Moving forward: Balancing the financial and emotional costs of business failure

Why do owner-managers delay business failure when it is financially costly to do so? In this paper we acknowledge that delaying business failure can be financially costly to the owner-manager and the more costly the delay, the more difficult the recovery. But we complement this financial perspective by introducing the notion of anticipatory grief as a mechanism for reducing the level of grief triggered by the failure event, which reduces the emotional costs of business failure. We propose that under some circumstances delaying business failure can help balance the financial and emotional costs of business failure to enhance an owner-manager's overall recovery — some persistence may be beneficial to recovery and promote subsequent entrepreneurial action.     

Narrative attributions of entrepreneurial failure

We examine how organizational stakeholders use narratives in their psychological processing of venture failure. We identify a range of “narrative attributions”, alternative accounts of failure that actors draw on to process the failure and their role in it. Our analysis provides a view of entrepreneurial failure as a complex social construction, as entrepreneurs, hired executives, employees and the media construct failure in distinctively different ways. Narratives provide means for both cognitive and emotional processing of failure through grief recovery and self-justification.     

How personal nostalgia influences giving to charity

Personal nostalgia provides an emotionally engaging means for bonding a donor to a nonprofit organization. Yet, little is known about the relationship between personal nostalgia and charitable giving; this research seeks to fill this gap. A review of the extant literature is integrated with the findings from thirteen focus groups (Study 1) to develop a conceptual model. This model is tested in Studies 2 (using 457 older public television donors) and 3 (with a broader sample of 502 donors) using structural equations modeling. The findings indicate that discontinuity, recovery from grief, and loneliness, along with previous life experiences influence the level of personal nostalgia felt by a donor and associated with a charitable organization. This personal nostalgia provides emotional and familial utility to the donor. The research establishes that the effect of personal nostalgia on the donor's commitment is mediated by the emotional and familial utility that the nostalgia generates.     

Individual responses to firm failure: Appraisals,grief, and the influence of prior failure experience

This paper provides a systematic assessment of how entrepreneurs react to firm failure. We use appraisal theory as an overarching theoretical framework and hypothesize that the more the failure experience is appraised as stressful in terms of its implications for harm or loss, the greater the feelings of grief. To test this hypothesis we developed a unique database of entrepreneurs who recently filed for firm bankruptcy. Our results support that there is great variation in responses to firm failure, and we provide theoretically valid explanations to why this is the case. These findings have substantial implications for how scholars conceive and theorize about entrepreneurial failure.     

Guanxi and organizational dynamics in China: a link between individual and organizational levels

Guanxi in China is a very ancient concept embedded in the Confucian concept of life and one that is a ‚hot' topic in that it is currently attracting increasing attention from both Western and Chinese scholars. One aspect of Guanxi which has been the subject of most of the research of late is the influence of Guanxi on firm performance. However, relatively few studies have examined how Guanxi at the individual level is transferred into a firm to influence its financial performance. This study first reclassifies Guanxi into obligatory, reciprocal, and utilitarian types at the individual level as a means to clarifying the confusion brought above from previous studies. It then provides a conceptual framework in which to systematically characterize the link between Guanxi at the individual level and organizational dynamics: that is, how is Guanxi at the individual level shifted to a firm and how does it affect organizational dynamics of that firm at the organizational level. Finally, it provides a deeper understanding of the financial implications of Guanxi to business firms in China. Dr. Yi Zhang is Associate Professor of School of Public Administration and a former postdoctor of Scholl of Management at Huazhong University of Science and Technology. His research lie in international business and FDI, strategic management in China, and organizational learning. His work has been and will be published in the Journal of Business Ethic and Singapore Management Review. Zigang Zhang is Professor of College of Management at Huazhong University of Science and Technology. His research interests include strategic management, knowledge management, and cooperation management.An earlier version of this paper was presented at the Fourth Asia Academy of Management Conference, December 2004, in Shanghai, P.R. China.     

