The Role of Professionalization and Managerialization in Family Business Succession

Author/s Lucrezia Songini, Paola Vola
Publishing Year 2015 Issue 2015/1
Language English Pages 35 P. 9-43 File size 160 KB
DOI 10.3280/MACO2015-001002
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

This paper aims to analyze the role of professionalization (the involvement of professional non-family managers) and of managerialization (the use of managerial mechanisms) in the family firm’s succession process. In the light of the scarce literature on such issues, it aims to "open the black box", giving some insights on the relationship between the involvement of non-family managers, the use of managerial mechanisms, such as strategic planning (SP) and management control systems (MCSs), and family business succession. This is an explorative paper aimed at developing a theoretical framework on the outlined issues. The research method is based on the longitudinal analysis of a case study of a European medium-sized family firm, that made different choices in terms of: 1) how to cope with the family succession, 2) the involvement of non-family members, and 3) the role assigned to SP and MCSs. The longitudinal analysis of the case study shows that non-family professional managers may have a relevant role in the family firm’s succession, but in particular former employees of the company. A significant role of both family and firm governance mechanisms is also showed. Instead, managerial mechanisms, such as SP and MCSs, are introduced mostly to cope with firm’s and environment’s complexity and agency conflicts. Consistently with research findings, we propose a research framework, articulated in a few propositions, concerning the role of professionalization and managerialization in helping family firms to overcome generation succession.

Keywords: Managerialization, professionalization, family business succession

Jel codes: M10, M11, M13, M40

  1. Songini L., MorelliC., VolaP. (2014),The managerialization of family SMEs: evidences from Eastern Piedmont, EURAM 2014 conference paper
  2. HarrisL.C.,OgbonnaE.(2007),OwnershipandControlinClosely-heldFamily-ownedFirms:AnExplorationofStrategicandOperationalControl,BritishJournalofManagement,18,1,pp.5-26. DOI: 10.1111/j.1467-8551.2005.00471.x
  3. Ayres G.R. (1990), Rough Family Justice: Equity in Family Business Succession Planning. Family Business Review, 3, 1, pp. 3-22. DOI: 10.1111/j.1741-6248.1990.00003.x
  4. Anderson R.C., Reeb D.M. (2003), Founding-Family Ownership and Firm Performance: Evidence from the S&P 500, The Journal of Finance, 58, 3, pp. 1301-1328. DOI: 10.1111/1540-6261.00567
  5. Aram J.D., Cowen S.S. (1990), Strategic Planning for Increased Profit in the Family Owned Business, Long Range Planning, 23, pp. 76-81.
  6. Armstrong J.S. (1982), The value of formal planning for strategic decision: review of empirical research, Strategic Management Journal, 3, 3, pp. 197-211. DOI: 10.1002/smj.4250030303
  7. Aronoff C.E. (1988), Megatrends in Family Business, Family Business Review, 11, 3, pp. 181-186. DOI: 10.1111/j.1741-6248.1998.00181.x
  8. Arregle J.L., Hitt M.A., Sirmon D.G., Very P. (2007), The development of organizational social capital: Attributes of family firms, Journal of Management Studies, 44, pp. 73-95. DOI: 10.1111/j.1467-6486.2007.00665.x
  9. Astrachan J.H., Kolenko T. (1994), A Neglected Factor Explaining Family Business Success: Human Resource Practices, Family Business Review, 3, 7, pp. 251-262. DOI: 10.1111/j.1741-6248.1994.00251.x
  10. Beckhard R., Dyer W. (1983), Managing continuity in the family-owned business, Organizational Dynamics, 12, 1, pp. 5-12. DOI: 10.1016/0090-2616(83)90022-0
  11. Bloom N., Van Reenen J. (2007), Measuring and Explaining Management Practices Across Firms and Countries, The Quarterly Journal of Economics, 122, 4, pp. 1351-1408. DOI: 10.1162/qjec.2007.122.4.1351
  12. Brews P., Hunt M.R. (1991), Learning to plan and planning to learn: resolving the planning school/learning school debate, Strategic Management Journal, 20, 10, pp. 889-913. DOI: 10.1002/(SICI)1097.
  13. Chittor R.,DasR. (2007), Professionalization of management and succession performance – a vitallink age, Family Business Review, 20, 1, pp. 65-76. DOI: 10.1111/j.1741-6248.2007.00084.x
  14. Chua J., Chrisman J., Sharma P. (1999), Defining the family business by behavior, Entrepreneurship Theory and Practice, 23, 4, pp. 19-39.
