Centre for Family Entrepreneurship
Focusing on a developing country, this study investigates how an owning family builds its business’ continuity. While scholars of family businesses tend to depict the continuity of a family firm in terms of family succession, preserving the family legacy, or the firm’s longevity, in the social context of a developing country that is dominated by instability and hostility, family firms are subject to day-by-day survival risks. My approach is viewing family businesses’ continuity as day-by-day survival for the sake of ensuring the long-term orientation of the family businesses in the context of a developing country. The family is situated in a broader social context, and therefore the business is embedded in the family’s social networks that cannot be detached from the country’s social context. The developing country context is important because of its culture, politics, and history that differ from a developed world.
In this thesis, the continuity of family businesses is understood as: (1) sustaining the family’s legacy coming of the founder’s achievements, (2) succession, sustaining the business beyond the founder’s tenure, and ensuring that both the family and business stay together, and (3) longevity, ensuring a long-term orientation which is a crucial characteristic of all family businesses. This last category is relevant to this thesis because long-term orientation is achieved through futurity, persistence, and continuity patterns. This thesis focuses on continuity as daily and short-term survival to ensure the long-term orientation of a family business.
The findings of this thesis show clearly that family businesses in Rwanda are focused on preserving their firms for retaining the family legacy, but unfortunately, they are unable to plan for a long-term legacy. I posit that short-term survival, repeatedly, will lead to long-term survival and, subsequently, to longevity. The findings highlight the role of the specific context and associated cultural aspects of continuity in family businesses. The three aggregate dimensions developed present three main challenges to the continuity of family businesses in Rwanda. First, due to Rwandan cultural obligations of inheritance by the next generation, both the founding generation and the next generations are committed to family businesses’ continuity. Unfortunately, there is a detachment among generations in Rwanda, which is contrary to the cooperation expected in family businesses. Second, the uncertainties and inertia resulting from the absence of co-ownership and the inter-generational distance due to cultural aspects lead to separate and parallel planning for businesses’ continuity. Third, when it comes to the involvement in the management of family businesses, inter-generational conflicts and uncertainties result in weak family embeddedness that may push some family members away from the family businesses. This situation is a challenge because the absence of co-management between the incumbents and the next generation is abnormal since both parties, like dancing partners, need to manage the transition.
In this thesis, the role of entrepreneurial SMEs’ financial reporting is inquired into by posing questions about purposes of use and information needs of users, with the aim of increasing our understanding of what overall objective/s financial reporting can fulfill with respect to this group of entities. The study departs from an interpretivist view and follows a qualitative research strategy with empirical data collected through semi-structured interviews and document studies. The study encompasses the perspectives of different groups of actors within the financial reporting environment of entrepreneurial SMEs, including reporting entities, users and actors engaged in accounting standard setting and regulation.
The analysis suggests that the role of entrepreneurial SMEs’ financial reporting is more related to the concept of stewardship/accountability than that of decisionusefulness. Limited support is provided for the relevance of financial reporting information on past performance for users’ predictions about future performance. The study further emphasizes the confirmatory value of financial reporting, which is reinforced by the audits, not only for external users but also for management. While arguments in favour of the importance of reliability in evaluating stewardship/accountability are generally based on agency theory, the results of this study indicate that it is the inherent uncertainties and risks of the entrepreneurial process that call for reliable measures. The study further shows the complexity of the interactive relationships between reporting entities and users. Indications are also provided that the evaluation of accountability/stewardship is not restricted to management’s performance, but that capital providers are concerned about their accountability as well.
Internationalization is an important growth strategy for small and medium-sizedenterprises (SMEs). Yet, it is also a complex process since it involves a large variety of decisions and addressing the diverse nature of and unfamiliarity with foreign markets can especially be challenging for SMEs. Because SMEs have fewer resources they tend to be less equipped for internationalization and become more vulnerable to changes in the external environment. Therefore, continued growth in foreign markets is not easy nor guaranteed and instead, SMEs can de-internationalize and potentially re-internationalize. Thus, internationalization can be described as a discontinuous process.
Overall, the dissertation responds to a call for research on the dynamics in the internationalization process and makes four important contributions to the literatures on SME internationalization, family business and internationalization performance. First, it shows how family control can influence intermittent exporting. Second, it adds to the discussion on de-internationalization of SMEs by highlighting the role of attitudinal commitment in the de-internationalization process. Third, it extends the socioemotional wealth perspective by adding a real options lens to it. Fourth, a more nuanced understanding of the relationship between exit from exporting and performance is provided by proposing that exit from exporting can have costs as well as benefits and showing empirically that under certain circumstances exit from exporting can be beneficial for SME performance.
Relationships constitute a central and significant part of our lives and form the very foundation on which organizations are built. They provide meaning to work, create connections, and ultimately shape organizations. This dissertation adds to the growing literature on workplace relationships by studying the chief executive officer (CEO) in an organizational form that is inherently built on relationships: the family firm. Focusing on the introduction of a non-family CEO in a family firm, this dissertation investigates the meaning of relationships for non-family CEOs, the work they perform, and the organizations they reside in. It builds on a diverse set of relational perspectives and uses conceptual approaches and in-depth longitudinal case research.
The first paper reviews, organizes and extends the literature on non-family CEOs by using gap-spotting and assumption-challenging. The second paper outlines how relationships in the triad between a non-family CEO and members of the current and next generation family owners influence whether a CEO stays or leaves the family firm. The third paper investigates how family firms adopt professional practices and outlines four modes of professionalization, showing how family firms‘ overprofessionalize’. The fourth paper follows a CEO succession and reorganization in a family firm over 16 months and investigates how contesting processes of job design and crafting change and create job systems.
This dissertation contributes by introducing relational work as a core aspect of a CEO’s work, by extending our knowledge about non-family CEOs in family firms and by challenging the understanding of professionalization in family firms. It also contributes to practice by providing guidelines for structuring relations between family owners and (prospective) non-family CEOs.