A Multilevel Perspective of Tensions Between Knowledge Management and Social Media

In this article, we discuss the tensions that are perceived in organizations as the use of social media platforms such as Facebook and Twitter challenge past approaches to knowledge management initiatives in organizations. We address these perceived tensions using a three-level conceptual framework: the macro- (organizational) level, the meso- (group) level, and the micro- (individual) level. In our discussion, we posit that perceived tensions arise when managers seek to maintain their traditional roles at the macro- (organization) level, yet social media affordances enable these roles to be performed at the micro- (individual level) and mesolevels. Shifts in the extent of the meso-level connections beyond the immediate organizational boundaries enable a wider community of practice than before. As a consequence, traditional management roles may give way to more flexible roles, with greater individual responsibilities for control and more sense-making and knowledge access taking place at the mesolevel. Our contribution is three-fold. In our article, we examine four key organizational factors (roles, ownership, control, and value) using a three-level conceptual model; associate the perceived tensions that arise in organizations with implicit shifts in these variables that accompany the use of social media; and suggest that shifts in emphasis in roles and control at each level can be instrumental in resolving perceived tensions as knowledge management efforts encompass social media.     

Transformative and restorative consumption behaviors following attachment trauma

This study presents a model of how consumers respond to an attachment trauma for which they feel a substantial degree of personal responsibility. The model is derived from an analysis of the lived experiences, stories, and observations of divorced single mothers, who have experienced an attachment trauma as a consequence of a marriage break down. The trauma involves a dramatic loss of normalcy and certainty, accompanied by negative emotions, such as fear and uncertainty, stress and grief, self‐castigation, guilt and shame, and rumination and depression. In an effort to recover from the trauma and return to healthier emotional states, consumers adopt amelioration strategies characterized by self‐compassion, self‐care, and the (re)building of self‐capabilities. Consumption practices—restorative and transformative in nature—facilitate each strategy, as consumers strive to regain the confidence, sense of control, and equilibrium destroyed by the trauma. The model arguably provides a useful lens to understand other kinds of traumatic events where a sense of heightened personal responsibility prevails.     

Ethical Cognition of Business Students Individually and in Groups

This study provides evidence regarding the level of ethical cognition of business students at the entry to college as compared to a national norm. It also provides comparative evidence on the effects of group versus individual ethical cognition upon completion of a business ethics course. The Principled Score (P-score) from the Defining Issues Test (DIT) was used to measure the ethical cognition of a total sample of 301 business students (273 entering students plus 28 students in a business ethics course). The results indicate that (1) business students are not significantly different from the national norms at entry to college and (2) group reasoning helps male students improve their P-scores significantly in the business ethics course at a loss of P-score (albeit not statistically significant) for female students.     

Conflict and Confluence: The Multidimensionality of Opportunism in Principal–Agent Relationships

This comparative study explores 499 corporate social responsibility (CSR) initiatives implemented by 178 corporations in five distinct, institutionally consistent European clusters. This study provides an empirically grounded response to calls to develop comprehensive, nuanced pictures of CSR in the composite European business environment. In so doing, the article stresses three distinct, non-exclusive approaches that characterize the embedding of CSR considerations in corporations’ strategies across Europe and the CSR challenges for corporations operating in different socio-political contexts. Furthermore, the study reaffirms the CSR notion as a contextualized concept, shaped by socio-political drivers, and contributes by bridging macro-level, socio-political facets of CSR with its meso-level, organizational implications.     

Ethics in Business

The concept of ethics in business is presented through an examination of ethnical theories and through the application of the theories to several case incidents. A set of guidelines and implications for management, intended to stimulate ethics in the practice of business, are presented and discussed.     

Product Innovation in Family versus Nonfamily Firms: An Exploratory Analysis

How family firms manage product innovation remains an overlooked topic in existing business research. This happens despite the fact that family businesses play a crucial role across all economies, and they often use technological innovation to nurture their competitive advantage. By drawing upon the resource‐based view of the firm as well as agency, stewardship, and behavioral theories and using empirical evidence gathered through a multiple case study, the paper studies how and why the anatomy of the product innovation process differs between family and nonfamily firms. The analysis shows that family businesses differ from nonfamily ones as regards product innovation strategies and organization of the innovation process.     

Is the Culture of Family Firms Really Different? A Value-based Model for Its Survival through Generations

The current work represents a piece of research on the family firm of the semasiological, interpretive or culture creation type. In it we carry out a comparative analysis of the organizational culture of this type of firm along with firms not considered to be family firms, using as theoretical framework generally accepted theories in business administration, such as the systems, neoinstitutional, transformational leadership, and social identity theories. Our findings confirm the existence of certain elements of culture, especially values and allow us to propose a value-based model to help family firms to survive through different family generations.     

