Leveraging Ethnic Entrepreneurship, Culture and Family Dynamics to Enhance Good Governance and Sustainability in the Immigrant Family Business

Abstract

Immigrant family businesses are one of the most unique, complex and dynamic systems in our modern-day society. The blending of two inherently different realms — the performance-based world of business and the emotion-based domain of the immigrant family — creates a system potentially fraught with confusion and conflict. Applying traditional, limited and exclusively Western views of entrepreneurship to immigrant family business creation, growth and sustainability is to ignore or discount the core cultural/ethical values and ethnic contexts in which these firms operate. The objective of this conceptual paper is to identify and explore the three variables of enterprise, ethnicity and family dynamics that influence corporate governance to ensure the survival, growth and sustainability of immigrant family businesses. Conclusions and recommendations for future research are discussed.

The Intersection of Family Firms and Institutional Contexts: A Review and Agenda for Future Research

“…12 For example, collectivistic and hierarchical cultural norms (e.g., in-group favoritism, face saving and nonconfrontational norms, loyalty and obedience to authority) can lead to the formation of hidden or explicit coalitions within family firms, which promote conflicts and dysfunctionalities within family firms (Goel, He, & Karri, 2011; Sauerwald & Peng, 2013). Similarly, different ethnic dimensions (e.g., direct verbal vs. indirect nonverbal communication style, task vs. relationship focus) encourage family firms with different ethnic origins (e.g., African American, Mexican American) to nurture different sets of values, norms, and practices within their firms (Adendorff & Halkias, 2014; Danes, Lee, Stafford, & Heck, 2008; Koiranen, 2002; Tàpies & Moya, 2012). For example, ethnic values that emphasize family bonding may require family firms to reach a consensus on decisions before taking actions (Bhalla, Lampel, Henderson, & Watkins, 2009), or ethnic families’ stronger reliance on their family ties and support makes them view formalized human resource management practices as ineffective, compared with more informal systems (e.g., recruitment through social networks; Kidwell, Hoy, & Ibarreche, 2012).…”

Business support and training in minority-ethnic, family-run firms: the case of SMEs in Scotland

“…Organisational knowledge becomes especially sensitive to the familial narratives employed, where centralisation and powerful personalities can place boundaries on the development of a knowledge resource (Cunningham et al, 2016;Valkokari & Helander, 2007). This leads Jones and Ram (2012) to suggest that family dominance determines the trajectory of the business as a 20 heightened form of embeddedness, as implied is our data, providing enhanced meaning to the role of ethnicity in the business (Adendorff & Halkias, 2014). The result of this can bind firms to familial enclaves and social structures, as they become reliant on empathetic custom and fail to build an awareness of broader mainstream support and opportunities (Oc & Tiesdell, 1999;Jones et al, 2000).…”

“…The concept of business support provision in Scotland is framed around a 'free to all enquirers' model. However, the nature of minority-ethnic family firms is such that the convenience of familial and cultural resources, along with the strategic leverage afforded to them by maintaining an ethnic distinctiveness (Adendorff & Halkias, 2014), mean active enquiry for support on their part is less likely. This situation is compounded by an array of support bodies operating under universalistic principles.…”

An examination of firm size on intra-family business succession

“…These factors include the degree to which the board of directors (BOD) is dominated by family members, and whether the incumbent serves as both the chief executive officer and chairman of the BOD. Additionally, there have been several research studies illustrating the impact of governance factors on the performance and sustainability of family businesses (Basco and Rodríguez, 2009;Fahed-Sreih, 2009;Brenes et al, 2011;Kuan et al, 2011;Berent-Braun and Uhlaner, 2012;Siebels and zu Knyphausen-Aufseß, 2012;Yu et al, 2012;Adendorff and Halkias, 2014). Kuan et al (2011), Berent-Braun and Uhlaner (2012), and Adendorff and Halkias (2014) revealed that governance played a significant role in the long-term business performance of family businesses.…”