HANDBOOK OF RESEARCH ON FAMILY BUSINESS

Handbook of Research on FamilyBusiness

Edited by

Panikkos Zata Poutziouris

Associate Professor in Entrepreneurship and Family Business, CyprusInternational Institute of Management, Cyprus and Visiting Fellow,Manchester Business School, UK

Kosmas X. Smyrnios

Professor and Director of Research, School of Management, RMITUniversity, Melbourne, Australia

Sabine B. Klein

Assistant Professor in Family Business and Academic Director of theEuropean Family Business Center, European Business School, Germanyand Visiting Research Fellow, INSEAD, France

IN ASSOCIATION WITH IFERA – THE INTERNATIONAL FAMILY ENTERPRISE RESEARCH ACADEMY

Edward ElgarCheltenham, UK • Northampton, MA, USA

© Panikkos Zata Poutziouris, Kosmas X. Smyrnios and Sabine B. Klein, 2006

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system ortransmitted in any form or by any means, electronic, mechanical or photocopying, recording, orotherwise without the prior permission of the publisher.

Published byEdward Elgar Publishing LimitedGlensanda HouseMontpellier ParadeCheltenhamGlos GL50 1UAUK

Edward Elgar Publishing, Inc.William Pratt House9 Dewey CourtNorthamptonMassachusetts 01060USA

A catalogue record for this bookis available from the British Library

Library of Congress Cataloguing in Publication Data

Handbook of research on family business/edited by Panikkos Zata Poutziouris,Kosmas X. Smyrnios, Sabine B. Klein.

p. cm. — (Elgar original reference in association with IFERA)Includes bibliographical references and index.1. Family-owned business enterprises. I. Poutziouris, Panikkos Zata.

II. Smyrnios, Kosmas X., 1954– . III. Klein, Sabine B., 1962– .IV. Series.HD62.25.H36 2006338.6—dc22

2005037395

ISBN-13: 978 1 84542 410 7 (cased)ISBN-10: 1 84542 410 7 (cased)

Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall

Contents

List of contributors viiiForeword by Miguel Angel Gallo xixAcknowledgements xx

Introduction: the business of researching family enterprises 1Panikkos Zata Poutziouris, Kosmas X. Smyrnios and Sabine B. Klein

PART I FRONTIERS OF A FAMILY BUSINESS

1 Navigating the family business education maze 11Frank Hoy and Pramodita Sharma

2 An overview of the field of family business studies: current status and directions for the future 25Pramodita Sharma

3 Family businesses’ contribution to the US economy: a closer look 56Joseph H. Astrachan and Melissa Carey Shanker

PART II THEORIZING FAMILY BUSINESSES AND BUSINESS FAMILIES

4 A unified systems perspective of family firm performance 67Timothy G. Habbershon, Mary Williams and Ian C. MacMillan

5 The family’s dynamic role within family business entrepreneurship 80Ramona K.Z. Heck, Sharon M. Danes, Margaret A. Fitzgerald,George W. Haynes, Cynthia R. Jasper, Holly L. Schrank,Kathryn Stafford and Mary Winter

6 Critical leader relationships in family firms 106Nigel Nicholson and Åsa Björnberg

7 Business family as a team: underlying force for sustained competitive advantage 125Lorraine M. Uhlaner

8 Internal factors of family business performance: an integrated theoretical model 145Alberto Gimeno Sandig, Gaston J. Labadie, Willem Sarisand Xavier Mendoza Mayordomo

PART III FAMILY BUSINESS RESEARCH: METRICS AND METHODOLOGIES

9 The F-PEC scale of family influence: a proposal for solving the family business definition problem 167Joseph H. Astrachan, Sabine B. Klein and Kosmas X. Smyrnios

v

10 Identification of different types of private family firms 180Paul Westhead and Carole Howorth

11 From vision to variables: a scorecard to continue the professionalization of a family firm 196Ken Moores and Justin Craig

12 Working with families in business: a content validity study of the Aspen Family Business Inventory 215Sandra L. Moncrief-Stuart, Joe Paul and Justin Craig

PART IV FAMILY BUSINESS THEMES IN FOCUS

13 Founder–successor’s transition: a model of coherent value transmission paths 237Ercilia García-Álvarez and Jordi López-Sintas

14 Understanding strategizing in the family business context 253Annika Hall, Leif Melin and Mattias Nordqvist

15 The professionalization of family firms: theory and practice 269Lucrezia Songini

16 Formulating, implementing and maintaining family protocols 298Miguel Angel Gallo and Salvatore Tomaselli

17 Generic models for family business boards of directors 317Joseph H. Astrachan, Andrew Keyt, Suzanne Lane and Kristi McMillan

18 Effective knowledge transfer in family firms 343Rosa Nelly Trevinyo-Rodríguez and Josep Tàpies

19 Feuding families: the management of conflict in family firms 358Franz W. Kellermanns and Kimberly A. Eddleston

PART V FAMILY BUSINESS SUCCESSION

20 Lost in time: intergenerational succession, change and failure in family business 371Danny Miller, Lloyd Steier and Isabelle Le Breton-Miller

21 Towards a business family dynasty: a lifelong, continuing process 388Johan Lambrecht and Rik Donckels

22 Using the strategic planning process as a next-generation training tool in family business 402Pietro Mazzola, Gaia Marchisio and Joseph H. Astrachan

23 An integrated framework for testing the success of the family business succession process according to gender specificity 422Vassilios D. Pyromalis, George S. Vozikis, TheodorosA. Kalkanteras, Michaela E. Rogdaki and George P. Sigalas

PART VI FAMILY BUSINESS PERFORMANCE: GLOBAL AND TRANS-CULTURAL ISSUES

24 Internationalization of family businesses through strategic alliances:an exploratory study 445Kristin Cappuyns

vi Contents

25 Family and cultural forces: shaping entrepreneurship and SME development in China 460David Pistrui, Wilfred V. Huang, Harold P. Welsch and Zhao Jing

26 Board of directors in Italian public family-controlled companies 488Guido Corbetta and Alessandro Minichilli

27 Family-firm relationships in Italian SMEs: ownership and governance issues in a double-fold theoretical perspective 501Luca Gnan and Daniela Montemerlo

28 Longevity of Japanese family firms 517Toshio Goto

PART VII FAMILY BUSINESS FINANCE

29 Family firms and financial behavior: how family shareholder preferences influence firms’ financing 537Myriam Lyagoubi

30 The structure and performance of the UK family business PLC economy 552Panikkos Zata Poutziouris

31 Ownership structure and firm performance: evidence from Spanish family firms 575Susana Menéndez-Requejo

32 Family ownership, corporate governance and firm value: evidence from theSpanish market 593María Sacristán Navarro and Silvia Gómez Ansón

Epilogue: theory building and the survival of family firms – three promising research directions 614Shaker A. Zahra, Sabine B. Klein and Joseph H. Astrachan

Index 619

Contents vii

Contributors

Joseph H. Astrachan (PhD) is the director of the Cox Family Enterprise Center, holds theWachovia Eminent Scholar Chair of Family Business, is Professor of Management andEntrepreneurship in the Coles College of Business at Kennesaw State University and is adistinguished research chair at Loyola University Chicago (USA). He is a founding boardmember of IFERA and serves as editor of Family Business Review and as an editorialboard member of several other academic journals.

Åsa Björnberg holds the Institute for Family Business (IFB UK) Research Fellowship inassociation with LIFBRI at London Business School (UK). Her background is inOrganizational and Clinical psychology, and her research interests centre on familydevelopment/functioning in relation to leadership, culture and performance of familyfirms. Åsa Björnberg also works as a personal development coach and an academictranslator.

Kristin Cappuyns is Research Associate at IESE Business School, Barcelona Spain. Shehas co-authored numerous research papers, books and case studies on the subject offamily business in different disciplines including governance, business management, busi-ness ethics and values systems. She is a founding board member of International FamilyEnterprise Research Academy (IFERA).

Guido Corbetta is AIdAF-Alberto Falck Professor of Strategic Management in FamilyFirms, and Director of the Entrepreneurship and Entrepreneurs Research Centre(EntER) at Bocconi University in Milan, Italy. His research interests are mostly in the areaof family business, strategic management and entrepreneurship. He has a 20 years expe-rience with family companies, where he has been often consultant and member of theboard of directors.

Justin Craig received his PhD from Bond University in Australia. He is an assistant pro-fessor of entrepreneurship at Oregon State University.

Sharon M. Danes (PhD) is Professor of Family Social Science, University of Minnesota(USA) has over 125 refereed research articles, book chapters, and outreach publicationsemphasizing the intersection of economic and social decision-making. Research focus isthe impact of the interconnectedness between the family and business systems as it affectsthe viability of family businesses.

Rik Donckels is managing director of Cera and the former director of the Small BusinessResearch Institute at the Catholic University Brussels (Belgium).

Kimberly A. Eddleston (PhD) is an Assistant Professor at Northeastern University (USA),where she holds the Riesman Research Professorship and Tarica-Edwards Fellowship.

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She was recently selected as a Family Owned Business Institute Research Scholar by theFamily Owned Business Institute of the Seidman College of Business at Grand ValleyState University. She received her PhD in Management from the University ofConnecticut. Her research has appeared in journals such as the Academy of ManagementJournal, Academy of Management Executive, Academy of Management Perspectives,Human Resource Management Review, Journal of Occupational and OrganizationalPsychology, Entrepreneurship Theory and Practice, Journal of Business Venturing, andJournal of Applied Psychology.

