Francesco Chirico

Dynamic capabilities and trans-generational value creation in family firms: The role of organizational culture

While some research on entrepreneurship in family businesses has focused on transgenerational value creation, a gap exists in understanding how such value is generated across generations. The present research offers insights through the lens of dynamic capabilities, which are created by knowledge and in turn generate entrepreneurial performance and value creation. A model is built based on literature and case research. The crucial role of the organizational culture emerges through the empirical study. Family inertia is considered to be a factor preventing the creation of dynamic capabilities. We find that family inertia depends on characteristics of the family business culture, where paternalism and entrepreneurial orientation influence family inertia positively and negatively, respectively. Family firms from Switzerland and Italy active in the beverage industry represent the empirical context. Theoretical and practical implications are offered.

A farewell to the business: Championing exit and continuity in entrepreneurial family firms

What factors influence exit from the founders business and subsequent entrepreneurial renewal in a generational family firm? Guided by this research question, we trace the development of the Italian Falck Group from its inception as a steel company in 1906 – ascension as the largest privately owned steel producer in Italy – losses in the 1970s and 1980s leading to business exit from steel industry in the 1990s – followed by successful entry in the renewable energy business. A combination of insights from the literature and triangulation of data from multiple primary and secondary sources leads to the development of a model describing how inhibitors of exit from the founders business can be transformed into facilitators of change. The critical role of farsighted ‘family champion of continuity’ is found central in redirecting the family from its anchoring in past activities to focus on future entrepreneurial endeavours. While the commitment to the founders business continues, the family champion aided by business savvy and astute non-family executives ably modifies its meaning of ‘continuity of the founders business’ from ‘steel production’ to ‘continuity of the entrepreneurial spirit of the family’, hence preserving the institutional identity. Insights from this study can help generational family firms which plan to exit from a failing course of action to regenerate so as to create trans-generational value.

Family Firm Heterogeneity and Governance: A Configuration Approach

Family involvement in ownership and management of business varies significantly within family firms. Although the literature recognizes the diversity in family firms, it remains unclear what governance mechanisms are most appropriate to achieve prioritized performance goals of different types of family firms. By combining two established categorizations of family involvement in firm ownership and management, nine types of family firms are identified. Drawing on the configuration approach, we theorize the governance mechanisms likely to most efficiently address the incentive systems, authority relations, and norms of legitimization in each of these types of family firms.

Generational Involvement in the Top Management Team of Family Firms: Exploring Nonlinear Effects on Entrepreneurial Orientation

The present study contends that an inverted U–shaped relationship exists between generational involvement—i.e., the number of family generations simultaneously involved in the family–firm top management team (TMT)—and entrepreneurial orientation (EO). Drawing on the upper echelons theory, we conceive generational involvement as a proxy of knowledge diversity in multigenerational family TMTs. We argue that while moderate levels of generational involvement stimulate task–related constructive conflicts for EO, increased kinship distance and relationship conflicts led by high levels of generational involvement are likely to undermine this potential advantage by damaging the relational context for EO. Our hypothesis is confirmed on a data set of 199 family firms.

The Temporal Evolution of Proactiveness in Family Firms: The Horizontal S-Curve Hypothesis

We extend prior work on proactiveness in family firms by examining the relationship between firm age and proactiveness. Specifically, we propose an S-shaped effect of aging of family firms on proactiveness. Additionally, we provide a contingency perspective by considering the moderating role of the dispersion of managerial control among family members. Using a sample of Swiss family firms, we find that proactiveness first declines, then increases, and finally decreases again as the family firm ages, and that this relationship is steeper when the managerial control is dispersed among multiple family members.

Franchising and The Family Firm: Creating Unique Sources of Advantage Through 'Familiness'

The paucity of research examining family firms engaged with franchising is surprising. We theorize about differences in franchising behavior between family and nonfamily firms and the relative advantages accruing to family firms in this context. We also explore how selection processes tend to lead to family franchisor/family franchisee matches that enable a more effective sharing of complementary resources. The theoretical framework we develop is grounded in the “familiness” of the family firm as suggested by the logic of the resource–based view. Additionally, our theoretical analysis extends and complements the frequent use of agency theory as the basis for studying franchising.

Exit Strategies in Family Firms: How Socioemotional Wealth Drives the Threshold of Performance

Although research has shown the ability to exit from both successful and unsuccessful ventures is important to founders, families, firms, industries, and overall economic health, exiting from a family firm can be especially challenging. In this paper, we examine exit strategies in the context of the family firm and the family firm portfolio. Drawing upon threshold theory and the socioemotional wealth perspective, we develop a model that provides guiding theoretical explanations for exit strategies. We address two questions: (1) why do family owners develop specific exit strategies, and (2) how do these strategies differ within family firms and family firm portfolios? In doing so, we contribute to family business, portfolio entrepreneurship, and exit literatures.

Knowledge Internalization and Product Development in Family Firms: When Relational and Affective Factors Matter

Understanding the forces that support and inhibit product development (PD) in family firms is central to explaining their long–term success and survival. Our study reveals that social capital and relational conflict among family members do not affect PD directly, as existing theory suggests, but only through the internalization of knowledge among family members. In contrast, family members’ affective commitment to the family firm is so powerful that it has both a mediated and a direct effect on PD. These results differ across generations of the controlling family, therefore offering an extension of existing theories of knowledge and PD in family firms.

Firm philanthropy in small and medium-sized family firms : the effects of family involvement in ownership and management

Drawing on stewardship theory and arguments in relation to social and reputational capital, this study investigates how family involvement affects engagement in firm philanthropy in small- and medium-sized family firms. Specifically, we argue that family involvement in ownership positively influences firm philanthropy while its interaction with family involvement in management produces a negative effect. Based on a sample of 130 Italian family firms, our findings offer important implications for theory and practice and pave the way for future research in the field of philanthropy in the family firm context.Drawing on stewardship theory and arguments in relation to social and reputational capital, this study investigates how family involvement affects engagement in firm philanthropy in small- and medium-sized family firms. Specifically, we argue that family involvement in ownership positively influences firm philanthropy while its interaction with family involvement in management produces a negative effect. Based on a sample of 130 Italian family firms, our findings offer important implications for theory and practice and pave the way for future research in the field of philanthropy in the family firm context.

Is the Family an ‘Asset’ or ‘Liability’ for Firm Performance? The Moderating Role of Environmental Dynamism

By integrating the stewardship and agency perspectives, our study extends the understanding of the dynamics that regulate the family as either an asset or liability for the firm. Our results show that the percentage of family members on the top management team (TMT) has an inverted U‐shaped relationship with firm performance. However, when environmental dynamism is low, this curvilinear relationship becomes steeper. When environmental dynamism is high, an increased percentage of family members on the TMT enhances firm performance.