Skip to main content
SpringerLink
Log in

Do We Really Want to Cut Out the Deadwood? Family-Centered Noneconomic Goals, Restructuring Aversion, and Escalation of Commitment

  • Chapter
  • First Online:
The Palgrave Handbook of Heterogeneity among Family Firms

Abstract

We contribute to the theoretical depiction of family firms’ reactions during a downturn by adopting the ability and willingness approach. Specifically, we suggest that the combination of the ability and the willingness to pursue family-centered noneconomic (FCNE) goals makes family firms less likely to engage in restructuring activities and more likely to engage in an escalation of commitment. Moreover, we further investigate the family firms’ heterogeneity and introduce the idea that the willingness of family firms to pursue FCNE goals may be influenced by the geographical context and the generational stage of the enterprising family.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 299.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 379.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 379.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Berrone, P., Cruz, C., Gomez-Mejia, L. R., & Larraza-Kintana, M. (2010). Socioemotional wealth and corporate responses to institutional pressures: Do family-controlled firms pollute less? Administrative Science Quarterly, 55, 82–113.

    Article  Google Scholar 

  • Berrone, P., Cruz, C., & Gomez-Mejia, L. R. (2012). Socioemotional wealth in family firms theoretical dimensions, assessment approaches, and agenda for future research. Family Business Review, 25(3), 258–279.

    Article  Google Scholar 

  • Bingham, J., Dyer, W. G., Smith, I., & Adams, G. (2011). A stakeholder identity orientation approach to corporate social performance in family firms. Journal of Business Ethics, 99(4), 565–585.

    Google Scholar 

  • Birley, S. (2001). Owner-manager attitudes to family and business issues: A 16 country study. Entrepreneurship Theory and Practice, 26(2), 63–76.

    Google Scholar 

  • Block, J. (2010). Family management, family ownership, and downsizing: Evidence from S&P 500 firms. Family Business Review, 23(2), 1–22.

    Article  Google Scholar 

  • Bowman, E. H., Singh, H., Useem, M., & Bhadury, R. (1999). When does restructuring improve economic performance? California Management Review, 41(2), 33–54.

    Article  Google Scholar 

  • Brauer, M. (2006). What have we acquired and what should we acquire in divestiture research? A review and research agenda. Journal of Management, 32(6), 751–785.

    Article  Google Scholar 

  • Brockner, J. (1992). The escalation of commitment to a failing course of action: Toward theoretical progress. Academy of Management Review, 17(1), 39–61.

    Article  Google Scholar 

  • Brumana, M., Minola, T., Garrett, R. P., & Digan, S. P. (2017). How do family firms launch new businesses? A developmental perspective on internal corporate venturing in family business. Journal of Small Business Management, 55(4), 594–613.

    Article  Google Scholar 

  • Capron, L., Mitchell, W., & Swaminathan, A. (2001). Asset divestiture following horizontal acquisitions: A dynamic view. Strategic Management Journal, 22(9), 817–844.

    Article  Google Scholar 

  • Carr, C., & Bateman, S. (2009). International strategy configurations of the world’s topFamily firms. Management International Review, 49(6), 733–758. DOI: 10.1007/s11575-009-0018-3

  • Chirico, F., Salvato, C., Byrne, B., Akhter, N., & Arriaga MĂşzquiz, J. (2017). Commitment escalation to a failing family business. Journal of Small Business Management, in press. https://doi.org/10.1111/jsbm.12316

  • Chrisman, J. J., & Patel, P. C. (2012). Variations in R&D investments of family and nonfamily firms: Behavioral agency and myopic loss aversion perspectives. Academy of Management Journal, 55(4), 976–997.

    Google Scholar 

  • Chrisman, J. J., Chua, J. H., & Steier, L. P. (2011). Resilience of family firms: An introduction. Entrepreneurship Theory and Practice, 35(6), 1107–1119.

    Article  Google Scholar 

  • Chrisman, J. J., Sharma, P., & Taggar, S. (2007). Family influences on firms: An introduction. Journal of Business Research, 60, 1005–1011.

    Article  Google Scholar 

  • Chrisman, J. J., Steyer, L. P., & Chua, J. H. (2008). Toward a theoretical basis for understanding the dynamics of strategic performance in family firms. Entrepreneurship Theory and Practice, 32(6), 935–947.

    Google Scholar 

  • Chrisman, J. J., Chua, J. H., Pearson, A. W., & Barnett, T. (2012). Family involvement, family influence, and family-centered non-economic goals in small firms. Entrepreneurship Theory and Practice, 36(2), 267–293.

