Incubating the next generation to venture: The case of a family business in Hong Kong

Spinoffs’ alliance network growth beyond parental ties: performance diminishing, then performance enhancing

Spinoff firms are a common phenomenon in entrepreneurship where employees leave incumbent parent firms to found their own. Like other types of new firms, such new spinoffs face liabilities of newness and smallness. Previous research has emphasised the role of the initial endowments from their parent firm to overcome such liabilities. In this study, we argue and are the first to show, that, in addition to such endowments, growing an alliance network with firms other than their parents’ is also critical for spinoff performance. Specifically, we investigate the performance effect of alliance network growth in newly founded spinoffs using a longitudinal sample of 248 spinoffs and 3370 strategic alliances in the mining industry. Drawing on theory based on the resource adjustment costs of forming alliances, we posit and find a U-shaped relationship between the alliance network growth and spinoff performance, above and beyond the parent firm’s influence. We further hypothesise and find that performance effects become stronger with increased time lags between alliance network growth and spinoff performance, and when spinoffs delay growing their alliance networks. Implications for theory and practice are discussed.

The Role of Governance in Solving the Problems of SMEs

Small and medium enterprises (SMEs) face various challenges such as lack of resources, finance, networking capability. Many of the constraints could be mitigated with the help of proper governance in the SMEs. Many articles have explored the challenges faced by SMEs and how this challenge could be mitigated with the help of proper governance. However, very few studies have summarized the influence of governance in solving the problems of SMEs in one place. So, a systematic literature review has been made to find the role of governance in solving the problems of SMEs. As SMEs are the pillar of economic development for a country, their problems and solutions in one document could help practitioners and academician research and development further in this area. Our findings suggest that governance may influence the problems associated with corporate networking, finance, cross-cultural interactions of SMEs.

A systematic bibliometric review of the strategic entrepreneurship domain

Purpose

The strategic entrepreneurship (SE) literature exists at the intersection of the strategy and entrepreneurship literatures and has grown rapidly over the past two decades. This study aims to document the proliferation of research papers and identifies the major thematic clusters of topics and other summary information for the SE research domain.

Design/methodology/approach

This is a systematic bibliometric review of 586 articles published over the period 2009–2019 in 143 journals. The inductive quantitative assessment of these articles uses meta-data driven techniques that prioritize reproducibility and rigor in the process of literature analysis.

Findings

This study identifies six main themes in the strategic literature, namely, Sustainable Competitive Advantage; Knowledge Management; Ecosystems; Strategy; Entrepreneurialism; and Organization and Management. It also reports data on a variety of issues including research techniques, country of data, co-author count and trends and differences between journals based on their journal impact factors and calls for more research in key areas.

Originality/value

An innovative original analytical tool was developed to facilitate the analysis of research papers in this growing field. This online tool allows multiple tags to be attached to each paper by multiple authors working simultaneously to identify keywords and other aspects that were subsequently used to identify six main thematic areas within the SE literature. This paper highlights emerging research trends and identifies gaps in the literature that provide opportunities for further research in this field.

Whose international experience matters more? Decision-makers with international experience in Chinese family firms

Purpose

The purpose of this study is to examine if the international experience of a family firm’s chairman, second-generation managers and other top managers all have impacts of different strengths using information about Chinese family firms’ international expansion.

Design/methodology/approach

Matching tactics and dynamic Heckman 2-stage analysis were applied to data on 766 publicly-listed Chinese family businesses covering 2008–2014.

Findings

The international experience of the chairman, second-generation family managers and other senior managers all were found to correlate with the proportion of a firm’s revenue earned abroad, as well as with the number of its cross-border mergers and acquisitions. The impact of a chairman’s international experience is stronger than the impact of the other two groups when internationalization is measured in terms of the proportion of revenue earned overseas. The second-generation managers’ international experience is the most influential when internationalization is measured in terms of the number of cross-border mergers and acquisitions.

Originality/value

This paper bridges agency theory with upper echelons theory in the context of the family business. The findings contribute to the scholarly understanding of family business by illuminating the mechanisms through which second-generation managers may influence family firms’ internationalization. They also enrich the knowledge of family firms in China.

