Richard H. Lester

Family and Lone Founder Ownership and Strategic Behaviour: Social Context, Identity, and Institutional Logics

There is controversy in the literature about the effects of ownership on strategy and performance. Some scholars have taken agency explanations as definitive, arguing that closely held firms outperform. Empirical studies, however, show conflicting findings for firms with concentrated ownership: lone founder firms outperform, family firms do not. Such conflicts may be due to the failure of agency theory to distinguish between the social contexts of these different types of owners. We argue that explanations of performance must take into account not simply ownership, but who are the owners or executives and how their social contexts may influence their strategic priorities. Family owners and CEOs, influenced by family stakeholders in the business, are argued to assume the role identities and logics of family nurturers and thus strategies of conservation. By contrast, lone founders, influenced by a wider set of market-oriented stakeholders, are argued to embrace the identities and logics of entrepreneurs and strategies of growth. Family founders and founder-executives are held to blend both orientations. These notions are supported in a study of Fortune 1000 companies.

Interorganizational familiness: How family firms use interlocking directorates to build community-level social capital

We draw on the concept of community–level social capital and apply it to the situation of a family–controlled public corporation. While traditional agency theory argues that agency costs are minimized in a family–controlled business (FCB) due to an improved alignment of owner and manager interests, we argue instead that FCBs endure additional agency costs uniquely related to the family firm organizational structure. To mitigate these additional costs, we propose that FCBs use board interlocks to build and maintain community–level social capital. That is, the intercorporate network of FCBs generates shared understandings, values, problem solving techniques, and approaches to dealing with family issues. Further, the network generates a level of social support for family business owners and managers grappling with challenges endemic to family control of public corporations. We generate a number of propositions that can be used in future research to test the theory developed here. We conclude with the assertion that the community–level social capital generated by the network of FCBs is an important reason for the survival and persistence of individual family firms, despite the existence of additional family–related costs.

A course in innovative product design: A collaboration between architecture, business, and engineering

The importance of innovation and entrepreneurship has grown significantly over the past decade. Institutions of higher education have recognized the increasing level of importance being placed globally on producing college graduates with the skills to innovate new products and services, and many are rising to the occasion. Recently, Texas A&M University has established a small business accelerator available to all students. In addition, the University has supported the development of a new course where junior and senior students across the University can interact and learn about ideation, innovative product development, and entrepreneurship. Looking across the literature, most institutions are moving in a direction of fostering entrepreneurship through interdisciplinary courses either within engineering, business or through partnerships between both. This new course is novel in that, in addition to integrating product development with entrepreneurship, it also incorporates the ideation and innovation processes through involvement of the College of Architecture. By embedding architecture students into the teams of engineering and business students, expertise in these areas is added to the teams. Finally, the course exposes all students to new tools such as the lean startup method and Launchpad Central.