Family businesses and strategic change: the role of family ownership

Nina Schweiger (), Kurt Matzler (), Julia Hautz () and Alfredo Massis ()
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Nina Schweiger: University of Innsbruck
Kurt Matzler: University of Innsbruck
Julia Hautz: University of Innsbruck
Alfredo Massis: Free University of Bozen-Bolzano

Review of Managerial Science, 2024, vol. 18, issue 10, No 7, 3005 pages

Abstract: Abstract In this study, we analyze how the performance-aspiration gap influences strategic change in family firms, providing evidence of the moderating role of family ownership in this relationship. According to socioemotional wealth (SEW) theory, family owners pursue non-financial as well as financial goals, are more risk-averse due to their personal wealth being tied to the firm, and seek to maintain control of the firm to preserve and build their SEW—all characteristics that influence their strategic behavior. We therefore suggest that strategic decisions in family-owned firms are less influenced by purely economic performance, and that such firms tend to persevere more strongly in their strategic direction. We test our hypotheses on a sample of publicly listed European firms between 2007 and 2016. Our findings confirm that the success of firms inhibits strategic change, and that family ownership moderates this relationship by making the overall effect smaller, indicating greater resistance to change despite economic pitfalls.

Keywords: Family firms; Family ownership; Strategic change; Performance feedback theory (search for similar items in EconPapers)
JEL-codes: D81 L1 M1 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11846-023-00703-3

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