Esra Memili

Family Social Capital, Venture Preparedness, and Start-Up Decisions A Study of Hispanic Entrepreneurs in New England

Using insights from the resource-based view, social capital, and network theories, the authors develop a model of how family social capital, as well as an entrepreneur’s knowledge capital and external social capital, influences the venture creation process. The model is tested on a sample of 85 nascent Hispanic entrepreneurs. Results indicate that family social capital, measured as family support, contributes to venture preparedness and the start-up decision, suggesting that it has both a direct and an indirect influence on venture creation.

Nonfamily Managers, Family Firms, and the Winner's Curse: The Influence of Noneconomic Goals and Bounded Rationality

We explain why family–centered noneconomic goals and bounded rationality decrease the willingness and ability of small– and medium–sized family firms to hire and provide competitive compensation to nonfamily managers even in a labor market composed of stewards rather than agents. Family–centered noneconomic goals attenuate the ability to attract high–quality, nonfamily managers by promoting inferior total compensation packages, fewer opportunities for advancement, idiosyncratic strategies, and higher performance expectations. Furthermore, bounded rationality limits nonfamily managers’ ability to meet performance expectations when hired. The result is the “winners curse,” where neither the economic nor noneconomic goals of family owners are fully achieved.

Japanese Women Entrepreneurs: Implications for Family Firms

Japanese women entrepreneurs and their predominately family‐owned firms are a growing economic segment in apan. The number of entrepreneurs of both genders in apan is proportionately very small compared to other countries. The purpose of this research is to investigate the characteristics of Japanese women entrepreneurs and their family firms, identify barriers and resources that affect their success. A customized long‐term support system with strong connections between family business supporters and women business owners by both the governmental and private agencies was identified as important for further growth of Japanese women entrepreneurs. Implications are discussed.

Does Size Matter? The Moderating Effects of Firm Size on the Employment of Nonfamily Managers in Privately Held Family SMEs

Family firms’ decisions to hire nonfamily managers are influenced by agency costs, socioemotional wealth concerns, and the availability of high–quality nonfamily managers in the labor pool. We hypothesize that owing to these factors, family ownership and intrafamily succession intentions will be negatively associated with the proportion of nonfamily managers in private small– and medium–sized (SME) family firms. However, firm size is hypothesized to positively moderate those relationships because as family firm size increases, the benefits of hiring nonfamily managers rise faster than the costs. Tobit regression analyses of 7,299 private SMEs support our hypotheses.

Transaction Costs and Outsourcing Decisions in Small and Medium-Sized Family Firms

An important difference between family and nonfamily firms, and among different types of family firms, is in the way they make outsourcing decisions and thereby define the boundaries of the firm. The authors propose that transaction costs arising from human asset specificity, threats of opportunism, and risk aversion will make small- and medium-sized family firms operating with technologies of low to medium complexity less likely to outsource than comparable nonfamily firms. The authors also argue that the limiting influence of transaction costs on the outsourcing decisions of family firms may be mitigated by variations in available suppliers, goals, and ownership structures.

Going Beyond Research on Goal Setting: : A Proposed Role for Organizational Psychological Capital of Family Firms

Kotlar and De Massis found that membership assortment and the number of organizational members, as well as the imminence of succession, influence goal diversity in family firms. They also showed that goal diversity can be managed and family–centered goals can be stabilized through professional and familial social interactions, driving the formation of collective commitment to family–centered goals (CCFG). Using this research as a point of departure, we propose that CCFG may impact family firm economic and noneconomic performance. Furthermore, we introduce to the family firm literature the organizational psychological capital (OPC), consisting of hope, efficacy, resilience, and optimism. We also suggest that OPC may be more prevalent in family firms than in nonfamily firms. Moreover, OPC of family firms may play an important role in the link between CCFG and economic as well as noneconomic performance.

The propensity to use incentive compensation for non‐family managers in SME family firms

Purpose – The purpose of this paper is to use the socio‐emotional wealth perspective to examine how the level of family involvement reduces the propensity to use incentives to non‐family managers in small to medium‐sized enterprises (SME) family firms.Design/methodology/approach – Primary data were collected from US firms. To evaluate the hypotheses, a logit model was employed on a final sample of 2,019 small family firms.Findings – Results suggest that family influence and control and intra‐family transgenerational succession intentions are negatively related to the propensity to use incentives. Also, the interaction effects of family management and ownership reduce the propensity to use incentives.Originality/value – The paper’s empirical findings imply that despite their potential economic benefits, family involvement reduces the probability that incentives will be offered to non‐family managers because such incentives are perceived to be inconsistent with the preservation of the family’s socioemotiona...

THE IMPORTANCE OF LOOKING TOWARD THE FUTURE AND BUILDING ON THE PAST: ENTREPRENEURIAL RISK TAKING AND IMAGE IN FAMILY FIRMS

Drawing on organizational identity theory, we develop a model linking family ownership and expectations, entrepreneurial risk taking, and image in family firms to explain family firm growth. Testing our model on a sample of 163 Swiss family firms, we suggest that entrepreneurial risk taking and image can both lead to growth in family firms. We further find that family expectations have an influence on both entrepreneurial risk taking and family firm image. This finding suggests that family firms may benefit from two growth paths – forward looking risk taking and the image of the family firm that builds on the past, and that these paths are nurtured by family expectations.

Organizational Psychological Capital of Family Franchise Firms Through the Lens of the Leader–Member Exchange Theory

We explore organizational psychological capital (PsyCap) of family franchise firms by drawing on PsyCap and leader–member exchange (LMX) theories and family business literature. We suggest that unique family firm LMXs characterized by trust, respect, and obligation can foster organizational PsyCap of family franchise firms, in turn affecting their innovativeness. We also suggest that transgenerational succession intentions moderate the impact of the LMXs on the development of organizational PsyCap of family franchise firms as well as the consequent effects on innovativeness. We supplement these theoretical conjectures with two exploratory analyses based on survey data—a stepwise regression and correlational analysis. We also discuss implications for future research and practice.

Industry and Information Asymmetry: The Case of the Employment of Non‐Family Managers in Small and Medium‐Sized Family Firms

As family firms begin to professionalize, they face an important crossroads in deciding whether to employ non‐family managers. To preserve socioemotional wealth and minimize agency costs, family owners may resist employing non‐family managers. However, industry sector may play a role that influences the employment of non‐family managers. We argue that the familys reluctance will be stronger in industries where information asymmetries make monitoring managers more difficult. For industries where monitoring is easier, the benefits of employing non‐family managers may offset the loss in socioemotional wealth and increase in agency costs. Results based on a sample of 965 small and medium‐sized retail and manufacturing firms confirm our predictions.