Paper Abstracts

Generational Difference in Family CEOs and Internationalization Strategy of Family Managed Firms in India

Arindam Mondal
Xavier Labour Research Institute, Jamshedpur
Sougata Ray
Professor
Indian Institute of Management Calcutta
Sarada Devi GVSB
Fellow Student, Strategic Management
Indian Institute of Management Calcutta

We investigate the impact of generational variation of family CEOs on internationalization strategy of family managed firms. Empirical results based on a unique panel dataset of large Indian firms for the period 2008 to 2015 indicate that firms led by first generation family CEOs internationalize more than firms led by later generation family CEOs. While firms led by later generation family CEOs are, in general, less likely to internationalize, those firms led by later generation family CEOs with international exposure are more prone to internationalization. We also theorize and test the moderating influence of generational difference in family CEOs on the relationship between family ownership and internationalization. Our results suggest that differential attributes of the family CEOs owing to generational differences and experiences create condition for differential willingness and ability of families to shape heterogeneous risk behaviour like of internationalization of family managed firms.

Keywords: family managed firms; internationalization; CEO characteristics; founder vs. nonfounder
What encourages the Indian Family Small Medium Enterprises to internationalise?
Arpan Anand
Assistant Professor and Research Scholar,
Fortune Institute of International Business, New Delhi and
University Business School, Chandigarh
New Delhi

Purpose: The present study tries to discover the motivations behind internationalisation of the Indian Family Small Medium enterprises (IFSMEs) and explore whether these enterprises are searching for resources, advanced technologies, strategic assets, revenue benefits, improved efficiency or the new markets etc. Internationalisation by Indian FSMEs has substantially amplified in the recent years. The amplification in the degree of internationalisation requires examination of various factors that have made Indian Family Small Medium Enterprises internationalise.
Design/Approach/Methodology: The empirical analysis is done on the sample of 400 Indian Family Small Medium Enterprises using a structured questionnaire.
Findings: The findings of this study provides evidence of the existence of various factors behind the internationalisation of Indian Family Small Medium Enterprises. Indian Family Small Medium Enterprises have found to be inclined towards internationalisation in search of resources, technology, efficiency improvement etc. whereas exploring for new markets factor was reasonably weak referring to the empirical analysis. The findings and outcomes are vigorous enough to the use and analysis on other sample of Indian Family SMEs involved in internationalisation.
Practical Implications: This analysis of Indian Family Small Medium Enterprises multinationals have some observable implications. The existence of several factors infers that Indian Family Small Medium Enterprises can fetch many benefits to the Indian economy. Also the Indian Family firms those are not very frequent in internationalisation, can focus on the key factors which will encourage them to internationalise with more focused efforts.
Originality/Value: The linkage between Internationalisation and the Indian family small medium firm-specific factors has been studied thoroughly. Comprehensive and distinctive data of Indian Family Small Medium Enterprises collected from both the manufacturing sector and the non-manufacturing sector has been used in the study.
Keywords: Internationalisation, Family Enterprises, Technology, Empirical analysis, multinationals.
The impact of Socioemotional Wealth on Succession in Indian Family Firms

Juili Ballal
Research Scholar
SJM School of Management, IIT Bombay
Varadraj Bapat
Faculty of Finance
SJM School of Management, IIT Bombay

Family firm is the oldest and the most prevalent type of business organization in the world contributing significantly to the growth and development of a country. These firms are typically characterized by prioritizing their non-financial goals over their financial objectives. Also, the strategic choices made by the family firms are based on emotions rather than rationality. Combining the non-financial goals of Socioemotional Wealth (SEW) that is used in this study and the strategic choices of succession, we endeavour to investigate the impact of SEW on succession in Indian family firms. SEW refers to the non-financial aspects of the firm that meet the family's affective needs, such as identity, the ability to exercise family influence, and the perpetuation of the family dynasty. This study replicates the three dimensional model (REI) proposed by Hauck et al. and applies the same to demonstrate the effect of SEW on succession. Our sample comprises of 95 family firms based in India. Using binomial logistic regression to predict the probability of a firm having a Family CEO based on the three dimensions of SEW, our findings reveal that a firm with high a SEW is more likely to have a Family CEO and this is mainly due to the significant effect of Emotional attachment and Renewal of family bonds to the firm through dynastic succession. Keywords: Family Business, Socioemotional Wealth, Succession, Family Bond, Emotional attachment, Family CEO 
Critical Study of Problems and Prospects of Family Business in Small and Medium Enterprises


Poornima M Charantimath
Professor, Co-ordinator 

Centre for Entrepreneurship Development & Research Centre
KLS- Institute of Management Education 
Karnataka
Mita Dixit
Co-founder & Family Business Advisor
Equations Advisors Pvt. Ltd. 
Mumbai

Many of the businesses in India are nurtured by a family members. In India, family businesses range from the small kiran shop to conglomerates. Their contributions to India’s growth is also being increasingly recognized. Family business have certain advantages over non family businesses. Though family businesses have always been in India, managing them has its own unique challenges such as: managing family and business.

