IDEAS home Printed from https://ideas.repec.org/a/sae/entthe/v43y2019i3p629-646.html
   My bibliography  Save this article

The Effect of Transgenerational Control Intention on Family-Firm Performance: It Depends Who Pursues It

Author

Listed:
  • Christian Hoffmann
  • Peter Jaskiewicz
  • Torsten Wulf
  • James G. Combs

Abstract

Transgenerational control intention (TCI) is a pivotal characteristic of many family firms. Yet, it remains unclear whether TCI benefits family-firm performance by instilling a long-term view, or hurts performance by fueling harmful socioemotional wealth (SEW) goals. We posit that it depends who pursues it. When faced with TCI, family managers are known to suffer from cognitive biases that, we submit, do not similarly apply to nonfamily managers. Thus, only family managers harm performance when pursuing TCI. An empirical investigation of 107 private German family firms supports our theory; the effect of TCI on firm performance depends on who pursues it.

Suggested Citation

  • Christian Hoffmann & Peter Jaskiewicz & Torsten Wulf & James G. Combs, 2019. "The Effect of Transgenerational Control Intention on Family-Firm Performance: It Depends Who Pursues It," Entrepreneurship Theory and Practice, , vol. 43(3), pages 629-646, May.
    • Handle: RePEc:sae:entthe:v:43:y:2019:i:3:p:629-646
    DOI: 10.1177/1042258717730025
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1042258717730025
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1042258717730025?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Isabelle Le Breton–Miller & Danny Miller, 2013. "Socioemotional Wealth across the Family Firm Life Cycle: A Commentary on “Family Business Survival and the Role of Boardsâ€," Entrepreneurship Theory and Practice, , vol. 37(6), pages 1391-1397, November.
    2. Luis R. Gomez–Mejia & Joanna Tochman Campbell & Geoffrey Martin & Robert E. Hoskisson & Marianna Makri & David G. Sirmon, 2014. "Socioemotional Wealth as a Mixed Gamble: Revisiting Family Firm R&D Investments with the Behavioral Agency Model," Entrepreneurship Theory and Practice, , vol. 38(6), pages 1351-1374, November.
    3. Nils Plambeck & Klaus Weber, 2010. "When the Glass is Half Full and Half Empty: CEO's Ambivalent Interpretations of Strategic Issues," Post-Print hal-00528394, HAL.
    4. Jaskiewicz, Peter & Combs, James G. & Rau, Sabine B., 2015. "Entrepreneurial legacy: Toward a theory of how some family firms nurture transgenerational entrepreneurship," Journal of Business Venturing, Elsevier, vol. 30(1), pages 29-49.
    5. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    6. Jess H. Chua & James J. Chrisman & Erich B. Bergiel, 2009. "An Agency Theoretic Analysis of the Professionalized Family Firm," Entrepreneurship Theory and Practice, , vol. 33(2), pages 355-372, March.
    7. Nils Plambeck & Klaus Weber, 2010. "When the glass is half full and half empty: CEOs' ambivalent interpretations of strategic issues," Strategic Management Journal, Wiley Blackwell, vol. 31(7), pages 689-710, July.
    8. Jess H. Chua & James J. Chrisman & Pramodita Sharma, 1999. "Defining the Family Business by Behavior," Entrepreneurship Theory and Practice, , vol. 23(4), pages 19-39, July.
    9. repec:bla:jfinan:v:58:y:2003:i:3:p:1301-1327 is not listed on IDEAS
    10. Thomas M. Zellweger & Franz W. Kellermanns & James J. Chrisman & Jess H. Chua, 2012. "Family Control and Family Firm Valuation by Family CEOs: The Importance of Intentions for Transgenerational Control," Organization Science, INFORMS, vol. 23(3), pages 851-868, June.
    11. James J. Chrisman & Jess H. Chua & Lloyd P. Steier, 2011. "Resilience of Family Firms: An Introduction," Entrepreneurship Theory and Practice, , vol. 35(6), pages 1107-1119, November.
    12. Luis R. Gomez‐Mejia & Marianna Makri & Martin Larraza Kintana, 2010. "Diversification Decisions in Family‐Controlled Firms," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 223-252, March.
    13. Raj V. Mahto & Peter S. Davis & John A. Pearce II & Richard B. Robinson Jr., 2010. "Satisfaction with Firm Performance in Family Businesses," Entrepreneurship Theory and Practice, , vol. 34(5), pages 985-1002, September.
    14. David L. Deephouse & Peter Jaskiewicz, 2013. "Do Family Firms Have Better Reputations Than Non-Family Firms? An Integration of Socioemotional Wealth and Social Identity Theories," Journal of Management Studies, Wiley Blackwell, vol. 50(3), pages 337-360, May.
