Creating Value Across Generations in Family-Controlled Businesses: The Role of Family Social Capital

This article explores the processes through which family-controlled businesses (FCBs) access and recombine resources to match the evolving needs of their business activities. We do so by applying the conceptual lens offered by social capital to the comparative study of four FCBs active in traditional competitive arenas. Our data reveal that these firms’ ability to create financial value over generations does not result from possession of some unique resource, nor from higher-level combinative capabilities; rather, these FCBs have systematically created value through their ability to renew and to reshape their social interactions within and outside the controlling family.

[1]  Pramodita Sharma,et al.  Book Reviews: Managing for the Long Run: Lessons in Competitive Advantage from Great Family Businesses , 2005 .

[2]  P. Adler,et al.  Social Capital: Prospects for a New Concept , 2002 .

[3]  W. Baker.  Market Networks and Corporate Behavior , 1990, American Journal of Sociology.

[4]  J. Coleman,et al.  Social Capital in the Creation of Human Capital , 1988, American Journal of Sociology.

[5]  Sylvia M. Tunstall,et al.  A Psychological Perspective , 2001 .

[6]  L. Melin,et al.  Micro Strategy and Strategizing: Towards an Activity‐Based View , 2003 .

[7]  Randall Morck,et al.  Inherited Wealth, Corporate Control and Economic Growth: the Canadian Disease , 1998 .

[8]  Desiderio J. García-Almeida,et al.  The Succession Process from a Resource- and Knowledge-Based View of the Family Firm , 2001 .

[9]  M. C. Jensen,et al.  Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit , 1976 .

[10]  H. Demsetz,et al.  The Structure of Corporate Ownership: Causes and Consequences , 1985, Journal of Political Economy.

[11]  Vicente Vargas,et al.  RESEARCH NOTES AND COMMENTARIES OWNERSHIP, ORGANIZATION, AND PRIVATE FIRMS’ EFFICIENT USE OF RESOURCES , 2003 .

[12]  Tudor Rickards,et al.  Built to last: successful habits of visionary companies , 1997 .

[13]  E. Fama,et al.  Separation of Ownership and Control , 1983, The Journal of Law and Economics.

[14]  James J. Chrisman,et al.  Defining the Family Business by Behavior , 1999 .

[15]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.

[16]  Pramodita Sharma,et al.  Four Bases of Family Business Successor Commitment: Antecedents and Consequences , 2005 .

[17]  T. Habbershon,et al.  A Resource-Based Framework for Assessing the Strategic Advantages of Family Firms , 1999 .

[18]  M. Lubatkin,et al.  Agency Relationships in Family Firms: Theory and Evidence , 2001 .

[19]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[20]  M. Carney.  Corporate Governance and Competitive Advantage in Family–Controlled Firms , 2005 .

[21]  John A. Davis,et al.  Generation to Generation: Life Cycles of the Family Business , 1997 .

[22]  David G. Sirmon,et al.  Managing Resources: Linking Unique Resources, Management, and Wealth Creation in Family Firms , 2003 .

[23]  S. Ghoshal,et al.  Social Capital and Value Creation: The Role of Intrafirm Networks , 1998 .

[24]  Randel S. Carlock,et al.  Family Business on the Couch: A Psychological Perspective , 2007 .

[25]  Andrei Shleifer,et al.  Corporate Ownership Around the World , 1998 .

[26]  M. C. Jensen.  Self Interest, Altruism, Incentives, and Agency Theory , 1994 .

[27]  S. Ghoshal,et al.  Social Capital, Intellectual Capital, and the Organizational Advantage , 1998 .

[28]  Daniel A. Levinthal,et al.  Exploration and Exploitation in Organizational Learning , 2007 .

[29]  Ronald C. Anderson,et al.  Founding-Family Ownership and Firm Performance: Evidence from the S&P 500 , 2003 .