Reginald A. Litz

Comparing the Agency Costs of Family and Non-Family Firms: Conceptual Issues and Exploratory Evidence

Family involvement in a business has the potential to both increase and decrease financial performance due to agency costs. In this article we discuss the different nature of agency costs in family firms and specify the combination of conditions necessary to determine the relative levels of agency costs in family and non–family firms through the impacts of agency cost control mechanisms on performance. We also present exploratory results based on a study of 1,141 small privately held U.S. family and non–family firms that suggest the overall agency problem in family firms could be less serious than that in non–family firms.

The Family Business: Toward Definitional Clarity

There is considerable definitional confusion concerning the term family business. This chapter addresses this issue through two complementary approaches: a structure-based approach, which considers family involvement infirm ownership and management, and an intention-based approach, which focuses on the realized and unrealized value preferences of the organizations upper echelons.

A resource-based-view of the socially responsible firm: Stakeholder interdependence, ethical awareness, and issue responsiveness as strategic assets

In recent years the resource-based view of the firm has made significant headway in explaining differences in interfirm performance. However, this perspective has not considered the social and ethical dimensions of organizational resources. This paper seeks to provide such an integration. Using Kuhns three stage model of adaptive behavior, the resource worthiness of stakeholder management, business ethics, and issues management are explored. The paper concludes by drawing on prospect theory to understand the reasons for this conceptual lacuna.

The family firm's exclusion from business school research: explaining the void; addressing the opportunity

Why does the vast majority of business school research either ignore, or at best, gloss over the role of family in owning or managing business enterprises? This paper addresses this question and contemplates how the gap might be remedied. It begins by reviewing recent definitional work on the family firm in order to chart the parameters of the family business construct. It then proceeds to describe the nature of, and interaction patterns that have evolved between family firms, privately held corporations, faculties of business, and business school researchers seeking job security offered by tenure. The paper concludes by offering recommendations for addressing the family business research lacuna. The first recommendation focuses on rethinking the grounding assumptions that have undergirded much traditional organizational research. The second suggestion deals with methodological issues and recommends the patient nurture of long-term, mutually beneficial linkages with family firms that might facilitate in-depth longitudinal inquiry.

Your Old Men Shall Dream Dreams, Your Young Men Shall See Visions: Toward a Theory of Family Firm Innovation with Help from the Brubeck Family

Despite significant advances, a conspicuous gap remains in family business research concerning the practice of innovation in family firms. After reviewing innovation and family business literature, we offer coarse- and fine-grained conceptualizations of intergenerational innovation in the family enterprise. Given the fine-grained distinctions inherent in our resulting definition of family firm innovation, we move on to an in-depth study of one family involved in the innovative activity of jazz improvisation. After offering our analysis of the core dynamics apparent in this familys interactions, we conclude this paper with a research agenda for future work on family firm innovation.

THE FAMILY BUSINESS: TOWARD DEFINITIONAL CLARITY.

There is considerable definitional confusion concerning what is meant by the term family business. This paper addresses this issue through two complementary approaches. A structure-based approach c...

Charting the Future of Family Business Research: Perspectives From the Field

The authors provide insights concerning the current state of family business research through a survey that included input from more than 80 family business scholars. Findings suggest two general conclusions: first, a collective sense that significant progress has been made; second, a widespread conviction there is still much work to be done. The authors conclude with several recommendations for the field’s continued evolution, which include greater use of family sciences research, the development of innovative measures, the adoption of rich longitudinal methodologies, and inclusion of more diverse subjects and samples.

Two Sides of a One-Sided Phenomenon: Conceptualizing the Family Business and Business Family as a Möbius Strip

This article compares the family business, and its reciprocal institution, the business family, to a one-sided band known as the Mobius strip. After explaining the rationale for this comparison, the conceptualization is enriched and then enlarged to accommodate the diverse range of firms identifying themselves as family businesses. Next, a process model is presented to explain the emergence, existence, and decline of the family-business interface. The article concludes with a discussion of several research-related implications arising from this comparison.

Research Note: Trade Name Franchise Membership as a Human Resource Management Strategy: Does Buying Group Training Deliver 'True Value' for Small Retailers?

Human resource management (HRM) is an important source of competitive advantage. However, recent reports document that HRM, and in particular employee training, is less likely to occur in small firms. One possible remedy of special interest to small retailers is trade name franchise membership. Trade name franchises, or buying groups, claim to offer small firms advantages not otherwise realizable, including bulk buying discounts, brand name recognition and workforce training. We report results from our study of over 300 small and medium-sized hardware stores, which tested the effects of employee training and trade name franchise membership, on small firm performance. Trade name franchisees achieve higher mean performance; however, the contribution to performance made by franchisees’ training does not appear to be significantly better than that of independent stores.

Does Small Store Location Matter? A Test of Three Classic Theories of Retail Location

Abstract Just how important is physical location as a source of small-firm advantage? In this paper we consider this question by testing the predictive validity of three classic perspectives: central-place theory, spatial interaction theory and the principle of minimum differentiation. In addition, we identify and test two managergrounded hypotheses focusing on locational continuity and transactional convenience. We test these hypotheses on a sample of small U.S. retail hardware stores and find significant support for central-place theory and both manager-grounded hypotheses.