| Fairness in family firms: An organizational justice perspective on agency problems |
| | Baldridge, David C. | U. of Connecticut | Baldridge@sba.uconn.edu | 860-486-3638 |
| | Schulze, William S. | U. of Connecticut | bschulze@sba.uconn.edu | (860)-486-3504 |
| | An estimated 90% of all businesses are either family-owned or
family-controlled. Unfortunately, management literature has largely
ignored study of these firms. Agency theory suggests that family firms
enjoy advantages because the roles of owner and manager are united.
Active owner involvement eliminates the need for costly governance
mechanisms and reduces a score of agency problems. In contrast to agency
theory, studies of family firms reveal a host of problems. In particular,
it has been argued that altruistic acts among family members lead to a
unique set of agency problems in family firms. The purpose of the current
paper is to increase understanding of these agency problems by applying an
organizational justice perspective. Altruism suggests that family members
act generously toward one another and receive rewards that are not earned.
In terms of organizational justice theory, these rewards are distributed
based on non-equity notions of fairness. In the current paper, it is
argued that such acts lead to conflicting notions of fairness, and that
perceived injustices help fuel agency problems. |
| | Keywords: family business; organizational justice; agency problems |
| Patterns of Strategy Formulation in a Family Firm |
| | Ibrahim, Bakr | Concordia U., Montreal | ibrahim@vax2.concordia.ca | 514-848-2701 |
| | McGuire, Jean B. | Concordia U., Montreal | Jmcguir@vax2.concordia.ca | 514-848-2917 |
| | Ismail, Y. | Concordia U., Montreal | ibrahim@vax2.concordia.ca | 514-848-4502 |
| | Dumas, Collette | Suffolk U. | cdumas@suffolk.edu | 617-573-8753 |
| | This study examines strategy and inter-generational succession in one of the largest and most successful family business, Seagrams, Ltd, to investigate the interrelationships between family, succession, and firm strategy. Results suggest that the firm's ability to manage the issue of succession is a critical factor in its continued success. |
| | Keywords: Family business; Succession; Strategy |
| Founder Centrality and Strategy in the Family Owned Firm |
| | Kelly, Louise M. | Northeastern U. | lkelly@cba.neu.edu | (617)-373-5239 |
| | Athanassiou, Nickolas | Northeastern U. | nathanassiou@cba.neu.edu | 617-373-5759 |
| | The purpose of this paper is to explore how the family dynamic and, more explicitly, the founder influence strategic management in the family business. From a strategic management perspective, the founder is likely to be particularly influential regarding the motives, values, goals and attitudes that are central to the organization. Therefore, founders and their legacies will similarly shape the family firms' strategic behavior and interactions with the external environment. This paper reviews findings regarding the unique character of family-owned businesses' strategy and structure. Further, it explores the central role that founders play within a family business from a social network perspective and establishes the basis for the founder centrality concept. Then, this paper develops propositions about the role of the family owned firm's founder and its top managers with respect to the family-owned firm's strategic posture and performance. More specifically, it relates founder centrality and the family firm¢s top-management-group character to firm culture, strategic vision, and goals; to its orientation to environmental determinants of strategy; to its strategic controls; and, to the family firm's strategy management processes and its performance. |
| | Keywords: family; strategy; networks |