Hostname: page-component-8448b6f56d-m8qmq Total loading time: 0 Render date: 2024-04-19T09:35:37.827Z Has data issue: false hasContentIssue false

Family ownership logic: Framing the core characteristics of family businesses

Published online by Cambridge University Press:  30 June 2014

Ethel Brundin*
Affiliation:
Jönköping International Business School, Center for Family Enterprise and Ownership, Jönköping, Sweden
Emilia Florin Samuelsson
Affiliation:
School of Business, Economics and Law, Gothenburg University, Gothenburg, Sweden
Leif Melin
Affiliation:
Jönköping International Business School, Center for Family Enterprise and Ownership, Jönköping, Sweden
*
Corresponding author: ethel.brundin@jibs.hj.se

Abstract

In this article we show how specific family business logic shapes managerial practices. Based on empirical material from 20 case studies of family ownership governance, our study identifies seven core characteristics of family ownership logic. These include active, visible and persistent ownership with few owners, relatively stable strategic development encompassing multiple ownership goals, autonomy towards capital markets, and a strong identification and emotional bonding with the business. By considering the family business context, we find managerial practices that are prevalent in the majority of businesses around the world and that have implications for ownership research. It is concluded that by taking the logic of ownership into consideration when studying family businesses, researchers in this field can contribute to the growing literature on sociocultural and behavioural factors in corporate governance relations.

Type
Invited Article
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2014 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ahrens, T. (1996). Styles of accountability. Accounting, Organizations and Society, 21(2–3), 139173.CrossRefGoogle Scholar
Ahrens, T. (1997). Talking accounting: An ethnography of management knowledge in British and German brewers. Accounting, Organizations and Society, 22(7), 617637.Google Scholar
Anderson, R. C., Reeb, D. M. (2003). Founding-family ownership and firm performance: Evidence from the S&P 500. Journal of Finance, 58(3), 13011327.Google Scholar
Ashforth, B. E., Humphrey, R. H. (1993). Emotional labor in service roles: The influence of identity. Academy of Management Review, 18(1), 88115.CrossRefGoogle Scholar
Astrachan, J. H., Klein, S. B., Smyrnios, K. X. (2002). The F-PEC scale of family influence: A proposal for solving the family business definition problem. Family Business Review, 15(1), 4558.CrossRefGoogle Scholar
Avey, J. B., Avolio, B. J., Crossley, C. D., Luthans, F. (2009). Psychological ownership: Theoretical extensions, measurement and relation to work outcomes. Journal of Organizational Behavior, 30(2), 173191.Google Scholar
Baysinger, B., Hoskisson, E. (1990). The composition of boards of directors and strategic control: Effects on corporate strategy. Academy of Management Review, 15(1), 7287.Google Scholar
Belk, R. W. (1988). Possessions and the extended self. Journal of Consumer Research, 15(2), 139168.CrossRefGoogle Scholar
Berrone, P., Cruz, C., Gomez-Mejia, L. R. (2012). Socioemotional wealth in family firms: Theoretical dimensions, assessment approaches, and agenda for future research. Family Business Review, 25(3), 258279.CrossRefGoogle Scholar
Bjursell, C., Brundin, E., Melin, L., Samuelsson, F. E. (2009). The circle of trust: The logic and praxis of acquisitions in the family owned business. Presented at EURAM 9th Conference, Liverpool, UK, 11–14 May.Google Scholar
Björnberg, Å., Nicholson, N. (2012). Emotional ownership: The next generation's relationship with the family firm. Family Business Review, 25(4), 374390.Google Scholar
Bradley, M., Schipani, C. A., Sundaram, A. K., Walsh, J. P. (1999). The purposes and accountability of the corporation in contemporary society: Corporate governance at a crossroads. Law and Contemporary Problems, 62(3), 986.Google Scholar
