Corporate Governance and Competitive Advantage in Family–Controlled Firms

Michael Carney

Entrepreneurship Theory and Practice, 2005, vol. 29, issue 3, 249-265

Abstract: Recent attempts to identify the basis of family–controlled firms’ competitive advantage have drawn upon the resource–based view of the firm. This article supplements these efforts and advances the argument that family–controlled firms’ competitive advantage arises from their system of corporate governance. Systems of corporate governance embody incentives, authority patterns, and norms of legitimation that generate particular organizational propensities to create competitive advantages and disadvantages. For comparative purposes, the characteristics of managerial, alliance, and family governance are reviewed. The impact of a family's control rights over a firm's assets generates three dominant propensities (parsimony, personalism, and particularism). These propensities give advantages in scarce environments, facilitate the creation and utilization of social capital, and engender opportunistic investment processes. The experience of family–controlled firms in emerging markets is drawn upon to illustrate the argument.

Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (160)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1111/j.1540-6520.2005.00081.x (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:29:y:2005:i:3:p:249-265

DOI: 10.1111/j.1540-6520.2005.00081.x

Access Statistics for this article

More articles in Entrepreneurship Theory and Practice
Bibliographic data for series maintained by SAGE Publications ().