Strategies for Longevity in Family Firms: A European Perspective PDF
Preview Strategies for Longevity in Family Firms: A European Perspective
Strategies for Longevity in Family Firms BocconionManagement Series SeriesEditor:RobertGrant,EniProfessorofStrategicManagement,Department ofManagement,UniversitàCommercialeLuigiBocconi,Italy. TheBocconionManagement seriesaddressesabroadrangeofcontemporaryand cutting-edge issues relating to the management of organizations and the envi- ronmentinwhichtheyoperate.ConsistentwiththeongoingmissionofBocconi University,Italy,tolinkgoodsciencewithpracticalusefulness,theseriesischar- acterizedbyitsintegrationofrelevance,accessibility,andrigor.Itshowcasesthe workofscholarsfromallovertheworld,whohaveproducedcontributionstothe advancementofknowledgebybuildingontheoretical,disciplinary,cultural,or methodologicaltraditionswiththepotentialtoimprovemanagementpractice. TheseriesiseditedbytheCenterforResearchinOrganizationandManagement (CROMA)atBocconiUniversity,andispublishedthroughanagreementbetween PalgraveMacmillanandBocconiUniversityPress,animprintofEgea. 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Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke,HampshireRG216XS,England 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 Allrightsreserved.Noreproduction,copyortransmissionofthis publicationmaybemadewithoutwrittenpermission. Noportionofthispublicationmaybereproduced,copiedortransmitted savewithwrittenpermissionorinaccordancewiththeprovisionsofthe Copyright,DesignsandPatentsAct1988,orunderthetermsofanylicence permittinglimitedcopyingissuedbytheCopyrightLicensingAgency, SaffronHouse,6–10KirbyStreet,LondonEC1N8TS. Anypersonwhodoesanyunauthorizedactinrelationtothispublication maybeliabletocriminalprosecutionandcivilclaimsfordamages. Theauthorshaveassertedtheirrightstobeidentifiedastheauthorsofthis workinaccordancewiththeCopyright,DesignsandPatentsAct1988. Firstpublished2012by PALGRAVEMACMILLAN PalgraveMacmillanintheUKisanimprintofMacmillanPublishersLimited, registeredinEngland,companynumber785998,ofHoundmills,Basingstoke, HampshireRG216XS. PalgraveMacmillanintheUSisadivisionofStMartin’sPressLLC, 175FifthAvenue,NewYork,NY10010. PalgraveMacmillanistheglobalacademicimprintoftheabovecompanies andhascompaniesandrepresentativesthroughouttheworld. Palgrave®andMacmillan®areregisteredtrademarksintheUnitedStates, theUnitedKingdom,Europeandothercountries. ISBN 978-1-349-43857-0 ISBN 978-1-137-02458-9 (eBook) DOI 10.1057/9781137024589 Thisbookisprintedonpapersuitableforrecyclingandmadefromfully managedandsustainedforestsources.Logging,pulpingandmanufacturing processesareexpectedtoconformtotheenvironmentalregulationsofthe countryoforigin. AcataloguerecordforthisbookisavailablefromtheBritishLibrary. AcatalogrecordforthisbookisavailablefromtheLibraryofCongress. 10 9 8 7 6 5 4 3 2 1 21 20 19 18 17 16 15 14 13 12 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
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