A Strategic Management Perspective of the Family Firm: Past Trends, New Insights, and Future Directions

Family enterprises are the predominant form of business organizations estimated to range from 60% to 98% of all firms in different regions of the world (e.g., Miller and Le-Breton Miller, 2005). These businesses are some of the smallest and largest, youngest and oldest enterprises, in developing and developed economies (Chua et al, 2004; Fernandez-Araoz et al., 2015; La Porta et al., 1999). As lists of the oldest and largest family firms continue to garner interest among practitioners, educators, and policy makers (e.g., Eichenberger, 2011; Peterson-Withorn, 2015), scholarly efforts to understand the unique challenges and strategic advantages of these firms continue to escalate. Grant Calderu0027s (1953) dissertation on management problems in small family controlled manufacturing firms is the first documented scientific study in this field (see Sharma et al, 2007, for the evolution of family business studies). Although the seeds of the strategic management approach were sown in classic books like Keeping the Family Business Healthy (Ward, 1987), growth remained slow through the decade of the eighties when only about 30 peer-reviewed articles appeared per year. However, by 2000, this number had increased dramatically to 565 articles a year, with further increases to more than 800 articles annually since 2010 (Sharma, 2015). With a ubiquitous global presence, it is of little surprise that the study of family business has captured the interest of scholars from multiple disciplinary backgrounds (Melin et al., 2014). Family businesses are defined, theoretically, as businesses and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of in a manner that is potentially sustainable across generations of the family or families (Chua et al., 1999: 25). According to Yu, Lumpkin, Sorenson, and Brigham (2012), the involvement of the family within the business and the idiosyncratic goals of the family are what make the family enterprise unique (e.g., Gersick et al, 1997). Family firms are comprised of a family system that is at least partially governed by emotional relationships, and a business system that is subject to the economic logic of the market. Complexity emerges when these two systems are overlaid, resulting in substantial heterogeneity (Cohen and Sharma, 2016; Stewart, 2003). Given this complexity and heterogeneity, much remains to be studied about the causes and consequences of family firm behavior (Dyer et al, 2014; Gagne et al, 2014). Of particular importance is understanding how the family contributes to family firm performance (Basco, 2013; Dyer and Dyer, 2009). To address these issues, numerous theoretical perspectives have been used including, but not limited to, agency and stewardship (Madison et al, 2016), transaction cost economics (Verbeke and Kano, 2012), institutional (Leaptrott, 2005), social identity (Canella et al, 2015), and planned behavior (Koropp et al, 2014). Calls are made to expand the theoretical repertoire to include disciplines such as family science (Jennings et al, 2014), sociology (Martinez and Aldrich, 2014), and economics (Shukla et al, 2014), to name a few. While the topics of intergenerational succession (Daspit et al, 2016) and governance (Gersick and Feliu, 2014; Goel et al, 2014) have received the most scholarly attention, at this stage of evolution, the field is wide in scope and shallow in depth, leaving exciting research opportunities for scholars from different disciplinary perspectives (Zahra and Sharma, 2004). Although studies have been conducted at various levels of analyses, including the individual and group (Sharma, 2004), the focus of this special issue is on the strategic influences and implications of the familyu0027s involvement within the family firm. This perspective is valuable given the potential to contribute to understanding the causes and consequences of family firm behavior, an understanding that is of fundamental concern to business scholars. …