Understanding the transgenerational orientation of family businesses: the role of family governance and business family identity

The development of a transgenerational orientation is one of the most significant challenges that family businesses face and only a small number actually survive across generations. While prior research has focused on the business unit to provide us with a solid understanding of how corporate governance affects business performance and continuity, the role of the business family in the development of a transgenerational orientation has received less attention. To address this gap, this article applies a new systems and social identity theory framework to examine how family governance and business family identity can contribute to strengthening the transgenerational orientation of the business. A transgenerational orientation is defined as a decision premise to maintain the family’s control over the business across generations. Using a large data set, findings show that the presence of family governance measures and the business family’s identity are positively related to a transgenerational orientation of the business, with business family identity acting as a mediator. Thus, the development of family governance measures can foster communication within the business family and enhance the family members’ emotional investment in the business which strengthens the transgenerational orientation in the business.     

Gender-related factors in family business succession: a systematic literature review

Review of Managerial Science - Succession is one of the most discussed topics in family business research. However, despite the changing professional and family roles of women and the growing...     

Countervailing institutional forces: corporate governance in Turkish family business groups

This longitudinal study investigates the impact of national and international pressures to improve corporate governance in an emerging economy from an institutional theory perspective. Recently, family business groups (FBGs), the dominant form of organizing in emerging economies, have been criticized by policy makers for their poor governance structures. A common recommendation to FBGs has been increasing the number of independent, outsider directors on their boards. Thus, change in the board compositions of the quoted subsidiaries of the six biggest FBGs is analyzed over 2002–2006. One-way-ANOVA and t-tests were used as statistical tools. Findings reveal that there has not been a statistically significant change in board compositions over the research period. FBGs were found to resist institutional pressures through ‘avoidance’, ‘defiance’ and “manipulation” strategies due to the absence of coercive pressures and multiple forms of ‘institutional work’ for change.     

International business taxation and the business cash flow tax

Investments and business profits are internationally mobile. Countries respond by tackling international profit shifting. As a result, the international allocation of taxable profits becomes an increasingly complex and costly issue. Reform proposals either address the Organisation of Economic Co-operation and Development approach to international profit allocation or target tax bases that are less mobile than profits. This paper investigates cash flow as a tax base. A business cash flow tax abolishes current accrual accounting and has the potential to block international profit shifting. Financing vanishes to become a tax-planning tool because the investments’ market return is tax free under a cash flow tax. Profit shifting via intra-group transactions is eliminated if the business cash flow tax is based on the country of destination principle. However, a destination-based business cash flow tax might distort the investment decisions of international groups.     

Board characteristics effects on performance in family and non-family business: a multi-theoretical approach

This paper examines the role of the board of directors in influencing the value of Italian listed firms from 2003 to 2013. In particular, employing agency, stewardship and resource dependence theories, the study aims to compare board characteristics in family and non-family firms and define the theory that best applies to family firms. Empirical results show that the presence of CEO duality and busy directors has a positive effect on the value of family firms, while gender diversity has a negative impact on the value when a member of the family leads a family firm. Conversely, the size of the board positively affects the value of non-family firms. Our main findings suggest the prevalence, in family firms, of the benefits of the board structure argued by stewardship and resource dependence theories rather than the disadvantages expected from agency theory.     

The business environment in the 1980s

Dr. Harold Linstone, the editor of ‘Technological Forecasting and Social Change’ holds that too often the future is too much discounted. This seems particularly true in the case of business corporations, which tend to pay lip service to long-range planning—especially when prospective studies point to threats rather than to opportunities.The author believes that truly long-range planning will rarely be operative until business corporations muster the political will to jointly write a scenario of their (interlinked) future, and to act accordingly. Illustratively and speculatively, such a scenario might read as follows:     

Boundaries of the business model within business groups

Scholars have sought various ways to find out how financial performance of the firm can be affected by its business model (BM). However, to date academic literature has focused attention on the “firm” as a unit of analysis without clearly defining the boundaries of the reporting entity to which the BMs refer. The aim of this paper is to investigate what are the boundaries of the BM of the affiliated-group companies and how the degree of independence of BMs is measured within the business group. The contribution of the paper is in using the BM concept to expound and criticise the assumptions in economic analysis and accounting standards that groups of companies are economic units that optimise economic income of the group as a whole and that the financial statements of individual subsidiaries, sub-groups and the group as a whole report the value generated by the group.     

The pros and cons of drug testing in the business sector

The public policy issues of whether society should permit the business sector to test for the presence of illegal drug use by the employees is one in which seemingly convincing arguments can be advanced to support self-policing in this area as well as equally cogent arguments erected against the concept of empowering the corporate sector, to investigate the presumably enact sanctions against employee illegal drug usage.In this paper the authors will attempt to explore the controversy from several different scholarly perspectives, analyzing the most important arguments both for and against permitting the corporate sector to engage in employee drug testing. In criticizing each argument we will attempt to explicate the salient public policy implications, business effects and unique ethical issues that will have profound ramifications upon the larger society. In addition, we will analyze the current legal status of this controversy, citing the applicable controlling cases at the Federal level. Finally, the authors will give their policy recommendations based upon their analysis of the discussion in this paper.The authors believe it would be most advantageous to facilitate this discussion by first considering the arguments for permitting the corporate sector to engage in drug-testing employees for illegal substances, and then consider the arguments against permitting corporate drug-testing.     

