Strategies for Longevity in Family Firms: A European Perspective

217 Pages·2012·0.921 MB·English

by  Guido Corbetta, Carlo Salvato (auth.)

Strategies for Longevity in Family Firms
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MONEYANDCALCULATION
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ENTREPRENEURIALVALUESANDSTRATEGICMANAGEMENT
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STRATEGIESFORLONGEVITYINFAMILYFIRMS
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Strategies for Longevity
in Family Firms
A European Perspective
Guido Corbetta
BocconiUniversity,Milan,Italy
and
Carlo Salvato
BocconiUniversity,Milan,Italy
©GuidoCorbettaandCarloSalvato2012
Softcover reprint of the hardcover 1st edition 2012 978-1-137-02457-2
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Contents
ListofTables vi
ListofFigures vii
Acknowledgments viii
Introduction:StrategiesforLongevityinFamilyFirms 1
1 SomeMythsaboutFamilyFirms 9
2 UniqueCharacteristicsofFamilyFirms 19
3 AnalyzingFamilyFirms:ToolsandContents 31
4 SuccessfulFamilyFirms 51
5 CompetitiveStrategiesinFamilyFirms 70
6 DiversifyingtheFamilyEstate 87
7 FinancialStrategies 100
8 OrganizationalStrategies 117
9 InstitutionalStrategies 135
10 TheProcessofGenerationalChange 159
11 TransitionProcessesand“ThirdParties” 187
Notes 197
Bibliography 203
Index 207
v
Tables
I.1 Maindifferencesbetweenaveragefamilyfirmand
non-familyfirmrationalesinEurope 7
4.1 OverviewofMillerandLeBreton-Miller’s(2005)fourCs 53
10.1 Thegenerationalchallenge 180
11.1 Classificationofthirdparties 190
vi
Figures
I.1 Strategiesforlongevityinfamilyfirms:Structureofthe
book 3
2.1 Variablesusedtoclassifyfamilyfirms 22
3.1 GenogramoftheBianchifamily 32
5.1 Evolutionofthepropensityforchangeamong
entrepreneurs 82
8.1 Possibleevolutionofdecision-makingprocesses 127
8.2 DevelopmentofthemanagementteamatCampari 132
vii
Acknowledgments
We gratefully acknowledge the support that we received from Prof.
VittorioCodaoverseveralyearsofpassionatementorshipanddedicated
advice.WesincerelythankJillConnellyforherexcellenttranslationsof
originalmaterialsandforhereditorialsupport.
viii
Introduction: Strategies for
Longevity in Family Firms
What is uniqueabout strategyin family firms, and in European family
firmsinparticular?Ifitistruethatbetween60%and90%ofallfirmsare
family-controlled, as statistics in many countries suggest, the question
shouldactuallybereversed.Weshouldbeaskingwhatisuniqueabout
strategy in non-family firms. Yet it is a well-known fact that strategic
management developed both as a theory and as a management prac-
tice to address the specific needs of large publicly owned corporations,
fortwomainreasons.First,theseinstitutionsareownedbyavastnum-
berofshareholderswhoarenotdirectlyinvolvedinmanagement.This
meansthatsophisticatedstrategictheoriesandtoolsareneededtodele-
gateandtocontroldecision-makingpower.Second,thesecompaniesare
managed by a category of professional executives who require sophis-
ticated management practices to guide and to justify their behaviors
to their more-or-less dispersed shareholders. In light of this, it is not
surprising that strategy scholars and consultants have, over the years,
devoted most of their attention to studying and advising large public
companiesandguidingtheirstrategicbehaviors.
However,familyfirmsaredifferentandmanifeststrategicneedsthat
oftendivergefromthoseofpubliccompanies.Akeydifferentiatingfac-
tor,amongthosethatwewillexploreinthisbook,isthattheseparation
of ownership and management is far less pronounced in family than
in non-family firms. Although, as we will see, different types of family
firms show markedly different patterns in terms of shareholders’ influ-
enceonstrategicchoices.Butitistheimpactofoneorasmallnumber
of related families on a firm’s decisions and behaviors that determines
thehighlyspecificstrategiesandrequirementsoffamilyfirms.Aswewill
trytoillustratethroughoutthisbook,thesedifferencesarepossiblyeven
morepronouncedintheEuropeansettingthanelsewhereintheworld.
1