Family ownership logic: Framing the core characteristics of family businesses

Abstract

In this article we show how specific family business logic shapes managerial practices. Based on empirical material from 20 case studies of family ownership governance, our study identifies seven core characteristics of family ownership logic. These include active, visible and persistent ownership with few owners, relatively stable strategic development encompassing multiple ownership goals, autonomy towards capital markets, and a strong identification and emotional bonding with the business. By considering the family business context, we find managerial practices that are prevalent in the majority of businesses around the world and that have implications for ownership research. It is concluded that by taking the logic of ownership into consideration when studying family businesses, researchers in this field can contribute to the growing literature on sociocultural and behavioural factors in corporate governance relations.

Family business and regional development—A theoretical model of regional familiness

“…Family firms' specificities arise due to the interaction between family systems and firm systems, that is, family firms intermingle business and family resources to guarantee the continuity of the business (Haynes, Walker, Rowe, & Hong, 1999) and the family. The family-business relationship affects family firms' objectives (Brundin, Florin Samuelsson, & Melin, 2014) and therefore how the organization is governed and managed by altering the decision-making time frame (Sharma, Salvato, & Reay, 2014;Zellweger, 2007). In this context, family firms may alter the extent to which physical factors, such as capital and labor, are used within the boundaries of the region.…”

Family business and regional science: “Bridging the gap”

“…The evolution of family business research has been focused on the interaction between family systems and business systems and, specifically, on the influence of the family on firm-level dimensions. It has been demonstrated that family as an institution influences amongst others firm objectives and incentives (e.g., Basco & Calabrò, 2015;Brundin, Samuelsson, & Melin, 2014), governance behavior (e.g., Basco & Voordeckers, 2015), management behavior (e.g., De Clercq & Belausteguigoitia, 2015), the firm's strategic position (e.g., Basco, 2014), and resource creation and development (e.g., Huybrechts, Voordeckers, Vandemaele, & Lybaert, 2011).…”

Exploring value differences across family firms: The influence of choosing and managing complexity

“…The second most cited value is collectivism (e.g., Brundin et al, 2008;Eddleston & Kellermans, 2007;Miller & LeBreton-Miller, 2006), which refers to the subordination of personal goals to the goals of the collective (Triandis, 1995;Triandis, Dunnette, & Hough, 1993). There is also a reduced form of collectivism, which is referred to as clan-based collegiality (Corbetta & Salvato, 2004).…”

“…There is also a reduced form of collectivism, which is referred to as clan-based collegiality (Corbetta & Salvato, 2004). Another outstanding value for stewardship is trust (e.g., Brundin et al, 2008;Corbetta & Salvato, 2004). Trust implies the mutual confidence that no party will exploit another's vulnerabilities (Nahapiet & Ghoshal, 1998).…”

“…However, the discourse of family managers omits references to altruism and has little room for the concept of trust, which are both core values in the stewardship view (e.g., Brundin et al, 2008;Corbetta & Salvato, 2004;Eddleston & Kellermans, 2007;Miller & LeBreton-Miller, 2006;Zahra et al, 2008).…”