    Article  Google Scholar 

  • Chrisman, J. J., Chua, J. H., De Massis, A., Frattini, F., & Wright, M. (2015). The ability and willingness paradox in family firm innovation. Journal of Product Innovation Management, 32(3), 310–318.

    Article  Google Scholar 

  • Chrisman, J. J., Chua, J. H., De Massis, A., Minola, T., & Vismara, S. (2016). Management processes and strategy execution in family firms: From “what” to “how”. Small Business Economics, 47(3), 719–734.

    Article  Google Scholar 

  • Chua, J. H., Chrisman, J. J., & De Massis, A. (2015). A closer look at socioemotional wealth: Its flows, stocks, and prospects for moving forward. Entrepreneurship Theory and Practice, 39(2), 173–182.

    Article  Google Scholar 

  • De Massis, A., Kotlar, J., Chua, J. H., & Chrisman, J. J. (2014). Ability and willingness as sufficiency conditions for family-oriented particularistic behavior: Implications for theory and empirical studies. Journal of Small Business Management, 52(2), 344–364.

    Article  Google Scholar 

  • De Massis, A., Kotlar, J., Mazzola, P., Minola, T., & Sciascia, S. (2016). Conflicting selves: Family owners’ multiple goals and self-control agency problems in private firms. Entrepreneurship Theory & Practice, forthcoming. doi: https://doi.org/10.1111/etap.12257.

  • Feldman, E. R., Amit, R. R., & Villalonga, B. (2016). Corporate divestitures and family control. Strategic Management Journal, 37, 429–446.

    Article  Google Scholar 

  • GagnĂ©, M., Sharma, P., & De Massis, A. (2014). The study of organizational behaviour in family business. European Journal of Work and Organizational Psychology, 23(5), 643–656.

    Article  Google Scholar 

  • Garland, H. (1990). Throwing good money after bad: The effect of sunk costs on the decision to esculate commitment to an ongoing project. Journal of Applied Psychology, 75(6), 728.

    Article  Google Scholar 

  • Gersick, K. E., Davis, J. A., Hampton, M. M., & Lansberg, I. (1997). Generation to generation: Life cycles of the family business. Boston: Harvard Business School Press.

    Google Scholar 

  • GĂłmez-MejĂ­a, L. R., Haynes, K. T., Núñez-Nickel, M., Jacobson, K. J., & Moyano-Fuentes, J. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52(1), 106–137.

    Article  Google Scholar 

  • Gomez-Mejia, L. R., Makri, M., & Kintana, M. L. (2010). Diversification decisions in family-controlled firms. Journal of Management Studies, 47(2), 223–252.

    Article  Google Scholar 

  • Gomez-Mejia, L. R., Cruz, C., Berrone, P., & De Castro, J. (2011). The bind that ties: Socioemotional wealth preservation in family firms. The Academy of Management Annals, 5(1), 653–707.

    Article  Google Scholar 

  • Hoy, F. (2006). The complicating factor of life cycles in corporate venturing. Entrepreneurship Theory and Practice, 30(6), 831–836.

    Article  Google Scholar 

  • Kammerlander, N., & Ganter, M. (2015). An attention-based view of family firm adaptation to discontinuous technological change: Exploring the role of family CEOs’ noneconomic goals. Journal of Product Innovation Management, 32(3), 361–383.

    Article  Google Scholar 

  • Klein, S. B., Astrachan, J. H., & Smyrnios, K. X. (2005). The F-PEC scale of family influence: Construction, validation, and further implication for theory. Entrepreneurship Theory and Practice, 29(3), 321–339.

    Article  Google Scholar 

  • Kontinen, T., & Ojala, A. (2010). The internationalization of family businesses: A review of extant research. Journal of Family Business Strategy, 1(2), 97–107.

    Article  Google Scholar 

  • Leitterstorf, M. P., & Rau, S. B. (2014). Socioemotional wealth and IPO underpricing of family firms. Strategic Management Journal, 35(5), 751–760.

    Article  Google Scholar 

  • Mattessich, P., & Hill, R. (1987). Life cycle and family development. In M. B. Sussman & S. K. Steinmetz (Eds.), Handbook of marriage and the family (pp. 437–469). New York: Springer.

    Chapter  Google Scholar 

  • McCubbin, H. I., Joy, C. B., Cauble, A. E., Comeau, J. K., Patterson, J. M., & Needle, R. H. (1980). Family stress and coping: A decade review. Journal of Marriage and the Family, 42(4), 855–871.