Margaret A. Fitzgerald (PhD) is an Associate Professor in the Department of ChildDevelopment and Family Science at North Dakota State University in Fargo (USA). Sheteaches courses in financial planning and public policy. Dr Fitzgerald’s research is in thearea of family business and is focused on gender and management issues, copreneurs andbusiness social responsibility.

Miguel Angel Gallo is Emeritus Professor of General Management in the Department ofGeneral Management at IESE, Barcelona (Spain), where he has served as a full professorfrom 1975 to September 2003, and Chairman of the Family Business Chair at IESE fromits foundation (1987) until September 2003. His areas of specialization include strategicmanagement, organizational design, boards of directors and family businesses. He isfellow of the Strategic Management Society and Honorary President of IFERA. He isalso a co-founder and partner of Family Business Consulting Group International andChairman of FBCG Spain. He is a member of the board of directors of several familybusinesses in Spain, Portugal and Mexico.

Ercilia García-Álvarez (PhD), is full professor in management at the Universitat Rovira iVirgili Tarragona (Spain), Fellow of the Family Firm Institute and member of the boardof the Qualitative Research Network, European Sociological Association. Her researchin family business has received awards from the Family Business Network (2000) andFamily Firm Institute (2001). She has published in many international journals such as:Family Business Review, Journal of Business Research, Field Methods and the EuropeanSociological Review.

Alberto Gimeno Sandig (PhD) is Professor of Business Policy Department at ESADE,Barcelona, Spain. He is Program Director for both the Senior Executive Program andFamily Enterprise program. Alberto is a member of the Body of Knowledge of Family FirmInstitute (FFI), as well as of the Family Business Network (FBN) and of the InternationalFamily Enterprise Research Academy (IFERA). He is former professor at the WorldEconomic Forum and lectures in both national and international family enterprise forums.

Luca Gnan is Associate Professor of Organizational Design and Behaviour at theUniversity of Tor Vergata, Rome (Italy) and is a Faculty Member of the StrategicManagement Department at SDA Bocconi School of Management, Milan (Italy).

Silvia Gómez Ansón (PhD) is Associate Professor of Finance at the University of Oviedo(Spain). She graduated in Business Administration at the Complutense University of

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Madrid, has a master in International Economics at the University of Konstanz(Germany) and obtained her PhD at the University of Oviedo. Her research interestsinclude corporate governance, family firms and corporate finance.

Toshio Goto is on the Faculty of Integrated Engineering at the Graduate School for theCreation of New Photonic Industries, Hamamatsou (Japan). His background is in busi-ness strategy and his research focuses on strategies for sustainable growth, and especiallyfor that of family businesses.

Timothy G. Habbershon (EdD) is the founding Director of the Institute for FamilyEnterprising at Babson College in Wellesley, Massachusetts, USA. He is also an AssistantProfessor of Entrepreneurship and holds the Presidents Term Chair in Family Enterprising.His articles on family-based entrepreneurship have appeared in the Journal of BusinessVenturing and the Family Business Review and he has a regular column in Business Week’sSmall Business Magazine. In addition he is the founder and principal of the Telos Group,a consulting firm specializing in transition and growth strategies for family firms.

Annika Hall (PhD) is a research fellow and lecturer at Jönköping International BusinessSchool (Sweden), specializing in the fields of organization theory, strategy and familybusiness. She is a board member of International Family Enterprise Research Academy(IFERA).

George W. Haynes (PhD) is an Associate Professor in the Department of Health andHuman Development at Montana State University (USA). Dr Haynes teaches small busi-ness management and research methods courses and has been actively engaged in familybusiness finance, employee wellness and substance abuse treatment demand research.

Ramona K.Z. Heck (PhD) is the Peter S. Jonas Distinguished Professor ofEntrepreneurship in the Department of Management of the Zicklin School of Businessat Baruch College, The City University of New York (USA). Dr Heck teaches and con-ducts research related to family businesses and the owning family’s internal social andeconomic dynamics, the effects of the family on the family business viability over time, theeconomic impact of family businesses on communities, minority business ownership andgender issues within family firms.

Carole Howorth (PhD) is a Senior Lecturer in Entrepreneurship at Lancaster UniversityManagement School (UK) where she researches and teaches on family business and entre-preneurship. Her research has been published in national and international journals. Priorto entering academia Carole was owner-manager of two family businesses.

Frank Hoy (PhD) is director of the entrepreneurship programme and the Family andClosely Held Business Forum at the University of Texas at El Paso (USA). From 1991 to2001, he served as dean of the College of Business Administration at UTEP. Prior to thathe held the Carl R. Zwerner Professorship of Family-Owned Business at Georgia StateUniversity. Dr Hoy is a past president of the United States Association for Small Businessand Entrepreneurship and a past editor of Entrepreneurship Theory and Practice.

x Contributors

Wilfred V. Huang (PhD) is Professor of Management Information Systems at the Collegeof Business, Alfred University-New York (USA), where he holds the Raymond Chair inFamily Business.

Cynthia R. Jasper (PhD) is Professor and Chair of the Department of Consumer Scienceat the University of Wisconsin-Madison (USA). She is interested in decision-makingwithin family businesses, especially pertaining to retirement and estate planning, and busi-ness management issues.

Zhao Jing (PhD) is the Professor of Management Information Systems at the College ofManagement, China University of Geosciences, Wuhan, China.

Theodoros A. Kalkanteras is a graduate of the MBA International Programme of theAthens University of Economics and Business, Greece.

Franz W. Kellermanns (PhD) is an Assistant Professor of Management in the College ofBusiness and Industry at the Mississippi State University (USA). He was recently selectedas a Family Owned Business Institute Research Scholar by the Family Owned BusinessInstitute of the Seidman College of Business at Grand Valley State University. Hereceived his PhD from the University of Connecticut. His current research interestsinclude strategy process and entrepreneurship with a focus on family firms. His researchhas appeared in journals such as the Journal of Management, Journal of BusinessVenturing, Entrepreneurship Theory and Practice and the Academy of ManagementLearning and Education. He is the co-editor of the recent book Innovating StrategyProcess in the Strategic Management Society Book Series.

Andrew Keyt is the Executive Director of the Loyola University Chicago FamilyBusiness Center (USA) which is widely recognized as a leading think tank in issuesunique to business owning families. In addition, he is the President and Founder of aprivate consulting firm, Keyt Consulting. Having served as a manager in two family-owned firms, and as member of his own family partnership, Keyt has experienced thechallenges of family business at first hand. As a consultant to family firms he special-izes in dealing with family conflict and communication, working with adultsibling/cousin teams, succession planning strategic planning and emergency manage-ment transition. A cum laude graduate of Kenyon College (BA), Keyt completed aMasters in Family Systems Theory from Northwestern University with a concentrationon family business.

Sabine B. Klein (PhD) is the Academic Director of the European Family Business Centerand Assistant Professor in Family Business at the European Business School at Oestrich-Winkel, Germany. She is founding member of IFERA and, since 2003, President ofIFERA. Her research has been awarded several prizes. She is serving on the review boardof several journals and academic conferences.

Gaston J. Labadie (PhD) is Dean and Professor of Human Behaviour and OrganizationalBehaviour at Universidad ORT Uruguay. He is the research director of Study Group in

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Economics, Organization and Social Policies (GEOPS) and member of the editorialboards of Management Research and Latin American Business Review.

Johan Lambrecht is Director of the Research Centre for Entrepreneurship at EuropeanUniversity College Brussels (EHSAL) and Catholic University Brussels and Professor atEHSAL – Brussels (Belgium).

Suzanne Lane is Program Director of the Loyola University Chicago Family BusinessCenter (USA) and has been extensively involved in the Center’s programming andresearch initiatives. She specializes in working with President/CEOs, board directors, andsenior management in areas such as strategic planning, leadership transitions, boarddevelopment and corporate governance. Susanne currently serves on many boards ofadvisers for non-profit organizations throughout Chicago.

Isabelle Le Breton-Miller is President of OER, Inc. in Montreal, a strategic and organi-zational management consultancy, and Senior Research Associate at the University ofAlberta. Her recent book (with Danny Miller) is Managing for the Long Run (HarvardBusiness School Press, 2005), which has been chosen by JP Morgan Chase as one of the10 ‘must read’ books of 2005. It is to be translated into six languages. Her practice andcontinuing research focuses on how firms can better design their organizations to managefor the long run.

Jordi López-Sintas (PhD) is full professor in Business Economics at the UniversitatAutònoma de Barcelona (Spain) and elected director of the Humanities Research Centre(CERHUM). He is also convenor of the track ‘Combining qualitative and quantitativemethods’ at the Qualitative Research Network, European Sociological Association, andin 2006 he became Director of the Advanced Seminar in Qualitative Research (SAIC).His research in family business has received awards from the Family Business Network(2000) and Family Firm Institute (2001). He has published in many international journalssuch as: Family Business Review, Journal of Business Research, Field Methods and theEuropean Sociological Review.

Myriam Lyagoubi (PhD) is associate professor of corporate finance at EM Lyon BusinessSchool (France). She has been conducting research in the field of family business forseveral years. In 2003, she was awarded the F.B.N. Miguel Angel Gallo Award for the mostinnovative paper of the year.