The role of business in society

This is one of a series of articles dealing with social and political issues relevant to business. It is intended to present some of the dilemmas which face top management in setting objectives and policies for the business. A number of key issues are isolated, matching economic objectives and social responsibilities, defining the rôle of the huge multi-national company, reconciling the different aims of owners, managers, and employees, etc. Finally the authors pose the problem: how should the modern corporation be controlled to ensure that it operates in the interests of the community at large, as well as the shareholders?     

European management and European business schools: Insights from the history of business schools

This article looks at the history of business schools and identifies specific characteristics that are common to European management schools. On the basis of these characteristics, European management is subsequently defined as a cross-cultural, societal management approach based on interdisciplinary principles. In a final step, a closer look is taken at how European business schools should prepare their students for the unique European management context. It is suggested that such schools should provide courses on cross-cultural management and courses explaining the interdependencies between the private and public sector, offer students opportunities to experience other cultures over the course of their studies, and teach management from an interdisciplinary and practically-oriented perspective.     

The principles of war applied to business

The search for excellence in business is not enough. First a company has to survive before it can become excellent. Competition in the marketplace is a form of warfare. Twenty centuries of military history have produced principles of warfare that business executives can adapt for use in today's competitive environment. The Chinese have a “Society for the Study of Ancient Management Thinking.” Japan's success after World War II, they explain “a little bitterly”, owes much to its study of ancient Chinese wisdom, particularly Sun Tzu'sThe Art of War, which the Japanese use as a treatise on market strategy. Businessmen must use all the tools available to them to survive and prosper.     

Institutional forces and the written business plan

In this study, we examined factors that led nascent organizations to write business plans, following 396 nascent entrepreneurs during a two-year period. We examined both the production and the outcomes of written business plans produced in nascent organizations. Our findings show that institutional variables, such as coercion and mimetic forces, are important predictors influencing the propensity of new organizations to write business plans. Our results are contrary to rationalist predictions of planning-performance, and are more in line with institutional predictions. Interestingly there was no evidence to support positive outcomes, in terms of profitability, for those nascent organizations that produced business plans during a two-year initial period. We discuss the implications for institutional theory and studies of nascent businesses, as well as for the literature on business planning.     

Strategy and flexibility in the smaller business

In this article the author considers the advantages of the small business and then considers the strategic implications which relate to these advantages. He concludes that it is essential that a strategy be developed for a small business taking the form of a long-linked series of short-term plans which take advantage of the business assets.     

Beyond the purely commercial business model: Organizational value logics and the heterogeneity of sustainability business models

The business model has been conceived as a commercial logic of value proposition, creation, exchange and capture. However, its underlying conceptual structure of an organizational value logic holds promise also for application beyond a purely commercial context, for partially commercial and even noncommercial organizations. This paper unlocks this potential by conceptualizing homogeneous and heterogeneous organizational value logics shaped by a variety of institutional logics. Homogeneous value logics are dominantly shaped by individual institutional logics, such as the value logic of businesses shaped by an institutional logic of the commercial market, or that of a churches shaped by an institutional logic of religion. Heterogeneous value logics, however, are co-shaped by two or more institutional logics. The application of these concepts is exemplified in the context of sustainability business models, which are built on a heterogeneous value logic that combines elements from commercial, sustainability, welfare and government logics. The paper contributes to the business model discussion by extending it to partially commercial and noncommercial organizations; by creating a conceptual space between value logics and institutional logics; and by proposing the meta-logic of value proposition, creation, exchange and capture, a novel analytical tool for the study of organizations shaped by plural institutional logics.     

Managing relations with government and society—The business perspective

This paper addresses the theme ‘Facing Realities’ which was the subject of the EFMD Dublin Conference. The author believes that the future of democracy depends on the style and quality of management. A narrow and authoritarian view of business management now will ultimately lead to a centralized state bureaucracy. An enlightened and knowledgeable approach by management, designed to secure the voluntary consent of employees, will safeguard the future of democracy.     

The business of education: a new paradigm

Business as usual is not the answer these days. But how do you create a new paradigm for academic educational and research endeavors? There is increasing pressure to separate the costs of providing care to patients from those of educating students and residents. It is evident already that we will not enjoy the flexibility of the past to cross-subsidize the academic effort. Presented here is a case study--a joint venture between Harvard Medical School and Beth Israel HealthCare created to sustain the academic mission, as distinct from its clinical business, and promote innovation in medical education and research through intellectual leadership, dedicated state-of-the-art facilities, and a focused development effort.