There has been a good deal of debate regarding the performance of family firms.
Explanations for divergent findings have ranged from variations in governance
arrangements to particular organizational practices. One avenue that has not
been much explored is the role played by industry. We theorize that market
requirements, when coupled with firm–specific behaviors and resources, can
account for why some family businesses do well in particular industries. More
precisely, due to their long–term orientation and the intimate connection among
family members, some family firms are especially adept at accumulating human
capital, passing on tacit knowledge, protecting and leveraging reputation, and
building strong relationships and slack resources. These capacities promote
success in industries with high levels of uncertainty regarding product quality,
product value, and demand. The arts–related industries, we shall argue, are one
such environment, and we use it to demonstrate our thesis that family firms, if
oriented appropriately, can thrive where relationships, tacit knowledge, and
reputation are demanded.
Get full access to this article
View all access options for this article.
References
1.
AldrichH. & CliffJ. (2003). The
pervasive effects of family on entrepreneurship.
Journal of Business Venturing,
18(5),
573–591.
2.
AlloucheJ. & AmannB. (1998). La
confiance: Une explication des performances des entreprises
familiales. Economies et Sociétés,
32, 129–154.
3.
AndersonR.C. & ReebD.M. (2003).
Founding–family ownership and firm performance: Evidence from
the S&P 500. Journal of Finance,
58(3),
1301–1327.
4.
Aragón–CorreaJ.A. & SharmaS. (2003). A
contingent resource–based view of proactive corporate environmental
strategy. Academy of Management Review,
28(1),
71–88.
5.
ArregleJ.L., HittM., SirmonD., & VeryP. (2007). The
development of organizational social capital: Attributes of family
firms. Journal of Management Studies,
44(1),
73–95.
6.
AspdenP. (2011, September 30).
Lunch with the FT: William Acquavella. Financial
Times.
7.
BarneyJ. (1991).
Firm resources and sustained competitive
advantage. Journal of Management,
17(1),
99–120.
8.
BeckerH.S. (1982). Art
worlds. Berkeley, CA:
University of California
Press.
9.
BeckerH.S. (2006).
The work itself. In
BeckerH. S., FaulknerR. R., &
Kirshenblatt–GimblettB. (Eds.), Art from start to
finish: Jazz, painting, writing, and other improvisations (pp.
21–30). Chicago,
IL: University of
Chicago.
10.
BellowA. (2004). In praise
of nepotism. New York: Random House
LLC.
11.
BertrandM. & SchoarA. (2006). The
role of family in family firms. TheJournal of Economic Perspectives, 20,
73–96.
12.
BloomN. & Van
ReenenJ. (2007).
Measuring and explaining management practices across firms
and countries. Quarterly Journal of
Economics, 122(4),
1341–1408.
13.
BouglioneL. & AiolfiM. (2002). Le cirque
d'hiver. Paris, FR:
Flammarion.
14.
BourgeoisL. (1981). On
the measurement of organizational slack. Academy of
Management Review, 6(1),
29–39.
15.
BrighamK.H., LumpkinG. T., PayneG. T., &
ZacharyM. A. (2014).
Researching long–term orientation.
Family Business Review,
27(1),
72–88.
16.
BryantS. (2005). The
impact of peer mentoring on organizational knowledge creation and sharing.
Group and OrganizationalManagement, 30(3),
319–338.
17.
CavesR.E. (2000). Creative
industries: Contracts between art and commerce.
Cambridge, MA: Harvard
University Press.
18.
CavesR.E. (2006a).
Organization of arts and entertainment
industries. In ThrosbyD. &
GinsberghV. (Eds.), Handbook on the
economics of arts and culture (pp.
533–566).
Amsterdam:
North–Holland.
19.
CavesR.E. (2006b).
Economic analysis and steps toward completing the
work. In BeckerH. S., FaulknerR. R., &
Kirshenblatt–GimblettB. (Eds.), Art from start to
finish: Jazz, painting, writing, and other improvisations (pp.
135–148). Chicago,
IL: University of
Chicago.
20.
ChrismanJ.J., ChuaJ.H., &
SteierL. (2005).
Sources and consequences of distinctive familiness: An
introduction. Entrepreneurship Theory and
Practice, 29(3),
237–247.
21.
CoffR. &
KryscynskiD. (2011).
Drilling for micro–foundations of human capital based
competitive advantages. Journal of
Management, 37(5),
1429–1443.
22.