Ian C. MacMillan is the Executive Director of the Sol C. Snider Entrepreneurial Center andDhirubhai Ambani Professor of Entrepreneurial Management, Wharton School,University of Pennsylvania (USA). He has published numerous articles and books on orga-nizational politics, new ventures and strategy formulation. His articles have appeared in theHarvard Business Review, the Sloan Management Review, the Journal of Business Venturingand others. He is co-author with Rita McGrath of the best-selling books TheEntrepreneurial Mindset, which focuses on how managers and entrepreneurs can create acontinuous stream of growth opportunities for their firms, and MarketBusters, whichfocuses on strategies firms can use to dramatically change and grow their existing businesses.

xii Contributors

Gaia Marchisio (PhD) is Assistant Professor of Management at the Michael J. ColesCollege of Business and faculty associate of the Coles College Cox Family EnterpriseCenter, both at Kennesaw State University (USA). Her research primarily concerns familybusiness, corporate entrepreneurship, and strategic management, with particular interestin: fostering entrepreneurship in family business; family businesses’ strategic planningprocess; and going public and family offices.

Pietro Mazzola is the director of the Master in Investor Relations e Financial Analysisholds at IULM University in Milan (Italy) in collaboration with the Italian StockExchange, he is Full Professor of Management at IULM University and is Senior FacultyMember at the Strategic and Entrepreneurship Management Department at SDABocconi, Bocconi University School of Management, Milan.

Kristi McMillan is the Associate Director of the Cox Family Enterprise Center atKennesaw State University, which she joined in 1994. Ms McMillan has a Master ofScience in Conflict Management and is co-author of the acclaimed book Conflict andCommunication in the Family Business.

Leif Melin (PhD) is Professor of Strategy and Organization at Jönköping InternationalBusiness School (Sweden). He is the founding Director of the Center for FamilyEnterprise and Ownership (CeFEO). He has published widely in international journalsand book volumes and he serves on editorial boards for several academic journals, suchas Organization Studies and Strategic Organization.

Xavier Mendoza Mayordomo (PhD) is Dean of the ESADE Business School, Barcelona,Spain, and Professor of the Business Policy Department and the Institute of PublicManagement. He is the Academic Vice-Chair of the Supervisory Board de la EuropeanAcademy of Business in Society and member of the Editorial Advisory Committee of theCorporate Governance.

Susana Menéndez-Requejo (PhD) is a Professor of Finance at the University of Oviedo(Spain). She is the Director of the Family Business Chair at the same university. Herresearch interests are in the areas of Corporate Finance (capital structure, corporate gov-ernance) and Family Firms.

Danny Miller is President of Paradox Learning Resources and Chaired Professor inStrategy and Family Enterprise at HEC Montreal and the University of Alberta. He hasauthored six books and over 100 articles, and has held professorships at McGillUniversity and the Columbia Business School. He consults with numerous Fortune 500companies, and has directed major thought leadership projects for several internationalmanagement consulting firms. His practice and current research concerns how firms candevelop sustainable competitive advantage by expanding their time horizons and chang-ing their strategies, metrics and incentives.

Alessandro Minichilli is a post-doctoral fellow at Bocconi University in Milan (Italy)where he received is PhD in Business Administration and Management. He is lecturer in

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Corporate Governance and Business Administration. His research mostly deals withboards of directors in large companies, with a focus on a behavioural perspective onboard activity. He is also concerned with the development of evaluation systems for thecorporate boards in quoted companies.

Sandra L. Moncrief-Stuart holds dual Masters Degrees in Marriage and Family Therapyand Social Work. Sandra is currently an individual and family therapist in Michigan.Previously, Sandra worked with Joe Paul and the Aspen Family Business Group design-ing and refining consulting methodologies and working with multi-generational familybusinesses.

Daniela Montemerlo is Associate Professor of Business Administration at the Universityof Insubria, Professor of Strategic Management in Family Business at Bocconi Universityand Senior Faculty Member of the Strategic Management Department at SDA BocconiSchool of Management, Milan (Italy). She is a founding board member and Fellow ofIFERA.

Ken Moores (PhD) is the Director of Bond University’s Australian Centre for FamilyBusiness – a centre he established in 1994 and in which he served as Foundation Directorfrom 1994 to 1998. Professor Moores pioneered research and recognition of familybusiness in Australia and has achieved wider recognition for his work including his 2003book, Learning Family Business: Paradoxes and Pathways (co-authored with MaryBarrett). Professor Moores served as Vice-Chancellor and President of Bond Universityfrom 1997 to 2003.

Nigel Nicholson is Professor of Organizational Behaviour at London Business School(UK) where he is also the director of the Leadership in Family Business ResearchInitiative (LIFBRI). This major new initiative aspires to make London Business Schoolone of the world’s leading centres for the study of family business. He has published 18books and monographs and over 180 articles on many aspects of business psychology,leadership and organization.

Mattias Nordqvist (PhD) is a research fellow and co-director of the Center for FamilyEnterprise and Ownership (CeFEO) at Jönköping International Business School(Sweden). He is also Research Associate and Visiting Scholar for Family Enterprising atthe Arthur M. Blank Center for Entrepreneurship at Babson College (USA). His maininterests are strategizing, governance and entrepreneurial processes within the context offamily businesses.

Joe Paul specializes in family business leadership and the resolution of family issues thatinterfere with asset development. He authored several family business assessment instru-ments, is a Fellow and Director Emeritus of the Family Firm Institute, and a partner inthe Aspen Family Business Group and Global Family Business Advisors.

David Pistrui (PhD) is the Professor of Business at the Illinois Institute of Technology –Chicago (USA) where he holds the Coleman Foundation Chair in Entrepreneurship.

xiv Contributors

Panikkos Zata Poutziouris (PhD) is the Associate Professor in Entrepreneurship andFamily Business at the Cyprus International Institute of Management and VisitingFellow for Family Business Initiatives at Manchester Business School (UK). Whilst on theFaculty of University of Manchester-MBS he served on the Advisory Board of theInstitute for Family Business (UK) and on the Board of Directors of the Institute forSmall Business Entrepreneurship (UK). Currently he is the founding Vice-President ofthe International Family Enterprise Research Academy and serves on the editorial boardsof Family Business Review and Journal of Small Business Management. In 2004, hereceived the FFI Barbara Hollander Award, in recognition of his work to promotethe interests of family business. Panikkos, has carried out research and consultancy pro-jects in the area of strategic financial development of owner-managed companies fornumerous financial institutions, government bodies, enterprise support agencies andfamily firms.

Vassilios D. Pyromalis is a graduate of the MBA International Programme of the AthensUniversity of Economics and Business, Greece.

Michaela E. Rogdaki is a graduate of the MBA International Programme of the AthensUniversity of Economics and Business, Greece.

María Sacristán Navarro (PhD) is Associate Professor of Business Administration at theRey Juan Carlos University, Madrid (Spain). She graduated in Business Administrationand obtained her PhD at the Complutense University of Madrid. Her research interestsinclude corporate governance, family firms and strategic management.

Willem Saris (PhD) is Professor in Methodology of the Social Sciences, University ofAmsterdam and ICREA Professor at ESADE-URL. He is a member of the centralco-ordination team of the European Social Survey, awarded with the prestigiousDescartes Prize in 2005, and is President of the European Survey Research Association(ESRA).

Holly L. Schrank (PhD) is a Professor of Consumer Sciences and Retailing at PurdueUniversity (USA). She focuses on the impact of boundary changes in the family, businessand ownership systems of the family business. She also has research interests in impactsof disasters on business.

Melissa Carey Shanker is an accomplished consultant, educator and researcher in the fieldof family business. Shanker played a key role in the growth and development of theChicago-based Loyola University Family Business Center (USA), one of the oldest andmost respected centres in the world where she designed and directed the innovative NextGeneration Leadership Institute, an educational programme designed to develop familybusiness leaders.

Pramodita Sharma (PhD) is a Professor of Management and Associate Dean at theSchool of Business, Wilfrid Laurier University (Canada). She is the recipient of variousinternational research awards, including the prestigious NFIB Dissertation Award from

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the Entrepreneurship division of the Academy of Management. She is an AssociateEditor of the Family Business Review and serves on the editorial boards of various entre-preneurship journals. Dr Sharma serves on the board of the Family Firm Institute, theInternational Family Enterprise Research Academy and is the Representative-at-Large ofthe Entrepreneurship division of the Academy of Management.

George P. Sigalas is a graduate of the MBA International Programme of the AthensUniversity of Economics and Business, Greece.

Kosmas X. Smyrnios (PhD) holds the position of Professor and Director of Research inthe School of Management at RMIT University, Melbourne, Australia and is AssociateEditor of the Family Business Review. Kosmas has developed an extensive applied researchrecord with over 70 international refereed publications across the disciplines of marketing,psychology, physics, management and accounting. Kosmas has been involved in a numberof prominent national and international research projects. He is a founding board memberof the International Family Enterprise Research Academy (IFERA). In 1998 and 2001, hewas awarded prizes for the Best International Research Papers at the 9th and 12th WorldFamily Business Network Conference in Paris and Rome, respectively. Kosmas is a recip-ient of over $1.5 million in research funding, and is frequently called upon to provideexpert media commentary on pertinent matters relating to family firms and SMEs.