  15. Churchill N.C., Lewis V.L. (1983), The Five Stages of Small Business Growth, Harvard Business Review, 3, pp. 30-50.
  16. Corbetta G. (2010), Le aziende familiari, Milano, Egea.
  17. Daily C.M., Dollinger M.J. (1992), An empirical examination of ownership structure in family and professionally managed firms, Family Business Review, 2, pp. 117-136. DOI: 10.1111/j.1741-6248.1992.00117.x
  18. Daily C.M, Dollinger M.J. (1993), Alternative methodologies for identifying family-versus non family-managed businesses, Journal of Small Business Management, 2, 31, pp. 79-90.
  19. Dyck B., Mauws M., Starke F.A., Miske G. (2002), Passing the baton: The importance of sequence, timing, technique, and communication in executive succession, Journal of Business Venturing, 17, 2, pp. 143-162. DOI: 10.1016/S0883-9026(00)00056-2
  20. Dyer W.G. (1986), Cultural change in family firms: Anticipating and managing business and family transitions. San Francisco, Jossey-Bass Publishers.
  21. Dyer G.B. (1996), Integrating professional management into a family owned business, Family Business Review, (Special Issue the Best of family business review), pp. 44-50.
  22. Dyer W.G. (2001), Integrating Professional Management into A Family Owned Business, The best of FBR, pp. 44-50. DOI: 10.1111/j.1741-6248.1989.00221.x
  23. Eisenhardt K.M. (1989), Building Theories from Case Study Research, The Academy of Management Review, 14, 4, pp. 532-550. DOI: 10.5465/AMR.1989.4308385
  24. Firnstahl T.W. (1986), Letting go, Harvard Business Review, 64, 5, pp. 14-18.
  25. Fox M., Nilakant V., Hamilton R.T. (1996), Managing succession in family-owned businesses, International Small Business Journal, 15, 1, pp. 15-25. DOI: 10.1177/0266242696151001
  26. Gallo M., Vilaseca A. (1998), A financial perspective on structure, conduct, and performance in the family firms: An empirical study, Family Business Review, 11, pp. 35-47. DOI: 10.1111/j.1741-6248.1998.00035.x
  27. Gersick K.E., Davis J.A., McCollom Hampton M., Lansberg I. (1997), Generation to generation: Life cycles of the family business, Boston, Harvard Business School Press.
  28. Gnan L., Songini L. (2003), The Professionalization of Family Firms: the Role of Agency Cost Control Mechanisms, in Poutziouris P., Steier L.P., a cura di, New Frontiers in Family Business Research. The Leadership Challenge, IFERA-F.B.N. publications.
  29. Gomez-Mejia L., Nuñez-Nickel M., Gutierrez I. (2001), The Role of Family Ties in Agency Contracts, Academy of Management Journal, 44, pp. 81-95. DOI: 10.2307/3069338
  30. Habbershon T., Williams M., Kaye K. (1999), A resource-based framework for assessing the strategic advantages of family firms, Family Business Review, 12, 1, pp. 1- 25. DOI: 10.1111/j.1741-6248.1999.00001.x
  31. Handler W., Kram K.E. (1989), Succession in Family Firms: The Problem of Resistance, Family Business Review, 1, 4, pp. 361-381. DOI: 10.2307/3069338
  32. Handler W. (1989), Methodological issues and considerations in studying family businesses, Family Business Review, 2, 3, p. 257-276. DOI: 10.1111/j.1741-6248.1989.00257.x.
  33. Hartmann F.G.H., Maas V.S., Naranjo-Gil D. (2009), How CFOs Determine Management Accounting Innovation: An Examination of Direct and Indirect Effects, The European Accounting Review, 18, 4, pp. 667-695. DOI: 10.1080/09638180802627795
  34. Kellermanns F.W., Eddleston K.A. (2006), Corporate Entrepreneurship in Family Firms: A Family Perspective, Entrepreneurship Theory and Practice, 30, pp. 809-830. DOI: 10.1111/j.1540-6520.2006.00153.x
  35. Ketokivi M., Castaner X. (2004), Strategic planning as an integrative device, Administrative Science Quarterly, 49, pp. 337-365. DOI: 10.2307/4131439
  36. Kimhi A. (1997), Intergenerational succession in small family business: borrowing constraints and optimal timing succession, Small Business Economy, 9, 4, pp. 309-318. DOI: 10.1023/A:1007987731337
  37. Lane S.H. (1989), An Organizational Development/Team-Building Approach to Consultation with Family Businesses, Family Business Review, 2, pp. 5-16. DOI: 10.1111/j.1741-6248.1989.00005.x
  38. Lansberg, I. (1988), The succession conspiracy, Family Business Review, 1, 2, pp. 119-143. DOI: 10.1111/j.1741-6248.1988.00119.x
  39. Le Breton-Miller I., Miller D., Steier L. (2004), Toward an integrative model of effective FOB succession. Entrepreneurship, Theory and Practice, 28, pp. 305-328. DOI: 10.1111/j.1540-6520.2004.00047.x
