New research led by Lancaster University Management School's Centre for Family Business shows family-related considerations often trump a desire to grow and expand among firms with a greater presence of family members in management.
The study, involving the University of Bergamo and the CYFE, in Italy, is published in European Management Review. It takes in 587 multi-generational family companies from 35 countries around the world who took part in the STEP (Successful Transgenerational Entrepreneurship Practices) survey.
Growth - Strategies - Family - Need - Liquidity
Growth strategies can threaten the family need for liquidity and control over the business, meaning some firms deliberately limit their growth, while others see it as a way of dealing with multiple challenges and helping them pursue a wealthy company.
Family members tend to be more conservative when it comes to business decisions, seeking stability and security for the family and being more loss averse, sticking with past strategies and established routines. This generally encourages inertia and hampers the potential for growth, but the new research looks at the different roles family members can play in senior positions as owners or managers, rather than treating them in a uniform fashion.
Involvement - Management - Team
"Family involvement in the top management team is particularly important in determining...
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