CyertR. & MarchJ. (1963). A
behavioral theory of the firm. Englewood
Cliffs: Prentice
Hall.
23.
DanielF., LohrkeF., &
FornaciariC. (2004).
Slack resources and firm performance: A
meta–analysis. Journal of Business,
57(6),
565–582.
24.
DantoA. (1964). The
artworld. Journal of Philosophy,
61(19),
571–584.
25.
DeephouseD.L. &
JaskiewiczP. (2013). Do
family firms have better reputations than non–family firms?Journal of Management Studies,
50(3),
337–360.
26.
DoneyP. & CannonJ. (1997). An
examination of the nature of trust in buyer–seller
relationships. Journal of Marketing,
61(2),
35–51.
27.
DreuxD.R. (1990).
Financing family business: Alternatives to selling out or
going public. Family Business Review,
3(3),
225–243.
28.
FamaE.F. & JensenM.C. (1983).
Separation of ownership and control.
Journal of Law and Economics, 26,
301–325.
29.
FarberS. & GreenM. (1984). Hollywood
dynasties. New York:
Delilah/Putnam.
30.
FarrellB. (1993). Elite
families: Class and power in nineteenth–century Boston.
Albany, NY: State University
of New York Press.
31.
FombrunC.J. (1996).
Reputation: Realizing value from the corporate image.
Boston, MA: Harvard Business
School Press.
32.
FossN. (2011). Why
micro–foundations for resource–based theory are needed and what they may
look like?Journal of Management, 37(5),
1413–1428.
33.
FukuyamaF. (1996). Trust: The
social virtues and the creation of prosperity. New
York, NY:
Viking.
34.
GarbarinoE. & JohnsonM. (1999). The
different roles of satisfaction, trust and commitment in customer
relationships. Journal of Marketing,
63(2),
70–87.
35.
GeorgeG. (2005).
Slack resources and the performance of privately held
firms. Academy of Management Journal,
48(4),
661–676.
36.
GersickK., DavisJ., HamptonM., &
LansbergI. (1997). Generation
to generation: Life cycles of the family business.
Boston, MA: Harvard Business
School Press.
37.
Gómez–MejíaL.R., CruzC., BerroneP., &
DeCastroJ. (2011). The
bind that ties: Socioemotional wealth preservation in family
firms. Academy of Management Annals,
5(1),
653–707.
38.
Gómez–MejíaL.R., HaynesK.T.,
Nuñez–NickelM., JacobsonK.J.L., &
Moyano–FuentesJ. (2007).
Socioemotional wealth and business risks in family controlled
firms. Administrative Science Quarterly,
52(1),
106–137.
39.
GrayA. (1994, Monday, October 24,
10). The Walter Klinkhoff Gallery will
never sell you a ‘piece of rubbish’. The Gazette,
Montreal.
40.
GrayE.R. & BalmerJ.M.T. (1998).
Managing corporate image and reputation.
Long Range Planning, 31(5),
695–702.
41.
HaackeH. (1975). Framing
and being framed: 7 works 1970–75. New
York: New York University
Press.
42.
HabbershonT.G. &
WilliamsM.L. (1999). A
resource–based framework for assessing the strategic advantages of family
firms. Family Business Review,
12(1),
1–22.
43.
HesmondhalghD. (2002). The
cultural industries. London:
Sage.
HirschP. (1972).
Processing fads and fashions.
American Journal of Sociology,
77(4),
639–659.
46.
JamesH. (1999).
Owner as manager, extended horizons and the family
firm. International Journal of Economics and
Business, 6(1),
41–55.
47.
KraaijenbrinkJ., SpenderJ.–C., &
GroenA.J. (2010).
The resource–based view: A review and assessment of its
critiques. Journal of Management,
36(1),
349–372.
48.
LandesD. (2006). Dynasties:
Fortunes and misfortunes of the world's great family businesses.
New York:
Viking.
49.
LampelJ., ShamsieJ., & LantT. (2006). The
business of culture: Strategic perspectives on entertainment and
media. Mahwah, NJ:
Erlbaum.
50.
LansbergI. (1999). Succeeding
generations: Realizing the dream of families in business.
Boston: Harvard Business
School Press.
51.
LawrenceP. & LorschJ. (1967).
Organization and environment.
Boston: Harvard University
Press.
52.
Le Breton–MillerI. & MillerD. (2009).
Agency vs. stewardship in public family firms: A social
embeddedness reconciliation. Entrepreneurship Theory
and Practice, 33(6),
1169–1191.
