Resistance to change in the financial management of small family-owned firms: a grounded theory of family firms in Laos

Abstract

Purpose The purpose of this study is to apply a grounded theory (GT) approach to develop a theory of resistance to change in the financial management of Laotian family firms. Design/methodology/approach The research adopts a GT approach, using a theoretical sampling procedure. Interviews were conducted with 36 Laotian family firms between April 2017 and May 2019. The in-depth interview transcriptions were analyed using open coding, axial coding and selective coding. Findings The interviewees identified that strategic planning, budgeting and management processes are factors influencing resistance to change. Research results show that accounting portfolios, investment decisions and return on assets are aspects of financial management that are particularly prone to change. The authors, therefore, suggest that Laotian family firms’ reduction in confidence and loss aversion may activate resistance to the adoption of more efficient financial management practices. Originality/value To the best of the authors’ knowledge, this is the first research to attempt to use grounded data to emerge a theory of resistance to change in financial management in Laos.

Estimating the capital assets of Laotian entrepreneurial families to compete in the garment industry

“…Our finding shows that financial capital continues to be a major factor determined by income, investments, savings and loans due to high competition. These findings are consistent with earlier studies on entrepreneurial families (Dunn and Holtz-Eakin, 2000; Kim et al , 2006; Coleman, 2007; Mari et al , 2016; Daovisan and Shen, 2020; Daovisan and Chamaratana, 2020a, b), leading to the implication that high financial capital may create a sustainable competitive advantage. Saad et al (2018) and Gomez-Mejia et al (2018) found that growing the financial capital, which is positively associated with working capital, has become an increasingly important and fundamental aspect of competition.…”

“…According to Peteraf and Barney (2003), competitive advantage creates “economic value” and “firm performance” for capable and efficient competitors. Therefore, our study focusses on the “economic values” of capital accumulation for the competitive advantage of entrepreneurial families (Orhangazi, 2008; Sigalas et al , 2013; Daovisan and Chamaratana, 2020a, b).…”

“…In Lao PDR, many entrepreneurial families are dependent on utilizing their capital assets to maintain their competitive position (Inmyxai and Takahashi, 2009; Tachibana, 2014; Daovisan and Chamaratana, 2020a, b). However, they lack the resource bases, technologies and raw materials required for success in competition.…”

“…However, they lack the resource bases, technologies and raw materials required for success in competition. Many studies have found that human and social capital have an insignificant impact on competition in Lao PDR (Onphanhdala and Suruga, 2010; Daovisan and Chamaratana, 2020a, b; Daovisan and Shen, 2020). Sayvaya and Kyophilavong (2015) uncovered a positive association with financial capital, although it is statistically insignificant.…”

“…Other studies have estimated the impact of capital assets by examining the existing research. For this reason, our study seeks to fill the gaps by estimating how the use of capital assets are positively related to competition (Sharma, 2008; Pearson et al , 2008; Danes et al , 2009; Molly et al , 2012; Daovisan and Chamaratana, 2020a, b; Daovisan and Shen, 2020). First, we investigate capital assets in the context of Lao PDR.…”