Social embedding of the corporation: family conglomerates around the world

This chapter studies large family conglomerates around the globe, showing that they are deeply embedded in each country’s institutional and social structure. While this type of business organization is prominent in developing countries, it also occupies a very important role in developed ones. The author examines the main theories to understand the resilience of large family conglomerates, using explanations originating in different fields, from political science, sociology, law, economics and finance to management. From the origins of the legal tradition, to transaction costs, institutions, and studies that highlight the crucial role of ideas, culture and other socially constructed variables, the author critically assesses these theories and their empirical application, providing examples of large family conglomerates from both developed and developing countries. Finally, the author briefly analyses the future of this sort of organization under a more open and globalized world. In particular, he discusses whether overseas expansion is the future for developing countries’ large family conglomerates. He argues that many of these conglomerates have all the capabilities to expand abroad, and their flexibility can be an asset in their internationalization process.