Edited by Panikklos Zata Poutziouris, Kosmas X. Smyrnios and Sabine B. Klein
Chapter 10: Identification of Different Types of Private Family Firms
10 Identiﬁcation of diﬀerent types of private family ﬁrms Paul Westhead and Carole Howorth Introduction The importance and powerful inﬂuence of family in all aspects of entrepreneurship and business has recently been highlighted (Aldrich and Cliﬀ, 2003; Rogoﬀ and Heck, 2003). Despite their signiﬁcant contribution to the economy, research into private family ﬁrms is relatively neglected. Perhaps this is because they are believed to be less interesting owing to a lack of agency problems, little separation of ownership and control and shared goals. Many view private family ﬁrms as a homogenous group, but casual observation suggests that they diﬀer with regard to their ownership and management structures and the extent to which family objectives dominate. Currently, there is limited understanding of how, why, or the extent to which, private family ﬁrms diﬀer. This has implications for the future of family ﬁrms research, because the use of an overarching family ﬁrm deﬁnition, and the failure to recognize contrasts between ‘types’ of family ﬁrms may impact on the validity and generalizability of ﬁndings. Also, most studies fail to explore the link between the ‘type’ of family ﬁrm and its performance, which is important for the development and eﬃcacy of practitioner and public policy support. The stereotypical family ﬁrm with good relationships and low information asymmetries may occur less frequently than expected. Indeed, family ﬁrms may not be the corporate governance panacea predicted by agency models (Schulze et al., 2001). Limitations of agency theory in...
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