Investigating a neglected part of Schumpeter’s creative army: what drives new-to-the-market innovation in micro-enterprises?

This paper tests a theoretical model to evaluate e-business capability and value in the fast growth small-to-medium enterprise (SME) context. We propose that e-business value depends on how fast growth SMEs deploy IT resources, strategic planning, culture, and business partnerships to develop e-business capability and business process competence which help these companies to achieve outstanding business performance. Structural equation modelling is employed to test our theoretical conceptualization on a cohort of 310 Australian fast growth SMEs across different industrial sectors. The results show that IT resources, strategic IT alignment, market orientation, and business partnerships do contribute significantly and indirectly to SME performance through the development of e-business capability and business process competence. Our study provides an initial empirical evidence to understand the relationship between IT and entrepreneurial SME performance. These findings have important implications for research and business practices.     

Situating ‘Giving Voice to Values’: A Metatheoretical Evaluation of a New Approach to Business Ethics

The evaluation of new theories and pedagogical approaches to business ethics is an essential task for ethicists. This is true not only for empirical and applied evaluation but also for metatheoretical evaluation. However, while there is increasing interest in the practical utility and empirical testing of ethical theories, there has been little systematic evaluation of how new theories relate to existing ones or what novel conceptual characteristics they might contribute. This paper aims to address this lack by discussing the role of metatheorising in assessing new approaches to ethics. The approach is illustrated through evaluating a new pedagogy and curriculum for ethics education called Giving Voice to Values (GVV). Our method involves identifying a number of metatheoretical lenses from existing reviews of ethical theories and applying these to examine GVV’s conceptual elements. Although GVV has been explicitly presented as a pedagogy and teaching curriculum, we argue that it has the potential to contribute significantly to the development of ethical theory. We discuss the general implications of this metatheoretical method of evaluation for new approaches to business ethics and for GVV and its future development.     

家族企业实际控制人贫困经历对企业战略变革的影响

战略变革是家族企业实现基业长青的关键,但现有研究忽略了家族企业实际控制人的作用。基于2003—2019年中国上市家族企业的经验数据,研究家族企业实际控制人贫困经历对企业战略变革的影响。研究发现,家族企业实际控制人贫困经历对企业战略变革具有负向影响,这一结论在经过内生性检验后依然稳健;并且证实,实际控制人的风险偏好和预防性储蓄动机是两条作用机制。同时,数字经济水平对上述关系有负向调节作用,代际传承对上述关系有正向调节作用。研究丰富了家族企业实际控制人经历与企业战略变革的文献,而且为更好地理解家族企业实际控制人如何影响战略决策提供了经验证据。     

Assessing business value of Big Data Analytics in European firms

In the strategic management field, dynamic capabilities (DC) such as organizational agility are considered to be paramount in the search for competitive advantage. Recent research claims that IT business value research needs a more dynamic perspective. In particular, the Big Data Analytics (BDA) value chain remains unexplored. To assess BDA value, a conceptual model is proposed based on a knowledge-based view and DC theories. To empirically test this model, the study addresses a survey to a wide range of 500 European firms and their IT and business executives. Results show that BDA can provide business value to several stages of the value chain. BDA can create organizational agility through knowledge management and its impact on process and competitive advantage. Also, this paper demonstrates that agility can partially mediate the effect between knowledge assets and performance (process level and competitive advantage). The model explains 77.8% of the variation in competitive advantage. The current paper also presents theoretical and practical implications of this study, and the study's limitations.     