Lucrezia Songini is a Lecturer in Bocconi University, Milan and senior faculty member ofthe Accounting and Control Department of the SDA Bocconi School of Management,Milan (Italy) She is professor of Management Accounting in the Università degli Studidel Piemonte Orientale ‘Amedeo Avogadro’, Novara, in the Business AdministrationDepartment in Casale Monferrato.

Kathryn Stafford (PhD) is an Associate Professor at the Ohio State University in theDepartment of Consumer and Textile Sciences. She teaches a course on Businèss-Owningfamilies and conducts research on the management practices of business-owning familiesand family businesses.

Lloyd Steier (PhD) is a Professor in Strategic Management and Organization at theUniversity of Alberta School of Business – Canada. He holds a research chair in familyenterprise and entrepreneurship and is the academic director of the Centre forEntrepreneurship and Family Enterprise and the Alberta Business Family Institute.

Josep Tàpies (PhD) is professor in the departments of general management and financeand holder of the Chair of Family-Owned Business at IESE, Barcelona (Spain). His areasof specialization include family business, strategic management, private equity, mergersand acquisitions and management buy-outs. He writes and teaches courses in manage-ment and governance of family business in the MBA programme, and strategic manage-ment in several executive education programmes.

Salvatore Tomaselli (PhD) is Professor of Business Policy at the ‘Università di Palermo’(Italy). His areas of specialization include strategic management, organizational design,

xvi Contributors

boards of directors and family businesses. In 1983 and 1999 he received the FBN Awardfor the best research paper presented at the FBN Annual World Conference. He isa founding board member and Fellow of IFERA and member of the StrategicManagement Society. He is also partner of Family Business Consulting GroupInternational and FBCG Spain.

Rosa Nelly Trevinyo-Rodríguez, currently pursuing a PhD at IESE Business School(Spain) has worked for several years as a Professor at Instituto Tecnológico y de EstudiosSuperiores de Monterrey, Campus Monterrey (ITESM), MÉXICO. She taught courseson the MBA Programme and other undergraduate programmes at ITESM andUniversidad Mexicana del Noreste (UMNE) focusing in the management of FamilyBusinesses and in Strategic Management/Valuation analysis.

Lorraine M. Uhlaner (PhD) is Director of the European Family Business Institute atErasmus University Rotterdam in the Netherlands, sponsored by Arenthals GrantThornton Accountants and Advisors, Fortis Bank, and Mees Pierson, the privatebankers of Fortis Bank. Before joining the Erasmus University Rotterdam she served asfull professor in Management at Eastern Michigan University. She is author of a numberof journal articles on family business and entrepreneurship, and is co-author of thebook, Dynamic Management of Growing Firms: A Strategic Approach, published byPrentice-Hall.

George S. Vozikis is the Edward Reighard Chair in Management at California StateUniversity, Fresno and the Director of the Institute for Family Business. Prior to joiningCalifornia State University at Fresno, he taught at the University of Tulsa where he wasthe Davis D. Bovaird Endowed Chairholder of Entrepreneurial Studies and PrivateEnterprise, and the Founding Director of the Family-Owned Business Institute, as wellas the Tulsa University Innovation Institute.

Harold P. Welsch (PhD) is the Professor of Management at DePaul University, Chicago(USA) where he holds the Coleman Foundation Chair in Entrepreneurship.

Paul Westhead (PhD) is the Professor of Enterprise in the Enterprise Division at WarwickBusiness School. He is also a Visiting Professor at Bodø Graduate School of Business,Nordland Regional University, Bodø, Norway. His research interests include familyfirms, habitual entrepreneurs, internationalization of small firms, training programmetake-up and benefits, technology-based firms, and Science Parks.

Mary Williams is Professor of Management and Department Head of the MIS andDecision Sciences Department at Widener University in Chester, Pennsylvania, USA. Shehas presented research in entrepreneurship at the Academy of Management Meetings, theInternational Atlantic Economic Meetings, and the National Business and EconomicSociety Meetings. Her entrepreneurship research appears in the Journal of BusinessVenturing, Frontiers of Entrepreneurship Research, and Research in Entrepreneurship andManagement. Her research in family business appears in the Journal of Family andEconomic Issues and the Family Business Review.

Contributors xvii

Mary Winter (PhD) has recently retired from the position of Professor of HumanDevelopment and Family Studies and Associate Dean for Research and GraduateEducation at the College of Family and Consumer Sciences, Iowa State University. Herresearch interests have focused on the responses of ordinary families to extraordinary cir-cumstances. She has studied the responses of families in Mexico and Poland to changesin their country’s economy, and resource development and allocation among US familieswith a family business.

Shaker A. Zahra (PhD) is the Robert E. Buuck Professor in Entrepreneurial Studies at theCarlson School of Management, University of Minnesota (USA). His research coverscorporate, technological and international entrepreneurship. He has published nine booksand his research has appeared in several journals such as Academy of ManagementJournal, Academy of Management Review, Academy of Management Executive, StrategicManagement Journal, Journal of International Business Studies, Journal of Management. Hehas been awarded several grants and has garnered dozens of prestigious honors and awards.

xviii Contributors

Foreword

I take much pleasure in contributing the Foreword to this outstanding Handbook ofFamily Business. Having dedicated my academic life to the field of family business, I amexcited to observe that now, decades after humble beginnings in the 1970s, that this topicis gaining increasing momentum. The growing number of rigorous research projects ispromising, and now, academia is taking into account the fact that family enterprises aredominant around the world.

The study of family business is challenging, to say the least. This line of inquiry is inter-disciplinary in nature, involving different fields such as finance, organizational behaviour,law, tax, child psychology and ethics, to name a few. In order to master the challengesassociated with studying disparate topics like these, one not only requires a broad educa-tion but also extensive experience and a disciplined way of thinking.

Family business research was international and interdisciplinary from the outset.Interestingly, the editors of this book mirror this aspect of the field: emanating from threedifferent countries, namely Cyprus, Australia and Germany, and respectively, their prin-cipal academic disciplinary backgrounds are entrepreneurial management, psychologyand strategy. Panikkos Poutziouris, Kosmas Smyrnios, and Sabine Klein are a teamtypical of the family business arena.

The editors have collated a selection of notable papers, all of which have been blind peerreviewed. As a senior scholar of this field, this handbook contributes substantially to fur-thering this area, serving as a watershed for research students and investigators. Consistentwith this view, I sincerely hope that this scholarly text is only the start of a long line of tra-dition founded by IFERA in encouraging researchers to undertake rigorous and relevantprojects and to publish them in volumes like the one you are holding in your hands.

Miguel Angel GalloProfessor Emeritus, IESE Business School

University of Navarra, Barcelona, SpainHonorary President IFERA

xix

Acknowledgements

The publishers wish to thank the following who have kindly given permission for the useof copyright material:

Blackwell Publishing Ltd for articles: Astrachan, Joseph H. and Melissa Carey Shanker(2003), ‘Family businesses’ contribution to the US economy: a closer look’, FamilyBusiness Review, 16(3), 211–19; Sharma, Pramodita (2004), ‘An overview of the fieldof family business studies: current status and directions for the future’, Family BusinessReview, 17(1), 1–36; and Astrachan, Joseph H., Sabine B. Klein and Kosmas X.Smyrnios (2002), ‘The F-PEC scale of family influence: a proposal for solving thefamily business definition problem’, Family Business Review, 15(1), 45–58.

Elsevier Ltd for articles: Miller, Danny, Lloyd Steier and Isabelle Le Breton-Miller (2003),‘Lost in time: intergenerational succession, change and failure in family business’,Journal of Business Venturing, 18(4), 513–31 and Habbershon, T.G., M. Williams andI.C. MacMillan (2003), ‘A unified systems perspective of family firm performance’,Journal of Business Venturing, 18(4), 451–65.

Every effort has been made to trace all the copyright holders but if any have been inaver-tently overlooked the publishers will be pleased to make the necessary arrangements atthe first opportunity.

xx

Introduction: the business of researchingfamily enterprisesPanikkos Zata Poutziouris, Kosmas X. Smyrnios andSabine B. Klein

The Handbook of Family Business Research is a substantial collection of papers mani-festing recent advances in the theory and practice of family business research. Thiscompilation is, to a large extent, in response to the extensive growth of the family busi-ness discipline as a topic of academic inquiry. The principal objective underlying thisvolume was to provide readers with a compilation of authoritative and scholarly papers,providing an overview of current thinking and contributing to the further advancementof the field.

Emergence of a family business themeFamily enterprises, irrespective of scale of operation, legal form, industrial activity, andlevel of socio-political and market development have been the backbone of corporate life,across nations, remaining a cornerstone of socio-economic development. Historically,family firms are, for the most part, enduring institutions. Their importance parallelssocio-cultural advances, technological advances, and the so-called new market order asso-ciated with globalization.

Family business research, as an academic field of inquiry, is relatively young. The emer-gence of this topic of research can be attributed largely to the proactive approach offamily business practitioners whose early efforts focused on practice-based articles andcase studies, as noted by Donnelley (1964) and Barnes and Hershon (1976).

Arguably, in the early days, treatment of this topic from the practitioners’ side has oftenbeen subjected to journalistic exploitation, whilst from an academic perspective researchhas tended to be data driven. Despite adoption of increasingly sophisticated empiricaland analytic procedures, causal-based research has remained myopic. However, articula-tion of conceptual and theoretical papers is gaining momentum.

