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In order to respond to economic globalization and increased competitive pressures, companies need innovative, efficient and effective management strategies. Accordingly, this book explores various scenarios faced by entrepreneurs and family businesses, and proposes strategies to tackle the challenges and seize opportunities to grow in a highly competitive environment. It underscores the importance of deploying vital strategies to survive and flourish in the long term, overcoming challenges, and capitalizing on opportunities in order to attain / maintain a competitive position. By presenting and integrating the latest insights and case studies on entrepreneurship, family businesses, and strategy research, the book provides concrete recommendations for effective business survival and growth.

Inhaltsverzeichnis

Frontmatter

Introduction to Entrepreneurship and Family Business Vitality

Abstract
The economic globalization and increased competitive pressures for most firms demand innovative, efficient, and effective management strategies to comply with such dynamic, increasingly technological, and highly uncertain environments. Faced with this scenario, companies need to deploy critical strategies to survive and flourish in the long term, breaching challenges, seizing opportunities to hold a competitive position. The uniqueness of family firms means that they face a series of specific challenges, and whose analysis has eclipsed the study of other relevant aspects of change and development. Vital strategies require more than just focusing on the internal and external environment; those must also involve a constant search to integrate and coordinate the resources and actions that support competitive advantages and superior performance. The authors of this book review the different scenarios for entrepreneurship and family firms and propose strategies to tackle the challenges and seize the possibilities to grow in this competitive environment.
José Manuel Saiz-Álvarez, Jesús Manuel Palma-Ruiz, João Leitão

Family Firms: Socioemotional Intelligence and Wealth

Frontmatter

Between Reason and Emotion: Socioemotional Intelligence as a Non-tangible Resource for Strategy, Operation, and Sustainability for the Family Business

Abstract
Financial and non-financial wealth in the family company has been a subject of discussion by several authors, placing family and profitability as the focus of their leaders’ decisions. In this study, we explain how the relevant variables work together to defend this wealth while considering the management of emotional and social intelligence and considering innovation and risk factors as elements of the decisions taken by the leading members of the family business. Through theoretical review, the authors present the wealth of socioemotional intelligence matrix or SEIW matrix, and according to the use of this socioemotional intelligence, four types of enterprises can be defined, which in turn takes us to pose the three-dimensional model Dual-SEIW as a solution. This model establishes, for the stakeholders, a performance profile of the business where the priorities are money and family.
Danny Christian Barbery-Montoya, Carlos Luis Torres-Briones

Small Family Firms and Strategies Coping the Economic Crisis: The Influence of Socio-emotional Wealth

Abstract
In this chapter, the socio-emotional wealth perspective is used to understand how, during phases of economic recession, a company’s family nature can influence its decision-making processes and the implementation of an ambidextrous strategy, as well as its effectiveness. A qualitative analysis based on a case study is presented in this chapter. The analyzed case involves an Italian family-owned small business that faced the recent economic crisis adopting a mix of defensive and offensive strategies. Thanks to this balanced—ambidextrous—strategy, the company was able to limit the impact of the crisis and then to recover positive profit margins. This study contributes to the extant literature by shedding light on how the aim of preserving the socio-emotional wealth can influence small family firms’ ability to adopt ambidextrous strategies in order to face an economic recession.
Francesca Maria Cesaroni, Annalisa Sentuti, Serena Cubico

Employees’ Change-Oriented and Proactive Behaviors in Small- and Medium-Sized Family Businesses

Abstract
This chapter sheds light on family business employees’ change-oriented and proactive behaviors and the structural conditions they find to support or hinder these behaviors. A study consisting of 20 semi-structured interviews with family business owners and employees is reported. The results give the first idea for linkages to existing theory in family business research and can be seen as a basis for additional theoretical considerations as well as empirical studies.
Teresa Spiess, Anita Zehrer

