Lorraine Uhlaner

Organization Context and Human Resource Management in the Small Firm

This paper examines the relationship between organization contextual variables and human resource management (HRM) practices in small firms. The proposed model is based on an integration of theoretical perspectives, including the resource-based approach, institutional theory, transaction cost economics (TCE), and concepts from strategic management. The model is explored empirically, with qualitative and quantitative analyses of data collected from a sample of sixteen small Dutch firms. Specific contextual variables examined include company size, the presence of a collective labor agreement, having a large firm associate, either as supplier, purchasing group or franchiser, and the companys strategic orientation toward growth (growth strategy). An important finding is the significance of having a large firm associate. Companies with a large firm associate are more likely to report having employer-based training programs. As predicted, company size is associated with more formal HRM practices, including greater regularity of performance appraisal and greater likelihood of employer-based training. A weak relationship is found between a more growth-oriented strategy and greater formality of these two HRM practices. Predictions based on collective labor agreements are not supported. The paper concludes that the findings warrant further research on the relationship between organization contextual variables and the formalization of HRM practices, although a clearer definition of the latter variable is needed in future research.

The Use of the Guttman Scale in Development of a Family Orientation Index for Small-to-Medium-Sized Firms

This research study tests whether family orientation criteria in small-to-medium-sized businesses (SMEs) can be ordered in difficulty from broad to narrow, using an existing statistical technique referred to as the Guttman scaleogram or scale. The results of the study lend support to the notion of imbeddedness of criteria, at least among SMEs, that is, some criteria are easier to meet than others, and also that the sets of firms meeting the more difficult criteria are subsets of the firms meeting easier criteria. Furthermore, in the sample under study (885 Dutch SMEs), the family orientation index produced via Guttman scaling techniques predicts self-perceptions as a family business almost as well as a statistical approach treating criteria as separate variables in a multiple regression.

Board Capital and the Downward Spiral: Antecedents of Bankruptcy in a Sample of Unlisted Firms

Manuscript Type. Empirical. Research Question/Issue. This study examines whether certain proxies for board incentives and board capital are linked with bankruptcy in unlisted firms. Research Findings/Insights. Based on data analyzed over a five‐year period with a sample of 232 matched pairs of unlisted firms, results reveal that firms with boards led by an independent Board Chair (vs. CEO duality), and including longer‐tenured directors, and directors with fewer additional directorships on average, are less likely to become bankrupt. Results of analyses of board size and board change support a “reputation” hypothesis, i.e. that directors begin to flee firms in a downward spiral prior to bankruptcy. Theoretical/Academic Implications. Results support an eclectic model of board incentives and board capital, which integrates elements of agency and resource dependence theories, and the group decision‐making literature to explain governance antecedents of firms that went bankrupt. It builds on a model proposed by Hillman and Dalziel, while identifying important differences, including lack of support for predicted moderating effects between board incentives and board capital. Findings also support applicability of the threat‐rigidity logic and reputation hypothesis in this context, and the importance of anchoring corporate governance research more precisely on prediction of certain levels of performance. Practitioner/Policy Implications. Findings support governance recommendations to separate Board Chair and CEO leadership and limit a directors number of outside directorships. Negative effects of director tenure on bankruptcy contradict the notion of “term limits,” suggesting that benefits of firm‐specific knowledge and experience may outweigh risks of entrenchment.

Linking Bonding and Bridging Ownership Social Capital in Private Firms Moderating Effects of Ownership–Management Overlap and Family Firm Identity

This study examines the relationship between bonding and bridging ownership social capital (OSC) for a random sample of 679 privately held small and medium-sized firms. Results confirm the positive effects of bonding OSC (quality of relationships and shared vision) on bridging OSC (network mobilization) as well as two- and three-way moderator effects of family firm identity and ownership–management overlap. Moderator effects are more robust, however, for the shared vision indicator of bonding OSC. Implications for social capital theory, social and organizational identity theory, and family firm research and practice are discussed.

Responsible ownership behaviors and financial performance in family owned businesses

Purpose – This study aims to examine the relationship of ownership behaviors with both firm financial performance and family assets in the context of family owned businesses.Design/methodology/approach – The research framework allows for a comparison of predictions drawn from social psychological, economic, and management literature. The hypotheses are tested using ordinary least squares hierarchical regression analyses conducted on a nonrandom sample of medium and large family businesses.Findings – The empirical results identify four potential categories of responsible ownership behaviors: professionalism, active governance, owner as resource, and basic duties. Professionalism (i.e. acting in accordance with expectations and agreements among owners and in relation to the firm) is the only behavior positively associated with financial performance. The effect of active governance (i.e. the monitoring of management) on financial performance is moderated by business size – this behavior has a negative effect...