The field of family business research was retarded by a series of factors, including achronic failure by scholars and practitioners to establish a consensus as to what constitutesa family business; adoption of methodologies not supported by theory; survey designslacking robustness; application of relatively unsophisticated statistical methods; and adearth of large-scale (longitudinal) databases to enable cross-sectional and time-serieseconometric analyses, enabling significant comparisons between family and other enter-prises (Brockhaus, 1994). Moreover, the focus of researchers was geared towards address-ing phenomenological problems rather than systematically exploring and advancingtheoretical paradigms. Specifically, early research tended to focus their lines of inquiry onsuccession, business governance and related structures, and performance, but failed toidentify important variables and their interrelationships, leading to sound theoretical con-ceptualizations. Today, prominent mainstream journals publish family business research

1

owing to its rigour, richness and relevance. Investigators have moved beyond descriptivecase study and survey research, employing triangulation approaches driven by theory.

Recent developmentsDuring the new millennium, family firm research has demonstrated significantadvances, not only in terms of quality, but also in articulation of new developments andestablishment of prominent international bodies. Below, we outline a number of thesedevelopments.

(a) Following the early push of a family business agenda by the Family Firm Institute(FFI) which has traditionally been geared to educationalists and practitioners, we sawthe emergence of the Family Business Network (FBN) International, establishingclose links with family business owner-managers and academics. Since these times,the International Family Enterprise Research Academy (IFERA), a group of aca-demics committed to the advancement of family business as a science-based disci-pline, has arisen.

(b) The International Family Research Enterprise Academy has been actively cam-paigning for the advancement of family business through international collaborativeprojects and work with emerging researchers. Its vision is to be a driving force of aninternational network that ensures that family business, as a multi disciplinary field,becomes a leading topic of business research. The Academy comprises a globalnetwork for scholars (including new doctoral students), committed to family businessresearch, providing investigators with valuable resources; and access to literature,family businesses, business families, and a network of scholars. Through its associa-tion with FBN-International in staging annual Global FBN research forums, IFERAhas helped to bridge the gap between research, theory and practice, on the one hand,and professionals that service these businesses, business families, owner-managersand the community, on the other. The valuable contribution made by IFERA isamply demonstrated by the quality of refereed conference proceedings and publica-tions (see Poutziouris, 2000; Corbetta and Montemerlo, 2001; Koiranen andKarlsson, 2002; Poutziouris and Steier, 2003; Tomasselli and Melin, 2004).

(c) Another indicator afforded to the recognition of this field is the inclusion of theFamily Business Review journal in the Social Citation Index by Thomson ISI, recog-nizing the academic standard of FBR by the scientific community.

(d) The Canadian Theorization Initiative, in response to calls for the deployment ofalternative research methodologies essential for theory development and research perse, has published a series of special issues in the Journal of Business Venturing, and theEntrepreneurship Theory and Practice journal. Similarly, in the North America, theFamily Enterprise Research Conference has helped to promote family business atthe Academy of Management-Entrepreneurship Division.

Consistent with these developments, research in this field has broken through the glassceiling and is being published in top-tier journals, particularly in areas focusing on listedfamily businesses and their performance (Anderson and Reeb, 2003; Anderson et al.,2003; Burkart et al., 2003; Gomez-Mejia et al., 2001; Villalonga and Amit, 2004), agencycosts (Morck and Yeung, 2003) and nepotistic altruism (Schulze et al., 2003). These

2 Handbook of research on family business

notable investigations, inter alia, have helped elevate the family business theme. Withinthis backdrop, the Handbook of Family Business Research raises the bar further, demon-strating an interdisciplinary and multidimensional field of research, traversing processtheory, case studies, application of quantitative and qualitative procedures that employprimary, secondary, narrative and ethnographic methods, along with papers that con-tribute to the validation of theoretical constructs.

Unequivocally, this volume contributes significantly to the advancement of family busi-ness research, theory, and practice. This selection of extant research and conceptual articles:

● helps to validate the protagonist role family firms play in social-economic milieus;● provides an in depth treatment of operational and definitional issues surrounding

what constitutes a family business;● offers a systematic account of the historical development of the field of family

business;● embraces methodologies encompassing micro and macro perspectives;● introduces theoretical bases, conceptualizations, and paradigms underpinning

family business entrepreneurship, the papers of which challenge the orthodoxmicroeconomic view of homo-economicus firms by highlighting the virtues offamily influence, familiness and social capital; and

● finally, proffers a selection of empirical studies addressing the current family busi-ness research agenda.

Structure of the bookThe Handbook of Research on Family Business involves 33 substantial contributions, fiveof which are reprints published in top-tier journals. This collection is organized in sevenparts: ‘Frontiers of Family Business’; ‘Theorizing Family Businesses and BusinessFamilies’; ‘Family Business Research: Metrics and Methodologies’; ‘Family BusinessThemes in Focus’; ‘Family Business Succession’; ‘Family Business Performance: Globaland Trans-cultural Issues’; and ‘Family Business Finance’.

Part One ‘Frontiers of a Family Business’ establishes the academic scene and reviewsdevelopments of the family business field.

● Frank Hoy and Pramodita Sharma provide a chronology detailing the evolution ofeducational programmes and research.

● Pramodita Sharma, based on a review of 217 published studies, reflects on thestatus of the field and scope of family business.

● Joseph Astrachan and Melissa Shanker present an empirical research frameworkfor assessing the economic role of family firms.

Part Two ‘Theorizing Family Businesses and Business Families’ is a selection of papersdealing with pertinent theoretical constructs concerning family business entrepreneurship.

● Timothy Habbershon, Mary Williams and Ian MacMillan propose a unified systemsperspective of family firm performance, their model of which encapsulates the notionof familiness, and the systemic relationship between resources and capabilities assources of advantage (or constraint) and performance.

Introduction: the business of researching family enterprises 3

● Ramona Heck, Sharon M. Danes, Margaret Fitzgerald, George Haynes, CynthiaJasper, Holly Schrank, Kathryn Stafford and Mary Winter, based on the SustainableFamily Business Model, proffer an analytical framework for the study of the family’sdynamic role within family business entrepreneurship.

● Nigel Nicholson and Åsa Björnberg introduce the concept of Critical LeaderRelationships (CLRs), capturing the neglected theme of shared leadership. Theseinvestigators explore possible dyad types in family business CLRs, and propose aSituation–Process–Qualities (SPQ) model of leadership effectiveness as applied toCLRs.

● Lorraine Uhlaner proposes a theoretical framework within which the businessfamily, as a team, can be explored to identify aspects that impact on business strat-egy and performance.

● Alberto Gimeno Sandig, Gaston Labadie, Willem Saris and Xavier MendozaMayordomo advance a theoretical model, incorporating business and family com-plexity, and identifying internal factors that explain family business performance.

Part Three ‘Family Business Research: Metrics and Methodologies’ comprises a col-lection of papers dealing with definitional, methodological, and measurements issues.

● Joseph Astrachan, Sabine Klein and Kosmas Smyrnios report on their pioneeringwork concerning the Family: Power–Experience–Culture (F-PEC) scale, a system-atic measure of family influence on businesses.

● Paul Westhead and Carole Howorth examine variables relating to family firmobjectives and ownership, and management structures, leading to an identificationof a taxonomy of private family firm types.

● Ken Moores and Justin Craig demonstrate how elements of the Balanced Scorecard,an accepted strategic management and measurement tool, can be adapted to thefamily business context for use as a strategic tool and as a means of contributing tothe professionalization of family firms.

● Sandra Moncrief-Stuart, Joe Paul and Justin Craig present a methodological papervalidating the Aspen Family Business Inventory, an assessment tool designed specif-ically for use by consultants working with families in business.

Part Four ‘Family Business Themes in Focus’ incorporates a series of in-depth papersfocusing on functional areas of the family business strategic management.

● Ercilia García-Álvarez and Jordi López-Sintas present evidence from in-depth crosscase analysis to delineate a model encompassing value transmission and successors’socialization, for facilitating family business continuity.

● Annika Hall, Leif Melin and Mattias Nordqvist, utilizing a case study approachidentifying key parameters associated with everyday, micro and human aspects oforganizational life, submit a theoretical framework concerning family businessstrategizing and direction.

● Lucrezia Songini reflects on the theory and practice of professionalization pro-cesses in family firms.


● Miguel Angel Gallo and Salvatore Tomaselli explore the theoretical and practicaldimensions of protocols in family business strategic planning processes.

● Joseph Astrachan, Andrew Keyt, Suzanne Lane and Kristi McMillan focus on thegovernance schemes of family and non-family businesses, and tender propositionsconcerning accountability in firms.

● Rosa Nelly Trevinyo-Rodríguez and Josep Tàpies conceptualize a knowledge trans-fer model of family firms concentrating on internal and external relationships infamily-enterprise next-generation systems.

● Franz Kellermanns and Kimberly Eddleston furnish a conceptual paper targetingmanagement strategies relating to task and relationship conflict in family firms.

Part Five ‘Family Business Succession’ incorporates a collection of in-depth papersfocusing on the popular theme of strategic succession planning:

● Danny Miller, Lloyd Steier and Isabelle Le Breton-Miller, within the context ofinductive and case study methodologies, examine the main issues associated withbusiness successions that fail.