Small Family Businesses: Innovation, Risk and Value

This article reviews the literature and applies principal-to-principal (PP) conflict theory to small family based businesses. The lack of accurate measurement and communication of risk leading to issues with innovation, is the primary cause of PP agency costs. Careful analysis of the risk levels reflected in the cost of debt and opportunity cost of equity provides a theoretically robust and empirically estimable process for ascertaining the true PP agency cost. Awareness of the constraining governance structures and the suggested method, based on the cost of capital, to assess small business risk can assist SME owners and financiers to SMEs to promote business efficiency and innovation.

Strategic plurality in intergenerational hand-over

Purpose

With strategy-as-practice theory the authors explore successful business-owning families hand-over of roles to the next generation. The authors argue for the usefulness of strategy-as-practice theory in exploring the complexity and plurality of best practices in intergenerational hand-over. The paper aims to discuss these issues.

Design/methodology/approach

A cross-cultural in-depth case study with best practice cases from China, Germany, Sweden, England, Tanzania, Israel and the USA, based on in-depth interviews of family members and non-family employees.

Findings

The authors identified three different succession patterns: a “monolithic practice,” a distributed leadership hand-over, and active ownership with a non-family managing director/CEO. Two other types of hand-over practices were categorized as incubator patterns that formed a part of, or replaced, what we traditionally see as a hand-over of roles. Families would switch between these practices.

Research limitations/implications

Surprisingly, a monolithic succession practice (a one-company-one-leadership role) was rarely used. Quantitative and qualitative research should consider, as should advisors to family owners and family businesses, the plurality of succession practices. Education should explore a variation of succession and how the dynamic of gender influences the process.

Practical implications

Giving practitioners, such as research and practitioner, an overview of strategic options so as to explore these in a client or research case.

Social implications

Adding the notions that the family is an incubator for new entrepreneurship makes it possible to show how not only sector or public policy generate new ventures. That family as source of entrepreneurship has been well established in the field but it mainstream policy thinking the family is not seen as such a source.

Originality/value

The paper offers an integrative model of the complexity of hand-over practices of ownership and leadership roles. It shows how these practices are fundamental for understanding how a family’s ownership and their leadership of businesses and new entrepreneurship develops.

The role of familial socio-political forces on new venture creation in family business

Purpose

New venture (NV) creation is critical to the growth and long-term survival of business groups. The purpose of this paper is to investigate the NV creation process in family business (FB) context and examine the influence of familial socio-political considerations and dynamics on venture creation processes.

Design/methodology/approach

The paper employs a triangulation technique drawing from the extant literature, observations from 25 in-depth interviews of FB leaders and insights from two FB practitioners and abductive reasoning to theorize on the NV creation process and the influence of socio-political considerations and dynamics within family.

Findings

The results show that there are four distinct stages of the NV creation process in FB context. Familial socio-political considerations and dynamics greatly influence the NV creation process. These considerations and dynamics vary according to the socio-political clout enjoyed by the proposer. Leadership’s predisposition to the proposer and the proposer’s socio-political clout in the family determine whether an NV proposal leads to venture creation.

Research limitations/implications

The study extends NV creation literature by suggesting that in addition to the economic rationale, socio-political considerations play a critical role in venture creation decisions. Future research can validate the findings with quantitative analysis.

Practical implications

FB members must garner strong socio-political support for their NV proposal. FB leaders must ensure that their NV proposal evaluation and resource allocation decisions are not unduly influenced by the proposer’s socio-political clout.

Originality/value

The study views the NV creation process in FB context from the lens of familial forces at play. It identifies four distinct stages of the NV creation process and examines the role played by familial socio-political considerations and dynamics during each stage.

The impact of sociocultural context on strategic renewal

Purpose

The purpose of this paper is to contribute a multilevel, cross-national analysis of the role that sociocultural context may play to enrich the understanding of strategic renewal in family firms. The authors conceptualize sociocultural context as consisting of firm-level social contexts and national culture, and propose that: heterogeneous social contexts in family firm management, i.e. family CEO and multigenerational involvement, give rise to mindsets that have differential effects on renewal efforts and that the proposed effects are subject to variation due to the moderation of national cultural dimensions of uncertainty avoidance and power distance.

Design/methodology/approach

The authors use unique date set consisting of 959 family firms from 26 countries drawn from a cross-national, quantitative study of family firms.

Findings

The authors found that family CEO is negatively related to renewal across cultures, and this relationship is attenuated by uncertainty avoidance and power distance. In addition, multigenerational involvement is positively related to renewal, and this relationship is enhanced by the two cultural dimensions.

