Bivalent Attributes of the Family Firm

Abstract

Although family‐owned and managed firms are the predominant form of business organization in the world today, little systematic research exists on these companies. This paper builds upon insights found in the emerging literature on these enterprises and upon our own observations to provide a conceptual frame‐work to better understand these complex organizations. We introduce the concept of the Bivalent Attributes–a unique, inherent feature of an organization that is the source of both advantages and disadvantages–to explain the dynamics of the family firm.

The Effects of Transformational Leadership in Chinese Family Business How Should Family Business Lead Their Family Employees?

“…One group of scholars believes that family businesses provide a perfect ground for the exercise of transformational leadership. The leadership adopted in family businesses may actually be similar to transformational leadership [17,18]. The other group of scholars argues that transformational leadership will be seen as threatens to the stability of the traditional family business structure, thus may not be welcomed by both family business owners and family employees [10,14,19].…”

“…One school of thought claims that owners and family employees in family businesses share certain vision, value and beliefs, and have high level of loyalty, commitment, trust and communication based on their long-term family relationship [17,18]. These characteristics all serve as beneficial contextual factors for the exercise of transformational leadership.…”

Internationalisation of publicly traded family firms: a transaction cost theory perspective and longitudinal analysis

“…Williamson (1981) suggests that in cases of high asset specificity, both the buyer and the seller prefer exchanges that have the potential for stability and dependability. Close monitoring and control by family owners can improve the quality of products and services and build trust, goodwill (Sako, 1991), and reputation (Weigelt and Camerer, 1988) with customers with whom the family firm engages in repeated exchanges (Poppo and Zenger, 2002;Tagiuri and Davis, 1996;Ward and Aronoff, 1991). Indeed, family businesses seem to possess strong relationships with customers and other external stakeholders and good reputations consistent with the emphasis on socioemotional wealth and use of trust to minimise transaction costs (Aronoff and Ward, 1995;Dick and Basu, 1994;Habbershon and Williams, 1999;Lyman, 1991).…”

Study of factors influencing knowledge transfer in family firms

“…Thus, founder's tacit knowledge is a strategic asset that must be transferred and developed (Bracci, 2008). Tagiuri and Davis (1996) argue that emotional involvement, the life in common and the use of a private language in family businesses allow a communication more easily between family members. Moreover, such communication will allow them to develop idiosyncratic knowledge and specific dynamic capabilities to a resource recombination that remain (or continue) in the -1220-Intangible Capital -http://dx.doi.org/10.3926/ic.405 family and the company through the generations (Chirico & Salvato, 2008;Salvato & Melin, 2008).…”

“…Apart from that, family businesses have certain characteristics that can produce both strengths and weaknesses for the firm (Tagiuri & Davis, 1996;Fuentes, Fernández-Ortiz & Cano-Rubio, 2011). Despite the fact that sharing knowledge is important, Zahra et al (2007) point some characteristics that limit this exchange.…”