    15. Villalonga, Belen & Amit, Raphael, 2006. "How do family ownership, control and management affect firm value?," Journal of Financial Economics, Elsevier, vol. 80(2), pages 385-417, May.
    16. David G. Sirmon & Michael A. Hitt, 2003. "Managing Resources: Linking Unique Resources, Management, and Wealth Creation in Family Firms," Entrepreneurship Theory and Practice, , vol. 27(4), pages 339-358, October.
    17. Isabelle Le Breton–Miller & Danny Miller & Lloyd P. Steier, 2004. "Toward an Integrative Model of Effective FOB Succession," Entrepreneurship Theory and Practice, , vol. 28(4), pages 305-328, July.
    18. Kimberly A. Eddleston & Franz W. Kellermanns & Steven W. Floyd & Victoria L. Crittenden & William F. Crittenden, 2013. "Planning for Growth: Life Stage Differences in Family Firms," Entrepreneurship Theory and Practice, , vol. 37(5), pages 1177-1202, September.
    19. Lucia Naldi & Carmelo Cennamo & Guido Corbetta & Luis Gomez–Mejia, 2013. "Preserving Socioemotional Wealth in Family Firms: Asset or Liability? The Moderating Role of Business Context," Entrepreneurship Theory and Practice, , vol. 37(6), pages 1341-1360, November.
    20. Morris, Michael H. & Williams, Roy O. & Allen, Jeffrey A. & Avila, Ramon A., 1997. "Correlates of success in family business transitions," Journal of Business Venturing, Elsevier, vol. 12(5), pages 385-401, September.
    21. Alessandro Minichilli & Guido Corbetta & Ian C. MacMillan, 2010. "Top Management Teams in Family‐Controlled Companies: ‘Familiness’, ‘Faultlines’, and Their Impact on Financial Performance," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 205-222, March.
    22. T.K. Das & Bing‐Sheng Teng, 1999. "Cognitive Biases and Strategic Decision Processes: An Integrative Perspective," Journal of Management Studies, Wiley Blackwell, vol. 36(6), pages 757-778, November.
    23. Franz W. Kellermanns & Kimberly A. Eddleston & Thomas M. Zellweger, 2012. "Article Commentary: Extending the Socioemotional Wealth Perspective: A Look at the Dark Side," Entrepreneurship Theory and Practice, , vol. 36(6), pages 1175-1182, November.
    24. Ronald C. Anderson & David M. Reeb, 2003. "Founding‐Family Ownership and Firm Performance: Evidence from the S&P 500," Journal of Finance, American Finance Association, vol. 58(3), pages 1301-1328, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ruijie Jin & Helen Wei Hu, 2024. "Liability of Ownership Origin, Corporate Philanthropy, and Desire for Control in Chinese Family Firms," Entrepreneurship Theory and Practice, , vol. 48(3), pages 763-787, May.
    2. Cox, Kevin C. & Lortie, Jason & Marshall, David R. & Kidwell, Roland E., 2022. "Beyond the balance Sheet: The effects of family influence on social performance," Journal of Business Research, Elsevier, vol. 143(C), pages 318-330.
    3. Yannick Bammens & Paul Hünermund & Petra Andries, 2022. "Pursuing Gains or Avoiding Losses: The Contingent Effect of Transgenerational Intentions on Innovation Investments," Journal of Management Studies, Wiley Blackwell, vol. 59(6), pages 1493-1530, September.
    4. Michele Pinelli & Francesco Debellis & Alfredo Massis, 2024. "Long-term orientation, family-intensive governance arrangements, and firm performance: an institutional economics perspective," Small Business Economics, Springer, vol. 63(2), pages 731-754, August.
    5. Chang, Erick P.C. & Zare, Sina & Ramadani, Veland, 2022. "How a larger family business is different from a non-family one?," Journal of Business Research, Elsevier, vol. 139(C), pages 292-302.
    6. James J. Chrisman & Kristen Madison & Taewoo Kim, 2021. "A Dynamic Framework of Noneconomic Goals and Inter-Family Agency Complexities in Multi-Family Firms," Entrepreneurship Theory and Practice, , vol. 45(4), pages 906-930, July.
    7. Anna Maria Bornhausen & Torsten Wulf, 2024. "Digital innovation in family firms: The roles of non-family managers and transgenerational control intentions," Small Business Economics, Springer, vol. 62(4), pages 1429-1448, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xueru Yang & Jun Li & Laura J. Stanley & Franz W. Kellermanns & Xinchun Li, 2020. "How family firm characteristics affect internationalization of Chinese family SMEs," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 417-448, June.
