contexts would contribute significantly to the family business field (Smallbone and Welter, 2001; Welter, 2011). This track encourages studies that acknowledge and explore family businesses in developing, emerging and transitional economies.

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

  • Traditional familybusiness research topics (such as succession, management, corporate governance, and ownership among other) but contextualizing the study in emerging, developing and transition economies.
  • The economic and social impact of family businesses in emerging, developing and transition economies.
  • The origin and evolution of family businesses in emerging, developing, and transition economies.
  • Historical, sociological and anthropological perspectives to study family businesses in emerging, developing, and transition economies.
  • Cooperation and/or competitive dynamics of family businesses 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.
  • The applicability of mainstream theories in understanding familybusiness behavior in emerging, developing and transition economies.
  • Strategies adopted by family businesses to counteract/compromise/obey institutional isomorphism in emerging, developing and transition economies.
  • Corporate entrepreneurship and innovation in familybusiness in emerging, developing, and transition economies.
  • Familybusiness (economic and non-economic) performances in emerging, developing, and transition economies.
  • Internationalization 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.
  • Family businesses, familybusiness groups and family elites in emerging, developing, and transition economies.
  • Cultural aspects that frame family and familybusiness values, norms, and ethics in emerging, developing, and transition economies.
  • The impact of the context on shaping familybusiness management and governance practices in emerging, developing, and transition economies.

We believe that this special track at EURAM (European Academy of Management) will make several contributions to family business research. First, by contextualizing family businesses we may have a better understanding of the diversity of family firms across contexts (e.g. historical, temporal, institutional, special and social). Second, by contextualizing borrowed theories (agency theory, institutional theory, institutional logics, etc.), we may validate, extend or contrast mainstream theories in the family business field. More importantly, we may be able to contextualize existing theories in the family business literature aiming to improve the validity, reliability and applicability in diverse settings. Finally, by theorizing about the effects of context on family firms we expect to generate the discussions that could lead to a generic Theory of Context useful for family business studies.

A workshop about “contextualizing family firms” will take place in EURAM 2016. 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.

 

To submit your paper to the EURAM 2016 Conference – Deadline 12th January 2016


References

Basco, R. (2013), “The family’s effect on family firm performance: A model testing the demographic and essence approaches”, Journal of Family Business Strategy, Vol. 4 No. 1, pp. 42–66.

Basco, R. (2015), “Family Business and Regional Development. A theoretical model of regional familiness”, Journal of Family Business Strategy, No. Forthcoming.

Discua Cruz, A. and Howorth, C. (2008), “Family business in Honduras: Applicability of agency and stewardship theories”, in Gupta, V., Levenburg, N., Moore, L., Motwani, J. and Schwarz, T. (Eds.),Culturally-sensitive models of family business in Latin America, Hyderabad: ICFAI University Press, pp. 222–243.

Gupta, V. and Levenburg, N. (2010), “A Thematic Analysis of Cultural Variations in Family Businesses: The CASE Project”, Family Business Review, Vol. 23 No. 2, pp. 155–169.

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

Howorth, C., Rose, M., Hamilton, E. and Westhead, P. (2010), “Family firm diversity and development: An introduction”, International Small Business Journal, Vol. 28 No. 5, pp. 437–451.

Rosa, P., Howorth, C. and Discua Cruz, A. (2014), “Habitual and portfolio entrepreneurship and the family in business”, in Melin, L., Nordqvist, M. and Sharma, P. (Eds.),The SAGE Family Business Handbook, Sage, London.

Smallbone, D. and Welter, F. (2001), “The distinctiveness of entrepreneurship in transition economies”, Small Business Economics, Vol. 16 No. 4, pp. 249–262.

Welter, F. (2011), “Contextualizing Entrepreneurship—Conceptual Challenges and Ways Forward”, Entrepreneurship Theory and Practice, Blackwell Publishing Inc, Vol. 35 No. 1, pp. 165–184.

Whetten, D.A. (2009), “An Examination of the Interface between Context and Theory Applied to the Study of Chinese Organizations”, Management and Organization Review, Vol. 5 No. 1, pp. 29–55.

Wright, M., Chrisman, J.J., Chua, J.H. and Steier, L.P. (2014), “Family Enterprise and Context”, Entrepreneurship Theory and Practice, Vol. 38 No. 6, pp. 1247–1260.

[i] The International Monetary Fund’ list of developing countries is used to determine the countries that fall within such category: World Economic Outlook – 2014

Family Business in Emerging, Developing, and Transition Economies

Untitled

Call for Papers – European Academy of Management

 

The aim of this special track is to increase understanding about family businesses by focusing on developing, emerging, and transition economies.