Practical implications

The authors suggest that decision makers examine how different contexts, practices and cognition contribute to overall dominant logics that exist in firm. In doing so, they can evaluate how logics as a whole affect renewal, and also how different parts of the logics play a role. This overall evaluation will afford managers a holistic picture of renewal forces that operate in family firm and allow managers to make precise changes to enhance strategic renewal.

Originality/value

The findings support the contention that there is cultural-dependent countervailing effects on strategic renewal within family firms.

Identification of growth factors for small firms: evidence from hotel companies on an island

Purpose

The purpose of this paper is to mainly investigate what factors drive growth for independent hotel firms on an island.

Design/methodology/approach

Two steps were followed. First, to identify hotels demonstrated significant growth; 92 independent hotels in North Cyprus were analyzed via a self-report questionnaire. Second, key growth factors were examined in five hotels showing the growth over years among the independent hotels via in-depth, semi-structured interviews, focus group interviews, and observations.

Findings

The study findings revealed 16 important growth factors for hotels, including active risk taking, education, family history, networks of contacts, other business interests, family investing friends, key employee partners, customer concentration, autonomy, innovativeness, proactiveness, competitive aggressiveness, location, desire to succeed, age of founders, and state support where are strong, weak, and interrelated relationships among these factors. These findings allow factors to be categorized into new groups, namely, strategic and tactical factors. The research findings unveil new factors referred to as “political conflict – pursuing different strategy and opportunities,” importance of second generations affect and entrepreneur’s metacognitive strategies, “informal networking.”

Research limitations/implications

More research should also be undertaken for entrepreneurs or managers who formulate and implement strategies to enter new markets or to tackle turbulent and/or unstable environments.

Practical implications

This study reveals that one factor on its own cannot influence the growth of hotels. Rather, successful growth depends on the entrepreneur’s ability to combine all factors in harmony.

Originality/value

Given that there is limited empirical evidence on the growth of independent hotels on islands, this study made an important attempt to contribute to the entrepreneurship literature in the hospitality management and family business fields via micro-level approaches concerning the factors influencing hotels’ growth on an island. This is one of the first studies presenting and discussing empirical findings on growth factors for small hotels on an island, and brings a new perspective by grouping factors as strategic and tactical factors.

INNOVATION IN FAMILY FIRMS — EXAMINING THE INVENTORY AND MAPPING THE PATH

Over the past decade, research on innovation in family firms has received growing attention by scholars and practitioners around the globe with a wide range of aspects explored within the current body of literature. Despite the constantly growing number of scientific publications, research lacks a comprehensive and critical review of past and present research achievements. First, conducting a bibliometric analysis with a focus on innovation in family firms, we identify five topical clusters that help to understand the foundations of recent findings: namely ownership and governance, structural settings, organizational culture and behaviour, resources, and innovation and strategy. Second, based on a thorough literature review the major research avenues are reflected. The comparison of the results of both analyses showed the following areas for future research on family firm innovation: members‘ individual human capital and their leadership behaviour, openness to externals, cross-country comparisons, and finally the family‘s functional integrity on innovation performance.

Drivers of organizational reorientations in planned economies

Purpose

– The purpose of this paper is to convey how the transition to market-based orientations by state-owned enterprises (SOEs), particularly the military sector, represents a coevolutionary process between business and regulatory institutions that has an impact on both the military and civilian markets.

Design/methodology/approach

– The authors conducted a longitudinal case study of a military SOE, the Aosheng Group, between 1951 and 2012 to understand the dynamics between institutions and organizations. A comparative analysis between the main stages of evolution was completed, and conclusions about the main patterns of organizational and institutional change were reached.

Findings

– The study reports evidence on the coevolutionary nature of change in big SOEs in China, demonstrating how institutional changes are bigger drivers in promoting reorientations than are market pressures. Within the framework of punctuated equilibrium theory, the determining role that managers may play in leading and implementing organizational reorientations is emphasized.

Research limitations/implications

– A triangulated methodology was employed to analyse a long period; however, its application to just a single case might be questioned in terms of generalizing any of the findings.

Originality/value

– The longitudinal perspective applied in this case study contributes to critical questioning as to how Chinese agencies define forms of control and the goals for SOEs under their jurisdiction and the importance of allowing managerial discretion to the assigned managers.