Family business succession is a complex and challenging process, in which family members often build on the support of trusted advisors who can be seen as the most relied external source of advice and knowledge that family businesses draw on. Based on an extensive literature review, this article aims to synthesize prior research on both advisors and succession to systematically describe and analyze the role of trusted advisors during the succession-planning process. Based on arguments from agency theory, we discuss potential benefits and drawbacks associated with the involvement of trusted advisors along the four phases-trigger, preparation, selection, and training-of the succession-planning process and outline how trusted advisors can mitigate but also enhance agency costs-in particular goal divergence and information asymmetry-during each of these four phases. Subsequently, we discuss four typical constellations of advisor involvement, which vary in their agency costs and thus have different levels of bias and efficiency. We thereby outline several inefficiencies that result from the common setup in which an incumbent and a successor both rely on their own trusted advisors or a team of expert advisors and propose a balanced and efficient model of advisor involvement as a potential solution which reduces the agency costs. This conceptual article contributes to research on succession, agency theory, and trusted advisors in family firms.
Family business succession is a complex and challenging process, in which family members often build on the support of trusted advisors. Based on an extensive literature review, this study aims to synthesize prior research on advisors as well as on succession in order to systematically describe and analyze the role of trusted advisors along four phases of the succession planning process. Based on information asymmetry, divergent goals, and arguments from resource based view, we outline benefits and costs associated with the involvement of trusted advisors along the different phases. Subsequently, we discuss four typical constellations of advisor involvement with different levels of bias and efficiency. In a final step, we outline how role adjustment of the advisor over time - from initializer to process planer to task support to coach - can lead to an efficient, unbiased triadic relationship between incumbent, successor, and advisor with minimized costs and maximized benefits.
Family business succession is a crucial and challenging process, during which incumbents and successors increasingly build on the support of advisors. Based on qualitative data gathered from five small- and medium-sized companies, we aim to explore the different roles an advisor assumes along the four phases – trigger, preparation, selection and training – of the succession process. This study makes three contributions to the literature. First, we outline how the role of the advisor adjusts over time – from an initializer to a process planer to a task supporter to finally that of a coach – and thereby supports him or her in serving both, incumbent and successor. Second, we show how the different roles of the advisor and the corresponding activities affect the emotions of incumbent and successor in each phase of the process either positively or negatively. Finally, we suggest that full role adjustment of the advisor supports the incumbent and the successor in adjusting their own roles which ultimately has a positive effect on the outcome of the succession process.
Affective organizational commitment is an important predictor of the willingness to contribute to organizational goals and is of particular relevance to family firms, as these firms often rely on long-term involvement of family members through transgenerational succession. Drawing on organizational commitment and ownership attachment theories, we probe the influence of family firm dynamics (i.e. family harmony and relationship conflict) on work-family conflict and family owner-managers' ownership attachment, which in turn impact affective organizational commitment. Based on a study of 326 family firms, we introduce ownership attachment as an important antecedent to affective organizational commitment. We find that ownership attachment is positively affected by both family harmony and work-family conflict, whereby work-family conflict is influenced by relationship conflict. We also find that work-family conflict affects ownership attachment.
According to Buchanan (1974), organizational commitment of employees is essential for the survival and effectiveness of organizations. Indeed, studies highlight the important consequences of organizational commitment that are lower turnover and absenteeism, higher attendance, participation, effort, organizational citizenship, and performance (Solinger, Van Olffen & Roe, 2008; Steers, 1977). Affective organizational commitment emerges as the most consistent predictor of turnover and absenteeism and with the strongest and most favorable correlations with attendance, performance, and organizational citizenship behavior (Somers, 1995; Rhoades, Eisenberger & Armeli, 2001). This underlying emphasis on the retention of employees and their willingness to contribute to organizational goals makes affective organizational commitment particularly important for family firms as they rely on family members in transgenerational succession, survival, and success (Miller & Le Breton-Miller, 2005; Sharma, Chrisman & Chua, 1997).
In this study, we draw upon organizational identity theory to examine factors that lead to the creation of family firm image and investigate how a family firm image impacts firm performance. We find that family firm pride, community social ties, and long-term orientation are positively associated with the likelihood that a firm portrays itself as a family business to consumers and stakeholders. In turn, we find that a family firm image benefits firm performance. Thus, our study demonstrates that by building a family firm image the unique family influences on the firm can be leveraged to create a competitive advantage for family firms.
Drawing on organizational identity theory, we develop a model linking family ownership and expectations, entrepreneurial risk taking, and image in family firms to explain family firm growth. Testing our model on a sample of 163 Swiss family firms, we suggest that entrepreneurial risk taking and image can both lead to growth in family firms. We further find that family expectations have an influence on both entrepreneurial risk taking and family firm image. This finding suggests that family firms may benefit from two growth paths - forward looking risk-taking and the image of the family firm that builds on the past, and that these paths are nurtured by family expectations.
Drawing from organizational identity theory, we explore how family ownership and family expectations influence family firm image and entrepreneurial risk taking, and ultimately firm performance. We find support for a fully-mediated model, utilizing a sample of 163 Swiss family firms. Family ownership was shown to positively influence the development of a family firm image. High family expectations of the firm leader was shown to promote a family firm image and risk taking. In turn, risk taking and family firm image contributed to firm performance. Accordingly, our study identifies why family ownership and family expectations can benefit family firm performance - through their influence on family firm image and entrepreneurial risk taking.
Questioning the validity of scholarly work is not a typical path to publication in the management field. However, although considerable scholarship assesses entrepreneurial attitudes and intentions models of behaviour, methodological weaknesses in scale development have hampered scholars’ ability to rigorously interpret and build upon their research findings. We review 20 years of research and discover that the pioneer measure of entrepreneurial attitudes as a predictor of self-employment intentions, has yet to be empirically validated. We show that construct and measurement differences, one-off modifications to existing scales and a lack of adequate justification may partially explain why studies in the entrepreneurship education domain have produced inconsistent results. We address this limitation by performing factor analytic techniques on data from two sets of English-speaking university students from two North American countries. The result is a more parsimonious and streamlined ‘mini-Kolvereid’ scale. We further demonstrate that this scale is an effective predictor of entrepreneurial intentions.