53.
Le Breton–MillerI. & MillerD. (2015). The
paradox of resource vulnerability: Considerations for organizational
curatorship. Strategic Management Journal,
36, 397–415. doi:10.1002/smj.2220.
54.
Le Breton–MillerI. & MillerD. (2015). Learning
stewardship in family firms. Academy of Management
Learning & Education, doi:10.5465/amle.2014.0131.
55.
Le Breton–MillerI., MillerD., & LesterR. (2011). Stewardship or
agency: A social embeddedness reconciliation of conduct and performance in
public family businesses. Organization
Science, 22(3),
704–721.
56.
LohseM. (2012, April).
Maeght: A family affair. France
Today, 27(4),
27.
57.
LubatkinM.H., LingY., & SchulzeW.S. (2007).
An organizational justice–based view of self–control and
agency costs in family firms. Journal of Management
Studies, 44(6),
955–971.
58.
MaussM. (1971). Essais de
sociologie. Paris:
Éditions de Minuit.
59.
MehrotraV., MorckR., JungwookS., &
WiwattanakantangY. (2013).
Adoptive expectations: Rising sons in Japanese family
firms. Journal of Financial Economics,
108(3),
840–854.
60.
MillerD., & Le
Breton–MillerI. (2005). Managing
for the long run. Boston:
Harvard Business School
Press.
61.
MillerD. & Le
Breton–MillerI. (2006).
Family governance and firm performance: Agency, stewardship
and distinctive capabilities. Family Business
Review, 19(1),
73–87.
62.
MillerD., Le
Breton–MillerI., LesterR., &
CannellaA. (2007). Are
family firms really superior performers?Journal of Corporate Finance,
13(5),
829–858.
63.
MillerD., Le
Breton–MillerI., &
ScholnickB. (2008).
Stewardship vs. stagnation. Journal
of Management Studies, 45(1),
50–78.
64.
MillerD. & ShamsieJ. (1996). The
resource–based view of the firm in two environments: The Hollywood film
studios from 1936 to 1965. Academy of Management
Journal, 39(3),
519–543.
65.
MillerD., XuX., &
MehrotraV. (2015). When is human
capital a valuable resource?Strategic Management Journal,
36(6),
930–944.
66.
MorckR., WolfenzonD., & YeungB. (2005).
Corporate governance, economic entrenchment, and
growth. Journal of Economic Literature,
43(3),
577–720.
67.
MorckR. & YeungB. (2003).
Agency problems in large family business
groups. Entrepreneurship Theory and
Practice, 27(4),
367–382.
68.
MorrisB. (2012, March 6). When the
family business is art. New York Times.
69.
MoulinR. (1967). Le marché
de la peinture en France. Paris:
Les Éditions Minuit.
70.
NonakaI. (1994). A
dynamic theory of organizational knowledge creation.
Organization Science, 5(1),
14–37.
71.
NonakaI. & von
KroghG. (2009).
Perspective–tacit knowledge and knowledge conversion:
Controversy and advancement in organizational knowledge creation
theory. Organization Science,
20(3),
635–652.
ParrishD. (2005). T–shirts
and suits: A guide to the business of creativity.
Liverpool, UK: Merseyside
ACME.
74.
PearsonA.W., CarrJ.C., & ShawJ.C. (2008).
Toward a theory of familiness: A social capital
perspective. Entrepreneurship Theory and
Practice, 32(6),
949–969.
75.
PenningsJ.M., LeeK., &
WitteloostuijnA.v. (1998).
Human capital, social capital, and firm
dissolution. Academy of Management Journal,
41(4),
425–440.
76.
ReidR., DunnB., CromieS., & AdamsJ. (1999).
Family orientation in family firms: A model and some
empirical evidence. Journal of Small Business and
Enterprise Development, 6(1),
55–67.
77.
ReidR.S. & AdamsJ.S. (2001).
Human resource management—A survey of practices within family
and non–family firms. Journal of European Industrial
Training, 25(6),
310–320.
78.
RobertsP.W. &
DowlingG.R. (2002).
Corporate reputation and sustained superior
performance. Strategic Management Journal,
23(12),
1077–1093.
79.
SirmonD. & HittM. (2003).
Managing resources: Linking unique resources, management and
wealth creation in family firms. Entrepreneurship
Theory and Practice, 27(4),
339–358.
80.
ThompsonJ.D. (1967).
Organizations in action. New
York:
McGraw–Hill.