    2. Kosmidou, Vasiliki & Holt, Daniel T., 2022. "The relationship between family management and performance: A configurational approach in exploring the role of socioemotional wealth and generational stage," Journal of Family Business Strategy, Elsevier, vol. 13(4).
    3. Barros, Ismael & Hernangómez, Juan & Martin-Cruz, Natalia, 2016. "A theoretical model of strategic management of family firms. A dynamic capabilities approach," Journal of Family Business Strategy, Elsevier, vol. 7(3), pages 149-159.
    4. William S. Schulze & Franz W. Kellermanns, 2015. "Reifying Socioemotional Wealth," Entrepreneurship Theory and Practice, , vol. 39(3), pages 447-459, May.
    5. Simon C. Parker, 2016. "Family Firms and the “Willing Successor†Problem," Entrepreneurship Theory and Practice, , vol. 40(6), pages 1241-1259, November.
    6. Sami Basly & Paul-Laurent Saunier, 2020. "Familiness, socio-emotional goals and the internationalization of French family SMEs," Journal of International Entrepreneurship, Springer, vol. 18(3), pages 270-311, September.
    7. Jessenia Davila & Luis Gomez-Mejia & Geoff Martin, 2024. "Family Firms and Employee Pension Underfunding: Good Corporate Citizens or Unethical Opportunists?," Journal of Business Ethics, Springer, vol. 192(2), pages 323-339, June.
    8. Cambrea, Domenico Rocco & Ponomareva, Yuliya & Pittino, Daniel & Minichilli, Alessandro, 2022. "Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms," Journal of Family Business Strategy, Elsevier, vol. 13(3).
    9. Jean-Luc Arregle & Francesco Chirico & Liena Kano & Sumit K. Kundu & Antonio Majocchi & William S. Schulze, 2021. "Family firm internationalization: Past research and an agenda for the future," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(6), pages 1159-1198, August.
    10. Shujun Ding & Baozhi Qu & Zhenyu Wu, 2016. "Family Control, Socioemotional Wealth, and Governance Environment: The Case of Bribes," Journal of Business Ethics, Springer, vol. 136(3), pages 639-654, July.
    11. Ginesti, Gianluca & Ossorio, Mario & Dawson, Alexandra, 2023. "Family businesses and debt maturity structure: Focusing on family involvement in governance to explain heterogeneity," Journal of Family Business Strategy, Elsevier, vol. 14(2).
    12. Schierstedt, Bennet & Henn, Marisa & Lutz, Eva, 2020. "Diversified acquisitions in family firms: Restricted vs. extended family priorities," Journal of Family Business Strategy, Elsevier, vol. 11(2).
    13. Hiebl, Martin R.W., 2013. "Bean counter or strategist? Differences in the role of the CFO in family and non-family businesses," Journal of Family Business Strategy, Elsevier, vol. 4(2), pages 147-161.
    14. Hauck, Jana & Suess-Reyes, Julia & Beck, Susanne & Prügl, Reinhard & Frank, Hermann, 2016. "Measuring socioemotional wealth in family-owned and -managed firms: A validation and short form of the FIBER Scale," Journal of Family Business Strategy, Elsevier, vol. 7(3), pages 133-148.
    15. Claudia Arena & Giovanna Michelon, 2018. "A matter of control or identity? Family firms' environmental reporting decisions along the corporate life cycle," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1596-1608, December.
    16. Hafner, Cornelius & Pidun, Ulrich, 2022. "Getting family firm diversification right: A configurational perspective on product and international diversification strategies," Journal of Family Business Strategy, Elsevier, vol. 13(1).
    17. Fynn-Willem Lohe & Andrea Calabrò & Mariateresa Torchia, 2021. "Disentangling the drivers of family firms internationalization through the lens of socioemotional wealth," Journal of International Entrepreneurship, Springer, vol. 19(4), pages 479-509, December.
    18. Ivan Miroshnychenko & Alfredo De Massis & Danny Miller & Roberto Barontini, 2021. "Family Business Growth Around the World," Entrepreneurship Theory and Practice, , vol. 45(4), pages 682-708, July.
    19. Patricio Duran & Nadine Kammerlander & Marc van Essen & Thomas Zellweger, 2016. "Doing More with Less : Innovation Input and Output in Family Firms," Post-Print hal-02276703, HAL.
    20. Felix K. Thiele, 2017. "Family businesses and non-family equity: literature review and avenues for future research," Management Review Quarterly, Springer, vol. 67(1), pages 31-63, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:entthe:v:43:y:2019:i:3:p:629-646. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.