  40. Levinson H. (1971), Conflicts that plauge family businesses, Harvard Business Review, 49, 2, pp. 90-98.
  41. Lin S., Hu S. (2007), A Family Member or Professional Management? The Choice of a CEO and Its Impact on Performance, Corporate Governance, 15, 6, pp. 1348-1362. DOI: 10.1111/j.1467-8683.2007.00650.x
  42. Mancini D. (2011), L’azienda-rete e le decisioni di partnership: il ruolo del sistema informativo relazionale, Management Control, 1, pp. 65-97. DOI: 10.3280/MACO2011-001004
  43. Martínez J.I., Stöhr B.S., Quiroga B.F. (2007), Family Ownership and Firm Performance: Evidence From Public Companies in Chile, Family Business Review, 20, 2, pp. 83-94. DOI: 10.1111/j.1741-6248.2007.00087.x
  44. Mazzola P., Marchisio G., Astrachan J. (2008), Strategic Planning in Family Business: A powerful developmental tool for the next generation, Family Business Review, 21, 3, pp. 239-258. DOI: 10.1111/j.1741-6248.2008.00126.x
  45. Miller D., Friesen P.H. (1984), A Longitudinal Study of the Corporate Life Cycle, Management Science, 30, 10, pp. 1161-1183. DOI: 10.1287/mnsc.30.10.1161
  46. Mishra C.S., Randøy T., Jenssen J.I. (2001), The Effect of Founding Family Influence on Firm Value and Corporate Governance, Journal of International Financial Management and Accounting, 12, 3, pp. 235-259. DOI: 10.1111/1467-646X.00073
  47. Moores K., Mula J. (2000), The salience of market, bureaucratic, and clan controls in the management of family firm transitions: Some tentative Australian evidence, Family Business Review, 13, 2, pp. 91-106. DOI: 10.1111/j.1741-6248.2000.00091.x
  48. Moores K.S., Yuen (2001), Management Accounting Systems and Organizational Configuration: A Life Cycle Perspective, Accounting, Organizations and Society, 26, pp. 351- 389. DOI: 10.1016/S0361-3682(00)00040-4
  49. Morck R., Yeung B. (2003), Agency Problems in Large Family Business Groups, Entrepreneurship Theory and Practice, 27, 4, pp. 367-382. DOI: 10.1111/1540-8520.t01-1-00015
  50. MorckR., ShleiferA., VishnyR. (1988), Management owner ship and market valuation: An empirical analysis, Journal of Financial Economics, 20, pp. 293-316
  51. DOI: 10.1016/0304-405X(88)90048-7
  52. Morris M.H., Williams R.O., Allen J.A., Avila R.A. (1997), Correlates of success in family business transitions, Journal of Business Venturing, 12, pp. 385-401. DOI: 10.1016/S0883-9026(97)00010-4
  53. Nordqvist M., Melin L. (2010), Entrepreneurial families and family firms, Entrepreneurship & Regional Development, 22, pp 211-239. DOI: 10.1080/08985621003726119
  54. Perez-Gonzalez F. (2006), Inherited Control and Firm Performance, American Economic Review, 96, 5, pp. 1559-1588. DOI: 10.1257/aer.96.5.1559
  55. Piantoni G. (1990), La successione familiare in azienda, Milano, Etas Libri.
  56. Rosenblatt P.C., deMik L., Anderson R.M., Johnson P.A. (1985), The family in business. San Francisco, Jossey-Bass.
  57. Rue L.W., Ibrahim N.A. (1995), Boards of Directors of Family-Owned-Businesses. The Relationship between Members Involvement and Company Performance, Family Business Annual, 1, pp. 14-21.
