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Performance implications of institutionalization process in family-owned businesses: Evidence from an emerging economy

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  • Alpay, Güven
  • Bodur, Muzaffer
  • YIlmaz, Cengiz
  • Çetinkaya, Saadet
  • ArIkan, Laçin

Abstract

This paper attempts to understand the role of two highly relevant founder family characteristics, harmony among family members and the degree of democratization in decision-making, in the institutionalization and adaptive capability development processes of family firms in Turkey as an exemplar of an emerging market. The paper examines how institutionalization and adaptability jointly drive firm-level differences in quantitative (i.e., sales growth, market share, and return on investment) and qualitative performance (i.e., quality of goods/services, new product development, employee satisfaction) components. Data were collected from 436 respondents in 132 family firms through structured questionnaires administered to at least three respondents from each firm. Findings indicated that among the institutionalization dimensions, transparency had the strongest effect on both quantitative and qualitative firm performance, whereas adaptability influenced qualitative performance only. Harmony in family relations increased efforts for institutionalization, whereas democracy in decision-making enhanced adaptability. Implications of these findings are discussed and several future research directions are suggested.

Suggested Citation

  • Alpay, Güven & Bodur, Muzaffer & YIlmaz, Cengiz & Çetinkaya, Saadet & ArIkan, Laçin, 2008. "Performance implications of institutionalization process in family-owned businesses: Evidence from an emerging economy," Journal of World Business, Elsevier, vol. 43(4), pages 435-448, October.
    • Handle: RePEc:eee:worbus:v:43:y:2008:i:4:p:435-448
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    2. Turhan Erkmen & Ayşe Günsel & Erkut Altındağ, 2020. "The Role of Innovative Climate in the Relationship between Sustainable IT Capability and Firm Performance," Sustainability, MDPI, vol. 12(10), pages 1-26, May.
    3. Xu, Kai & Hitt, Michael A. & Dai, Li, 2020. "International diversification of family-dominant firms: Integrating socioemotional wealth and behavioral theory of the firm," Journal of World Business, Elsevier, vol. 55(3).
    4. Kiljae Lee & Kyung Young Lee & Lorn Sheehan, 2020. "Hey Alexa! A Magic Spell of Social Glue?: Sharing a Smart Voice Assistant Speaker and Its Impact on Users’ Perception of Group Harmony," Information Systems Frontiers, Springer, vol. 22(3), pages 563-583, June.
    5. Christofi, Michael & Pereira, Vijay & Vrontis, Demetris & Tarba, Shlomo & Thrassou, Alkis, 2021. "Agility and flexibility in international business research: A comprehensive review and future research directions," Journal of World Business, Elsevier, vol. 56(3).
    6. Ana Roque & Maria-Ceu Alves, 2023. "The Impact of COVID-19 on the Internationalization Performance of Family Businesses: Evidence from Portugal," JRFM, MDPI, vol. 16(12), pages 1-14, December.

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