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Family businesses and strategic change: the role of family ownership

Author

Listed:
  • Nina Schweiger

    (University of Innsbruck)

  • Kurt Matzler

    (University of Innsbruck)

  • Julia Hautz

    (University of Innsbruck)

  • Alfredo Massis

    (Free University of Bozen-Bolzano)

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.

Suggested Citation

  • Nina Schweiger & Kurt Matzler & Julia Hautz & Alfredo Massis, 2024. "Family businesses and strategic change: the role of family ownership," Review of Managerial Science, Springer, vol. 18(10), pages 2981-3005, October.
    • Handle: RePEc:spr:rvmgts:v:18:y:2024:i:10:d:10.1007_s11846-023-00703-3
    DOI: 10.1007/s11846-023-00703-3
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    More about this item

    Keywords

    Family firms; Family ownership; Strategic change; Performance feedback theory;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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