Session 56

Family firms

Track K

Date: Monday, October 5, 2015


Time: 08:00 – 09:15


Room: Governor's Square 11

Session Chair:

  • Garry Bruton, Texas Christian University

Title: Family Businesses Are All the Same?


  • Xiaodong Yu, Central University of Finance and Economics
  • Garry Bruton, Texas Christian University

Abstract: Academic literature analyzing the performance of family firms has typically focused on the difference between family business and non-family business. But family firms have a wide range of family relationships among their managers, leading to very different implications for firm outcomes. This manuscript finds that closer family relationships within a top management team positively impact family firm performance. However, when we examine the presence of multi-generational relatives active in the firm there is lower financial performance. Looking deeper at the performance impact of having multi-generational relatives in the family firm we find that the ownership concentration negatively moderates the impact of multiple generations in the firm. These findings push scholars to look deeper as they seek to understand the rich impact of family on the strategic management of the firm.

Title: Family Firms' Tolerance for Risk: A Downside Risk Perspective


  • Todd Alessandri, Northeastern University
  • Jan Mammen, University of Erlangen-Nuremberg
  • Kimberly Eddleston, Northeastern University

Abstract: Family firms are often portrayed as risk averse. However, some studies challenge this perspective, showing that family firms can become risk seeking when family control are jeopardized. Our study seeks to explore this phenomenon by extending the myopic loss aversion lens to propose that family firms are more tolerant of organizational downside risk than nonfamily firms. In contrast to traditional volatility-based risk assessments that consider both gains and losses, organizational downside risk only considers losses, which corresponds to the view of managers, owners and investors towards risk. Additionally, we propose that the effects of managerial incentives on TMT wealth can alter family and nonfamily firms’ organizational downside risk. Testing these relationships on a sample of S&P 1500 firms, our theoretical framework is predominantly supported.

Title: Lessons from the Past: The Effect of Founders' Prior Founding Experience on New Venture Formalization


  • Sung Namkung, Indiana University of Pennsylvania
  • MB Sarkar, Temple University

Abstract: This study explores how founders’ prior founding experience affects the extent to which their new ventures are formally structuralized at the founding stage, and investigates circumstances where such effect is more pronounced. Through an analysis of the founders of 2,736 new ventures, all established in 2004, this study explores how a particular type of founder prior career experiences —founding experience — influences on new venture formalization. Findings indicate that a founder’s prior founding experience increases the likelihood that new ventures will formalize their organizational structure. In addition, the positive effect of prior founder experience on formal structure is intensified when new ventures are founded in high technology industries.

Title: Resource Acquisition in a Family-Founded Technology Venture


  • Melissa Graebner, University of Texas at Austin
  • Suho Han, University of Texas at Austin
  • Philip Roundy, University of Texas-Austin

Abstract: This study explores how a family-founded technology venture manages the tension between business and family logics during resource acquisition. Given limited prior theory, we use an in-depth, qualitative single case study of a technology venture founded by the “Smith” family. We present a framework in which family management engage in sensegiving tactics that downplay risks typically associated with family firms, thereby facilitating initial resource acquisition. To further growth, family management hire seasoned professionals surrounding key resource milestones. However, a hostile environment leads to the disillusionment and quick exit of these professionals. Moreover, mutual dependence between family management and external investors prevents investors from replacing family management or easily exiting the venture. Overall, our framework provides contributions to the literatures on hybrid organizations, family business, and entrepreneurship.

All Sessions in Track K...

Sun: 08:00 – 09:15
Session 10: Entrepreneurship in Base-of-the-Pyramid Markets
Sun: 09:45 – 11:00
Session 11: Crowdfunding Research: Present and Future
Sun: 11:15 – 12:30
Session 12: Environmental Entrepreneurship: How and When do Entrepreneurs address Environmental Degradation?
Sun: 16:15 – 17:30
Session 50: Entrepreneurship and Institutional Environment
Sun: 17:45 – 00:00
Session 319: Entrepreneurship and Strategy Business Meeting
Mon: 08:00 – 09:15
Session 56: Family firms
Mon: 11:15 – 12:30
Session 119: Competition and entrepreneurial entry
Mon: 13:45 – 15:00
Session 53: New forms of entrepreneurial funding
Session 97: Accelerators, corporate VCs and new venture creation
Mon: 16:45 – 18:00
Session 59: Entrepreneurship in emerging markets
Session 98: Culture, institutions and entrepreneurship
Tue: 08:00 – 09:15
Session 54: Venture capital and angel financing
Session 118: Entrepreneurial orientation and strategic entrepreneurship
Session 217: Leadership and Governance in Family Firms
Tue: 11:00 – 12:15
Session 51: Academic entrepreneurship
Tue: 14:15 – 15:30
Session 58: Corporate VCs and spin-outs
Session 120: Creativity, knowledge spill overs and a venture's legitimacy
Tue: 15:45 – 17:00
Session 52: Entrepreneurial business models
Session 55: Entrepreneurship and cognitions
Tue: 17:30 – 18:45
Session 57: Entrepreneurial teams
Session 99: Governance and entrepreneurial finance

Strategic Management Society