Torsten M. Pieper

The Impact of Goal Alignment on Board Existence and Top Management Team Composition: Evidence from Family-Influenced Businesses

Using a sample of 714 private family influenced businesses in Germany, we investigate the relationship of goal alignment between owners and managers and the existence of a board of directors. Agency theory and stewardship theory serve as theoretical bases for our study. We find that firms with relatively high levels of goal alignment are less likely to have a board of directors. Our results provide support for the substitution hypothesis of formal by social control mechanisms. Furthermore, the findings show that firms without a board and with relatively low levels of goal alignment have less family members in the top management team. This circumstance might in turn be a trigger for owners to install a board.

The Bulleye: A Systems Approach to Modeling Family Firms

The purpose of this article is to develop a model of family business that accounts for the unique characteristics and diversity of family businesses and addresses the dynamics among family business subsystems. An open-systems approach serves as the conceptual foundation of the model. The distinctive features of the proposed model are the multiple levels of analysis and the dynamics and interdependencies among the subsystems, allowing the integration of mainstream theories. The model can serve to discover and explore a relevant research question in the context of family business, which may help researchers advance theory building on family business. Furthermore, the model may help family business practitioners better understand the particularities of family firms.

CEO Tenure and Entrepreneurial Orientation Within Family and Nonfamily Firms

The current research investigates how entrepreneurial orientation changes during a chief executive officer (CEO)s tenure in family and nonfamily firms. Based on secondary data collected from 210 firms representing five industries, the results show an inverse U–shaped relationship between CEO tenure and entrepreneurial orientation, consistent with the executive life cycle literature. Moreover, in family firms the shape of the inverse U is less pronounced and the level of entrepreneurial orientation peaks considerably later in the CEOs tenure when compared with nonfamily firms.

Family Involvement in the Board of Directors: Effects on Sales Internationalization

Previous research shows that family involvement in the board of directors can be both positive and negative for sales internationalization. The ambiguous nature of this relationship has hindered theory building on this important phenomenon. Integrating stewardship, stagnation, and upper echelons perspectives, we propose a nonlinear, J‐shaped relationship between family involvement in the board of directors and sales internationalization. Results from running ordinal regression analysis on data drawn from 203 U.S. family businesses confirmed our conjecture. We discuss the implications of our findings for family business theory and practice and indicate avenues for future research.

The Persistence of Multifamily Firms: Founder Imprinting, Simple Rules, and Monitoring Processes

This study focuses on a particular form of family businesses—businesses with at least two unrelated founding families—and how their organizational form of a multifamily business persists over several generations. Using an inductive approach to study five multifamily cases, we discovered that these firms did not meet complexity with complex structures and processes. Instead, four cases developed and utilized simple rules imprinted by the founders and pulled through to current generations, enabling effective mutual monitoring and persistence of the multifamily organizational form. The lack of simple rules development is associated with one multifamily business to abandon this organizational form.

Family business goals, corporate citizenship behaviour and firm performance: disentangling the connections

Prior research has suggested that family businesses may have a higher proclivity to behave as good corporate citizens, as compared with non-family firms, which may impact financial performance. However, while this idea is intuitively appealing, the actual antecedents of corporate citizenship behaviour in the family firm context have not yet been assessed systematically. In addition, empirical evidence regarding the impact of citizenship behaviour on firm performance remains inconclusive. Drawing from the literature on family business goals and corporate citizenship, our conceptual framework proposes that family-centred and business-centred goals act as determinants of family firm citizenship, but each with a different impact. Furthermore, we argue that family firm reputation partially mediates the relationship between family firm citizenship behaviour and family firm performance. We discuss implications for family business research and practice and offer suggestions for future studies.

Family Firm Goals and their Effects on Strategy, Family and Organization Behavior: A Review and Research Agenda: Family Firm Goals

Goals are a key differentiator between family businesses and non‐family businesses. To improve understanding of this topic, the authors take stock of what they know about goals in family business. They synthesize prior research findings and classify the research into five categories: family business goal antecedents; goal characteristics; goal‐related outcomes; moderators of goal outcomes; and feedback loop. The paper concludes by highlighting future research to advance both family business goal and general management research.