This study investigates problems and challenges peculiar to family businesses in small and Medium Enterprises in India. There are a number of questions that need answers: What is unique about them? Why do some survive and grow across generations while others do not? Why do families fight over businesses and vice versa? What are the implications of multiple variables of family and business constantly influencing one another while undergoing changes in themselves over a period of time? It is certain that finding solutions to managing such challenges will be way forward to making family businesses prosper and perpetuate.

This study is based on data collected from small and medium sized family businesses by administering a structured questionnaire. The two angles of family businesses are investigated in the study such as: family domain and business domain. The study will help the family business owners, managers, advisors, consultants and researchers in developing a model unique to family business in small and medium enterprises in India. The research also contributes to the body of knowledge in establishing a links between family domain and business domain.

Key Words: Family-Business Systems, Family Domain, Business Domain

Familiness and the Competitive Advantages of Family Businesses: A Case Study of Japanese Family Firms
Yasuhiro Ueno
Professor, Faculty of Sociology
Kansai University
Japan


The purpose of this paper is to reveal the sources of competitive advantage of family business, that non-family business cannot have. For this purpose, we are interested in the concept of “familiness”. We think that “familiness” is very useful concept for competitive advantage, and the core values and networks in family businesses are the most important factors of “familiness”. This paper investigates the role of core values and networks as characteristics of “familiness” for the competitive advantage of family firms.
 
Our case study shows that Japanese family firms have made and kept their core values and management policies for the continuity of their family and community. It is most important for them to keep sustainability. These core values have been passed down from one generation to the next generation. This succession has made the competitive advantage of Japanese family firms.
 
Japanese family firms have two types of network ties. These are strong ties and weak ties, which are used for their competitive advantage appropriately. Consequently, Japanese family firms can build their “familiness”. Weak ties are social capital resources in the structural dimension of “familiness”. The core values supported by their family network are family firm resources in the cognitive dimension of “familiness”. These resources interact with each other.
 
Key words:
familiness, core value, network, competitive advantage, weak ties, strong ties
When do family firms become pathfinders? An inductive framework for digital transformation in family-owned businesses


Aneesh Banerjee
Assistant Professor
Faculty of Management
Cass Business School, City Univeristy London
Ajay Bhalla
Professor of Global Innovation and Family Business
Cass Business School, City Univeristy London
 

Family-owned businesses are often viewed to be slow adopters of digital transformations – fundamental changes in a firm’s business model, products, or services, as well as internal processes due to the adoption of digital technologies. Mainstream family business literature argues that this is because decision-making in family-owned businesses is constrained by the family’s emotional attachment to existing value-creating assets and mental models that slows down change. As a result, firms in which families have greater influence are likely to be slower to respond to the demands of digital transformation. However, as many scholars have noted, family influence can also enable change. When families back a change agenda, firms are likely to implement change more effectively and with greater stamina, fuelled by the same values of the family system that may have constrained the decision-making process in other contexts. Therefore, a central question in family business research remains – When do family firms adopt digital transformation? In this paper, drawing upon existing literature on the adoption of digital technologies and a caase of a family business adopting cutting-edge production technologies, we study – when do family firms break away from the constraints of decision-making and become early adopters of technology i.e. pathfinders? Our analysis proposes two mechanisms that influence early adoption: (i) Collective aspiration and (ii) Capability enablement.  

Keywords: British family business, digital transformation early adopters of technology, family aspiration

Family-Controlled Leadership from Transition to Transformation


Simachal Mohanty
Founder Director
Foundations for Community Development and Research
Bhubaneswar
Nibedita Pattanaik  
Managing Trustee
Foundations for Community Development and Research
Bhubaneswar
 
Most of the family owned business are struggling in the arena of governance and leadership simply because lack of shared vision and not so strong leadership transition from one generation to the other. However, we have also witnessed success stories of healthy and harmonious family business in the past. Cultural mores of the family owned business is also a strong determinant in the performance of this business. Most of the family controlled firms are facing challenges pertaining to governance as there is a huge question of internal talent vs. external professional management team.