The Importance of Specific Human Capital, Planning and Familiarity in Dutch Small Firm Ownership Transfers: A Seller's Perspective

This study focuses on the transfer process and the importance of human capital and succession planning as firm resource from the sellers perspective. It further differentiates amongst two types of human capital – specific and generic – to predict the transfer duration, obtained price and satisfaction with the transfer. A representative dataset of 112 Dutch small firm owners, who sold their firm in 2005 and 2006, is analysed. Hierarchical multiple regressions show that specific human capital, like flexibility, social skills and market awareness predict transfer performance better than generic human capital like general education. Results also indicate that succession planning in business transfers is unrelated to the objective transfer performance indicators transfer duration and obtained price. Succession planning is strongly related to the subjective transfer performance indicator satisfaction. Results also show that familiarity between seller and buyer rather than kinship or family ties is a key predictor for all transfer performance indicators.

Social, cultural and human capital in European SMEs : an introduction

This paper provides an overview of this special issue on human, social and cultural capital effects on the SME. After providing initial definitions for these three concepts, it provides an overview of the other seven papers in the special issue, including research questions, methods used and key findings. As concluded in the other papers, each of these aspects can have an influence on SME performance.

Cooperation and teamwork in technology start-ups: reflected in some Italian, British, Dutch and German findings

Cooperation and teamwork is often a challenge for technology start-ups. Cooperation is usually needed in order to combine the variety of expertise and it requires trust between partners. The idea of national locality is changing in European enterprises because of the new shared markets and possibilities for cooperation. In this article we explore technology start-ups taking an Italian sample (N = 20) from the Torino-Milano area as a benchmark. Survey findings as well as case-study interviews are used as data. Italians are reputed to be communitarian and family minded as part of their national culture. Such start-ups would prefer to cooperate locally. A questionnaire and in-depth interviews are used to shed light on this issue. The samples from other EU countries, such as the United Kingdom (UK), The Netherlands (NL) (both N = 5) and Germany (N = 24) are used for comparison. Italy still seems to prefer family values and local cooperation, but with an openness to build teams within and between start-ups. The trend is similar in the UK and Germany, but not in the NL. Results also suggest that cooperation often happens informally and randomly even if benefits of it are widely recognised.

Strategic Renewal after Ownership Transfers in SMEs: Do Successors’ Actions Pay Off?

Different types of strategic renewal by the successor are identified: organisational change, innovation, combined actions and no action. The main assumption is that renewal after succession improves SME post-transfer performance compared to no actions taken. Also, successors timing of the takeover is observed, looking at the economic conditions in the year of ownership transfer: decline, average or growing conditions. The hypotheses are tested on a random stratified sample of 333 Dutch firms. Univariate analysis of variance (ANOVA) and complementary T-tests show that organisational change, product/market innovation and combined actions all increase post-transfer performance compared to no renewal. Strategic renewal pays off in any economic period, but mostly so in periods of economic decline. The control variable firm size is a significant predictor: the smaller the firm the better the post-transfer performance.

The effect of family business professionalization on dividend payout

Purpose The topic of dividend policies of private family-controlled firms has aroused the interest of corporate finance and governance scholars and practitioners alike. However, a lot of questions concerning the dividends in privately held family firms remain unanswered. The purpose of this paper is to examine whether a private family firm’s dividend payout is influenced by its degree of professionalization. Design/methodology/approach The hypotheses are tested on a sample of 492 small to medium-sized Belgian family-controlled businesses with Tobit regression models. Findings The results show that professionalized family-controlled firms pay higher dividends to their shareholders than do less-professionalized firms. In particular, the use of financial control systems, non-family involvement in governance systems, and the use of human resource control systems have a positive significant impact on the average level of dividend payout. Practical implications This study may be of interest to family business consultants and (potential) investors, as the results contradict the assumption that family businesses (especially those privately held) will always have a no or low dividend policy. Originality/value Investigating dividend payout in the context of other components than family ownership (in this case, professionalization) can broaden our understanding of dividend payout.