Sustaining the Family Business With Minimal Financial Rewards

Abstract

Abstract:We engaged in a multi-case comparative study exploring how family farm businesses continue when economic returns are minimal. We analyzed strategic approaches used by 20 family dairy farms operating in the UK and identified four different strategic behaviors chosen by the family farm businesses -diversifying the business, maximizing debt, sacrificing family needs and compromising. Each strategy allows the firm to survive, but has consequences for the family, the business, or both. Our study contributes to the socioemotional wealth literature by showing how emotional attachment to the business can influence firm decision-making.

Entrepreneurial behaviour, firm size and financial performance: the case of rural tourism family firms

“…This finding indicates that despite the flexibility originating from their small size (Bamiatzi & Kirchmaier, 2014;Getz & Carlsen, 2000), micro firms might face difficulties in either implementing proactive efforts due to limited workforce, expected margins, or that they simply do not have the financial means to exploit these proactive capabilities (Weiermair & Peters, 1998). Drawing on the literature of social networks in tourism and the regional embeddedness of tourism family firms (Peters & Kallmuenzer, 2015;Strobl & Peters, 2013), one can find that microsized rural tourism family businesses use their networks and social ties to cooperate (Chrisman et al, 2015;Glover & Reay, 2015) and overcome their size disadvantage (Harms, Memili, & Steeger, 2015;Sundbo et al, 2007). This interpretation can also be supported by quotes from the follow-up interviews:…”

Entrepreneurship in the Agricultural Sector: A Literature Review and Future Research Opportunities

“…Consequently, the opportunities and barriers for entrepreneurship in these contexts differ from the developed Western world (Welter, 2011), and we cannot easily transfer or generalize our current Relatedly, entrepreneurship research can do more to establish the rewards of entrepreneurship for the individual and teams (Wiklund et al, 2011), including financial benefits and other consequences of entrepreneurship (Carter, 2011). Here, the agricultural sector provides a useful context to highlight the multi-faceted motives and rewards of entrepreneurship, exceeding factors such as autonomy and satisfaction, and showing that rewards are not solely defined by business norms and goals but also by personal and family norms and goals which may alter over time and across the business life-cycle (Carter, 2011;Glover & Reay, 2015). Clearly, further research is needed to better understand the financial and non-financial payoffs resulting from entrepreneurship, the micro-processes involved and how they are managed and coordinated at various levels of analysis.…”

“…The desire to preserve the farm for their children becomes a central issue (Ollenburg & Buckley, 2007), which can constrain entrepreneurship in the agricultural sector, but can also become a key driver for pursuing business opportunities to create employment for family members and to keep the family on the farm (McGehee & Kim, 2004, Barbiere & Mahoney, 2009) even when profitability is low (Glover & Reay, 2015). Specific family lifecycle events like marriage and divorce may also affect agricultural entrepreneurship, as spouses and partners can energize the business with new competences, networks and ideas (e.g., Bock, 2004).…”

Social Tie Heterogeneity and Firms’ Networking Strategy

“…If a family firm's current financial performance is above or equal to its aspirational level, the controlling family is likely to maintain SEW logic, as in the case of Mani and Durand's (in press) study. Good performance provides enough slack resources such that the controlling family is not under pressure to forgo SEW logic and adopt an economic logic to ensure the firm's survival, for example, by increasing debt (Glover & Reay, 2015) or diversifying into a different industry (Gomez-Mejia, Patel, & Zellweger, 2018). Thus, the controlling family can ex ante plan the firm's network development to maintain the affective content of its SEW (Gu, Lu, & Chung, in press).…”