Theoretical Perspectives on Family Businesses
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Theoretical Perspectives on Family Businesses

Edited by Mattias Nordqvist, Leif Melin, Mattias Waldkirch and Gershon Kumeto

Family business has become an increasingly studied field over the last decade and forms one of the fastest growing research areas today. The uniqueness of family businesses is the interaction between two systems; the family and the business systems, leading to specific characteristics that we rarely see in other types of businesses. In order to understand the interaction between the family and the business systems, researchers have adopted a diverse range of theories from different fields. The contributors provide a thorough discussion of thirteen theoretical perspectives that have been used in family business research to a varying degree. Each chapter introduces a theory, demonstrates its previous application in family business research and offers compelling ideas for future research that could contribute to both the family business field and the original theory behind it. This book aims to spark new insights for researchers and PhD students in the field of family business, and is also a good introduction for researchers who are new to the field.
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Chapter 4: Agency theory and the family business

Andreas Kallmuenzer


Individual business and family preferences form a unique situation in family firms, leading to multiple sources of agency costs that negatively influence performance. Hence, the theory of agency became a dominant organisation theory perspective that is applied to and further developed in family business research. This chapter elucidates prior research and demonstrates relational and altruistic aspects of family firms as sources of agency costs identified by family business research. It proposes to differentiate between heterogeneous structures of family firms when analysing agency costs and recommends taking an agency perspective when looking at the relationship of entrepreneurial attitudes and performance. Finally, it suggests ways to reduce agency costs by monitoring and contractual mechanisms. Keywords: family business, agency theory, agency costs, altruism, monitoring, heterogeneity, entrepreneurial attitudes

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