  58. Scandura T.A., Williams E.A. (2000), Research methodology in management: Current practices, trends, and implications for future research, Academy of Management Journal, 43, 6, pp. 1248–1264. DOI: 10.2307/1556348
  59. Sciascia S., Mazzola P. (2008), Family Involvement in Ownership and Management: Exploring Nonlinear Effects on Performance, Family Business Review, 21, pp 331-345. DOI: 10.1177/08944865080210040105
  60. Schein E.H. (1986), Organizational Culture and Leadership. San Francisco, Jossey-Bass.
  61. Schulze W., Lubatkin M., Dino R. (2003), Toward a theory of agency and altruism in family firms, Journal of Business Venturing, 18, 4, pp. 473-490. DOI: 10.1016/S0883-9026(03)00054-5
  62. Schwenk C.R., Shrader C.B. (1993), Effects of Formal Strategic Planning on Financial Performance in Small Firms: A Meta-Analysis, Entrepreneurship: Theory and Practice, 17, pp. 53-64.
  63. Scott M., Bruce R. (1987), Five Stages of Growth in Small Business, Long Range Planning, 3, pp. 45-52. DOI: 10.1016/0024-6301(87)90071-9
  64. Schulze W.S., Lubatkin M.H., Dino R.N., Buchholtz A.K. (2001), Agency relationship in family firm: theory and evidence, Organizational Science, 12, 2, pp. 99-116. DOI: 10.1287/orsc.
  65. Sharma P., Chrisman J.J, Chua J.H. (1997), Strategic Management of the Family Business, Past Research and Future Challenges, Family Business Review, 10, pp. 1-35. DOI: 10.1111/j.1741-6248.1997.00001.x
  66. Sharma P., Chua J.H., Chrisman J.J. (2000), Perceptions about the extent of succession planning in Canadian family firms, Revue Canadienne des Sciences de l’Administration, 17, 3, pp. 233-44. DOI: 10.1111/j.1936-4490.2000.tb00223.x
  67. Songini L. (2006), The Professionalization of Family Firm: Theory and Practice, in Poutziouris P., Smyrnios K.X., Klein S.B. editors, Handbook of Research in Family Business, Cheltenham, Edward Elgar Publishing.
  68. Songini L., Gnan L. (2013a), The formality and informality of HRM practices in Family Small and Medium-Sized Enterprises, Current state of the art and directions for future, EURAM 2013 conference paper.
  69. Songini L., Gnan L. (2013b), Family involvement and agency cost control mechanisms in family small and medium-sized enterprises, Journal of Small Business Management, forthcoming. DOI: 10.1111/jsbm.12085.
  70. Speckbacher G., Wentges P. (2007), The Impact of Firm Size and Family Ownership on Management Control Systems in Small and Medium-Sized Enterprises, Working Paper, Wirtschaftuniversitat, Wien.
  71. Stewart A, Hitt M.A. (2011), Why Can’t a Family Business Be More Like a Nonfamily Business? Modes of Professionalization in Family Firms, Family Business Review, 25, 1, pp. 58-86.
  72. Szulanski G., Amin K. (2001), Learning to make strategy: balancing discipline and imagination, Long Range Planning, 34, pp. 537-556. DOI: 10.1016/S0024-6301(01)00073-
  73. Villalonga B., Amit R. (2006), How Do Family Ownership, Control and Management Affect Firm Value?, Journal of Financial Economics, 80, pp. 385-417. DOI: 10.1016/j.jfineco.2004.12.005
  74. Vola P. (2012), La pianificazione del passaggio generazionale nelle family firms, Torino, Giappichelli Editore.
  75. Voss C., Tsikriktsis N., Frohlich M. (2002), Case research in operations management, International Journal of Operations & Production Management, 22, 2, pp.195–219. DOI: 10.1108/01443570210414329
  76. Ward J.L. (1987), Keeping the family business healthy, San Francisco, Jossey-Bass Publishers.
  77. Ward J.L. (1988), The Special Role of Strategic Planning for Family Businesses, Family Business Review, 1, 1, pp. 105-117. DOI: 10.1111/j.1741-6248.1988.00105.x
  78. Ward J.L. (1991), Creating Effective Boards for Private Enterprises, San Francisco, Jossey-Bass.
  79. Ward J.L. (2001), The Special Role of Strategic Planning for Family Businesses, The Best of FBR, pp. 140-146.
  80. Wortman M.S. (1994), Theoretical Foundations for Family-owned Business: A Conceptual and Research-Base Paradigm, Family Business Review, 7, pp. 3-27. DOI: 10.1111/j.1741-6248.1994.00003.x
