Edited by Kosmas X. Smyrnios, Panikkos Z. Poutziouris and Sanjay Goel
Chapter 21: Strategy formulation in family businesses: a review and research agenda
The effect of family on strategic firm behavior is a growing field of interest in the family business literature. Issues of family business strategy are considered an important area for future research (Harris et al., 1994), because this contributes to the development of a strategic management theory of the family business (Chrisman et al., 2008). The prime goal of scholars interested in this area is to understand whether the strategic behavior of family businesses is different from non-family businesses as well as different from diverse types of family businesses and, if so, how and why they differ (Chrisman et al., 2008). The underlying supposition therein is that the family significantly impacts the business and, therefore, its strategic behavior (Ward, 1987). The influence of family on strategy is seen as so central to the firm that Chua et al. (1999) chose to define family businesses in terms of the family domination of strategic decision-making. In particular, several researchers suggest that strategy formulation, that is, the ‘strategy process’ (e.g. Cromie et al., 1995; Sharma et al., 1997; Carlock and Ward, 2001) and ‘strategy content’ of firms (e.g. Aronoff and Ward, 1997; Sharma et al., 1997), are importantly influenced by the family (Dyer, 2003). Reviewing the existing literature on family business strategy serves as a starting point for promoting future research.
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