Family Firms: Leadership

Frontmatter

Entrepreneurial Leadership Across Countries: The Role of Informal Institutions

Abstract
This chapter examines the influence of informal institutions on the probability of becoming an entrepreneurial leader. In this regard, institutional economics is used to frame the hypotheses that relate to environmental factors and entrepreneurial leadership. These hypotheses are tested through logistic regression analysis, using a sample of 67,268 individuals from the World Values Survey (WVS) for 50 countries. The main findings show that informal institutions such as independence, risk-taking, and networking increase the probability of becoming an entrepreneurial leader. Also, networking and religious faith moderate the relationship between independence and entrepreneurial leadership. The contributions of this chapter are both conceptual, regarding development in the field of leadership and entrepreneurship and practices concerning business and education.
Claudia Felix, Sebastian Aparicio, David Urbano

Generational Diversity as a Moderator for the Relationship Between Absorptive Capacity and Innovation Performance at Family Firms

Abstract
The objective of this research study involves analyzing the capacities of family firms to absorb relevant information about the external environment and to incorporate this into their innovation-focused activities before then consequently analyzing the repercussions for innovation performance. This furthermore seeks to grasp whether, and to what extent, the generational diversity in the firm’s management represents a valuable resource. In order to obtain these objectives, we opted for a quantitative study with the data collected by a questionnaire sent out by email to the managers of Brazilian firms, specifically those with their headquarters in the state of Rio Grande do Sul and registered with the Rio Grande do Sul Industrial Federation. The results of this study provide recognition of ACAP as an important predictor of FF innovation performance. In particular, the findings suggest that the potential absorptive capacity (PACAP) generates a positive and significant effect on the realized absorptive capacity (RACAP). We may also report the positive and significant effect of PACAP on the incremental innovation performance and, similarly, for the RACAP influence on the radical innovation performance. Contrary to that expected, however, the results point to generational diversity in the management of the FF which is not a significant moderator between ACAP and innovation performance.
Gloria Charão Ferreira, João M. Ferreira

Shared Leadership at the Top of Family Firms: How Sibling Teams Engage in Successful Co-leadership

Abstract
This paper explores shared leadership arrangements at the top of a family firm where leadership is equally shared among a group of family members rather than focused on a designated leader. Pairing different capabilities, characteristics and leadership strategies is viewed as being of benefit in hybrid family firms which face the different sets of logic inherent in maintaining their familiness while also enabling flexibility. We build on the shared leadership approach and recent work on succession and sibling teams to examine the following research question: How do sibling teams succeed in synchronizing their leadership efforts into a successful leadership team? In this research, we draw upon a qualitative, inductive case study to explore two siblings who jointly hold the responsibility at the top of a family firm. Findings indicate that the co-leaders integrate their shared leadership activities into concerted action by considering their reciprocated affirmation, by drawing upon their shared entrepreneurial spirit, and by acknowledging their complementarity. By discovering the integrating mechanisms of shared leadership practices at the top of family firms, we contribute to both the family business literature and research on shared leadership.
Jana Bövers, Christina Hoon

Territorial Maps of Senior Entrepreneurship: A Multidimensional Analysis Based on GEM Data

Abstract
Using APS GEM (Global Entrepreneurship Monitor) data, the authors use a multidimensional analysis based on a regression analysis of a nonlinear (cubic) polynomial equation between senior entrepreneurship and the United Nations’ human development index to define territorial maps of senior entrepreneurship (SE). The objective of analyzing these maps is to know (a) which are the strongest nations of the world concerning SE, (b) if SE differs among countries, and (c) which are the main factors affecting SE. Our results suggest that SE will increase in the coming years due to the aging of the population (“Papy boom”), especially in Europe and to a lesser extent in some regions of the United States and Japan. Finally, and related to SE, four groups of countries can be formed.
José Manuel Saiz-Álvarez, Alicia Coduras-Martínez

Relationship Conflicts in Family Firms: An Empirical Analysis

Abstract
Relationship conflicts between family members can have disastrous consequences on the performance of the family firm (FF) and even endanger its continuity. This study examines the relationship between family influence, relationship conflicts, and the organizational effectiveness of FF. Using a sample of 102 Spanish FFs, the authors analyzed the data using a partial least squares structural equation model. The results show that the involvement of family members in the ownership and on the boards of governance and management enhance the incorporation of the family values and culture into the firm and thus reduce relationship conflicts. More importantly, we find a negative relation between relationship conflicts and the effectiveness of FF.
Ismael Barros-Contreras, Juan Hernangómez-Barahona, Natalia Martín-Cruz

Family Firms: Innovation

Frontmatter

Commitment to Learning, Knowledge, and Strategic Renewal: Do Family Firms Manage Them Differently?