Brundin, E. (2002). Emotions in motion. The strategic leader in a radical change process. JIBS Dissertation Series No. 12. Jönköping: Jönköping International Business School.Google Scholar
Brundin, E., Sharma, P. (2011). Love, hate and desire. In A. Carsrud & M. Brannback (Eds.), International perspectives on future research in family business: Neglected topics and under-utilized theories (pp. 5571). New York, NY: Springer.Google Scholar
Carlsson, R. H. (2003). The benefits of active ownership. Corporate Governance, 3(2), 631.Google Scholar
Chi, N. W., Han, T. S. (2008). Exploring the linkages between formal ownership and psychological ownership for the organization: The mediating role of organizational justice. Journal of Occupational and Organizational Psychology, 81(4), 691711.Google Scholar
Collins, R. (2004). Interaction ritual chains. Princeton: Princeton University Press.Google Scholar
Corbetta, G., Montemerlo, D. (1999). Ownership, governance, and management issues in small and medium-size family businesses: A comparison of Italy and the United States. Family Business Review, 12(4), 361374.CrossRefGoogle Scholar
Cruz, C., Justo, R., De Castro, J. (2012). Does family employment enhance MSEs performance? Integrating socioemotional wealth and family embeddedness perspectives. Journal of Business Venturing, 27, 6276.Google Scholar
Danes, S. M., Stafford, K., Haynes, G., Amarapurkar, S. S. (2009). Family capital of family firms bridging human, social, and financial capital. Family Business Review, 22(3), 199215.Google Scholar
Davis, J. H., Schoorman, F. D., Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22(1), 2047.CrossRefGoogle Scholar
Davis, P., Stern, D. (1988). Adaptation, survival, and growth of the family business: An integrated systems perspective. Family Business Review, 1(1), 6984.Google Scholar
Dent, J. F. (1991). Accounting and organizational cultures: A field study of the emergence of a new organizational reality. Accounting, Organizations and Society, 16(8), 705732.CrossRefGoogle Scholar
Eisenhardt, K. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532550.Google Scholar
Fineman, S. (1996). Emotion and organizing. In S. H. Clegg, C. Hardy & W. Nord (Eds.), Handbook of organization studies (pp. 543564). Thousand Oaks, CA: Sage.Google Scholar
Fiss, P. C., Zajac, E. J. (2004). The diffusion of ideas over contested terrain: The (non)adoption of a shareholder value orientation among German firms. Administrative Science Quarterly, 49(4), 501534.Google Scholar
Fligstein, N. (1996). Markets as politics: A political-cultural approach to market institutions. American Sociological Review, 61(4), 656673.CrossRefGoogle Scholar
Frese, M., Krauss, S. I., Keith, N., Escher, S., Grabarkiewicz, R., Luneng, S. T., Heers, C., Unger, J., Friedrich, C. (2007). Business owners’ action planning and its relationship to business success in three African countries. Journal of Applied Psychology, 92(6), 14811498.CrossRefGoogle ScholarPubMed
Friedland, R., Alford, R. R. (1991). Bringing society back in: Symbols, practices and institutional contradictions. In W. W. Powell & P. J. DiMaggio (Eds.), The new institutionalism in organizational analysis (pp. 232263). Chicago: University of Chicago Press.Google Scholar
Fromm, E. (1976). To have or to be. New York, NY: Harper & Row.Google Scholar
Gallo, M. A. (2004). The family business and its social responsibilities. Family Business Review, 17(2), 135149.CrossRefGoogle Scholar
Gallo, M. A., Tàpies, J., Cappuyns, K. (2004). Comparison of family and nonfamily business: Financial logic and personal preferences. Family Business Review, 17(4), 303318.CrossRefGoogle Scholar
Golden, W., Powell, P. (2000). Towards a definition of flexibility: In search of the Holy Grail? Omega, The International Journal of Management Science, 28(4), 373384.CrossRefGoogle Scholar
Gomez-Mejia, L. R., Cruz, C., Berrone, P., De Castro, J. (2011). The bind that ties: Socioemotional wealth preservation in family firms. Academy of Management Annals, 5, 653707.Google Scholar
Gomez-Mejia, L. R., Haynes, K., Nuñez-Nickel, M., Jacobson, K. J. L., Moyano-Fuentes, J. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52, 106137.Google Scholar