This dissertation studies trust in Multiple Branches Family Firms. It focuses on a form of trust that has received little attention: collective trust (Kramer 2010). Drawing on self-categorization theory (Tajfel and Turner 1986; 1987), the relational models of procedural justice (Blader and Tyler 2015), and the Economies of Worth (Boltanski and Thévenot 1986, 1991), this dissertation provides a framework for understanding how collective trust evolves when groups branch out. It sheds light on the role of the leader(s) in this process. This study investigates how changes in identity perception – due to changes in group’s structure – can erode collective trust, and the procedures the leader(s) can create to maintain identification with the group, as well as collective trust. Empirically, the study is based on in-depth and interpretive case studies of collective trust erosion and maintenance in four family firms. The evolution of the relationships between family members in the family and business contexts is apprehended through in-depth interviews. When the family branches out, family leaders tend to develop formalities to maintain collective trust. These formalities aim to reduce family members’ perception of vulnerability, and address the changes in identity that family members experience over time. As the family evolves, family members develop varying identifications, moving from Family to Branch identification. Over the years, Family identification tends to decline leading to Family collective trust erosion. Family leaders can create procedures to maintain superordinate group (SOG) identification, and collective trust. Three forms of identification emerged: The Family SOG, The Professionalized Family SOG, and The Family Owners SOG.
This study offers a new perspective on trust erosion and maintenance with a consideration for the group level as a source and object of trust. Two distinct forms of trust erosion emerged: one deriving from a perception of leaders’ unfair treatment towards group members, and the other one from gradual changes in group members’ identity perception of one another. In these processes of trust erosion, I identified two triggers: the denunciation of the familial nature of the family leaders’ procedures in business situations, and the denunciation of family leaders’ illegitimate ways of qualifying family members. They result from family members’ changes in identification when the family branches out. Family leaders can avoid that trust erodes through the generation of new salient superordinate group identifications that address family members’ changes in identity perception.
This thesis addresses the emerging role of advisory boards in strategizing in privately held family firms. The thesis focuses on the period in which family firms start considering to work with an advisory board through the board’s first several years of existence. A micro-level strategy perspective is combined with insights from sensemaking theory to understand how the practitioners involved make sense of this new arena involved in strategizing. Empirically, the study is based on four real-time case studies that primarily use observations along with interviews and secondary documents. The within- and cross case interpretations are integrated into a conceptual model that explains how the roles of advisory boards in strategizing emerge over time.
The most important finding of this study is that advisory boards emerge into unique configurations through the sensemaking activities of the practitioners involved. Moreover, this study shows that practitioners make sense of both the content that should be addressed and the role and tasks of the advisory board. This sensemaking is achieved in different ways and in different forms (individual versus mediated versus collective sensemaking), which explains the substantial differences between the advisory boards in different situations. It is suggested that the lack of an institutional frame or institutional norms provides considerable freedom in interpreting the role of the advisory boards, through which such boards largely become a contextualized practice. Two underlying causal mechanisms have been identified that drive the sensemaking processes of the practitioners involved in advisory board meetings: the learning orientation of the practitioners involved and the (a)symmetry between the advisory board members on the one hand and the family firm decision makers on the other hand.
This dissertation contributes to our current understanding of advisory boards using a micro-level strategy lens instead of a governance lens to understand the emerging role of the advisory board in strategizing in the family firm context. This approach has helped to characterize the advising and sensemaking processes at play and how advisory boards emerge into unique configurations over time. Second, this dissertation contributes to the strategy as practice literature by devoting attention to a new arena involved in strategizing that emerges over time and the elements that play a role in this process. Instead of studying how an existing arena is performed, this study focuses on the emergence of a new strategy arena along with the practices used, the praxis performed and the practitioners involved. Thus I show how such a new arena is contextualized and becomes situated over time, attending to the processual dimensions, the content dimensions, the outcomes of the process and the outcomes generated by strategizing.
The purpose of this dissertation is to improve our understanding of how family firms adapt to their dynamic environments through creating new businesses and to explore the role of dynamic capabilities driving firm’s strategic entrepreneurial activities. I address the above aims by conducting qualitative case studies of Hum Network and AVT channels, which are both family firms at the time of their entry into the deregulated TV industry of Pakistan in 2005. A deregulated environment is often characterized as highly dynamic owing to the rapid and frequent changes that occur in customer groups and product offerings and the mix of competitors. Reduced barriers to entry through government legislation often produce a massive shift in the structure of competition, as it attracts new entrants to the industry, intensifying the hostility of the business environment. The success and long-term survival in this increasingly dynamic environment often rests on building dynamic capabilities that transform firm resources and competences and revitalize existing firm businesses. However, we still lack detailed insights into how family firms build dynamic capabilities to facilitate the implementation of entrepreneurial initiatives, which focus on the creation of new corporate businesses.
In the literature of family entrepreneurship, the dominant view holds that family objectives concerned with ensuring longevity made family firms low risktakers and conservative in their strategies and they are thus less likely to engage in venturing initiatives. Some scholars point to potential insufficiencies when family firms use their resources: they argue that family owner-managers often draw from a family pool rather than a wider market for talent which can stifle the development of capabilities needed to engage in entrepreneurial initiatives. Contrary to this view, one of the key insights that emerge from this study is that to cope with changes in the competitive environment, family firms adopt new business venturing as a strategic approach to establish and protect their position in a competitive industry. By a strategic approach, I mean the intent of family founding executives to seek strategic adaptation, particularly through continuously identifying unmet customer needs in the industry and exploiting these needs through producing new media products and services well in advance of their competitors. To enact or implement their strategic imperative, both firms develope a set of capabilities, which I call entrepreneurial venturing capabilities (EVC).
New firms are important sources of new employment, economic growth and innovation. Yet, a large portion of them do not manage to survive their first years of existence. This is often linked to their initial lack of capabilities, resources, routines and legitimacy. Certain favorable conditions at founding may allow new firms to partially overcome these initial shortcomings, and help them survive. For instance, organizational members’ prior experience may provide knowledge and skills to the new firm. However, it may also act as a constraint. It can lead new firms to follow a prescribed way of doing things which may ultimately threaten their survival. Similarly, certain unfavorable conditions of the external environment at founding may paradoxically offer a fertile ground for new firms to nurture their survival. Thus, whether some founding conditions are good or bad for new firms is still an unanswered question.
Building on imprinting theory, this dissertation investigates how different founding conditions affect the survival of new firms. At the organizational level, I study founders’ prior working experience in an incumbent family firm, organizational members’ prior shared international experience and prior industry experience, and focus respectively on three types of new firms: entrepreneurial spawns, international new ventures and high/mid-high tech new firms. I use a matched employer-employee dataset to test the effect of different types of prior experience on new firm survival. At the environment level, I propose how population density of similar organizational forms and the mortality of generalist organizations at founding may affect the survival of new family firms.
