Now showing 1 - 10 of 16
  • Publication
    Listening to the heart or the head? Exploring the “willingness vs. ability” succession dilemma
    Incumbents typically seek a highly committed and at the same time highly competent child as a successor, yet such a candidate is often not available. Extant literature is unable to predict which desired attribute—commitment (i.e., willingness) or competence (i.e., ability)—is most important in this dilemma. Drawing from institutional logics literature, we suggest that the incumbent’s personal experiences, education, and cultural embeddedness, as much as firm-level situational stimuli, direct incumbent attention to either corporate logic, favoring competence, or family logic, favoring commitment, to guide decision-making about which family member to choose as a successor. We test our hypotheses using policy capturing with responses of 1,060 family firm owner-managers, and contribute to research on succession, family firms, and institutional logics.
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  • Publication
    Maintaining Moral Legitimacy through Worlds and Words: An Explanation of Firms' Investment in Sustainability Certification
    (Blackwell Publishing Limited, 2017) ; ;
    Gond, Jean-Pascal
    A prominent way for firms to manage their moral legitimacy is to invest in sustainability certifications. However, a significant subset of firms remain reluctant to invest in sustainability certifications even decades after the establishment of such certifications. Our paper seeks to elucidate this variance by exploring how firms in the coffee, tea, and chocolate industries legitimise themselves on moral grounds through external communication to stakeholders. Drawing on insights from French Pragmatist Sociology, we suggest that firms primarily rely on two distinct sets of legitimacy principles that reflect their identity orientation: the ‘civic and green’ world and the ‘domestic’ world. Specifically, our results show that reliance on the domestic world is negatively related to firms’ investment in sustainability certifications. Our findings also suggest that the strength of the relationship between these distinct methods of moral legitimising and certification varies depending on whether firms are characterised by first- or multi-generation family control.
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    Scopus© Citations 48
  • Publication
    How Much Am I Expected to Pay for My Parents' Firm? An Institutional Logics Perspective on Family Discounts
    (Wiley-Blackwell SSH, 2015-03-24) ; ; ;
    Patel, Pankaj C.
    Recent evidence suggests that successors do not simply inherit their parents' firm, but have to pay a certain price. Building on institutional logics literature, we explore successors' family discount expectations, defined as the rebate expected from parents in comparison to nonfamily buyers when assuming control of the firm. We find that family cohesion increases discount expectations while successors' fear of failure and family equity stake in the firm decrease discount expectations. Higher education in business or economics weakens these effects. On average, in our study comprised of 16 countries, successors expect a 57% family discount.
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    Scopus© Citations 37
  • Publication
    An attention-based view of family firm adaptation to discontinuous technological change: Exploring the role of family CEOs' non-economic goals
    (Wiley-Blackwell, 2014-04-10) ;
    Recent studies show that managerial attention is a particularly important precursor of established firms' responses to discontinuous technological change. However, little is known about the factors that shape managerial attention-response patterns. In our qualitative study, we investigate how the attention of family firm CEOs to discontinuous technological shifts, the interpretation and decision-making processes associated with these changes, and ultimately organizations' responses are affected by CEOs' non-economic goals. Based on seven longitudinal case studies in the German consumer goods industry, we induce a process model that extends the findings of the literature on the attention-based view and helps to explain heterogeneity in family firms' adaptation to discontinuous technological change. We show that the family CEO's specific non-economic goals-such as power and control, transgenerational value, the maintenance of family reputation, the continuance of personal ties, or personal affect associated with the family business-determine whether the CEO assesses an emerging technology as relevant enough to warrant a reaction from the firm. Moreover, the family CEO's non-economic goals constrain the set of considered responses. The outcome of this sensemaking process determines the organization's response. For instance, in the specific context of this study, the goal of "family power and control" entailed an immediate interpretation of the focal trend as important for maintaining influence, and resulted in an unconstrained set of responses and, ultimately, high innovation in the new domain. Over time, family CEOs might re-evaluate the emerging trend based on their goals and adapt organizational moves accordingly. We identify and discuss how ambiguities and dilemmas may arise during this process. Our findings contribute to the literature on adaptation to discontinuous technological change and to family firm research.
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  • Publication
    Exploring the impact of firm communication on the organization's commitment to ethical labels: Do family firms decouple less?
    (IFERA, 2014-07-24)
    Due to increasing environmental complexity firms can no longer rely on their taken-for-granted legitimacy but instead have to actively manage their image in society through communication. This is particularly true for firms operating in industries characterized by severe ethical challenges such as commodity farming. With the help of quantitative text analysis, this paper seeks to scrutinize the firms' legitimizing strategies in the coffee, tea and chocolate industry, assessed through archival website content. Based on the institutional logics literature and the French Pragmatist Sociology, my theorizing suggests that firms will mostly rely on vocabulary associated with two distinct worlds, the ‘domestic world' and the ‘civic world,' when seeking to maintain their legitimacy vis-à-vis western consumers. I argue that the prevalence of each world within firm communication affects the organization's effort to ensure work standards by collaborating with ethical labeling organizations. The impact of the firm's legitimizing strategy on the organization's labeling effort in turn depends on whether the firm can be classified as family firm as the latter is less likely to engage in decoupling.
  • Publication
    Vocabularies of divergent legitimizing strategies and their effect on ethical standardization
    (Academy of Management, 2014-08-05)
    Due to increasing environmental complexity firms can no longer rely on their taken-for-granted legitimacy but instead have to actively manage their image in society through communication. This is particularly true for firms operating in industries characterized by severe ethical challenges such as commodity farming. With the help of quantitative text analysis, this paper seeks to scrutinize the firms' legitimizing strategies in the coffee, tea and chocolate industry, assessed through archival website content. Based on the institutional logics literature and the French Pragmatist Sociology, my theorizing suggests that firms will mostly rely on vocabulary associated with two distinct worlds, the ‘domestic world' and the ‘civic world,' when seeking to maintain their legitimacy vis-à-vis western consumers. I argue that the prevalence of each world within firm communication affects the organization's effort to ensure work standards by collaborating with ethical labeling organizations. The impact of the firm's legitimizing strategy on the organization's standardization effort in turn depends on whether the firm can be classified as family firm as the latter is less likely to engage in decoupling.
  • Publication
    The Incumbent's Dilemma when Exiting the Firm: Torn between the Family and the Corporate Logic
    When considering their own exit from the firm, incumbents are often challenged with two dilemmas. First, they need to hand over management to either a family-internal or a family-external successor. Second, they are often confronted with the trade-off between the successors' levels of ability versus willingness, particularly when relying on family-internal candidates. Based on institutional logics literature we argue that these dilemmas arise as the corporate and the family logic lead to conflicting expectations regarding which exit route and which candidate to prefer. We hypothesize that past experiences, the level of education, and situational stimuli affect incumbents' preferences for different succession candidates by focusing individual attention on either corporate or familial goals. In order to test our hypotheses we rely on responses to an exit scenario, completed by 2024 owner-managers of Swiss SMEs. Our findings contribute to literatures on entrepreneurial exit, institutional logics, and family firm succession.
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    Scopus© Citations 2