● Johan Lambrecht and Rik Donckels develop an explanatory model of businesstransfer derived from an examination of transitional paths associated with familybusiness succession.

● Pietro Mazzola, Gaia Marchisio and Joseph Astrachan explore the specific benefitsof strategic planning processes as a next-generation training tool, particularlyduring the post-succession stage of the business transfer planning process.

● Vassilios Pyromalis, George Vozikis, Theodoros Kalkanteras, Michaela Rogdakiand George Sigalas advance an integrated framework for evaluating the success ofthe family business succession process according to gender specificity.

Part Six ‘Family Business Performance: Global and Trans-cultural Issues’ presents inter-nationally based research initiatives.

● Kristin Cappuyns, through a prism of multiple case studies of Spanish family firms,reports on internationalization via strategic alliances.

● David Pistrui, Wilfred Huang, Harold Welsch and Zhao Jing describe seminalattributes, characteristics and growth orientations of mainland Chinese entrepre-neurs, highlighting the contributions of relationships, roles, family and culture inthe development of private small and medium enterprises (SMEs).

● Guido Corbetta and Alessandro Minichilli examine the essential features of boardsof directors in Italian publicly listed companies.

● Luca Gnan and Daniela Montemerlo compare Italian family versus non-familySMEs in terms of ownership and governance issues.

● Toshio Goto documents the historical development of the Japanese family businesseconomy, providing solid explanations for its longevity.

Part Seven ‘Family Business Finance’ is a compilation of empirical papers exploringfinancial and related performance issues pertaining to privately held and quoted familycompanies.


● Myriam Lyagoubi investigates relationships between family ownership and debtfinancing behaviour in French privately held and public companies.

● Panikkos Zata Poutziouris, in a study of the UK London main stock market, pro-files the UK Family Business PLC economy, and through the lens of a FamilyBusiness Index, reports on their performance.

● Susana Menéndez-Requejo evaluates the impact of family governance and owner-ship on Spanish firm performance.

● MaríaSacristánNavarroandSilviaGómezAnsónreviewsthe influenceof familyown-ership, management and control on the performance of Spanish quoted companies.

‘Epilogue’

● Shaker Zahra, Sabine Klein and Joseph Astrachan undertake an element of crystal-ball gazing and provide reflections on the future directions and new frontiers opento this field.

To sum up, this volume features a kaleidoscope of competitive research papers,dealing with conceptual and theoretical frameworks, new methodologies, leading to anidentification of best research practice. As is evidenced by this collection, one impera-tive is the need to continue developing balanced family business entrepreneurshipframeworks where new standards of research are achieved in order to strengthen theo-ries relating to family-controlled firms. Another imperative calls for the use of alterna-tive research methods incorporating sources of competitive advantage and dynamiccapabilities of family firms, namely, familiness and family influence. This imperative isconsistent with the words of Aristotle who is reported as saying that the family isthe association established by nature for the supply of people’s everyday wants(Aristotle, 400 BC). These words reflect the dual and interrelated nature of family busi-ness entrepreneurship.

In closing, we express our gratitude to the IFERA Board who have entrusted us withthe co-ordination of this initiative, and of course, to Edward Elgar Publishing Limited forrecognizing the emergence of the importance of the theme of family business entrepre-neurship. Special thanks are extended to Jo Betteridge, Caroline Cornish and FrancineO’Sullivan, and their Elgar editorial team. We appreciate the support of the publishers ofthe Journal of Entrepreneurship and Theory and Practice, Journal of Business Venturingand the Family Business Review journal for permission to utilize a number of reprints. Weare also very grateful to the contributors for their co-operation and zeal to deliver top-quality research papers. Many thanks are also extended to our reviewers who were gen-erous with their time and provided valuable guidance to the authors and editorial team.

Reviewers

Åsa Björnberg, London Business School (UK)Justin Craig, Oregon State University (USA)Maria Ercilia Garcia, Universitat Rovira i Virgili de Tarragona, (Spain)Christopher Graves, Adelaide University (Australia)Annika Hall, Jönköping International Business School (Sweden)


Thomas Zellweger, St Gallen University (Switzerland)Ramona Heck, Baruch College (USA)Carole Howorth, University of Lancaster (UK)Bakr Ibrahim, Concordia University (Canada)Peter Jaskiewicz, European Business School (Germany)Andrew Keyt, Loyola University Chicago (USA)Eleni Kostea, University of Cyprus (Cyprus)Eddy Laveren, University of Antwerp ( Belgium)Jordi Lopez, Universitat Autonoma de Barcelona (Spain)Myriam Lyagoubi, EM LYON (France)Gaia Marchisio, Kennesaw State University (USA)Susana Menéndez Requejo, University of Oviedo (Spain)Nicos Michaelas, Demetra Investment PLC (Cyprus)Daniela Montemerlo, SDA Bocconi and University of Insubria (Italy)Mikko Mustakallio, Helsinki Institute of Technology (Finland)María Sacristán Navarro, University Rey Juan Carlos (Spain)Mattias Nordqvist, Jönköping International Business School (Sweden)David Pistrui, Illinois Institute of Technology (USA)Lucrezia Songini, SDA Bocconi (Italy)Khaled Soufani, Concordia University (Canada)Lloyd Steier, University of Alberta (Canada)Jill Thomas, Adelaide University, (Australia)Rosa Nelly Trevinyo-Rodríguez, IESE (Spain)Salvo Tomaselli, Palermo University (Italy)Lorraine Uhlaner, Erasmus University Rotterdam (Netherlands)Elina Varamaki, University of Vasa (Finland)Yong Wang, Wolvehampton University, UKSo-Jin Yoo, NEWI, North East Wales Institute (UK)

On behalf of authors, reviewers, and the editorial team we trust that you find this volumeof scholarly papers not only of interest, but also relevant.

ReferencesAnderson, R. and Reeb, D. (2003), ‘Founding-family ownership and firm performance: evidence from the S&P

500’, Journal of Finance, June (3), 1301–28.Anderson, R., Mansi, S. and Reeb, D. (2003), ‘Founding family ownership and the agency cost of debt’, Journal

of Financial Economics, 68, 263–85.Barnes, L.B. and Hershon, S.A. (1976), ‘Transferring power in the family business’, Harvard Business Review,

July/August, 105–114.Brockhaus, R.H. (1994), ‘Entrepreneurship and family business research: comparisons, critique, and lessons’,

Entrepreneurship Theory and Practice, 19(1), 25–38.Burkart, M., Panunzi, F. and Shleifer, A. (2003), ‘Family firms’, Journal of Finance, 58(5), 2167–201.Corbetta, G. and Montemerlo, D. (eds) (2001), The Role of the Family in the Family Business. Book of Research

Forum Proceedings: 12th Annual Family Business Network World Conference, FBN Roma – SDA BocconiPublication.

Donnelley, R.G. (1964), ‘The family business’, Harvard Business Review, 42, 93–105.Gomez-Mejia, L., Nunez-Nickel, M. and Gutierrez, I. (2001), ‘The role of family ties in agency contracts’,

Academy of Management Journal, 44, 81–95.Koiranen, M. and Karlsson, N. (eds) (2002), The Future of the Family Business: Values and Social Responsibility.

Research Forum Proceedings, Book of Research Forum Proceedings: 13th Annual Family Business NetworkWorld Conference, FBN Helsinki – University of Jyvaskyla Publication.


Morck, R. and Yeung, B. (2003), ‘Agency problems in large family business groups’, Entrepreneurship Theoryand Practice, 27(4), 367–82.

Poutziouris, P. (ed.) (2000), Family Business: Tradition or Entrepreneurship in the New Economy, Book ofResearch Forum Proceedings: 11th Annual Family Business Network World Conference , FBN London –Manchester Business School Publication .

Poutziouris, P. and Steier, L. (eds) (2003), New Frontiers in Family Business Research: the Leadership Challenge,Book of Research Forum Proceedings: 14th Annual Family Business Network World Conference, FBN –IFERA Lausanne Publication.

Schulze, W.S., Lubatkin, M.H. and Dino, R.N. (2003), ‘Toward a theory of agency and altruism in family firms’,Journal of Business Venturing, 18(4), 473–90.

Tomaselli, S. and Melin, L. (eds) (2004), Family Firms in the Wind of Change, Research Forum Proceedings,Book of Research Forum Proceedings: 15th Annual Family Business Network World Conference, FBN –IFERA Copenhagen Publication.

Villalonga, B. and Amit, R.H. (2004), ‘How do family ownership, control, and management affect firm value?’,EFA 2004 Maastricht Meeting, Paper No. 3620.


PART I

FRONTIERS OF A FAMILYBUSINESS

1 Navigating the family business education mazeFrank Hoy and Pramodita Sharma

IntroductionAlthough we can safely assume that family businesses predate recorded history (Colli,2003), formal educational and research programs focusing specifically on family-ownedfirms are recent phenomena (for example, Hoy and Verser, 1994; Wortman, 1994). Litz(1997) provided a persuasive analysis of the reasons for the neglect of family businessstudies in the business schools citing a ‘longstanding pattern of interaction betweenbusiness firms, business regulators, academic institutions, and individual academicresearchers’ (p. 56). However, fuelled by a growing awareness of the importance and dom-inance of family firms in most countries (for example, IFERA, 2003), the interest infamily business studies is growing at a rapid pace, as reflected in recent review articles(Bird et al., 2002; Sharma, 2004; Chrisman et al., 2005).