Family businesses are ubiquitous, diverse and dominant in the economic landscapes around the world (Howorth, Rose, Hamilton, & Westhead, 2010). The diversity of family business models suggest that we should look closely at the context in which family businesses dwell (Gupta, Levenburg, Moore, Motwani, & Schwarz, 2008) because of the intrinsic relationship among family – family business – context. While family businesses have received increasing attention, the vast majority of research has concentrated on developed economies. This is evident as more than 85% of research findings (qualitative or quantitative) published about family businesses in leading journals in the last three years uses samples from developed countries. This may limit our understanding of family businesses as the contexts in which they operate around the world are varied: some contexts may either foster or prevent family business start-up, some may fuel or hinder existing family business development and the way family businesses are governed and managed, and some may prevent or accelerate their demise. A family’s (and firm’s) external environmental context (that is, cultural, demographic, economic, educational, legal, and social) can shape family firm formation, diversity, and development (Howorth et al., 2010). Studies on developing, emerging, and transition economies are underrepresented in the family business field[i]

Theorizing about family businesses in general has followed three main paths: borrow and replication, borrow and extending and inverse contribution (Pérez Rodríguez & Basco, 2011). The unit of analysis that most works have focused on has been the family businesses per se (Jansen & Basco, 2014) with little attention to the context. While some recent studies have attempted to focus on cultural aspects, entrepreneurial behavior, applicability of mainstream theories and the external environment to uncover the extent of family firm diversity (e.g. Discua Cruz & Howorth, 2008; Gupta & Levenburg, 2010; Rosa, Howorth, & Discua Cruz, 2014) there is still a timid focus on the dynamic contexts where family businesses operate within developing, emerging and transition economies. There is a need to focus on contextualizing theory (theories in context) and/or theorize about context (theories of context) (Whetten, 2009). Studies that acknowledge and explore the context in which family businesses are embedded into would contribute significantly to the family business field (e.g. Aldrich & Pfeffer, 1976; Welter, 2011).

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

  • Traditional family business research topics (such as succession, management, corporate governance, and ownership among other) but contextualizing the study in emerging, developing and transition economies.
  • The economic and social impact of family businesses in emerging, developing and transition economies.
  • The historical perspective and evolution of family businesses 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.
  • The applicability of mainstream theories in understanding family business behavior in emerging, developing and transition economies.
  • Strategies adopted by family businesses to counteract/support economic policies in emerging, developing and transition economies.
  • Family businesses, entrepreneurship, and innovation in emerging, developing, and transition economies.
  • Family business performance (economic and non-economic firm performance aspects) in emerging, developing, and transition economies.
  • Internationalization 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.
  • Family businesses, family business groups and family elites in emerging, developing, and transition economies.
  • Cultural aspects that frame family and family business values, norms, and ethics positions in emerging, developing, and transition economies.
  • Corruption and family businesses in emerging, developing, and transition economies.
  • The impact of the context on shaping family business management and governance practices in emerging, developing, and transition economies.

We believe that this special track at EURAM (European Academy of Management) will make several contributions to family business research. First, by contextualizing family businesses we may have a better understanding of the diversity of family firms across contexts. Second, by contextualizing borrowed theories (agency theory, institutional theory, etc.), we may validate or contrast mainstream theories highlighted in the family business field. Finally, by theorizing about the effects of context on family businesses we expect to generate the discussions that could lead to a Theory of Context useful for family business studies.

For questions regarding this special track, please contact Rodrigo Basco (bascorodrigo@gmail.com) or Allan Discua Cruz (a.discuacruz@lancaster.ac.uk).

[i] The International Monetary Fund’ list of developing countries is used to determine the countries that fall within such category: World Economic Outlook – 2014

 Proponents

Basco, R. (Witten/Herdecke University, Germany)

Discua Cruz, A. (Lancaster University, UK)

Jimenez-Seminario, G. (Universidad del Desarrollo, Chile)

Ramachandran, K.  (Indian School of Business, India)

Xin-chun, L. (Sun Yat-sen Business School, China)

Welter, F. (Institut für Mittelstandsforschung, Germany)

 

 

To submit your paper to the EURAM 2015 Conference (click here)

Deadline 13th January 2015

 

 

References

Aldrich, H. E., & Pfeffer, J. (1976). Environments of Organizations. Annual Review of Sociology, 2, 79-105.

Discua Cruz, A., & Howorth, C. (2008). Family business in Honduras: Applicability of agency and stewardship theories. In V. Gupta, N. Levenburg, L. Moore, J. Motwani & T. Schwarz (Eds.), Culturally-sensitive models of family business in Latin America (pp. 222-243): Hyderabad: ICFAI University Press.

Gupta, V., & Levenburg, N. (2010). A Thematic Analysis of Cultural Variations in Family Businesses: The CASE Project. Family Business Review, 23(2), 155-169.

Gupta, V., Levenburg, N., Moore, L., Motwani, J., & Schwarz, T. (Eds.). (2008). A Compendium on the Family Business Models Around the World Hyderabad: ICFAI University Press.

Howorth, C., Rose, M., Hamilton, E., & Westhead, P. (2010). Family firm diversity and development: An introduction. International Small Business Journal, 28(5), 437-451.

Jansen, T., & Basco, R. (2014). It´s not the concept, stupid!. What family business research is about. Witten/Herdecke University (Germany).

Pérez Rodríguez, M. J., & Basco, R. (2011). The Cognitive Legitimacy of the Family Business Field. Family Business Review, 24(4), 322-342.

Rosa, P., Howorth, C., & Discua Cruz, A. (2014). Habitual and portfolio entrepreneurship and the family in business. In L. Melin, M. Nordqvist & P. Sharma (Eds.), The SAGE Family Business Handbook. London: Sage.

Welter, F. (2011). Contextualizing Entrepreneurship-Conceptual Challenges and Ways Forward. Entrepreneurship Theory and Practice, 35(1), 165-184.

Whetten, D. A. (2009). An Examination of the Interface between Context and Theory Applied to the Study of Chinese Organizations. Management and Organization Review, 5(1), 29-55.

 

[i] The International Monetary Fund’ list of developing countries is used to determine the countries that fall within such category: World Economic Outlook – 2014

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.

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