Evolutionary selection and variation in family businesses

Abstract

PurposeThis qualitative study attempts to understand what kinds of evolutionary selection and variation occur in family businesses during the preparation of a managerial and ownership succession.Design/methodology/approachThe study was conducted by interviewing members of one family business in Louisiana, USA and one in Finland in order to contribute to the understanding of succession preparation in small family businesses with two generations. Evolutionary economics was adapted for this interdisciplinary study to explain evolutionary changes in a family business succession.FindingsThe findings indicate that both selection and variation can take place through different routes during the preparatory phase of a family business succession. Selection is influenced both by the founder and next generations. However, it does not occur in company A due to the reluctance of the younger generation. In company B selection is processed through joint thinking and visioning. This will lead to variation which is shaped by both generations.Research limitations/implicationsThis study is based on qualitative interpretation. Limitations of the study are the small number of informants and the lack of generalization of the results.Practical implicationsThis study shows that selection and variation are intertwined. If selection does not occur in a family business, it leads to no variation between the generations. However, exits are possible; death and birth of companies are part of the life cycle of family businesses.Originality/valueEvolutionary thinking has not been studied recently among family firms except in the field of evolutionary psychology. Evolutionary thinking offers a variety of topics to study in the future.

Influence of the individual characteristics and personality traits of the founder on the performance of family SMEs

“…In family SMEs, the influence of the founding generation is so great that it can represent a threat to their development and continuity, if the following generation is found to be unable to take on total responsibility in the decision-making process (Laakkonen and Kansikas, 2011). In family SMEs, top management is therefore centralised on the founder, meaning that this person's attitude explains the firm's behaviour (Andersson and Florén, 2011).…”

Family Business in Vietnam and in Poland: Review of Characteristics and Trends of Development

“…Not taking all of that under thorough consideration, many companies seem to be unsuccessful in conquering the difficulties surrounding a succession [18]. As finding a successor could become problematical, especially for the small and family businesses, government should intervene by taking adequate initiatives in form of legislation changes and policy reforms to improve the odds of that important sector of the economy [28], [29].…”

“…While clan culture fosters higher levels of entrepreneurship when only one generation is involved in family business, it is the hierarchical culture that fosters higher levels of trans-generational entrepreneurship when multiple generations are simultaneously involved. This specific transgenerational entrepreneurship enables the process of trans-generational value creation with the highest risk consisted in the possible loss of next generation's involvement and interest, therefore having no one to take over the family business at that time [29]. This entails a reinforcement of the formalization of control system in family businesses to support family governance mechanisms, for the purpose of preserving sustainable entrepreneurship of family business [14], [15], [39] As a part of family business culture, the problem of knowledge sharing within family business is intergenerational.…”

Succession in the family business: drivers and pathways

“…Furthermore, it is useful to investigate succession in a non-Western cultural context as cross-cultural research on family business dynamics ensures that theories are not "culture bound" (Handler, 1994;Dyer and Sanchez 1998). Several non-western family business studies in China (Dou and Li, 2013), Honduras (Discua Cruz et al, 2013), Malaysia (Zainol, 2013), and Finland (Laakkonen and Kansikas, 2011) among others serve to augment the family business audience's awareness and appreciation of a multicultural perspective. This paper explores drivers and pathways of succession in Lebanon, a Middle Eastern country representing a collectivistic culture that values family and tradition.…”