Correlates of success in family business transitions

Fundamental differences are identified between the nature and functioning of family-owned and -managed businesses and those that are not familu-controlled. These differences include the time horizons of management, the implications of business failure, the degree of job security, the centralization of decision-making, accountability for decision-making, and the impact of the family system on the business system, among others. It is argued that the most significant of these differences concerns the way in which executive succession occurs, and specifically, unique aspects of the process of intergenerational transfer within family-owned businesses.Based on an initial round of interviews with second- and third-generation family business owners, and a detailed review of the extant literature, a model is proposed consisting of three sets of determinants of successful family business transitions: the preparation level of the heirs, the nature of relationships among family members, and the types of planning and control activities engaged in by the management of the family business. Successful transitions are further hypothesized to influence subsequent company performance.Much of the research to date on family business transitions has tended to be qualitative, case-oriented, and/or anecdotal in nature. The result has been a number of rich insights into the complexities and dynamics of the family enterprise, but limited in terms of the generalizability of the findings. Considerably less attention has been devoted to quantitative studies that employ larger samples and provide empirical tests of relationships between key variables. This lack of attention is traced to inherent measurement difficulties in the family business field, and to the relatively young status of the field itself as a distinct area receiving academic attention. The current study attempts to bridge this gap.The study provides a quantitative assessment of the proposed model using two cross-sectional sub-samples consisting of 209 second- and third-generation family-owned businesses. Both regression and structural equations (LISREL) analyses are employed. The results indicate support for the proposed model. Family business transitions do occur more smoothly when heirs are better prepared, when relationships among family members are more trust-based and affable, and when family businesses engage in more planning for taxation and wealth-transfer purposes. Of these factors, relationships within the family has the single greatest impact on successful transitions. At the same time, smoother transitions do not necessarily result in better post-transition performance by the enterprise. This linkage to performance appears to be more complex. One possibility is that some level of conflict or strife is a prerequisite for the transition to have a significant impact on subsequent performance.Based on these results, family business owners are encouraged to devote relatively more attention to relationship issues, and relatively less to estate and tax planning. It is suggested that a “relationship charter” be developed as a vehicle for strategically managing relationships within the family, much as relationships must be managed with suppliers or customers. Suggestions are also made for further research, and the study's limitations are denoted. Researchers are encouraged to devote efforts to exploring relationships among the exogenous variables in the research model, such as that between preparation levels of heirs and family relationships. Further, the issue of success and failure in second- and third-generation businesses warrants greater attention, including identification of key failure and success factors as well as determination of differences in failure rates for family— versus non-family—owned businesses and isolation of the reasons for such differences.     

Knowledge and training in family firms of the European periphery: Spain in the eighteenth to twentieth centuries

This article is a first attempt to explore the relationship between training and entrepreneurship in Spanish family firms. It examines changes and continuities over time, and relates the evolution of the training practices of Spanish family firms to the technical and economic conditions of the first and second industrial revolutions. The article demonstrates the interaction betweeen technical and educational ideas, the creative adaptation to the entrepreneurial needs of regions and economic sectors, and institutional conditions. It is organised in three main sections. The first briefly introduces new institutional and sociological theories applied to the study of the formation of business groups. The second summarises existing literature and research that deals with knowledge transference and business training in Spanish family firms, and provides a general survey of informal and formal business education in eighteenth to twentieth-century Spain. The third presents case studies of changing training practices in big and old family firms, and relates this evidence with theoretical and institutional insights.     

Contrasting Expectations of Individualists and Collectivists

This article explores practical ways for effectively training international business students in Hofstede's individualism and collectivism dimension. It details the behaviors arising from this dimension that frequently interfere with the success of group projects in international business classes as well as the implications arising from these behaviors for international business relations between those from individualist and collectivist cultures. Too often, projects aimed at fostering collectivism fail. Conventional theories of motivation derive from and apply to North American individualist culture, but may not have the same application in collectivist situations. Tools for adapting group projects which are given to individuals from individualist cultures to help them develop a more collectivist orientation are explored here. These tools-group autonomy in excluding non-performers (loafers), and self and group evaluations empower groups while engendering collectivist concepts.     

Next-generation entrepreneurial identity in family business systems: The influence of role-changing events on the understanding of legacy,individual identity,and transgenerational entrepreneurship of next-generation family business principals

The paper addresses how the understanding of family business legacy, individual identity, and transgenerational entrepreneurship of next-generation principals is affected by role changing events in family business systems. The paper uses the insights of a focus group of 38 next-generation family business principals of ultrahigh-net-worth business families from 14 countries. It corroborates that parents and role models are influencing factors on the understanding and perception of family identity, values, and transgenerational entrepreneurship. Identity inflection points during moments of expected and unexpected role changes, such as family business succession, can either positively or negatively impact the appreciation of a next-generation principal regarding legacy, identity, and transgenerational entrepreneurship. Based on the results of the qualitative interviews and peer group discussions, the findings indicate how identity inflection points affect the preservation of the next-generation family business principal's identity and family identity during a moments of role changes in family businesses and are a bottleneck for transgenerational entrepreneurship.