Grunebaum, J. O. (1987). Private ownership. London and New York, NY: Routledge & Keegan Paul.Google Scholar
Gubitta, P., Gianecchini, M. (2002). Governance and flexibility in family-owned SMEs. Family Business Review, 15(4), 277297.Google Scholar
Gudmundson, D., Hartman, E. A., Tower, C. B. (1999). Strategic orientation: Differences between family and nonfamily firms. Family Business Review, 12(1), 2739.CrossRefGoogle Scholar
Habbershon, T. G., Pistrui, J. (2002). Enterprising families domain: Family-influenced ownership groups in pursuit of transgenerational wealth. Family Business Review, 15(3), 223237.Google Scholar
Hall, A. (2003). Strategising in the context of genuine relations: An interpretative study of strategic renewal through family interactions, doctoral dissertation, Jönköping: Jönköping University.Google Scholar
Hansmann, H., Kraakman, R. (2001). The end of history for corporate law. Georgetown Law Journal, 89, 439468.Google Scholar
Heidegger, M. (1967). Being and time. Translated by J. Macquarrie & E. Robinson. Oxford: Blackwell.Google Scholar
Hellgren, B., Melin, L. (1991). Business systems, industrial wisdom and corporate strategies: The case of the pulp-and-paper industry. In R. Whitley (Ed.), European business systems: Firms and markets in their national contexts. London: Sage, 99118.Google Scholar
Huse, M. (2007). Boards, governance and value creation. Cambridge: Cambridge University Press.Google Scholar
Ikävalko, M., Pihkala, T., Jussila, I. (2008). A family dimension in SME owner-managers ownership profiles: A psychological ownership perspective. Electronic Journal of Family Business Studies, 1(2), 424.Google Scholar
James, H. S. (1999). What can the family contribute to business? Examining contractual relationships. Family Business Review, 12(1), 6171.Google Scholar
James, L. R., Demaree, R. G., Wolf, G. (1984). Estimating within-group interrater reliability with and without response bias. Journal of Applied Psychology, 69(1), 8598.Google Scholar
James, W. (1980) [1890]. The principles of psychology. New York, NY: Henry Holt & Co.Google Scholar
Jonnergård, K., Kärreman, M., Svensson, C. (2005). The impact of changes in the corporate governance system on the board of directors. International Studies of Management and Organization, 34(2), 113152.Google Scholar
Jönsson, S. (1998). Relate management accounting research to managerial work!. Accounting, Organizations and Society, 23(4), 411434.Google Scholar
Jorissen, A., Laveren, E., Martens, R., Reheul, A.-M. (2005). Real versus sample-based differences in comparative family business research. Family Business Review, 18(3), 229246.Google Scholar
Lansberg, I. (1988). The succession conspiracy. Family Business Review, 1(2), 119143.Google Scholar
Lester, R.H., Cannella, A.A. (2006). Interorganizational familiness: How family firms use interlocking directorates to build community-level social capital. Entrepreneurship: Theory & Practice, 30(6), 755775.Google Scholar
Letza, S., Sun, X., Kirkbride, J. (2004). Shareholding versus stakeholding: A critical review of corporate governance. Corporate Governance, 12(3), 242262.Google Scholar
Lewis, M. (1998). The development and structure of emotions. In M. F. Mascolo & S. Griffin (Eds.), What develops in emotional development? New York and London: Plenum Press, 2950.Google Scholar
Littunen, H., Hyrsky, K. (2000). The early entrepreneurial stage in Finnish family and nonfamily firms. Family Business Review, 13(1), 4154.Google Scholar
Lounsbury, M. (2007). A tale of two cities: Competing logics and practice variation in the professionalizing of mutual funds. Academy of Management Journal, 50(2), 289307.CrossRefGoogle Scholar
Lounsbury, M. (2008). Institutional rationality and practice variation: New directions in the institutional analysis of practice. Accounting, Organization and Society, 33(4–5), 349361.Google Scholar
Marx, K. (1978). The Marx–Engels reader (2nd ed.). New York, NY: Norton.Google Scholar
