Extending the concept of familiness to relational capability: A Belgian micro-brewery study

Abstract

While research in family businesses has focused on familiness as a resource with potential to generate competitive advantage, a gap exists in understanding how such value can be extended to wider business relationships. We contribute to an increased understanding of how familiness can influence the development of relational capability in entrepreneurial family firms. Using a business relational and family embedded perspective, we advance a conceptualisation of the link between familiness and relational capability based on an analysis of the extant literature and qualitative case research. The critical role of the family identity emerges through the empirical study. As such, we find six relational processes across family identity which link or mitigate the movement between familiness and relational capability. Theoretical and practical implications are offered.

What Do We Know About Business Families? Setting the Stage for Leveraging Family Science Theories

“…The more the family identified with the business (i.e., it was once a core business, it had the family’s name on it) the more likely the family would shut it down (in the hope of someday reopening) rather than sell it. Similarly, based on interview data from six Belgian microbrewers, McGrath and O’Toole (2018) found that family firms with strong family identities emphasize relational capabilities within the firm at the cost of external network ties, which results in less collaborative innovation.…”

A Dynamic Network Model of the Successor’s Knowledge Construction From the Resource- and Knowledge-Based View of the Family Firm

“…the unique bundle of resources and capabilities a particular organization possesses because of the family firm system’s interaction among the family, its individual members, and the business” (p. 11). Since that definition was provided, the concept has been widely discussed in the family business field (for a compilation, see Dawson & Mussolino, 2014; Frank, Kessler, Rusch, Suess-Reyes, & Weismeier-Sammer, 2017; McGrath & O’Toole, 2018; Moores, 2009).…”

“…Finally, it has also been underlined that FFs’ managers should extend their social interactions even beyond their FFs to develop trusting relationships with other firms and external stakeholders (bridging social capital) to support the creation of human capital and value across generations (Salvato & Melin, 2008; Sirmon & Hitt, 2003). This relational capability can provide the FF with access to external opportunities, critical information, innovations, advice, and ideas and can enable the exchange of knowledge and the creation of new knowledge, which may lead to enhanced opportunity recognition and ultimately to superior performance (McGrath & O’Toole, 2018; Randolph, Li, & Daspit, 2017).…”

Internal social capital and international firm performance in emerging market family firms: The mediating role of participative governance

“…Prior studies show that the interaction between family and business does not necessarily create competitive advantage (Basco, 2013; O’Boyle et al, 2010); rather, it is critical to develop appropriate processes and capabilities (Basco, 2013; McGrath and O’Toole, 2018; Sirmon and Hitt, 2003). Drawing on the dynamic capability perspective (Eisenhardt and Martin, 2000; Teece et al, 1997), we explore the role of participative governance capability as an intermediary capability between internal social capital and international firm performance.…”