Aims and contributions of chapter As the field is gaining momentum, it is important to pause momentarily to capture its evo-lution with an aim to preserve our legacy and provide a common historical basis of ourpast. This chapter endeavors to provide such a pause to the field of family business studies.While we draw our inspiration from the example of Katz (2003) who captured the evolu-tion of entrepreneurship as a discipline of study and instruction, our focus is much nar-rower as it is limited to tracking the history of family business studies only. Through thisattempt, we hope to preserve our beginnings and provide navigational guidelines to familybusiness scholars and practitioners of tomorrow.

Scope and limitations To capture the evolution of educational and research programs aimed to create and dis-seminate knowledge related to family firms, a chronology of key events that have shapedthe intellectual trajectory of family business studies was developed and is shared in thenext section (Table 1.1). The study of family business lies at the convergence of severalresearch fields including anthropology, family therapy, family studies, organizationalstudies, sociology and psychology (to name a few). Owing to the limitations of time andspace, it is impossible to identify and report all the events and writings that have a bearingon where we stand today. While we have endeavored to provide a comprehensive list ofsignificant events that have helped shape our field of study, this table should only beviewed as the tip of an unexplored iceberg. We invite readers1 to join us in this effort torefine our chronology as we capture our collective past and lay a foundation to carve thefuture of family business studies.

FindingsIn hindsight, it seems remarkable to us that the early contributions, coming as theydid from prestigious business schools such as Indiana University and Harvard, had so

11


Table 1.1 Chronology of family business studies

1953 Grant H. Calder completes the first doctoral dissertation on family business studiesin North America entitled ‘Some management problems of the small familycontrolled manufacturing business’, School of Business, Indiana University

1953 Christensen’s book, Management Succession in Small and Growing Enterprisespublished by Harvard University Press

1954 Cases in the Management of Small, Family-Controlled Manufacturing Businessespublished at the Indiana University Press (first family business-specific case book)

1958 English’s book, Financial Problems of the Family Company published bySweet and Maxwell, London.

1961 Trow’s article ‘Executive succession in small companies’, published in AdministrativeSciences Quarterly, 6

1964 Donnelley’s article entitled ‘The family business’, published in Harvard BusinessReview, 42(3)

1968 Churchman publishes The Systems Approach, Dell Publishers, New York

1968 Alfred Lief’s Family Business: A Century in the Life and Times of Strawbridge &Clothier published by McGraw-Hill Book Company

1968 Léon Danco holds first interdisciplinary seminar on family business

1971 Levinson’s article entitled ‘Conflicts that plague family business’, published inHarvard Business Review, 49(2)

1972 Ianni and Ianni’s book entitled A Family Business published by Russell SageFoundation, New York

1974 Levinson’s article entitled ‘Don’t choose your own successor’, published inHarvard Business Review, 52(6)

1975 Léon Danco’s Beyond Survival: A Business Owner’s Guide for Success publishedby Reston Publishing

1975 Simon A. Hershon completes his dissertation entitled ‘The problem of managementsuccession in family businesses’, Harvard University

1976 Barnes and Hershon’s article entitled ‘Transferring power in the family business’,published in Harvard Business Review, 53(4)

1978 Streich Chair in Family Business established at Baylor University (Chair holder:Nancy Upton)

1978 Becker and Tillman’s book entitled The Family-Owned Business published by theCommerce Clearing House, Chicago

1978 Longnecker and Schoen’s article entitled ‘Management succession in the familybusiness’, published in Journal of Small Business Management, 16(3)

1981 Chair of Private Enterprise established at Kennesaw State College (first Chair holder:Craig Aronoff appointed in 1983)

1981 Elaine Kepner presents a workshop on ‘Family dynamics and family ownedorganizations’, at the Gestalt Institute of Cleveland conference

1982 Wharton Family Business Program launched at the Wharton Applied Research Center(Founding Director: Peter Davis)

Navigating the family business education maze 13

Table 1.1 (continued)

1982 John A. Davis completes his dissertation entitled ‘The influence of life stage onfather–son work relationship in family companies’, Harvard University

1982 John Davis and Renato Tagiuri develop the first compendium of literature onfamily-owned business entitled ‘Bibliography on family business’, unpublisheddocument, Harvard Business School

1983 Organizational Dynamics publishes a special issue on family business studies(Co-editors: Richard Beckhard and Warner Burke)

1983 Karen L. Vinton completes her dissertation entitled ‘The small, family-ownedbusiness: a unique organizational culture’, unpublished document, University of Utah

1984 Gibb W. Dyer Jr completes his dissertation entitled ‘Cultural evolution inorganizations: the case of a family owned firm’, Sloan School of Management,Massachusetts Institute of Technology

1984 Yale establishes program for the Study of Family Firms (Founding members: JoeAstrachan, Ivan Lansberg, Sharon Rogolsky)

1985 The College of Business, Oregon State University starts the second Family BusinessProgram in the US (Founding Director: Patricia A. Frishkoff)

1985 First ‘for credit’ family business course offered

1985 Rosenblatt and deMik publish The Family in Business, Jossey-Bass

1985 First Family Business Research Conference, University of Southern California (Chair:John Davis)

1986 Founding of the Family Firm Institute Inc. (FFI) (Founding President:Barbara Hollander)

1986 John Ward’s book Keeping the Family Business Healthy published as part of theJossey-Bass series on Management of Family Owned Businesses (Consulting Editors:Richard Beckhard, Peter Davis, Barbara Hollander)

1986 Kennesaw State College establishes the Family Business Center and runs the FirstFamily Business Forum (Founding Director: Craig Aronoff)

1986 Andrew Errington edits, The Farm As a Family Business: An Annotated Bibliography,Agricultural Manpower Society, University of Reading Farm Management Unit

1987 First Family Business Chair launched in Europe at IESE Business School, Universityof Navarra, Barcelona (Chair holder: Miguel Ángel Gallo)

1987 Institute for Family Enterprise established at Baylor University (Founding Director:Nancy Upton)

1988 Family Business Review began publication (Editor-in-Chief Ivan Lansberg). AJossey-Bass publication

1988 First FFI research conference hosted by Boston University School of Management,chaired by Marion McCollom Hampton (20 attendees)

1988 Carl R. Zwerner endowed professorship in Family Business established at GeorgiaState University in the US (Chair holder: Frank Hoy)

1989 Baylor University establishes Institute for Family Business conducts first conference(Chair: Nancy Upton)



1989 ‘The outstanding outsider and the fumbling family’, by Thomas A. Teal andGeraldine E. Willigan, first family business case published in Harvard Business Review

1989 FFI established the Best Doctoral Dissertation Award (first award recipient: ColetteDumas) and the Best Unpublished Research Paper Award (first award recipient:Stewart Malone)

1989 Wendy Handler completes her dissertation entitled ‘Managing the family firmsuccession process: the next generation family member’s experience’, Boston University

1990 Founding of the Family Business Network (FBN)

1992 First FFI Educators Conference hosted by Northeastern University Center for FamilyBusiness, Boston

1993 First Mass Mutual Annual Gallup survey of family businesses (the first large samplestudy of FBs in the United States)

1994 Family Business Division established at the United States Associationof Small Business Enterprise (USASBE)

1994 Entrepreneurship Theory and Practice publishes a special issue on family businessstudies (Co-editors: Gibb W. Dyer Jr and Wendy Handler)

1994 FFIs Case Series Project launched (Editor: Jane Hilburt-Davis)

1994 FAMLYBIZ listserv established by Scott Kunkel, University of San Diego

1994 Max Wortman publishes first major review article of family business studies inFamily Business Review

1995 The first annual Psychodynamics of Family Businesses (PDFB) conference hostedby the Northwestern University (Chair: Ken Kaye)

1995 FFIs Body of Knowledge (BOK) task force created

1996 A Review and Annotated Bibliography of Family Business Studies by Sharma,Chrisman and Chua published by Kluwer Academic (first major bibliographyof family business studies)

1996 First Family Business major offered at the Texas Tech University

1997 First National Family Business survey (first large study using household sample).Findings reported in Family Business Review special issue 7(3)

1997 Gersick, Davis, Hampton and Lansberg’s book entitled Generation to Generationpublished by Harvard Business School Press

1998 Sharma’s dissertation receives the NFIB Best Dissertation award (first familybusiness dissertation recognized by the Entrepreneurship division of the Academyof Management)

1999 First Family Business professorship established in Northern Europe at theUniversity of Jyväskylä, Finland (Chair: Matti Koiranen)

2000 Doctoral program for family business studies established at the University ofJyväskylä, Finland

2001 International Family Enterprise Research Academy (IFERA) founded (FoundingPresident: Albert Jan Thomassen). First IFERA conference hosted by INSEADFountainbleau (co-organizers: Christine Blondel and Nicholas Rowell; 35 attendees)

little initial stimulative effect on the field. More critical appears to have been theinfluence of practitioners – family business owners and family business consultants.Popular trade books by authors such as Léon Danco and the launch of university-based outreach programs such as the one at the University of Pennsylvania demon-strated that there was a latent demand in the business community for education,training and development focused on issues peculiar to organizations characterized byfamily ownership and control. This recognition precipitated more scholarly research inorder to have a knowledge base for instruction. To complete the circle, researchersreturned to the early contributions for theoretical and empirical justifications forinvestigations.

