This issue of Executive Summaries from FBR Assistant Editor, Karen Vinton, covers a range of topics, from the use of storytelling in an effort to foster business growth to the pros and cons of paternalism in family enterprises. So enjoy the recaps, and of course: be sure to click on the links to read the complete articles.
SUMMARY 1: Advancing Family Business Research Through Narrative Analysis
By Alexandra Dawson and Daniel Hjorth
This article proposes and explores the possibility of using narrative analysis in family business research. Narrative analysis, the study of the stories people tell, was used by the authors to help understand the succession process and what followed in an Italian family enterprise. The authors use two narratives:
- The autobiography of Tommaso Berger (Onora il padre: Autobiografia di un imprenditore [Honor the father: Autobiography of an entrepreneur]).
- A chapter in a book (Gli affair di famiglia. Fatti e misfatti della nuova generazione di padroni [Family affairs: Deeds and misdeeds of the new generation of masters]) written by the journalist F. Astone about the son, Roberto Berger.
Both tell about similar events but from very different perspectives.
Five themes about succession emerge from the narrative analysis and are discussed using details from the two stories:
- Leadership-style and succession
- Trust and communication
- Balance between agents
- History and identity
- Letting go as losing identity/standing
Practitioners should find this article thought-provoking and beneficial for their practices. Many times practitioners are faced with varying stories of the same event. This article gives some insights into how to handle and understand these conflicting stories. The rich narratives of clients can help shed light on the relationships among family members and the relationship between family and business.
SUMMARY 2: Simulating Dynamic Capabilities and Value Creation in Family Firms: Is Paternalism an “Asset” or a “Liability”?
By Francesco Chirico, Mattias Nordqvist, Gianluca Colombo and Edoardo Mollona
This article explores the following two research questions: How and when does paternalism affect dynamic capabilities and value creation in family firms? How can simulation experiments shed light on complex decision processes in family firms?
Dynamic capability (DC) is a firm’s entrepreneurial ability to adjust and reconfigure to meet rapid changes in the environment. According to the authors, paternalism is the practice of excessively caring for others so as to interfere with their decisions and autonomy thus often producing resistance to change. Since paternalism has been observed as a feature of family firms, is it an asset or liability? The authors decided to use a computer simulation in order to study this question. The results indicate that the effect of paternalism on DC, creation of financial value, and family social capital varies over time. In particular, in the early stages of a family firm, founder’s paternalism leads to nimble structures, and helps to train and guide the next generation. However, as time passes, paternalism and the organizational culture that emerges in the firm may suffocate the ability of other members of the firm or family to contribute to the value creation in the firm.
While the authors recognize that a computer simulation needs to eventually be matched with empirical “reality,” the results from this computer simulation give practitioners and family firm owners much to think about. It demonstrates how paternalism can cause positive or negative outcomes depending on the amount of paternalism (high or low) and the time when this behavior occurs (early stage of firm or later stage of firm). These results can lead to interesting discussions about how and when to “use” paternalism.
SUMMARY 3: Assessing Espoused Goals in Private Family Firms Using Content Analysis
By Aaron F. McKenny, Jeremy C. Short, Miles A. Zachary and G. Tyge Payne
The websites and press releases of 100 of the largest private Australian family firms were studied using content analysis and a computer-aided content analysis (a program called DICTION). The researchers were attempting to assess the espoused goals of these businesses. They found 10 normative goals and 18 utilitarian goals. The most common normative goal category was donations and community involvement. Company age was the most often referenced utilitarian goal. Three clusters of firms were found based on espoused goals (Figure 1): those high on utilitarian goals and low on normative goals; those high on normative goals and low on utilitarian goals; and those low on both types of goals.
Different modes of narratives (i.e. websites vs. press releases) were used to emphasize different goals. For example, making donations or community involvement were more common in press releases than on company websites, while the goals of engaging in ethical practices were more often communicated through websites. Table 8 identifies other narratives that might be useful in identifying the goals of a family business.
Besides helping family business researchers, narratives can also help practitioners when working with their family business clients. For example, are the espoused goals in family firm narratives similar or different to those espoused by the family members themselves?
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