Family-centered goals,family board representation,and debt financing

Small Business Economics - This study investigates the effect of both family-centered goals and family board representation (family member representation on the board of directors) on family firm...     

Charisma,paternalism, and business leadership in Latin America

If populist politics reveals a paradigm, in countries where populist politics are acceptable, effective paternalistic business leaders must offer unlimited protection in exchange for similarly unlimited allegiance from the workers. The reverse interview survey reported here suggests that, within knowledge‐based industries, the knowledgeable leader might override paternalistic considerations that nonetheless rule for the larger segment of Brazilian workers, who may shun the foreign‐appointed boss the most. Unfortunately, multinationals tend to expand abroad when they are mature businesses whose people‐oriented founders may be long gone. Their more technocratic successors are more likely to appoint the most despised leaders at subsidiaries. © 2010 Wiley Periodicals, Inc.     

Motivation Gaps and Implementation Traps: The Paradoxical and Time-Varying Effects of Family Ownership on Firm Absorptive Capacity

We present a theoretical framework of family ownership as a driver of the heterogeneity (between-firm differences) and variability (within-firm differences over time) of absorptive capacity (AC). Building on our analysis of the multiple dimensions of family ownership influence on firm behavior and the mechanisms that can shape the firm willingness and ability to acquire, assimilate, transform, and exploit external knowledge, we introduce the concepts of motivation gap and implementation gap to explain why, paradoxically, family ownership can cause both upward and downward divergences in AC. Our contingency framework identifies conditions under which the positive and negative effects of family ownership on AC are likely to prevail and adds a temporal perspective suggesting that AC varies depending on the duration of family ownership and ownership succession.     

Technology Acquisition in Family and Nonfamily Firms: A Longitudinal Analysis of Spanish Manufacturing Firms

Technology acquisition from external sources has been identified as a critical competence for sustained success in innovation, and research has paid a good deal of attention to studying its advantages, drawbacks, determinants, and outcomes. Traditionally, research has modeled the choice to acquire technology from outside a firm's boundaries as the result of a trade‐off between the benefits of external acquisition (e.g., higher return on investment, lower costs, increased flexibility, access to specialized skill sets, and creativity) and its drawbacks (e.g., opening the market to new entrants, risk of imitation of core competencies, and reduced value appropriability). Yet, this view does not capture the behavioral considerations that may potentially encourage or discourage managers from sourcing technology outside the firm's boundaries. This behavioral aspect is especially important if one wants to understand the conduct in external technology acquisition of family firms, which are found to favor strategic actions that preserve the controlling families' control and authority over business, even at the cost of giving up potential economic benefits. Thus, external technology acquisition is likely to be interpreted differently in family and nonfamily firms. Despite its importance, how the involvement of a controlling family affects decisions in technology and innovation management and specifically external technology acquisition is an overlooked topic in extant research and requires further theoretical and empirical examination. This study attempts to fill these gaps by extending the tenets of the behavioral agency model and prior research pointing to particularistic decision‐making in family firms to uncover the behavioral drivers of external technology acquisition in family and nonfamily firms. Theory is developed that relates performance risk, family management, and the contingent effect of the degree of technology protection on external technology acquisition, and the hypotheses are tested with longitudinal data on 1540 private Spanish manufacturing firms. The analyses show that managers are more likely to acquire technology from external sources through research and development contracting when firm performance falls below managers' aspirations. Family firms are generally more reluctant to acquire external technology, and the effect of negative aspiration performance gaps becomes less relevant as family management is higher, which is attributed to family managers' attempts to avoid losing control over the trajectory that technology follows over time. However, family firms become more favorable to considering the adoption of an open approach to technology development when some protection mechanisms (specifically, the filing of patents on the firm proprietary technologies) increase the managers' perceptions of control over the technology trajectory. As such, this study makes a contribution to the understanding of the behavioral factors driving external technology acquisition, and it offers important insights regarding technology strategy in family firms.     

Production in advance versus production to order: The role of downstream spatial clustering and product differentiation

In every production process, suppliers have to decide whether an item should be produced and stored as inventory before an explicit purchase order is received (production in advance), or whether it should be produced only after such an order is received (production to order). We study the determinants of this firm-level choice. We present a simple conceptual framework to derive predictions that we subsequently test in the empirical analysis. We argue that an increment in buyers’ spatial concentration benefits production in advance more in homogenous industries than in differentiated ones, while the benefits for production to order are larger as product differentiation increases. Consequently, the propensity to adopt one of the two production modes, following an increase in the number of local downstream buyers, changes according to the degree of product differentiation of the goods. Relying on a large data set of Italian manufacturing firms, we find empirical support to our ideas.     

Impact of sustainable management policies on tourism companies' performance: the case of the metropolitan region of Madrid

The adoption of sustainable management practices is booming among service companies, whether due to pressure exerted by external agents or the internal perception that not being aligned with sustainability distances companies from clients and puts companies' long-term prospects at risk. However, few studies have examined the combined effect of implementing environmental management practices and corporate social responsibility practices in the tourism sector. By analysing two surveys conducted with the managers of 370 hotels and 176 restaurants and using structural equations, this study concludes that sustainability practices have a direct and significant impact on the company's competitiveness and on the companies' financial results. However, a separate study of the two surveys shows significant differences between the two analysed groups. This article suggests that despite operating in the same sector, hotels and restaurants behave differently regarding sustainability practices, and they achieve significantly different results in their implementation. In addition, by focusing on the tourism industry, a highly competitive sector, this analysis sheds light on whether investing in sustainability is a good strategy for companies to differentiate themselves and survive in complex sectors.