Now showing 1 - 10 of 18
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Listening to the heart or the head? Exploring the “willingness vs. ability” succession dilemma

2019-01 , Richards, Melanie Maria , Kammerlander, Nadine , Zellweger, Thomas Markus

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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Family, Wealth, and Governance: An Agency Account

2015-11 , Zellweger, Thomas , Kammerlander, Nadine

Family firms often evolve into ownership constellations with multiple family owners. Building on agency theory, we argue that the growing complexity within a group of family blockholders gives rise to what we label family blockholder conflicts, defined as conflicts within a group of family owners. To curb family blockholder conflicts, families often separate the family from its assets and install intermediary governance structures. We explore four frequently applied structures (uncoordinated family, embedded family office, single family office, and family trust), which vary in their degree of separation between family owners and assets and consequently the extent to which the firm might incur family blockholder costs and the double-agency costs associated with appointing agents to oversee agents. We conclude with a discussion of the distributive effects of the four family governance constellations for family wealth over time.

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Family Firm Innovativeness-A Meta-Analysis

2014-08-05 , Duran, Patricio , Kammerlander, Nadine , van Essen, Marc , Zellweger, Thomas

An increasing stream of research has started to investigate innovation behavior in family firms, which is expected to be distinct from that of other types of firms; however results have been mixed so far. Conducting a meta-analysis of 110 studies covering 42 countries we synthesize prior work and extend prior knowledge on the precise linkages of family control and innovation behavior. We find that innovation input is lower in family as compared to non-family firms, yet innovation output is enhanced. We argue that lower input can be explained by the investment and decision making preferences of family owners. Higher output can be explained by family-firms' capabilities to efficaciously manage R&D resources. We further discuss and test the effect of important family-, firm-, and institutional-level contingencies. Based on the results from our meta-analytical analysis we develop new insights into the sources of competitive advantage of family firms and propose new directions for further research.

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Succession Dilemmas of Exiting Entrepreneurs: Prioritizing Willingness or Ability?

2014-11-13 , Kammerlander, Nadine , Ganter, Melanie , Zellweger, Thomas

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Doing more with less: Innovation input and output in family firms

2016-08 , Duran, Patricio , Kammerlander, Nadine , van Essen, Marc , Zellweger, Thomas

Family firms are often portrayed as an important yet conservative form of organization that is reluctant to invest in innovation; however, at the same time, evidence shows that family firms are still flourishing and that many of the world's most innovative firms are indeed family firms. Our study contributes to disentangling this puzzling effect. We argue that family firms-owing to the family's high level of control over the firm, wealth concentration, and importance of non-financial goals-invest less in innovation but have an increased conversion rate of innovation input into output and, ultimately, a higher innovation output than non-family firms. Empirical evidence from a meta-analysis based on 108 primary studies from 42 countries supports our hypotheses. We further argue and empirically show that the observed effects are even stronger when the CEO of the family firm is a later-generation family member. However, when the CEO of the family firm is the firm's founder, innovation input is higher and, contrary to our initial expectations, innovation output is lower than that in other firms. We further show that the family firm-innovation input/output relationships depend on country-level factors, namely, the level of minority shareholder protection and the education level of the workforce in the country.

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The Role of Information Asymmetry in the Choice of Entrepreneurial Exit Routes

2014-11-08 , Dehlen, Tobias , Zellweger, Thomas , Kammerlander, Nadine , Halter, Frank

Our quantitative study investigates the determinants of internal versus external exit routes in family firms. Building on information asymmetry theory, we examine how an owner's inferior knowledge about the abilities of potential external entrants (in contrast to family internal successors) renders a family internal transfer more likely. This information asymmetry, however, can be mitigated by activities such as owners' screening and transfer candidates' signaling efforts to reveal the candidates' abilities. Our data exhibits a positive effect of signaling and an inverted U-shaped effect of screening on the probability of external exit routes. Firm age, as a driver of emotional attachment, weakens these effects.

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Following the family or the corporate logic? An empirical investigation of two entrepreneurial exit dilemmas

2014-09-01 , Ganter, Melanie , Kammerlander, Nadine , Zellweger, Thomas

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Value Creation in Family Firms: A Model of Fit

2015-06 , Kammerlander, Nadine , Sieger, Philipp , Voordeckers, Wim , Zellweger, Thomas

We propose a framework describing how family ownership can create or destroy value depending on the goals, resources, and governance of the family firm, which are each influenced by the family owners. Taking a contingency perspective, we suggest that a fit is required for all three elements - family-influenced goals, resources, and governance - for the family firm to flourish over generations. We conclude with a suggested research agenda indicating research opportunities at the nexus of these identified elements. Further we provide some guiding questions for practitioners that might stimulate fruitful discussions among family firm owners and managers about how to realize "fit."

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Are family firms really less innovative? A meta analysis

2014-10-24 , Duran, Patricio , Kammerlander, Nadine , van Essen, Marc , Zellweger, Thomas

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The Incumbent's Dilemma when Exiting the Firm: Torn between the Family and the Corporate Logic

2014-08-05 , Ganter, Melanie , Kammerlander, Nadine , Zellweger, Thomas

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.