Sub-theme 65: Family Firms Growth and Development: The Role of Interorganizational Networks
Call for Papers
The small size of companies represents one of the most important obstacles to the competitiveness of industrial
systems, particularly in the innovative sectors. At the same time, in management literature a growing interest towards topics
on design of those types of inter-organizational coordination finalized towards the creation of value through product and
process innovation development. A gradual refocusing of research on factors external to the organizations (instead of the
internal ones) can be noticed by analyzing the most recent contributions to the literature on the key elements of the different
types of organizational innovation, ascribable to the development of network studies and more specifically, those on network/clusters
of small and medium-sized enterprises (SMEs). According to this approach, the creation and the governance of organizational
networks and the inter-organizational coordination are interpreted as the key elements for innovation development.
The main aim of this sub-theme is to investigate the network configuration and inter-organizational coordination mechanisms adopted (within the network) as antecedents of innovation processes in small and medium-sized family firms. From a configurational perspective a promising area of research is the analysis of how certain inter-organizational configurations and coordination mechanisms may promote or limit the range of opportunities that be effectively pursued by. On the basis of a review of network research, we have gained that different combinations of coordination mechanisms, associated with separate ownership structures, can describe and account for a good part of the variety of network forms; as much as different combinations of the same mechanisms, have been capable of explaining processes of innovation, internationalization and growth. Among others, results of the recent meta-analysis by Stam et al. (2013) suggest that, in order to asses the main effects of entrepreneurs' social capital on small firm performance, the current focus on relational and structural network properties in extant literature must be complemented with research that considers the quality of resources held by entrepreneurs' network contacts and the mechanisms through which they can be accessed and leveraged. Moreover, studies highlight that small firms’ network requirements change over time as well as the optimal configuration of entrepreneurs’ social capital that evolves while small firms grow older.
Family businesses are characterized by a modus operandi that pays special attention to employees (often along with their families), the relationship with suppliers (often also funding the supply chain), and more generally, to the community to which they belong. An important aspect is that family businesses may be less inclined to fire employees (e.g., D'Aurizio & Romano, 2013). In other words, a family business enhances ties with stakeholders by its own constitution, naturally (Cennamo et al., 2012; Mitchell et al., 2011). Therefore, it produces a societal surplus value that goes beyond its financial statements and losing a family business involves losing that surplus to its community of reference (Ferri and Mariani, 2013).
Family businesses are usually micro or small enterprises which need bank loans to finance investments and grow. Due to their opaqueness they tend to profit from intense or long-term relationships to one bank, which accumulates soft information about the business through time (Neuberger & Räthke, 2009; D'Aurizio et al., 2012). This relationship lending may reduce credit risk and loan rates (Neuberger & Räthke-Döppner, 2015).
The focus of our sub-theme will be driven by the following research questions:
- Which are the most successful business models that lead small and medium-sized family firms to innovation development?
- Which are the most successful network configurations that small and medium-sized family firms to innovation development?
- What about the inter-organizational coordination mechanisms adopted?
- Which are the configurations of networks able to ensure long term survival for small and medium-sized family firms?
- Which are the main organizational characteristics of small and medium-sized family firms that allow them to maximize an effective partnership?
- Can the relational dynamics that develops naturally in a family business be a strength to create high value-added relationships with financial institutions and especially with banks and investors?
- Which are the economic and social conditions where bank lending to family businesses can follow a model of relationship banking?
- Is there an economic space for corporate and investment banking services to family businesses?
- Are the particular characteristics of family businesses an obstacle or an opportunity for investors in bonds and equity?
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- Cennamo, O., Berrone, P., Cruz, C., & Gomez-Mejia, L.R. (2012): "Socioemotional Wealth and Proactive Stakeholder Engagement: Why Family-Controlled Firms Care More About Their Stakeholders." Entrepreneurship: Theory and Practice, 36 (6), 1153–1173.
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