Owners’ rule-based decision-making in family firm strategic renewal

Hanna Maria Sievinen, Tuuli Ikäheimonen and Timo Pihkala

Scandinavian Journal of Management, 2020, vol. 36, issue 3

Abstract: We explore the process and consequences of family firm owners applying informal rules to decision-making in the context of later-generation family firms attempting strategic renewal. Based on the case studies of two firms in a Nordic country where the owners serve as non-executive board members, and following institutional action theory, we propose that informal rules – based on historical precedents and cumulative experience – applied to a family firm’s decision-making play many roles. They sustain family traditions over time, transfer experience over generations and depersonalise family members’ use of power. In addition, the rules on governance structure, governance processes and the content of the strategies form a hierarchy and can both facilitate and hinder the renewal.

Keywords: Corporate governance; Family firm; Institutional action theory; Strategic renewal; Decision-making (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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DOI: 10.1016/j.scaman.2020.101119

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