Also in retrospect, the formation of associations whose memberships consisted of indi-viduals and organizations with family business constituents or clienteles, that is, theFamily Firm Institute (1986) and the Family Business Network (1990), fostered furtherresearch investigations for benchmark information and best practices that could belearned and used to serve family enterprises. In 1988, the Family Firm Institute-sponsoredFamily Business Review began offering an outlet for refereed publications. This break-through encouraged more academics to produce new knowledge for the field. The aca-demic community is characterized by the axiom, ‘publish or perish’. Journal access is anincentive to contribute to a stream of research.

FutureGuided by lessons of history, our critical reflections of the past enable us to speculateabout our future (cf. Van Fleet and Wren, 2005). At the time of writing this chapter, itwas estimated that there were in excess of 200 family business educational programs based



2001 First Theories of Family Enterprise (ToFE) conference co-hosted by the universitiesof Alberta (UoA) and Calgary (UoC) at the School of Business, UoA, Edmonton(co-organizers: Jim Chrisman, Jess Chua and Lloyd Steier)

2003 Journal of Business Venturing publishes two special issues on family business studies(Co-editors for 18(4) issue: Jim Chrisman, Jess Chua and Lloyd Steier, and for 18(5)issue: Ed Rogoff and Ramona Heck)

2005 International Masters Programme for Family Business established at the Universityof Jyväskylä, Finland (lectured in English and Finnish)

2005 FITS-project established, a strategic alliance between Finnish (Jyväskylä), Italian(Bocconi), and Swiss (Lugano) universities to offer Doctoral and Post-Doctoralsin Family Business.

2005 First Family Enterprise Research Conference (FERC) hosted by the Austin FamilyBusiness Program, Portland (co-organizers: Mark Green and Pramodita Sharma;55 attendees)

2005 Miller and Le Breton-Miller’s book entitled Managing for the Long Run publishedby Harvard Business School Press

2005 Family Business Review is listed in Social Science Citation Index (SSCI) and CurrentContents/Social and Behavioral Sciences (CCBS) (Editor: Joe Astrachan)

at institutions of higher education worldwide. To this can be added other colleges and uni-versities offering courses addressing family business issues, but short of academic con-centrations or outreach programs. All this suggests that a critical mass has been reachedwith family business studies gaining acceptance as a legitimate field of study.

For over a decade at the annual meeting of the Family Firm Institute, an award hasbeen presented for the best doctoral dissertation on the subject of family business. Everyyear multiple dissertations are submitted for consideration. This has two implications.The first is that both new faculty entering the field and faculty at their degree-grantinginstitutions value family business issues as significant areas of study. The second is thatthe continuous streams of research assure that topical issues will be investigated usingup-to-date research designs and analytical tools. Further, these dissertations are comingfrom all regions of the globe, with recent award winners being from Canada, Spain, SouthAfrica, Sweden and the United States, indicating widespread appeal of family businessstudies for young scholars.

Chronology of family business studies

MethodsMultiple sources of information were used to develop the chronology of key eventsshaping family business studies (Table 1.1). These include:

● Reviews of primary and secondary historical source documents including many ofthe earliest books and review articles (for example, Christensen, 1953; Danco, 1975;Dyer Jr, 1986; Sharma et al., 1996; Trow, 1961; Ward, 1986; Wortman Jr, 1994).

● Reviews of websites including of some of the major professional associationsfocused on family business studies, for example the Family Firm Institute (FFI), theFamily Business Network (FBN) and the International Family Enterprise ResearchAcademy (IFERA).

● Reviews of websites of some of the oldest and most well established family busi-ness programs across the world. Examples include the Cox Family EnterpriseCenter at Kennesaw University, the Baylor Institute for Family Business at BaylorUniversity, the Wendel International Centre for Family Enterprise at INSEAD andmany more.

● A survey of leading thinkers and professionals in the field. Discussions with manyfaculty and practitioners who have directly influenced the development of the field.Examples include, Craig Aronoff, Joe Astrachan, Jim Chrisman, Guido Corbetta,John Davis, Nancy Drozdow, Gibb Dyer Jr, Miguel Gallo, Judy Green, JaneHilburt-Davis, Paul Karofsky, Ken Kaye, Matti Koiranen, Kosmas Smyrnios,Nancy Upton and Karen Vinton, to name a few.

● Finally, the authors immodestly acknowledge their own expertise and contributionsto the field. The first author was the inaugural holder of the Carl R. ZwernerProfessorship in Family-Owned Businesses, thought to be the third endowed pos-ition established dedicated to family business education and research. In additionto writing an award-winning dissertation on family business, the second author hasparticipated in the development of extensive reviews of the literature (Chrismanet al., 2005; Sharma, 2004; Sharma et al., 1996, 1997).


Reflections of the past and current statusA critical analysis of Table 1.1 reveals the field of family business studies can be viewedas having gone through the following stages in its growth.

1950s and 1960s – era of rugged pioneers The decades of the 1950s and 1960s weremarked by negative connotations of family businesses both within the circles of highereducation as well as within the business community. At this time of perceived negativitytowards family business, it was the rugged efforts of entrepreneurial pioneers who ven-tured into exploring and writing about family firms.

In the broader community, an interesting schizophrenia has been extant. Businessfounders frequently labeled their firms by the family name. It is not unusual to see signsdeclaring ‘John Doe and Sons’ or ‘Jones Brothers’ (the gender bias implied by these hypo-thetical examples reflects the historic male dominance of the family firm, particularlyregarding succession). Despite these appellations, many company owners objected tobeing categorized as family enterprises. Their assumption was that a family business wassomehow less professional than a non-family firm. The stereotype for many family-ownedenterprises could be summarized in the negative connotation, nepotism (Ewing, 1965).

Within the confines of academia, efforts were devoted to develop scientific knowledgebased on rigorous empirical investigations and to disseminate it in the classroom.Application of the scientific method translated not only into content, but also into ped-agogical processes. In business education specifically, students were taught to be analyt-ical in their approach to management. For many in the education profession, this resultedin encouraging students to focus on objective data and to apply quantitative analysistools (Bennis and O’Toole, 2005). Emotions and affective behavior were addressed asvariables to be controlled by practicing effective managerial techniques in leadership,organization, communication, motivation, and so on (for example, Dyer Jr, 2003). Onthose rare occasions when family issues might arise in course material or class discus-sions, students would be taught to segregate what was perceived to be irrelevant variablesfrom business management in order to prevent them from entering into the decision-making process or from disrupting the organizational system (cf. Ghoshal, 2005). Whilesome valiant efforts at conduct of academic research on family firms are visible especiallyat Harvard and Indiana universities, most of the writings at the time were completed byrugged pioneers such as Donnelley and Trow who were working against the prevailingnorms and trends.

1970s – enter practitioner-consultants Practitioner-consultants were the first to begin tofill the educational void, offering training and development programs for family busi-nesses. Disciplines represented by these consultants included law, accounting, psychology,financial planning, general management and others. Early contributors enhanced theirability to market training and consulting by publishing books aimed towards the businessowner. For many consultants, the books were elements of marketing strategies to promotethemselves as experts in consulting or as professional speakers. Their markets were familybusiness owners and prospective successors to those owners. The lecture circuit often con-sisted of trade associations that had large numbers of independent businesses among theirmembership. This early stage marked the identification and cultivation of the owner-manager market segment for education programs.


Early efforts towards building a community of interested scholars in family businessresearch started to emerge, for example, Danco’s interdisciplinary seminars. Evidence ofscholarly seriousness started to surface, as did the realization of the complexity and inter-disciplinary nature of family business studies.

1980s – the decade of institution building By 1980, there were published indications thatawareness was arising in the practitioner community regarding the need for education,and for educating more than just the business owner/founder (Poe, 1980). Additionally,popular books about family-owned enterprises brought attention to the interactionsbetween families and the firms that they owned and/or managed (Ward, 1986). A smallnumber of academic scholars who believed that family business warranted study joinedthe practitioner-consultants in their pursuit of aiding family business owner-managers.These early scholars tended to blend research, consulting and teaching. Research investi-gations often relied on convenience samples, participant observation or case studies. Thus,the books published by the academics were generally directed toward practitioner marketsrather than the academic community. Few courses were offered at American universitiesspecifically oriented towards the ownership and management of family companies.

The most distinctive trend of the 1980s, however, is that of institution building. Familybusiness programs started to emerge in universities. The Wharton Family BusinessProgram at the University of Pennsylvania was the first to be launched, in 1982. OregonState University started its program in 1985 and was followed by Kennesaw a year later.In 1988, Nation’s Business magazine identified 20 universities in the United States ashaving established some form of family business program within or affiliated to theirbusiness schools. For the most part, these were outreach or continuing education-typeprograms designed for business owners in the communities or regions served by the insti-tutions. Family business programs have proliferated at universities. Today there are morethan a hundred in the United States plus programs in at least 10 other countries (FamilyFirm Institute (FFI) and www.ffi.org).

For many universities, the creation of a forum was imposed by external pressure.Successful entrepreneurs and individuals involved in troubled family enterprises pressed uni-versities to go beyond standard business education and offer help and advice to this segmentof the business community. When Carl R. Zwerner endowed a professorship in family busi-ness in the United States at his alma mater, Geo

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