A Typology of Family Firms: An Investigation of Entrepreneurial Orientation and Performance

Abstract

Drawing on family firm heterogeneity research, we develop a typology of family firms using differences in family influence and firm life cycle. We offer hypotheses regarding the relationships between the different firm types and two important outcomes: Entrepreneurial orientation (EO) and performance. Applying latent profile analysis to a sample of 684 Spanish and Portuguese family firms using variables related to family influence (i.e., ownership, family CEO) and firm life cycle (i.e., generational management, size, and presence of board of directors), we find four family firm types, which differentially affect EO and performance. Implications of our findings for EO, family firm performance, and the development of family firm typologies are discussed.

Knowledge, Renewal and Flexibility: Exploratory Research in Family Firms

“…Secondly, in line with previous studies (Stanley et al 2019;Randolph et al 2017;Pérez-Pérez et al 2019;Chrisman et al 2015;Chrisman et al 2012), the gathered evidence of this exploratory study confirms the existence of heterogeneity among the family firms population. Our findings suggest that the varied strategic renewal orientations of family firms are impacted by the CEO's characteristics (Nadkarni and Herrmann 2010), the level of family involvement (Glaser et al 2015) and the firm's unique capabilities of acquiring and promoting knowledge (Pérez-Pérez and Hernández-Linares 2020).…”

“…To investigate the heterogeneity among family firms when identifying important characteristics by which they may vary, without compromising the ability to meaningfully analyze the data (Stanley et al 2019), this study employed a two-step cluster analysis approach to reveal natural groupings in the dataset (Rundle-Thiele et al 2015;Norusis 2008). This analysis was conducted using SPSS 22-software.…”

“…In this regard, family firms constitute a peculiar organizational context, where the identity overlap between the family and the firm tends to affect both the strategic flexibility and the KM process (Biscotti et al 2018), thus suggesting the relevance of exploring this singular context (Fang et al 2018;Gupta and Bhattacharya 2016) considering that family firms cannot be simplistically viewed as homogeneous entities (Sharma 2002;Chrisman et al 2005). In fact, a recent study from Family Business Review (Stanley et al 2019) highlights that research in family firm has begun to stress that family firms can be quite diverse and that a lot of variance exists within the family firm population. In this vein, a theory of the family firm must not only differentiate between family and nonfamily firms, but also "explain variations among family businesses" (Stanley et al 2019, p. 176), which requires identifying the important characteristics by which they may vary.…”

“…The two first criteria represent the two most widely used in the literature criteria to identify family business, namely family ownership and family management (Hernández-Linares et al 2018). The third criterion (self-definition) was similar to previous studies (e.g., Casillas et al 2010;Stanley et al 2019), and allows us to capture the "essence" of being a family firm (Chua et al 1999), as well as the most heterogeneity among the family firms. These criteria allowed us to identify 288 family SMEs.…”

Global determinants of sustaining and developing family enterprises in Slovakia

“…Since no unified concept of FE has been defined, and at the same time family business as such is not defined in Slovak legislation, the authors have adopted a definition of FE as proposed by the EU. This means that FE is such enterprise that can be characterized by at least one of the following elements [7,11]: one or more family members have established (acquired) the enterprise, and are the majority (or full) decision makers; the enterprise is owned by a spouse, parents, children, or direct descendants of the owners; at least one of the family members (or relatives) participates in the management and administration of the enterprise; while in listed enterprises, one family owns at least 25 % of the voting rights. The questionnaire was sent to 5,910 SMEs which operate in the Slovak market.…”