Mayhew, M. G., Ashkanasy, N. M., Bramble, T., Gardner, J. (2007). A study of the antecedents and consequences of psychological ownership in organizational settings. Journal of Social Psychology, 147(5), 477500.Google Scholar
McCollom, M. (1992). The ownership trust and succession paralysis in the family business. Family Business Review, 5(2), 145160.Google Scholar
Melin, L. (2001). Understanding strategic dynamics in family businesses through an integrative approach. Paper presented at Theories of the Family Enterprise: Establishing Paradigms for the Field – 1st Academic Conference, University of Alberta, Edmonton, Canada.Google Scholar
Melin, L., Nordqvist, M. (2007). The reflexive dynamics of institutionalization: The case of the family business. Strategic Organization, 5(3), 321333.CrossRefGoogle Scholar
Micelotta, E. R., Raynard, M. (2011). Concealing or revealing the family? Corporate brand identity strategies in family firms. Family Business Review, 24(3), 197216.Google Scholar
Miller, D., Le Breton-Miller, I. (2005). Managing for the long run: Lessons in competitive advantage from great family businesses. Boston, MA: Harvard Business School Press.Google Scholar
Miller, D., Le Breton-Miller, I. (2006). Family governance and firm performance: Agency, stewardship, and capabilities. Family Business Review, 19(1), 7387.Google Scholar
Miller, D., Le Breton-Miller, I., Lester, R. H. (2010). Family ownership and acquisition behavior in publicly-traded companies. Strategic Management Journal, 31(2), 201223.CrossRefGoogle Scholar
Miller, D., Le Breton-Miller, I., Lester, R. H. (2011). Family and lone founder ownership and strategic behaviour: Social context, identity, and institutional logics. Journal of Management Studies, 48(1), 125.CrossRefGoogle Scholar
Morgan, G. (1997). Images of organization (2nd ed.). London: Sage.Google Scholar
Mouritsen, J. (1997). Marginalizing the customer: Customer orientation, quality and accounting performance. Scandinavian Journal of Management, 13(1), 518.Google Scholar
Mouritsen, J. (1998). Driving growth: Economic value added versus intellectual capital. Management Accounting Research, 9(4), 461482.Google Scholar
Mouritsen, J. (1999). The flexible firm: Strategies for a subcontractor's management control. Accounting, Organizations and Society, 24(1), 3155.Google Scholar
Munro, R. (1996). Alignment and identity work: The study of accounts and accountability. In R. Munro & J. Mouritsen (Eds.), Accountability: Power, ethos and the technologies of managing. London: International Thomson Business Press, 119.Google Scholar
Murray, B. (2002). Understanding the emotional dynamics of family enterprises. In D. E. Fletcher (Ed.), Understanding the small family business. London and New York, NY: Routledge, 7593.Google Scholar
Mustakallio, M., Autio, E., Zahra, S. A. (2002). Relational and contractual governance in family firms: Effects on strategic decision making. Family Business Review, 15(3), 205222.CrossRefGoogle Scholar
Nordqvist, M. (2005). Understanding the role of ownership in strategizing: A study of family firms. JIBS Dissertation Series No. 29. Jönköping: Jönköping International Business School.Google Scholar
Parkinson, B. (1995). Ideas and realities of emotion. London and New York, NY: Routledge.Google Scholar
Pierce, J. L., Jussila, I. (2010). Collective psychological ownership within the work and organizational context: Construct introduction and elaboration. Journal of Organizational Behavior, 31, 810834.Google Scholar
Pierce, J. L., Kostova, T., Dirks, K. T. (2001). Toward a theory of psychological ownership in organizations. Academy of Management Review, 26(2), 298310.Google Scholar
Pierce, J. L., Rubenfeld, S. A., Morgan, S. (1991). Employee ownership: A conceptual model of process and effects. Academy of Management Review, 16(1), 121144.Google Scholar
Riordan, D. A., Riordan, M. P. (1993). Field theory: An alternative to systems theory in understanding the small family business. Journal of Small Business Management, 31(2), 6678.Google Scholar
Roberts, J., Scapens, R. (1985). Accounting systems and systems of accountability: Understanding accounting practices in their organizational context. Accounting, Organizations and Society, 10(4), 443456.CrossRefGoogle Scholar