In order to address and assess this situation in the family-owned business, a qualitative study of future leaders of both family and non-family members is carried out. A major research question was identified as to what are the basic tenets of leadership failure in the family controlled firms. We have observed a smooth transition of leadership as a part of their succession planning agenda but failed understand the logical inconsistency in transforming themselves in their individual capacity to learn, change and grow along with a fair amount of understanding in the area of ownership dynamics.

A large pool of family-business owners were requested to comply with a structures questionnaire with inputs relating governance, consistency, dynamics and dynamism,leadership,transforming of self and other members of the firm are put for both a quantitative figure to a qualitative analysis.

Key Words: Transition,Transformation,Leadership,Shared Vision,Governance,Family Business,Cultural mores,Clustered Diverse opinions,Logical inconsistency
Tales of Two Family Owned Businesses from Madras
 

Jayshree Suresh

Professor

Loyola Institute of Business Administration (LIBA)

Loyola Campus
Chennai   

Victor Louis  Anthuvan 
Professor
Loyola Insitute of Business Administration (LIBA)
Loyola Campus
Chennai

This qualitative research will be exploratory and descriptive and will identify the similarities and differences between two  very old family businesses from Madras: TVS and Murugappa groups. They have  sustained and grown  over   many years without breaking the family   or businesses. An attempt will be made to understand the uniqueness and how the family have knitted themselves. The information  about the family details, structure, core competencies  will be collected. The   research will measure the perception of different stake holders: share holders, investors, customers, suppliers, creditors,  employees, Government, CSR , local community etc. 
Secondary and primary source of information will be gathered and analysed to draw conclusions. Focus group   and 50 interviews of different stakeholders will be performed to get the insight.  The responses will be obtained from people who know both the family businesses.
The  framework of 10 commandments  developed by Prof. Kavil Ram will be used for the purpose of  data collection and analysis.
Stairway to Tax to Tax Heaven: Network Positions, Deactivation Rates, and Social Influences of Family Owned Offshore Entities in the Panama Papers

Ambra Mazzelli 
Assistant Professor of Management and Organizations
/ International Faculty Fellow and Research Affiliate
Sloan School of Management/ Massachusetts Institute of Technology

Robert S. Nason
Assistant professor of Management
Concordia University
John Molson School of Business

 

Despite burgeoning evidence that families’ wealth management often occurs in an ethical grey area—a realm of activity that is formally legal but socially illegitimate—it remains unclear how family ownership may affect organizational misconduct. In this study, we seek a better understanding of how family owners make decisions concerning the network positioning and deactivation of their offshore vehicles. Using the data leak of the Panama Papers, our analysis gives support to our main arguments: compared to their nonfamily counterparts, family-owned offshore vehicles are more likely to occupy brokerage positions within disperse communities, are less likely to be deactivated, and have a greater influence on the deactivation decisions of their network ties, especially other family-owned entities. Implications for the literature on organizational misconduct, family business, and social networks are discussed.

 

Keywords: Family ownership, organizational misconduct, social networks, Panama Papers, offshore vehicles, exit decisions.

Institutional Conditions for Family-Business: An Analysis of National Framework Condition using Global Entrepreneurship Monitor (GEM) Survey


Sunil Shukla
Director - Entrepreneurship Development Institute of India (EDII) &
GEM India National Team Leader
 Amit Kumar Dwivedi
Faculty - Entrepreneurship Development Institute of India (EDII) &
GEM Indian National Team Leader
Pankaj Bharti
Faculty- Entrepreneurship Development Institute of India (EDII) &
GEM Indian National Team Leader
 
Family-owned businesses contribute significantly across the globe. They play an important and vital role in entrepreneurship progress and economic development irrespective of their size. Literature suggests that the regulatory and cultural framework conditions impact on family-business entrepreneurship across the globe differently. The present paper is an attempt to understand the status of regulatory framework condition (RFC) and cultural framework condition (CFC) in different regions. This paper is based on the PAN-India study i.e. Global Entrepreneurship Monitor (GEM) research. The GEM study attempts to analyse (i). the Entrepreneurial Activities in factor driven, efficiency-driven and innovation-driven economies, and the status of (ii). entrepreneurial framework conditions (EFCs). Also, it provides countrywide analysis on attitudes toward entrepreneurship, business start-up intention and established business activities, besides understanding the aspirations of entrepreneurs for their businesses.

This paper concludes that RFCs for family businesses are higher in South and East Asia regions than other four economic regions (including Sub-Saharan Africa, Middle East and North Africa, Central and South America, and European culture countries).

Keyword: Family Business, Institutional Conditions, Global Entrepreneurship Monitor.