The purpose of this dissertation is to enrich understanding on the market valuation implications of mandatory financial and non-financial reporting beyond and in relation to traditional accounting information. It is comprised of four individual essays each of which examines a different, and to some extent internationally unique, jurisdiction that can best serve the particular purpose of the essay as well as the overarching purpose of the dissertation.
The starting point of this empirical inquiry is the value relevance of purchased goodwill under IFRS and the moderating role that different levels of compliance with IFRS mandatory disclosures play on its market valuation. Similar to the first essay, the second essay focuses on traditional accounting information (specifically book value of equity and earnings) and examines potential differences on its market valuation before and after the mandatory introduction of an integrated reporting approach. The third essay focuses on mandatory carbon emissions reporting and compares its valuation relevance when such reporting is mandated by regulation vis-à-vis when it is voluntary. Finally, the fourth essay examines the market valuation interplay between mandatory financial and non-financial disclosures.
This dissertation intends to be of particular relevance first; to the accounting academic community which acknowledges that mandatory disclosures are not well understood and it calls for further research on how users of annual reports view mandatory disclosures and second; to accounting regulators. Empirical research on the value relevance of corporate reporting can provide useful insights into questions of interest to regulators because its research questions are often motivated by broader questions raised by these non-academic constituents. The dissertation in hand has similar motivations.
This dissertation examines how family business portfolios endure across time and investigates the entrepreneurial strategies that they engage in. The goal of this dissertation is addressed through five appended papers in which I have argued for the importance of business families owning multiple firms, that is, portfolio entrepreneurship. Portfolio entrepreneurship plays a central role in economic development as it is a prevalent phenomenon in developed and emerging economies. However, despite its importance, there is currently very little research on portfolio entrepreneurship, especially in the context of family firms.
In so doing, I study nine business families owning multiple businesses in Pakistan. I conducted in-depth interviews with family owners and employees; the interviews were supplemented with other sources of data such as observations and archival material. When studying questions such as how a portfolio is built-up across generations, how and why business families exit and, when they exit, which businesses they choose to exit from, I draw on insights from the literature on portfolio entrepreneurship, business exit, family firms, socioemotional wealth, sensemaking, compassion and social identity theory in the five papers.
The dissertation addresses the calls for studies on portfolio entrepreneurship in the context of family firms by examining the process through which a portfolio is constructed by studying performance and exit related issues. In other words, it examines both the growth and the contraction of portfolios. The study offers several contributions. First, it contributes to studies on enduring entrepreneurship by investigating how business families last across time despite encountering difficult situations and declining business. Second, the study contributes to the portfolio entrepreneurship literature by elucidating how portfolios are built across generations and the roles of both growth and contractions while addressing processual and contextual issues.
Third, the study contributes to the business exit literature by looking at the exit process in a family business context and exploring multiple exits. This isunique, as it is, to the best of my knowledge, the first study on business exits looking at multiple exit in the context of family firms. Fourth, the study also contributes to the literature on family firms by exploring how and why business families refrain from exiting from their core legacy business and how their emotions influence the exit process.
Finally, the study contributes to context-related issues. The study adds to the literature on contextualization and addresses the call for more context-specific studies in entrepreneurship scholarship. This dissertation is focused on context-based factors considering the spatial and social context, where the former has been undertaken by taking an emerging economy and country context as the setting, while the latter refers to the relational and emotional ties within family firms. In addition to its theoretical contributions, this dissertation has important implications for practice. The dissertation brings to the fore some promising and unique ways in which entrepreneurship endures across time and context through the transgenerational transmission of entrepreneurship and insights into how business families behave in a declining business situation. Additionally, this study offers insights for family owners and managers on how to address the dilemma of continued entrepreneurship, that is, how to encourage and foster enduring entrepreneurship in organizations, in particular in the context of family firms.
This dissertation, comprising four appended papers, examines what entrepreneurs actually do in order to manage the intrinsic social complexity pertaining to relations of power and culture involved in entrepreneurial undertakings. The studies share the common interest in probing into the ways inwhich fundamental social divisions and conflicts, namely gender, ethnicity and class are inscribed into the entrepreneurs through the organization of difference (Ashcraft, 2012) and how these shape and are shaped by the identity construction processes of individual entrepreneurs. The thesis provides an empirical account of entrepreneurial identity formation and its implications on shaping differential degree and the forms of entrepreneurial agency exerted by entrepreneurs by drawing on two sets of empirical materials generated through life story narratives of seventeen immigrant women entrepreneurs and some particular family business members with Turkish origin, in their involvement with entrepreneurial practices in Sweden. In overall, the thesis approximates to the notion of the individual entrepreneur in identity terms. Three major theoretical approaches, including practice theory, identity work and the feminist intersectionality framework, lay the groundwork for thinking about the relational and contextual foundation of the individual and associated identity construction processes intraversing the contexts at different temporal and spatial scales, namely individual, organizational, familial and societal.
The thesis responds to the call for relational analysis examining the entanglement of material and symbolic resources and practices to draw a more rounded picture of entrepreneurship (Tatli, Vassilopoulou, Özbilgin, Forson, & Slutskaya, 2014). It adds to this debate by highlighting the identification processes of entrepreneurs, especially of those who have been historically and relatively marginalized in their societies. This thesis connects with studies emphasizing the socio-culturally constructed, relational and contextual nature of entrepreneurship and contributes to bridging the gap between two bifurcated streams of research in entrepreneurship-constructionist approaches, e.g., discursive/ narrative accounts with practice based perspectives. I emphasize the importance of considering both complex identification processes for the benefit of practice-based analysis and material practices and resources to the greater advantage of constructionist accounts. Throughout my thesis, I suggest that the discursive and material aspects of agency and structures are inseparable. In entrepreneurship, it is imperative to transcend symbolic and material boundaries. This way, the thesis provides complementary insights to cultural studies of entrepreneurship which emphasize access either to material or cultural representations.