Rousseau, D. M., Shperling, Z. (2003). Pieces of the action: Ownership and the changing employment relationship. Academy of Management Review, 28(4), 553570.Google Scholar
Rubach, M. J., Sebora, T. C. (1998). Comparative corporate governance: Competitive implications of an emerging convergence. Journal of World Business, 33(2), 167184.Google Scholar
Salvato, C., Chirico, F., Sharma, P. (2010). A farewell to the business: Championing exit and continuity in entrepreneurial family firms. Entrepreneurship and Regional Development, 22(3–4), 321348.Google Scholar
Samuelsson, M. (1999). Swedish family and non-family enterprises: Demographic and performance contrasts. JIBS Research Reports No. 1999-3. Jönköping: Jönköping International Business School.Google Scholar
Sartre, J. P. (1969) [1943]. Being and nothingness: An essay in phenomenological ontology. New York, NY: Philosophical Library.Google Scholar
Schulze, W. S., Lubatkin, M. H., Dino, R. N., Buchholtz, A. K. (2001). Agency relationships in family firms: Theory and evidence. Organization Science, 12(2), 99116.Google Scholar
Sharma, P., Chrisman, J. J., Chua, J. H. (1997). Strategic management of the family business: Past research and future challenges. Family Business Review, 10(1), 135.Google Scholar
Stewart, G. B. III (1991). The quest for value. New York, NY: Harper Business.Google Scholar
Thomas, J. (2002). Freeing the shackles of family business ownership. Family Business Review, 15(4), 321336.Google Scholar
Thornton, P. H., Ocasio, W. (2008). Institutional logics. In R. Greenwood, C. Oliver, K. Sahlin & R. Suddaby (Eds.), The Sage handbook of organizational institutionalism. Los Angeles: Sage, 99129.Google Scholar
Uhlaner, L. M., van Goor-Balk, H. J. M., Masurel, E. (2004). Family business and corporate social responsibility in a sample of Dutch firms. Journal of Small Business and Enterprise Development, 11(2), 186194.Google Scholar
Vandewalle, D., Van Dyne, L., Kostova, T. (1995). Psychological ownership: An empirical examination of its consequences. Group & Organization Management, 20(2), 210226.Google Scholar
Van Dyne, L., Pierce, J. L. (2004). Psychological ownership and feelings of possession: Three field studies predicting employee attitudes and organizational citizenship behavior. Journal of Organizational Behavior, 25, 439459.CrossRefGoogle Scholar
Ward, J., Dolan, C. (1998). Defining and describing family business ownership configurations. Family Business Review, 11(4), 305310.CrossRefGoogle Scholar
Westhead, P., Cowling, M. (1996). Performance contrasts between family and non-family unquoted companies in the UK, Working Paper No. 33, The University of Warwick, Coventry.Google Scholar
Westhead, P., Cowling, M., Howorth, C. (2001). The development of family companies: Management and ownership imperatives. Family Business Review, 14(4), 369385.Google Scholar
Wigren, C. (2003). The spirit of Gnosjö – The grand narrative and beyond. JIBS Dissertation Series No. 17. Jönköping,: Sweden Jönköping University.Google Scholar
Wigstrand, H. (2003). Dryckesbröder – Spendrups från säker källa. Stockholm: Ekerlid.Google Scholar
Yin, R. K. (1994). Case study research: Design and methods. Thousand Oaks, CA: Sage.Google Scholar
Zahra, S. A. (1996). Governance, ownership, and corporate entrepreneurship: The moderating impact of industry technological opportunities. Academy of Management Journal, 39(6), 17131735.CrossRefGoogle Scholar
Zahra, S. A. (2003). International expansion of U.S. manufacturing family businesses: The effect of ownership and involvement. Journal of Business Venturing, 18(4), 495512.Google Scholar
Zellweger, T. (2007). Time horizon, costs of equity capital, and generic investment strategies of firms. Family Business Review, 20(1), 115.Google Scholar
Zellweger, T. M., Astrachan, J. H. (2008). On the emotional value of owning a firm. Family Business Review, 21(4), 347363.Google Scholar
Zingales, L. (2000). In search of new foundations. Journal of Finance, 55(4), 16231653.CrossRefGoogle Scholar