Opportunities and Challenges for Family Businesses Pursuing Global Markets

Global expansion is virtually an imperative for family businesses and is no longer avoidable as a strategic choice. Globalization strategies are far from the norm, however, among small and medium size family enterprises. This article reviews the primary opportunities and drivers for globalization, highlights the distinct characteristics of family businesses that may enhance or constrain global expansion, and provides a framework for strategically evaluating business capabilities and global market opportunities.

Private Family Business Goals: A Concise Review, Goal Relationships, and Goal Formation Processes

Conventional wisdom holds that goals drive behavior and measured goals lead to results. The preeminent goals in business research revolve around financial performance. However, recently, more attention has been paid to non-financial goals, such as applied in the balanced scorecard. Family business research has also taken special note of goals, as family influence in business typically enhances the salience of non-financial goals that must be accommodated with more materialistic, financial objectives. For this and other reasons, goals are challenging to study in private family firms where goals reflect desired outcomes for family and business, and relative to publicly traded entities, owning-families have great freedom in goal selection, resulting in higher levels of goal idiosyncrasy and heterogeneity. To further the discussion of private family business goals, this chapter provides a concise review of the extant literature on family business goals, imparts relationships between financial and non-financial goals, and expounds processes of family business goal formation.

Extended Stakeholder Orientation: Influence on Innovation and Firm Performance

Stakeholder theory and market orientation both provide valuable insights to researchers and managers alike on fundamentals related to sustainable competitive advantage (Grinstein 2008a; Grinstein and Goldman 2011; Kirca et al. 2005; Laplume et al. 2008). Market orientation, where orientation is defined collectively as the culture, policies, organization and management practices within a firm (Ferrell et al. 2010), views customers and competitors as core stakeholders (Narver and Slater 1990), while stakeholder theory suggests a broader focus to include two more groups as core stakeholders: employees and shareholders. Scholars suggest that a broader stakeholder focus can enhance our understanding of the drivers necessary for sustainable firm performance (Maignan et al. 2011; Matsuno et al. 2000). Extended stakeholder orientation (XSO) is conceptualized here as an integrative approach that responds to calls to investigate market orientation and stakeholder theory (Ferrell et al. 2010; Narver and Slater 1990). The second order XSO construct is composed of orientations to core or ‘essential’ stakeholders – customers, competitors, employees and shareholders (Greenley et al. 2005; Yau et al. 2007). XSO includes embedded proactive considerations for each stakeholder in accord with suggestions by Narver et al. (2004). Additionally, amid market and technological turbulence virtually dictating the need for innovation (Christensen et al. 1998), this study also develops an innovation orientation scale to investigate the relationship of stakeholder orientation to innovation orientation. We conducted two pilot studies (n = 400) for an exploratory factor analysis which yielded scales for responsive and proactive customer, competitor, employee and shareholder orientations. A separate sample (n = 360) was obtained from across the USA in diversified industries with public and private companies ranging from small to large corporations to conduct a confirmatory factor analysis. Results were encouraging based on CB-SEM analysis. Model fit parameters were within guidelines and results significant at the p < .001 level (Hair et al. 2010). We found XSO is positively correlated to firm performance with 60 % variance explained. XSO is also positively correlated to innovation orientation which acts as a partial mediator to firm performance. In summary this empirical study shows extended stakeholder orientation is key to firm performance and innovation. The implication for management practice is that proactive considerations and a balanced approach to core stakeholders should be integral to the firm. For researchers the study provides a baseline to further investigate salience of stakeholders and interactive effects among them. Moreover, alternative analytical methods such as PLS-SEM may provide additional insights since CB-SEM overall model fit requirements may tend to result in elimination of otherwise important content (Binz et al. 2014).