This dissertation deals with family business governance. More specifically it focuses on why and how family businesses develop their governance structures.This is an important topic because governance plays an essential role in the business world, as it links ownership and management and defines its relationships. In the case of family businesses it is especially important because the boundaries of ownership and management are blurred by the overlapping of the two systems of family and business. This overlap makes the creation of governance structures challenging and elusive. Approaching the creation of governance structures as a process of development and understanding the reasons behind the pattern of adoption becomes a key element for family businesses.
Drawing on institutional theory, I suggest that legitimacy and efficiency seeking, two seemingly opposing reasons, motivate the development of governance structures over time. I also rely on institutional work and bring back individuals to institutional theory by showing how family members act as institutional champions and lead governance changes within their organizations while interacting with other interested actors involved.
Combining quantitative and qualitative methodologies, I study the development of governance structures in a processual way. On the one hand, using Mokken scale analysis, I test a sample of 1,596 cases for whether family businesses follow a specific sequence in the development of governance structures. Subsequently, I use Poisson regression analysis to test eleven hypotheses related to efficiency and legitimacy seeking and the degree ofdevelopment of such structure. On the other hand, qualitative case-based research is used to shed light on how governance structures change over time. The purposeful efforts of individuals are observed in the qualitative cases. Empirical findings suggest that, in the broad picture, family businesses follow a specific sequence that goes from business governance to family governance. When observing in detail with a process perspective individual cases show that family businesses follow different patterns of development due to four different motives. Legitimacy seeking has a strong influence in the decision to adopt governance structures, but if not aligned with efficiency seeking, this adoption may be ceremonial, meaning that despite not being really implemented and internalized they still allow these structures to exist. Efficiency seeking triggers substantive adoption and full institutionalization of such structures. In my research two other major reasons for the development of governance structurese merge: power and learning. Both can act in a positive way (power seeking or accumulated know-how) or in a negative way (resistance to give up power or lack of know-how). This appears as institutional work which takes place where different actors get involved with possible institutional champions guiding the process.
This dissertation discusses the regulation of organisation in limited companies from a closely held company perspective. The overall aim of the study is to evaluate whether the goals of the Swedish Companies Act are fulfilled by the current regulation on company organisation and decision taking organs when applied to closely held owner managed companies. The study is carried out in the field of Company Law, but the analysis also includes contributions from Regulation Theory and Law and Economics.
To fulfil the overall aim, the study sets up two main research tasks. The first research task is to identify the goals of the Swedish Companies Act and what regulative tools that are available to achieve these goals. The second research task is to investigate the current regulation of organization and decision taking organs of a company. Focus is placed on how owner managed companies can be flexible in their decision taking activity, both within the company organs and in other arenas outside the firm such an owners meeting or family council. When these two main research tasks have been performed, the overall aim of this study can be fulfilled. The evaluation of the Companies Act reveals that the legislator’s prioritisation of legislative goal can be challenged. It may be argued that the goal to lower the transaction costs of the parties can be enhanced without diminishing any other goals. In accordance with this conclusion, the final research task of this study is to give recommendations de lege ferenda on how the regulation can be developed in order to achieve a higher degree of reaching the goals of the Companies Act.
The conclusions argued for in this study are related to future regulation of the organisation of companies limited by shares. Therefore, the conclusions are aimed towards policy makers. However, the analysis within the second research task is of relevance for owner managers and their advisors on the subject of how they can be flexible in their decision taking activity, both within the company organs and in other arenas such as an owner’s meeting or a family council.
This dissertation is about organizational identity construction with a dualities perspective. By taking a dualities perspective the focus shifts from assuming that organizational identity actually is in place towards organizational identity construction where identities are socially constructed. A dualities perspective is very suitable for studying family business where family and business are seen as interdependent and interconnected forming a duality. Family business is an identity statement. Family business identities are constructed by stakeholders by managing a set of dualities. Dualities cause tensions because of the dual poles. These tensions need to be balanced in order to draw on both poles and maintain the family business identities.
In an empirical study of two media organizations dualities of informality/formality, independence-dependence, historic paths-new paths, and commercial-journalistic are used to understand how stakeholders balance the tensions in these dualities and thereby construct organizational identities. The study reveals the central role of owning family members in organizational identity construction.
The dualities perspective broadens studies on organizational identity construction as it accounts for the peculiarities of family businesses. I argue that these dualities are basis for constructing organizational identities that require stakeholders to work with managing the inherent tensions in the dualities. This means that owning family members and organizational members are continuously involved in constructing organizational identities when managing the dualities.
Based on my findings I recommend owning families to consider that being a family business is an identity statement implying that other stakeholders will consider them as role model whether they like it or not. Therefore owning family members should devote attention to manage dualities and balance inherent tensions. Then being a family business can be advantageous because they can draw on both family and business dimensions.
As the title denotes, I suggest we think differently about family business succession. I propose to rethink succession from a problem to a practice. This means that succession is not a problem to solve but something people do in family business; it is ongoing, it is integrated and it is ordinary. It poses an alternative to the common view of succession as something problematic, separate and extraordinary to handle in order to carry on with the business. To view succession as a practice opens up new understanding of succession as a continuing flow of activities embedded in the everyday life of business families instead of a problem to overcome through succession planning. This notion is philosophically inspired by sociology of practice, theoretically based in a practice perspective of strategy, and empirically explored in a case of succession at Karl Andersson & Söner. Three conceptions are developed that aid the analysis of succession, framing it as originating from socialization, included in everyday routines and progressing without design. The study shows how succession evolves as family members are socialized, engaged and trained through the durée of daily life. Beyond that, it shows how succession is not just about handing the business over from one generation to the next. It is also about working together in the moment, developing the business while preserving its essence. Engaging in the family business to be part of developing it is fundamentally different from joining because transfer of leadership and/or ownership is needed. It questions the idea of succession as a purpose in itself and suggests a shift from “taking over” to “being part”.
This dissertation deals with corporate governance, legal origin and firm performance with a focus mainly on Asia. The dissertation consists of four individual papers and an introductory chapter. All papers can be read individually but share a common theme in corporate governance and investments. The main region of interest is Asia due to its special characteristics of ownership structures and governance. However, comparative studies of Asia and Europe as well as global outlooks are included in the dissertation too. The papers contribute to research by studying effects on investment performance, firm performance, capital allocation and capital structure from legal traditions, institutional indicators and ownership type.
