Family Governance Mechanisms in Moroccan Family Businesses: An Exploratory Study

Abstract

<jats:p>Purpose - Despite the importance attached to the governance of family businesses, few studies have focused on the importance of family business governance in the Moroccan context. This article provides some specificities of family firms and an overview of main governance mechanisms identified in the literature while presenting the main contributions of agency and stewardship theories. We introduce a governance approach centered on the issue of strengthening family ties and increasing the commitment of family members to the firm. The purpose of this paper is to identify the governance mechanisms adopted by CEOs of Moroccan family businesses of the second generation. &#x0D; &#x0D; Method - the authors used a qualitative method, using face to face semi-structured interviews among ten CEOs of family businesses in Morocco. Through the analysis of verbatim responses of Moroccan CEOs, we were able to identify some of the governance mechanisms they adopt to ensure a certain continuity of their business.&#x0D; &#x0D; Findings-The results suggest that most of the Moroccan managers opt for an informal and unwritten system of governance. According to them, the important thing is to share values and vision while maintaining communication. Even family meetings remain informal, the crucial thing is to preserve family solidarity, as far as the system of governance is known by all the members. We have identified three informal governance mechanisms, family meetings, task management, and sharing a family vision. The results have also shown some of the sources of conflicts among family members. &#x0D; &#x0D; Practical implications &amp;ndash; This paper helps to raise awareness among Moroccan leaders on the importance of governance. Whether formal or informal, it is essential to have common rules shared by family members, which will enable the firm to last over time.&#x0D; &#x0D; Originality - This paper contributes to research on family businesses by exploring a different context especially in terms of culture and country values. Our paper has the originality to focus on a specific area of investigation, namely the Moroccan context, where the management model of family businesses is different from anterior contributions.</jats:p>

The main factors of family harmony in Moroccan family businesses: an exploratory study

“…As previously stated above, the preservation of family harmony becomes all the more difficult as the family business counts several members. Some conflicts among family members can emerge over time (Birgach et al, 2020) which will have a negative impact on family harmony. We suggest conducting a quantitative study concerning the impact of conflict on the preservation of family harmony in the Moroccan family businesses.…”

“…Interpersonal trust plays an important role in maintaining family harmony (Sundaramurthy, 2008). In this regard, Eddleston et al (2010) have studied the question of trust between family members as an important governance mechanism (Birgach et al, 2020) that allows the firm to improve its competitiveness (Steier, 2001;Sundaramurthy, 2008) and reduce the opportunistic behaviors of agents (Steier, 2001).…”

“…The main factors of family harmony in MFB autonomy at work in the context of family businesses Chiu et al, 2018;Birgach et al, 2020). Indeed, to achieve family harmony "it is necessary to have an autonomy at work as long as it is well allocated and that everyone knows his role, in this case it could work" (owner7).…”

“…When everyone is aware of the tasks they must perform, it will facilitate the interaction and coordination of the tasks they must do as a group. This analysis does not reject the idea that family members will be totally isolated from the work of the group; on the contrary, Moroccan family business leaders consider it to be a basic governance mechanism that will facilitate the distribution of responsibilities while remaining cohesive and united (Birgach et al ., 2020).…”

“…Indeed, unlike managerial businesses, the development of a family business depends not only on the success of the business but also on the functionality of the family (Stafford et al ., 1999). The family can either be a competitive advantage for the firm or an obstacle as it is the case in presence of dysfunctional conflicts that are likely to lead to the destruction of the firm (Eddleston and Kellermanns, 2007; Birgach et al. , 2020).…”