Understanding the transgenerational orientation of family businesses: the role of family governance and business family identity

Julia Suess-Reyes ()
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Julia Suess-Reyes: WU Vienna University of Economics and Business

Journal of Business Economics, 2017, vol. 87, issue 6, No 3, 749-777

Abstract: Abstract The development of a transgenerational orientation is one of the most significant challenges that family businesses face and only a small number actually survive across generations. While prior research has focused on the business unit to provide us with a solid understanding of how corporate governance affects business performance and continuity, the role of the business family in the development of a transgenerational orientation has received less attention. To address this gap, this article applies a new systems and social identity theory framework to examine how family governance and business family identity can contribute to strengthening the transgenerational orientation of the business. A transgenerational orientation is defined as a decision premise to maintain the family’s control over the business across generations. Using a large data set, findings show that the presence of family governance measures and the business family’s identity are positively related to a transgenerational orientation of the business, with business family identity acting as a mediator. Thus, the development of family governance measures can foster communication within the business family and enhance the family members’ emotional investment in the business which strengthens the transgenerational orientation in the business.

Keywords: Family business; Business family; Family governance; Transgenerational orientation; Business family identity; New systems theory; L2; L21; L29; M14 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (11)

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DOI: 10.1007/s11573-016-0835-3

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