The first paper focuses on family ownership which is found to affect firm performance negatively when using measures of firm valuation and returns, but investment performance positively when measured by marginal q. This suggest that family owned firms may be better at avoiding bad investments but at the same time have lower market valuation and returns to capital compared to firms with other owners.
The second paper investigates investment performance and firm size in terms of number of employees in 58 countries around the world. It is found that initial increase of staff size tend to positively affect investment performance overall, but excessive employment has a negative impact on investment performance.
The third paper studies the capital allocation in India after their economic reforms in the 1990s. It is found that allocation of capital has been slow to respond to reforms and firms face significant costs in adjusting their capital stock, leading to inefficient capital allocation.
The fourth paper deals with firm capital structure in 24 Asian and European countries. Both financial market indicators of maturity and firm specific characteristics influence the leverage of firms. Financial market maturity measures have a negative effect on debt levels as do family ownership of firms.
This dissertation, comprised of the cover story and the four separate but interrelated articles, focuses on exploring the development of entrepreneurial competence. Building on the assumption that purposeful engagement in entrepreneurial action potentially leads to the acquisition of specific entrepreneurial competencies, this thesis investigates the mechanisms facilitating and enabling entrepreneurs’ acquisition of entrepreneurial expertise, and the consequences of this process. As such, it unpacks the entrepreneurial learning process. In particular, building on Bandura’s (1986) social cognitive theory (SCT), this study explores the role of deeply held beliefs, goal orientation and social networks (role models) in shaping entrepreneurs’ behavior, specifically their ability to create new means-ends frameworks (cf. Sarasvathy, 2001).
The research included in this dissertation provides insight into the complexity of entrepreneurial competence development by connecting multiple theoretical perspectives, utilizing two different qualitative datasets situated in the context of gourmet restaurateurs and abductively building theory by developing explanations of the phenomenon of interest.
This is one of the first attempts to open the ‘black box’ of entrepreneurial learning by simultaneously incorporating the contextual variables and the cognitive properties and practices of entrepreneurs in exploring their learning process. By combining SCT with entrepreneurship theory, the thesis develops an integrating model of entrepreneurial competence development that explains the relation between the preferred learning mode, action-control beliefs, the perceived role identity and role models. The findings suggest that attainment of entrepreneurial competence, and ultimately expertise, is facilitated by changes in action-control beliefs; and by the development of entrepreneurial identity. The findings also suggest that the role model’s perceived function changes depending on the entrepreneur’s goal orientation. Thus, one of the most important implications of the study is the idea that entrepreneurs need to become agents of their own development.
Overall, this dissertation provides an explanation of the mechanisms of entrepreneurial competence development by suggesting that changing action-control beliefs and the formation of entrepreneurial identity are crucial in the development of entrepreneurial competence. In addition, access to role models and learning goal orientation facilitate this process.
This dissertation consists of an introductory chapter and three independent essays on financing investment and their returns. The first essay studies the impact of remittances on domestic investment. The analysis is carried out with a focus on the moderating roles of domestic financial development and institutional quality. The empirical results suggest that remittance inflows are associated with increased domestic investment spending, particularly under conditions of inadequate financial intermediation and poor institutional quality.
The second essay evaluates whether remittance inflows into the developing world impedes or spurs manufacturing growth. This study uses manufacturing data on a sample of 40 remittance dependent economies over the period from 1991 to 2004. The results suggest that remittance inflows accelerate manufacturing growth. This evidence is robust to industry- and year-specific effects, a range of country level control variables, and a number of estimators. The final essay examines the monitoring role of large shareholders and returns on investment. Specifically, the paper investigates the relevance of intrinsic motives of the large shareholder to monitor management in order to induce optimal return on investment. The findings suggest that large shareholders are actuated by both intrinsic and extrinsic motives to minimize managerial opportunism and inefficiency.
This dissertation studies meetings from a process perspective. Such an approach, which can be labelled ‘process organisation studies’ is promising in that it directs attention to social processes continuously in the making. The thesis builds on the current development in process organisation studies in two ways. The first centres on an elaboration on key assumptions of approaching organisational life from a process perspective. I here bridge process organisation studies with Bakhtin’s work on dialogue into a dialogical becoming perspective.
This perspective calls for a distinct way of understanding processes of becoming which makes it possible to explore meeting practices as situated, emerging and relational world-making activities. The second is a comprehensive processual account based on a collaborative field study with two owner families. Organised meetings held in a family that owns a business (or several) has proved to be of importance for family business longevity in that the family members can help to develop strong family relations and a healthy business. In this setting, where people are dealing with that which is often most important to them in life, such as their identity, work, family relationships and future wealth, a process approach is useful since it helps to understand the emotionally loaded, complex and intertwined issues at stake.What emerges as central in understanding movement and flow is the need to understand the here and now moments in meetings. I refer to these moments as ‘living moments’ as a reminder of the once-occurring, unique and momentary transformation that can take place between people in such encounters. Thus, the living moment is the moment of movement.
This dissertation provides an economic analysis of families as owners of large listed firms. The essential research question is whether family ownership provides an efficient form of governance. Family ownership and control is evaluated from different angles; how ownership, control, management, and board structure affects firm performance, and executive compensation.
Chapter two “A Contractual Perspective of the Firm with an Application to the Maritime Industry” is a conceptual paper analyzing the contractual structure of a firm. The chapter conceptualizes the relations between firms, and markets, and gives a transaction cost perspective of why firms are organized the way they are.
The third chapter “The Impact of Vote Differentiation on Investment Performance in Listed Family Firms” investigates ownership and control in Swedish family controlled firms. The analysis shows that family control is beneficial, but only if voting rights and cash-flow rights are aligned.
The fourth chapter “Family Control and Executive Compensation” analyses whether families use remuneration as a way to expropriate minority shareholders. The study shows that managers in family-controlled firms have alower share of variable compensation than managers in non-family controlled firms. The analysis shows further that family control has a reducing effect on the total level of CEO-compensation.
The last chapter “Board of Directors, Dependency, and Returns on Investment” investigates if there is a relationship between ownership structure, board of directors, and firm performance. The marginal q analysis indicate that firm dependent directors have a negative impact on firms’ investment performance. Owner-dependent and employee elected directors do not affect firm investment performance.
To sum up, the empirical results show that family ownership and control affects remuneration in listed firms, and the firm investment performance. The analysis further shows that there are clear differences in the ownership and governance structure between family and non-family controlled firms.
