Supply management and family business: A review and call for research

Highlights

• Family businesses behave and perform differently than non-family businesses.

• Extant literature studying family influences on supply management is mostly void.

• We introduce supply management scholars to family business.

• We develop research propositions of family business influences on supply management.

Abstract

Family-owned enterprises dominate global business, generating 70–90% of the world's gross domestic product. Existing management research has validated that family businesses often behave differently than non-family businesses, primarily by focusing on idiosyncratic non-economic goals that are not typically assessed in traditional business research. Extant supply management literature has yet to investigate the influences of family business, thus overlooking a potential significant source of variation in our research as well as limiting our managerial relevance. The objective of this paper is to introduce supply management scholars to family business, including its prominence and unique characteristics. Applying socioemotional wealth as a theoretical lens, we develop a research agenda from existing supply management and family business literature by offering propositions for future research where family business influences may permeate contemporary supply management topics including strategic supply management, sourcing strategy, supplier relationships, sustainability, risk, and e-procurement. In doing so, we provide an initial foundation for supply management scholars to both incorporate family business effects into research and launch new research streams. This is one of the first papers to our knowledge that introduces the field of family business to supply management scholars.

Introduction

The quantity, breadth, and rigor of research in supply management has greatly expanded in recent decades (Spina et al., 2013, Wynstra, 2010). Yet consider the possibly that despite such a voluminous research effort and literature base, the supply chain academic field has overlooked a key variable that could potentially increase the explanatory power and managerial relevance of our work. We contend herein that such is the case with family business.

For this paper, we follow the widely-accepted European Family Businesses (2016) definition of a family business as “an organization with decision-making control (direct or indirect) held within a family and at least one family member actively involved in governance of the organization.” This definition is effective regardless of firm size and age (longevity). Family enterprises dominate business by creating an estimated 70–90% of annual global gross domestic product (GDP) and 50–80% of job growth in a majority of countries worldwide (International Family Enterprise Research Academy, 2003). Despite its global ubiquity and prominence, family business represents a relatively new, maturing field in academia (Litz et al., 2012). Although highly-regarded family business publications have emerged in recent decades and other important business journals are publishing family business work, the field remains relatively under-researched (Astrachan, 2010). Nevertheless, existing literature consistently demonstrates that family firms behave and perform differently than non-family firms (Astrachan, 2010, Benavides-Velasco et al., 2013, Chrisman et al., 2010). Their objectives, capabilities, and business practices frequently differ from traditional expectations.

Such differences between family and non-family enterprises likely extend to supply management in profound ways, potentially impacting practices such as sourcing strategy and supplier integration as well as risk and sustainability (Jayaram et al., 2014). To initially investigate this contention, we conducted a comprehensive, systematic literature review (Tranfield et al., 2003), which we detail later herein, and found extremely few papers focusing on either family business effects on supply management or supply management practices in family firms. This includes no papers in supply chain journals and just a handful in management journals. The limited research that does exists suggests that supply chains for family firms behave and perform differently than those of non-family firms to some extent (Smith et al., 2014, Stanley and McDowell, 2014). Yet, the general paucity of literature greatly urges more research.

A parallel can be made with supply chain in small to medium-sized enterprises (SMEs), which went unexplored until recently (Ellegaard, 2006, Zheng et al., 2007). Since then, research has found not only many SME distinctions from larger firms but also overall SME supply chain performance gaps (Arend and Wisner, 2005, Thakkar et al., 2008). We contend that scholars will also find supply chain distinctions with family firms.

Given the lack of supply chain research in family business, our literature has largely ignored an important variable that could significantly advance the explanatory power of our research and perhaps yield insight for more effective supply management practice. Stated differently, family business may represent a missing link in supply management research. To address this gap, this paper develops a research agenda for family business supply management. Applying socioemotional wealth (SEW) as a theoretical lens (Berrone et al., 2012, Gómez-Mejía et al., 2007), we pursue two research objectives to provide an initial foundation for supply management scholars to incorporate family business effects into new avenues of research in the field:

• Introduce supply management scholars to family business, including those differentiating characteristics that make family businesses distinct from non-family businesses.

• Integrate existing supply management and family business literature to develop propositions for future research wherein family business effects might permeate contemporary supply management research topics.

Below, we first introduce the field of family business, highlighting differences from non-family businesses as well as providing an overview of socioemotional wealth used as theoretical support for the research propositions. We next describe our systematic review of supply management and family business literature that yielded a small number of articles. Given the absence of such research, we then identify prominent supply management research topics, relating family business influences to these topics to build research propositions. The propositions synthesize supply management and family business research while providing critical thought and specific starting points for scholars to pursue future research. We close with thoughts on how to proceed with such research. Ultimately, we hope that this paper launches new interdisciplinary research and strengthens the explanatory power of supply management research.