Abstract
Nowadays, knowledge is considered a critical resource through which organizations can develop sustainable competitive advantages and obtain superior results by allowing to transform themselves and to adapt to their environment. Hence, this research has a double purpose: first, to explore how commitment to learning determines the development of knowledge management practices (mainly, generation, flow, and storage) and how such practices impact small-sized and midsized firms’ strategic renewal and, second, to explore if previous relationships are different for family and nonfamily firms. To test our model, we conducted an empirical study based on a sample of 238 Spanish small- and medium-sized enterprises. Structural equation modeling in the form of partial least squares was used to test the measurement model and hypotheses. In order to assess the moderating effects of organizational context (differences among family and nonfamily firms), we adopted a multi-group approach using two subsamples. Results show that commitment to learning and knowledge management practices are the main undercurrent of strategic renewal. Furthermore, family and nonfamily firms are less heterogeneous than we expected at first sight.
Marta Pérez-Pérez, Remedios Hernández-Linares

The Moderating Effects of Family Farms Between Innovation, Information Systems, and Training-Learning Over Performance

Abstract
This work addresses how information systems and training-learning affect the innovation of productive processes and in turn how they influence the performance of the agricultural banana companies (AC). Particularly, it analyzes the moderation effect that being a family farm exerts on these relationships. To do that we apply partial least square technique to 416 AC in the province of El Oro—Republic of Ecuador. Data were obtained by an in hand self-administered questionnaire addressed in 2017 to the owners and managers of these businesses. The results show that (1) information systems contribute significantly to the innovation of productive processes of AC. It also contributes directly and significantly to the performance of the AC as well as through the innovation of productive processes mediation; (2) training directly and significantly influences the innovation of productive processes, but not on performance, which it influences only through the mediation effect of the innovation of productive processes; (3) innovation of productive processes significantly affects the performance of the AC Further, we demonstrate the moderating effect that the family farms have on the information systems—the innovation of productive processes—performance relationship.
Alfonso A. Rojo-Ramírez, Alicia Ramírez-Orellana, John Eddson Burgos-Burgos, Daniel Ruiz-Palomo

The Effect of CEO Attributes on the Internationalization-Performance Relationship in Private Family Firms

Abstract
This chapter explores the influence of CEO attributes on the internationalization-performance relationships of private family firms. Drawing on the upper echelon theory and the socioemotional wealth perspective, this research posits that CEOs play a crucial role in the internationalization of private family firms and that some of their attributes have moderating effects on the internationalization-performance relationship. Using cross-sectional data of 319 private family firms that expanded abroad, we find that both the family and the generational status of the CEO moderate the relationship between internationalization and firm performance.
Jonathan Bauweraerts

Family Firms: Case Studies

Frontmatter

Is Being Conservative at Home Whilst Taking Risks Abroad a Suitable Competitive Strategy? The Case of Spanish Family Firms Internationalizing to Mexico

Abstract
Family firms’ (FFs) importance for industrialized and developing countries and the growing competition has led to an increased interest in knowing how FFs develop their competitive strategies. Since FFs usually have a long-term vision when deciding how to compete, analyzing competitive strategies—usually linked with the long-term—makes even more sense. Furthermore, FFs’ behavior is especially interesting when they have been internationalized. Thus, the purpose of our study is to improve the understanding of the competitive strategies of FFs’ internationalizing to Mexico, namely, exploitation (at a national level) and exploration (at international level). Briefly, a firm’s exploitation strategy is characterized by better-using firms’ existing resources and knowledge, whereas a firm’s exploration strategy involves exploring new ways of doing. Based on data collected from 81 CEOs of Spanish firms that have been internationalized to Mexico, we use partial least squares structural equation modeling (PLS-SEM) technique. We conclude that FFs’ exploitation strategy (at a national level) has a positive impact on firms’ exploration strategy (at international level). In other words, being more efficient and leveraging current knowledge at a national level help to pursue opportunities internationally actively.
Julen Castillo-Apraiz, Unai Arzubiaga, Jesús Manuel Palma-Ruiz