New venture team composition lies at the heart of this thesis. Drawing on social-psychological explanations and human capital reasoning, the thesis addresses the social as well as the instrumental foci facing new venture teams. This is done by addressing four research questions: 1) What are the characteristics of new venture teams and their team members? 2) What impact does team composition and firm performance have on team dynamics? 3) What impact does team member characteristics and individual deviation have on individual dynamics? 4) How does team composition and team dynamics influence firm performance? Dynamics is studied by investigating the adding and dropping of team members.
Research on entrepreneurial teams is characterized by several methodological challenges that this thesis takes on. First, there is a lack of longitudinal studies. Second, no studies are based on truly random samples of teams. Third, the unit and level of analysis has been the team and the firm. Rarely is the individual considered. In addition, the thesis sheds light on team diversity and its effects as well as the relationship with performance, both as an antecedent and as a consequence.
The empirical setting is based on a unique database covering all individuals entering into self-employment in knowledge-intensive industries in Sweden during the 1996 to 2000 period. Their firms are tracked annually up to 2002, providing a census panel three to seven years long consisting of five cohorts. This is done by using secondary data from Statistics Sweden (SCB) covering information on individuals as well as their firms. By combining individual and firm level data, the thesis demonstrates how team level constructs can be obtained.
Overall, the hypothesized relations predicting team member and individual exits receive strong support. Entries to teams and the performance of the firms are not as well explained by the chosen constructs. The findings show that greater internal diversity along some but not all demographic dimensions is positively associated with a higher rate of team member exits. More precisely,when diversity can be linked to status differences, the impact is more pronounced. Furthermore, the findings show that deviation from others in the group has an impact on which individual is likely to leave the team. There are also considerable differences in behavior between teams consisting of spousal pairs and other teams. In fact, the findings show that spousal couples venturing together are very common and that the typical team does not match the entrepreneurial team as it often is portrayed in the literature. In sum, the study suggests that diversity in attributes related to status can influence team stability. In addition, trust and prior relationships appear to be especially important for the creation and development of new venture teams.
The relationships between work and personal life have been on the public, business, and research agenda for about 35 years. Perspectives on these relationships have shifted from a work-family to work-life or work-personal life focus, from a conflict to a balance or enrichment view and, finally, from a segmentation to an integration perspective. This evolution, however, leads to a theoretical and practical impasse where neither integration nor segmentation can be seen as the absolute individual, organisational and societal value. This thesis takes the discussion one step further and focuses on individuals’ work/non-work experiences, calling for a humanistic case. The humanistic case urges placing individuals’ work/non-work experiences at the centre of human resources and at the centre of the work-life field.
The aim of the thesis is to theorise individuals’ work/non-work experiences in their individual, organisational and societal contexts. To achieve the purpose, the thesis presents individuals’ work/non-work self-narratives. These self-narratives of six French middle-managers, three men and three women, underline how individuals experience their diverse life domains, namely the work, the family, the social and the private and their management. The self-narratives have been generated through in-depth qualitative interviews and diaries. The thesis explores and provides an understanding of individuals’ work/non-work experiences from a boundary perspective.
Focusing on the processes behind individuals’ work/non-work experiences, the thesis reveals that work/non-work preferences for integration and/or segmentation are not sufficient to understand individuals’ experiences. It is essential to consider the preferences in relation to their level of explicitness and the development of work/non-work self-identity. Moreover, it is important to understand the roles of positive and negative work/non-work emotions emerging in the work/non-work process as a respective signal of individuals’ satisfaction or dissatisfaction in how their life domains are developed and managed.
The thesis contributes to the work-life field, especially the boundary perspective on work and non-work by presenting a model of individuals’ work/non-work experiences. The model pursued is derived from 33 theoretical propositions. The study suggests a two-dimensional approach for life domain boundaries as a systematic combination of seven boundary types (spatial, temporal, human, cognitive, behavioural, emotional and psychosomatic) and their mental and concrete natures. It suggests a three-dimensional model for work/non-work preferences, revealing five major archetypes of work/non-work preferences between segmentation and integration, and stressing the emotional side of the work/non-work process. It shows that individuals value segmentation on a daily basis and integration on a long-term. This thesis concludes that segmenting and integrating is essential for the harmony of their life domains namely their work, their family, their social and their private.
Drawing on Penrose’s theory of the growth of the firm, the international business literature, the literature on the knowledge-based view, organizational learning, and absorptive capacity, this dissertation addresses four research questions: 1) What are the effects of downstream international activities (sales and marketing completed abroad) and upstream international activities (purchasing, production, and R&D completed abroad) on the acquisition of market knowledge and technological knowledge? 2) What is the role of prior knowledge in these relationships? 3) What are the effects of the newly acquired knowledge on different growth outcomes? 4) What is the role of processes of knowledge transformation and exploitation in these relationships?
Addressing these issues has practical relevance for the development of small and medium-sized enterprises (SMEs). On the one hand, international expansion might provide small and medium-sized firms with additional knowledge, enriching their limited resource base. On the other hand, internationalization might spread the limited resource base of SMEs too thin and create internal coordination problems.
Longitudinal survey data from 885 Swedish international SMEs yielded the following results. First, downstream internationalization and upstream internationalization are important sources of new market and technological knowledge for SMEs. Second, while downstream internationalization directly brings new market and technological knowledge, the acquisition of new knowledge from upstream internationalization is enhanced by the firm’s prior endowment of knowledge. Third, knowledge acquired from internationalization contributes to a firm’s growth advantage in international markets and to its further internationalization, and it provides the basis for entrepreneurial actions such as venturing into new markets and reaching new international customers. However, the new knowledge base has no, or very little, effect on SMEs’ growth in domestic markets. Fourth, the relationships between knowledge acquired from internationalization and different growth outcomes are not accentuated by a firm’s knowledge management processes. These processes have only a direct effect on a firm’s growth advantage in international markets, its continued internationalization, and its entrepreneurial growth through the development and commercialization of new products/services in international markets.
Overall, the study suggests that internationalization promotes the acquisition of new market knowledge and new technological knowledge, which in turn contribute to the growth of SMEs, especially in international markets.