  81. Yin R. (1994), Case study research. Design and methods, Sage Publications, Thousand Oaks.
  82. Yin R. (2003), Case study research. Design and methods (3rd ed.), Sage Publications, Thousand Oak.
  83. Zellweger T. (2007), Time Horizon, Costs of Equity Capital, and Generic Investment Strategies of Firms, Family Business Review, 20, pp. 1-15. DOI: 10.1111/j.1741-6248.2007.00080.x
  84. Zellweger T., Nason R.S., Nordqvist M. (2011), From Longevity of Firms to Transgenerational Entrepreneurship of Families. Introducing Family Entrepreneurial Orientation, Family Business Review, 25, 2, pp. 136-155. DOI: 10.1177/0894486511423531
  85. Zimmerman J.L. (2006), Accounting for Decision Making and Control, New York, McGraw Hill.
  86. Abernethy M.A., Bouwens J., Van Lent L. (2010), Leadership and Control System Design, Management Accounting Research, 21, 1, pp. 2-16. DOI: 10.1016/j.mar.2009.10.002

  • Context matters - Il ruolo del contesto negli studi di controllo di gestione Marco Gatti, Maria Serena Chiucchi, in MANAGEMENT CONTROL 3/2017 pp.5
    DOI: 10.3280/MACO2017-003001
  • Performance Measurement and Management Control: The Relevance of Performance Measurement and Management Control Research Lucrezia Songini, Chiara Morelli, Paola Vola, pp.193 (ISBN:978-1-78756-470-1)
  • Management Controlling and Governance of Family Businesses Cristiana Cattaneo, Gaia Bassani, pp.29 (ISBN:978-3-030-47740-0)
  • Professionalization in Family Businesses. How to strengthen strategy implementation and control, favouring succession Francesca Culasso, Elisa Giacosa, Luca Maria Manzi, Leo-Paul Dana, in MANAGEMENT CONTROL 1/2018 pp.45
    DOI: 10.3280/MACO2018-001003
  • Management Controlling and Governance of Family Businesses Annalisa Sentuti, Francesca M. Cesaroni, pp.51 (ISBN:978-3-030-47740-0)
  • Dynamic tensions in the budgetary system of a family business and the duality of structure Dalci Mendes Almeida, Valdirene Gasparetto, in Revista Contabilidade & Finanças /2022 pp.232
    DOI: 10.1590/1808-057x202114110
  • Management Controlling and Governance of Family Businesses Gaia Bassani, Cristiana Cattaneo, Elena Cristiano, Antonio Leotta, pp.109 (ISBN:978-3-030-47740-0)
  • Il controllo strategico nelle imprese familiari del settore vitivinicolo. Elaborazione di una proposta Barbara Iannone, in MANAGEMENT CONTROL 1/2019 pp.45
    DOI: 10.3280/MACO2019-001003
  • Strategic planning for value creation in business networks. Conceptual framework and theoretical proposals Andrea Cardoni, Filippo Zanin, Francesca Bartolacci, George H. (Jody) Tompson, in MANAGEMENT CONTROL 1/2018 pp.17
    DOI: 10.3280/MACO2018-001002
  • Firm performance and economic crisis: Family versus non-family businesses in Italy Maria Cesaroni Francesca, Chamochumbi Denisse, Sentuti Annalisa, in African Journal of Business Management /2017 pp.229
    DOI: 10.5897/AJBM2017.8288
  • Management Controlling and Governance of Family Businesses Antonio Leotta, Carmela Rizza, Daniela Ruggeri, pp.7 (ISBN:978-3-030-47740-0)
  • L'eterno divario tra teoria e prassi del pricing nel Management Accounting Graziano Coller, in MANAGEMENT CONTROL 2/2018 pp.11
    DOI: 10.3280/MACO2018-002002
  • Un framework integrato per la misura dell'innovazione del Piano Nazionale Scuola Digitale (PNSD) Domenico Consoli, Selena Aureli, in MANAGEMENT CONTROL 1/2018 pp.139
    DOI: 10.3280/MACO2018-001007
  • Management Controlling and Governance of Family Businesses Antonio Leotta, Carmela Rizza, Daniela Ruggeri, pp.143 (ISBN:978-3-030-47740-0)
  • Management Controlling and Governance of Family Businesses Annalisa Sentuti, Francesca M. Cesaroni, Gaia Bassani, Cristiana Cattaneo, pp.181 (ISBN:978-3-030-47740-0)

Lucrezia Songini, Paola Vola, The Role of Professionalization and Managerialization in Family Business Succession in "MANAGEMENT CONTROL" 1/2015, pp 9-43, DOI: 10.3280/MACO2015-001002