Karen Vinton’s Executive Summaries recap two articles from the March 2013 issue of FBR. In Should My Spouse Be My Partner? Preliminary evidence from the panel study of income dynamics, by W. Gibb Dyer, W. Justin Dyer, and Richard G. Gardner, the authors use study data to review the impact on a family business if it is run by spouses or a single member of the partnership.
A podcast with the authors as well as other podcasts are available here.
In the second article, Game Theory and Family Business Succession: An introduction, by Tim Blumentritt, Timothy Mathews and Gaia Marchisio, the authors explore the idea of using game theory in family enterprise research. A practitioner’s experience with the issue of family business succession can be very useful to game theory and succession researchers.
SUMMARY 1: Should My Spouse Be My Partner? Preliminary Evidence From the Panel Study of Income Dynamics
W. Gibb Dyer, W. Justin Dyer, and Richard G. Gardner
Copreneurial businesses, where husbands and wives work together, comprise about one third of all family businesses. However, there has been relatively little research done on the impact of copreneurship on the business and the family. This study provides an important first step.
Using data from the Panel Study of Income Dynamics, the authors were able to identify 813 owner-managed businesses that did not partner with a spouse and 71 firms that did partner with a spouse. The researchers were able to track the net profits of these businesses over a 10 year period from 1996–2006.
The major findings of this study are as follows:
- Adding a spouse did not improve firm income, but did increase family income.
- The number of hours worked by the additional spouse did not improve firm income or family income
- The level of education of the additional spouse did not improve firm income or family income.
- Strategic choices, such as choice of industry, by the owner-manager had more of an impact on firm income than adding a spouse.
The authors noted several limitations to their study which make it difficult at this point in time to make firm recommendations to practitioners or family businesses. Most of the businesses studied were sole proprietors and small so more research needs to be done looking at different types and sizes of family businesses. Practitioners should consider partnering with researchers to further study the impact of copreneurs on both the firm and the family.
SUMMARY 2: Game Theory and Family Business Succession: An Introduction
Tim Blumentritt, Timothy Mathews and Gaia Marchisio
This article proposes and explores the possibility of using game theory in family business research. In particular the article explores how game theory can contribute to our understanding of management succession in family businesses.
Game theory was developed in the 1940s as a tool for analyzing interactions between two or more entities. It can be used to model decisions and help predict outcomes. The article provides a good introduction to game theory and provides a foundation for the use of game theory to help understand the process of management succession in family business.
Practitioners could provide researchers with important insights into the management succession process in family businesses which would greatly help researchers develop richer models using game theory.
About the Contributor
Karen L. VintonPh.D. is a 1999 Barbara Hollander Award winner and Professor Emeritus of Business at the College of Business at Montana State University, where she founded the University’s Family Business Program. An FFI Fellow, she has served on its Board of Directors and also chaired the Body of Knowledge committee. From 1997 through 2011, Vinton served on the editorial board of Family Business Review, and is the current assistant editor. Before retiring, Vinton served as director for her own family’s business (negotiating its eventual sale) and had her own family business consulting practice, Vinton Consulting Services. Karen can be reached at firstname.lastname@example.org.
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