Corporations have become the dominant organizational form in modern market economies, managing vast resources. Corporations are however associated with a number of governance problems. This dissertation deals with these corporate governance issues from an investment perspective. The dissertation comprises one introductory chapter and five, from each other independent, essays. These essays can be read independently, but are kept together by a corporate governance and investment theme. The essays mainly contribute to the empirical literature on corporate governance and investment behavior. In chapter 2 a measure of capital allocation, based on the acceleration principle, is estimated across 44 countries. Capital allocation is compared to ownership concentration and indicators of corporate governance. Support for the so-called economic entrenchment hypothesis is found, whereas the legal origin hypothesis is rejected. Chapters 3, 4 and 5 look at corporate governance and investment in Scandinavia, and Sweden in particular. Chapters 3 and 4 look into how ownership concentration affects firm investment performance. Performance is measured with marginal q. How dual-class shares affect this ownership-performance relationship is examined. Dual-class shares are, in chapter 4, found to reduce the so-called incentive effect and enhance the so-called entrenchment effect. The role of profit retentions for investment is examined in chapter 5. Scandinavian firms are found to rely on earning retentions to a higher degree than firms in other countries. Chapter 6 contains an analysis of how the quality of property rights and investor protection affect the cost of capital.
This thesis consists of five separate essays and an introductory chapter, The essays can be read independently from each other, but they are all in the field of corporate governance and investment performance. Specifically, the focus is on the role of institutional owners in the conflict between controlling shareholders and minority owners. The essays mainly contribute to the empirical literature on corporate governance and investment performance. In four of the five essays, panel data methods are used in the empirical investigation.
The first essay investigates time and industry specific factors in the evaluation of firms’ investment performance, measured by marginal q. Significant differences in valuation is found between firms, depending on the market sentiments and industry affiliation. The second essay focuses on the role of institutional owners in relation to firms’ investment performance. Institutional owners are found to have a positive influence on firms’ investment performance. By studying a large panel of Swedish listed firms the essay also provides evidence on the relationship between control enhancing mechanism, such as vote-differentiated shares, and investment performance. The third essay looks at the role of institutional owners from the perspective of dividend policy. It is shown that institutional owners demand higher dividends to compensate for aggravated agency conflicts due to vote-differentiated shares. The fourth essay investigates the performance of European firms from a long run perspective. Firm profits converge over time, but this convergence is incomplete. Investment in R&D is put forward as an explanation for persistent profits above the norm. The fifth and last essay looks at individual mutual funds and specifically how to measure risk-adjusted performance. The results show that Swedish bond funds underperform their benchmark, even when risk-adjusted to the same level of risk.
This dissertation deals with founding visions in the venture capital setting. It is the story of two contrasting initiatives for venture capital as they unfold in the turbulence surrounding the millennium. It is the story of these contemporary initiatives seen in the light of what was originally intended, as we uncover the founding vision for an initiative that pioneered a venture capital phenomenon of global dimensions. It is the story of people and the reasons for their commitment.
The research draws on the complexity of human nature to problematise the venture capital phenomenon, by studying founding visions for unfolding initiatives in terms of intended purpose, intended beneficiaries, and psychic income. Three distinct visions are found in the rich stories of meaning and practice. By interpreting such visionary elements and their manifestations, implications of particular venture capital initiatives on the strategic and human levels are discussed. Streamlining, fraternity and pioneering visions involve different implications for affiliates as well as the socio-economic landscape as a whole.
Such reflections on what is and what has been give food for thought as we look towards the future. As a pioneering vision loses its spark to a streamlining landscape, tensions between venture and capital bring forth the question of who will provide venture capital in its original meaning of venturing into the unknown.This study contributes to our understanding of visions by bringing three dimensions to a concept that is typically treated one-dimensionally. In this sense, it gives a higher resolution of the vision concept which may refine our reasoning regarding such issues.
The study also contributes to our understanding of the value that lies in seeking affiliates and partners with visions that harmonise with one’s own. This is particularly relevant for a business founder who is considering the avenue of venture capital, or a venture capitalist who is striving to bring a pioneering or a fraternity vision to life.
The aim of this dissertation is to improve knowledge of how organizations adapt to their dynamic environments, by developing a detailed understanding of the configuration and evolution of organizational replicators.
Among open questions in the literature on organizational adaptation, I have explored the following: How can the structure of organizational replicators and the nature of their components be realistically described? How do different organizational replicators interact with each other at different levels within and across organizational boundaries? How do replicators evolve? Why do firms need dynamic capabilities?
I’ve addressed these questions by means of an embedded, longitudinal field study of Alessi, an Italian family firm founded in 1921, active in the development and production of hundreds of design household products. Data analysis has been carried out in two steps. First, a longitudinal analysis of available primary and archival data has provided an in-depth understanding of the composite nature of organizational replicators, their mutual relationships, their evolution, their outcome stability. Second, a more structured investigation relying on Optimal Matching Analysis allowed to reliably develop an understanding of replicators complexity and of the mechanisms behind their evolution.
There are four key findings. First, replicators are not simply behavioral entities—routines in the “narrow sense”. Reliable performance of a capability requires additional elements of physical, intellectual and social capital, which are essential components of replicators (or “Replication Base—RB”, as I suggest to label these more articulated organizational traits). Second, interactions among components of Replication Bases at different levels within and outside the organization suggest a more articulated perspective on how organizational knowledge develops. Components of Replication Bases are often located at different positions within the organization. Over time, knowledge of a particular organizational process takes different forms across the organizational hierarchy. What is local search at one level of analysis, gradually becomes sophisticated foresight at different, typically higher, levels. Third, over time Replication Bases evolve by means of a complex interplay between random mutations and intentional interventions, supported by articulated learning processes. Finally, development of higher-level replicators is not the ultimate answer to the challenge of adaptation. Rather, it allows managers to focus their intentional interventions to the higher-level problems posed by the dynamism of competitive environments. Part of this liberated managerial attention and resources are focused on the crucial, non-routine task of understanding how the organization’s idiosyncratic attributes affect its prospects in the specific competitive context. Taken together, these findings outline the microfoundations of a framework for interpreting organizational adaptation.
