Location Preferences of Family Firms: Strategic Decision Making or “Home Sweet Home”?

Abstract

Selecting a business location is among the most important strategic decisions for family firms. Yet the separate demands of the family and the business often prove difficult to balance. A comparison of location preferences in family and nonfamily firms provides insight into the family influence on strategic decision making.

Learning and Organization in the Knowledge‐Based Information Economy: Initial Findings from a Participatory Action Research Case Study

“…In terms of the relative rankings of the opportunity indices, the small company response profile shows highest opportunity indices for the internal aspects of the business, notably reward flexibility, the provision of relevant accounting and control information and internal exchange and communication. This is consistent with an organizational form which is predominantly, even traditionally, hierarchical and, in many cases, subject to family ownership and control (which a number of commentators have found to have a negative influence on organizational decision-making: Dyer, 1994;Kahn and Henderson, 1992;Upton and Heck, 1997;Upton and Seaman, 1991). By contrast, the Softco evidence suggests that the highest opportunity levels are associated with the externally directed aspects of the organization, notably intercompany learning and the capture of information external to the company from boundary-workers, and with the structures for career development and progression (which may indicate a 'professionalization' effect).…”

Family involvement in small, local nongovernmental organizations

“…Kinship, and subsequent moral orders, is seen at odds with market logic (Stewart, 2003), causing family firms to make decisions that hinder their ability to make profit. Although Kahn and Henderson (1992) dispute that families have a heavy influence on decision making, they did find evidence that family considerations affected decisions such as firm location.…”

Strategic Management of the Family Business: Past Research and Future Challenges

“…Other studies find that family firms emphasize personal values over corporate values in customer service policies (Lyman, 1991), place more emphasis on growth potential than on short-term sales growth, and pay higher wages to employees (Donckels and Frohlick, 1991;Trostel and Nichols, 1982). On the other hand, other studies find little difference in the location preferences of family and non-family firms (Kahn and Henderson, 1992). These results are interesting, but we do not know what they mean in terms of achieving the goals of family and non-family firms.…”