Edited by Kosmas X. Smyrnios, Panikkos Z. Poutziouris and Sanjay Goel
Chapter 7: Using the configuration approach to understand the reasons for and consequences of varied family involvement in business
Family firms are distinguished from other organizational forms due to the significant family influence that enables pursuit of the family’s vision for the business (Chua et al., 1999). However, due to an awareness of the staggering numbers and large variety in the organizational form referred to as ‘family firms’, researchers grapple with the fundamental question of the aspects of family involvement that helps differentiate these firms from other organizational forms, and sort out the heterogeneity within family firms (Pearson et al., 2008; Sharma and Nordqvist, 2008; Westhead and Cowling, 1998). Towards this end, two primary approaches are used in the literature which Chua et al. (1999) label as the ‘components of family involvement’ and ‘essence’ approaches. The first, more dominant approach captures the extent and mode of family involvement in management, ownership, governance and succession (Gersick et al., 1997; Klein et al., 2005; Westhead and Cowling, 1998); while the latter focuses on the behavioural consequences of family involvement in business (Chua et al., 1999; Klein et al., 2005). The components approach is descriptive in its orientation as it addresses the ‘what’ and the ‘when’ questions; that is, what is the extent and mode of family involvement in management and ownership of a firm – at a particular time, and the expected or intended involvement over the longer term (Litz, 1995)?
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