This dissertation deals with the role of ownership in strategizing in family firms. More closely, it examines how ownership is channeled through different actors and arenas in the everyday work on strategic issues. The study emanates from the increased interest in family firms and in the role of visible, active, and longterm ownership in the strategic development of firms. The study is positioned in the growing approach in strategy research often referred to as strategizing. The strategizing perspective draws attention to micro processes of strategic work, such as who the actors involved in strategic work are and how, where, and when, i.e. in what arenas, they meet and interact. In line with basic assumptions in the strategizing approach, the role of ownership in this process is addressed from a symbolic interactionist perspective, where inspiration from psychological ownership is also used in order to introduce and elaborate on a notion of socio-symbolic ownership.Empirically, the study is based on in-depth and interpretive case studies of strategizing in three family firms, where the everyday strategic work is followed in real time over a period of about fours years in two firms and one and a half years in one firm. The empirical work is based on in-depth interviews, detailed observations, and secondary documents in order to build rich case descriptions. Abbreviated versions of these case descriptions are presented in this dissertation.The empirical interpretations are integrated into a conceptual model with four ideal types of character of strategizing in terms of actors and arenas involved in this process in the three family firms, with the aim to also visualize how the process changes over time. Moving beyond this level of interpretation, a socio-symbolic understanding of the role of ownership in strategizing is outlined, where a central interpretive process labeled enacting ownership is especially elaborated on. Enacting ownership is about how actors, both family and non-family, interpret, understand, and act on the guiding province of meaning related to the ownership in the different arenas of everyday strategic work. It is suggested that how and why actors enact ownership is shaped by especially three interrelated processes: channeling ownership through formal intentions and vision, channeling ownership through informal interaction, and channeling ownership through symbolic embodiment in the strategic work.Consideration is also given to what the socio-symbolic understanding of the role of ownership means for outcomes of strategizing, both at the micro level of social interaction and at the organizational level of the family firm. At the micro level, particular attention is paid to the performance of actors and arenas in strategizing. At the organizational level, there is a specific focus on how the strategic proximity and the strategic persistence of family ownership can be a source of strategic advantage as well as disadvantage in family firms.
This thesis is concerned with strategising in the context of genuine relations. Every- day family interactions, and their related strategic outcomes for the family business are in focus. Through an interpretative, in-depth study of three second- generation family businesses the thesis explores strategising based on the paradox of identity, i. e. family members’ simultaneous needs for separation and belonging, inherent in the family system. The interplay of these needs ascribes two extended meanings to the businesses, business as a means of individuation, and business as an extension of the family and its core values.These meanings render the family businesses a dynamics with mutually reinforcing implications for the individual and the organisation, conceptualised as concern-based individuation, and focused strategic renewal. These concepts give an understanding of strategising as originating in family interactions.To sustain focused strategic renewal over time, the family business is required to meet the inherent challenges of role transition, i. e. the exit and entry of roles. For family members, the enactment of top management roles in the family business seems to be an important means of fulfilment of the needs of separation and belonging. Unless this is recognized and taken into consideration, role transition is likely to be more difficult, and even shunned.As a consequence, strategic renewal might be impeded. The thesis emphasises the inherent social character of role transition processes, and puts forward role clarification as a central means of facilitating the exit and entry of roles.Understanding the interactive dimension of strategising in the context of genuine relations requires an in- depth understanding of the interplay between the individual, the group, i. e. the family, and the organisation.
This book is about the famous Spirit of Gnosjö, characterising the enterprising and networking culture of a region in southern Sweden. The Spirit is so well-known that it is taken for granted by many as representing profitable businesses that are privately owned, formal and informal cooperation in networks between owner-managers, helpfulness and solidarity between employers and employees, and positive envy among entrepreneurs. This book describes and analyzes these common assumptions about the Spirit, but it also brings the reader beyond its famous face. A process oriented cultural perspective and three analytical concepts - degree of sharedness, inconsistency, and boundlessness - are applied. The readers are invited to visit four different arenas in the community; the business firm, the multifaceted arena of business related activities, the church, and the local theater association. The four arenas contribute, in different ways, to creating an understanding about Gnosjö and its Spirit. The stories from the four arenas are analysed, resulting in the identification of three value sources. These are religion, the family, and the heritage of the region. Through these value sources it is possible to understand why people ascribe certain meanings to the Spirit of Gnosjö. Norms and values are identified and the espoused values are contrasted with inferred values, to illustrate the inconsistencies within the Spirit of Gnosjö. Finally, some challenges for the future in Gnosjö are proposed and discussed.
This thesis discusses accounting and control practices in terms of accountability, i.e. how organizational actors work out who is accountable to whom over what. The study investigates how different forms of accountability can emerge and develop in organizations represented as family- controlled. This focus is grounded in the arguments of the interpretive accounting research which describes different modes, styles, and versions of control and accountability as intertwined with organizational identity construction. The empirical part of the study discusses accounting and control practices in two family businesses. The study showed that control practices and notions of sound organizing, which in the two cases included different approaches to the family business label, was intertwined. In keeping with the interpretive literature, the two case studies demonstrated differences in accountability when two organizational contexts were compared. As a possible contribution to the interpretive studies discussed in this thesis, the study also showed different styles of accountability to be interacting as well as repelling within an organizational context.In short, this study showed both control practices and notions of family control to have consequences in terms of organizational accountability. In other words, also when advanced control practices are implemented, there could be fundamental differences in terms of accountability between different family business contexts as well as within an organizational context.
This thesis offers an emotion perspective to the field of strategic change and leadership. Through a longitudinal study, following two strategic leaders in a real time setting of a radical change process, this study shows that emotions are all-embracing within such a process. The findings stress that strategic leaders are very emotionally committed and tied to the strategy of a company and feel personal responsibility for its progress. Emotions evolve in daily interaction and are produced and reproduced in this context. They arise as a means to understand and relate to the on-going process and as a means to explicitly emphasise and stress the importance of different aspects of the change as well.The results of this study shows that emotions can be related directly to the change process where they serve as driving forces or restraining forces and as indirect driving or restraining forces in relation to the strategic intent. Furthermore, the co-production of emotions between the strategic leader and other organisational members has power implications such as power gain or power drain for the strategic leader, and thereby the strategic leadership. Emotions have also been proven to serve as constructors of emotion sediments, good-mood-setters and bad-mood-setters within the process.Methodologically, this study opens up for further research on emotions. Through a series of micro-processes, the strategic leaders of this study have contributed by helping out with conversations prior to and after meetings and by offering their personal diary notes. Furthermore, a suggested classification of emotions is made in connection to a radical change process.
Content updated 2020-07-10