Corporate Venturing Determinants in Mexican Family Firms

Abstract
The objective of this study is to explore whether factors related to the focus of both the ability of the CEO to interpret the environmental signals and identify business opportunities and the characteristics of the firm in terms of previous innovation experience and ability to learn from that experience can determine the decision to enter into corporate venturing (CV) in Mexican family firms. Besides, we will consider the moderating effect of family members’ willingness to change on these relationships. In order to explore the proposed relationships, a theoretical framework that encompasses arguments from the resource-based view, the knowledge-based view, and the upper-echelons theory are used. To test our hypotheses, we conducted a study among CEOs in Mexican family firms of all sizes and performed a binomial logistic regression analysis based on a sample of 136 family companies across all sectors. The results obtained indicate that individual and firm variables are highly significant. All the variables except organizational learning, the effect of which is adverse, demonstrated positive effects, and this variable, also, is the only one moderated by the willingness to change.
Luis Arturo Torres-García, M. Concepción López-Fernández, Ana M. Serrano-Bedia

Determinants of the Economic Performance of Portuguese Family Firms: Is Innovation Relevant?

Abstract
Family firms contribute substantially to the economy of a country. Thus, it is surprising that few studies have considered these firms as an object of analysis, especially regarding the importance of innovation to their economic performance. In an attempt to fill this gap, this paper assesses the importance of innovation and technological capabilities in the performance of family firms in Portugal. Based on a sample comprising 230 firms, 110 of which are family-owned, and on econometric estimation methods, we show that internal factors are more relevant in explaining family firms’ economic performance than contextual factors. Family firms run by CEOs with a degree in engineering or with CEOs and management teams with more international experience tend, on average, to present higher levels of productivity. Additionally, the firms that are more experienced in business and more internationalized are also more productive generally. Notwithstanding family firms being less intensive in R&D than nonfamily ones, innovation is one of the most critical determinants for the performance of the former. Besides the relevance of technological- and innovation-related skills mirrored by investment in R&D, the result of innovation, reflected in the successful introduction of innovations (in marketing and combined), emerges as highly relevant statistically, playing a decisive role in the economic performance of family firms. Family firms that are located in economically less developed regions tend, on average, to present higher productivity levels. This seems to indicate that family firms may constitute a driver of regional convergence regarding dynamics and development.
Aurora A. C. Teixeira, Sofia F. Correia

RISE Model: Its Application on Diving Enterprises Located in the San Andres Archipelago (Colombia)

Abstract
This research aimed to identify the level of fulfillment of the four sustainability dimensions included in the RISE model, in three diving enterprises located in the Archipelago of San Andres. This model was developed at EAN University by the G3Pymes Research Group, which is rated A1 by Colciencias (Administrative Department of Science Technology and Innovation in Colombia). The model is composed of a diagnosis matrix that includes the following factors: innovation, sustainable production, leadership, strategic direction, organizational culture, collaborative processes, recognition, governance, new markets, technology, and financial indicators. Each factor is analyzed under the following four dimensions: (1) environmental, (2) economic, (3) social, and (4) managerial. The matrix measures the maturity level of each enterprise related to each dimension and factor. The results provided by the matrix, along with interviews performed in each enterprise, lead to a path for innovation and corporate sustainability. This path contains specific activities tailored to make improvements in each factor and dimension for which results were low. The expectation of performing this study is to motivate academic, industrial, and government institutions to use this model in order to boost best social, environmental, managerial, and economic practices.
María del Pilar Ramírez-Salazar, Rafael Ignacio Pérez-Uribe, Carlos Salcedo-Pérez, Julieth Paola Juffington-Smith
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