Adaptation or Expiration in Family Firms

Adaptation or Expiration in Family Firms

Organizational Flexibility in Emerging Economies

Andrés Hatum

Andrés Hatum explores determinants of organizational flexibility in this examination of four family-owned companies, two flexible and two less flexible, from the edible oil and pharmaceutical industries. By means of an innovative analysis – including longitudinal analysis, coding analysis, statistical analysis and the use of original display charts – he illustrates the determinants of flexibility and sheds light on the process of transformation and adaptation of family firms, an area that has not yet been the subject of extensive empirical inquiry.

Chapter 10: Determinants of Organizational Flexibility

Andrés Hatum

Subjects: business and management, entrepreneurship, family business, organisational behaviour


10. Determinants of organizational flexibility INTRODUCTION In the last two chapters, we described the findings of our case studies of the transformation process in four firms: two of which were considered to be flexible and two less flexible companies. A number of themes were apparent in our data which highlighted a range of managerial, organizational and contextual factors related to the ability of the firms to adapt quickly under environmental pressure. These themes included the effect of new managers coming in from outside the industry, the firms’ relationship with its industry peers, the nature of the decision-making process and the early adoption of strategies and organizational changes in the flexible firms. Our review of the literature (see Chapter 2) indicated that research on the determinants of organizational flexibility and innovativeness and institutional embeddedness offer an insight into the explanation of patterns or mechanisms of adaptation. While the literature describes different organizational capabilities as enablers of transformation and adaptation, there is no mention of how the nature of the firm can affect the creation of those capabilities. Moreover, themes such as adaptation and flexibility have not even been the focal point of the literature of family businesses. The critical role of succession process in a family firm has eclipsed the study of other aspects of change and development in a family firm. Zahra and Sharma (2004) also raised the concern that the same issues have dominated the discourse in the field of family business research. In this...

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