    Article  Google Scholar 

  • Memili, E., Eddleston, K. A., Kellermanns, F. W., Zellweger, T., & Barnett, T. (2010). Thecriticalpath to family firm success through entrepreneurial risk taking and image. Journal of Family Business Strategy, 1(4), 200–209.

    Google Scholar 

  • Memili, E., Fang, H., Chrisman, J. J., & De Massis, A. (2015). The impact of small-and medium-sized family firms on economic growth. Small Business Economics, 45(4), 771.

    Article  Google Scholar 

  • Miller, D., Le Breton-Miller, I., & Scholnick, B. (2008). Stewardship vs. stagnation: An empiricalcomparison of small family and non-family businesses. Journal of Management Studies, 45(1), 51–78.

    Google Scholar 

  • Miller, D., & Breton-Miller, L. (2014). Deconstructing socioemotional wealth. Entrepreneurship Theory and Practice, 38(4), 713–720.

    Article  Google Scholar 

  • Miller, D., Steier, L., & Le Breton-Miller, I. (2003). Lost in time: Intergenerational succession, change, and failure in family business. Journal of Business Venturing, 18(4), 513–531.

    Article  Google Scholar 

  • Miller, D., Breton-Miller, L., & Lester, R. H. (2010). Family ownership and acquisition behavior in publicly-traded companies. Strategic Management Journal, 31(2), 201–223.

    Google Scholar 

  • Minichilli, A., Brogi, M., & Calabrò, A. (2015). Weathering the storm: Family ownership, governance, and performance through the financial and economic crisis. Corporate Governance: An International Review, 24(6), 552–568.

    Article  Google Scholar 

  • Minola, T., Brumana, M., Campopiano, G., Garrett, R. P., & Cassia, L. (2016). Corporate venturing in family business: A developmental approach of the enterprising family. Strategic Entrepreneurship Journal, 10(4), 395–412.

    Article  Google Scholar 

  • Patel, P. C., & Chrisman, J. J. (2014). Risk abatement as a strategy for R&D investments in family firms. Strategic Management Journal, 35(4), 617–627.

    Article  Google Scholar 

  • Patel, P. C., & Fiet, J. O. (2011). Knowledge combination and the potential advantages of family firms in searching for opportunities. Entrepreneurship Theory and Practice, 35(6), 1179–1197.

    Article  Google Scholar 

  • Paul, J. J., Winter, M., Miller, N. J., & Fitzgerald, M. A. (2003). Cross-institutional norms for timing and sequencing and the use of adjustment strategies in families affiliated with family-owned businesses. Marriage & Family Review, 35(1/2), 167–191.

    Article  Google Scholar 

  • Pongelli, C., Caroli, M. G., & Cucculelli, M. (2016). Family business going abroad: The effect of family ownership on foreign market entry mode decisions. Small Business Economics, 47(3), 787–801.

    Article  Google Scholar 

  • Pukall, T. J., & Calabrò, A. (2014). The internationalization of family firms a critical reviewand integrative model. Family Business Review, 27(2), 103–125.

    Google Scholar 

  • Rodgers, R. H. (1964). Toward a theory of family development. Journal of Marriage and the Family, 26(3), 262–270.

    Article  Google Scholar 

  • Schulze, W. S., & Kellermanns, F. W. (2015). Reifying socioemotional wealth. Entrepreneurship Theory and Practice, 39(3), 447–459.

    Article  Google Scholar 

  • Sharma, P., & Manikutty, S. (2005). Strategic divestments in family firms: Role of family structure and community culture. Entrepreneurship Theory and Practice, 29(3), 293–311.

    Article  Google Scholar 

  • Shepherd, D. A. (2009). Grief recovery from the loss of a family business: A multi- and meso-level theory. Journal of Business Venturing, 24(1), 81–97.

    Article  Google Scholar 

  • Shepherd, D. A. (2016). An emotions perspective for advancing the fields of family business and entrepreneurship: Stocks, flows, reactions, and responses. Family Business Review, 29(2), 151–158.

    Article  Google Scholar 

  • Sleesman, D. J., Conlon, D. E., McNamara, G., & Miles, J. E. (2012). Cleaning up the big muddy: A meta-analytic review of the determinants of escalation of commitment. Academy of Management Journal, 55(3), 541–562.

    Article  Google Scholar 

  • Stavrou, E., Kassinis, G., & Filotheou, A. (2007). Downsizing and stakeholder orientation among the Fortune 500: Does family ownership matter? Journal of Business Ethics, 72(2), 149–162.

    Article  Google Scholar 

  • Staw, B. M. (1976). Knee-deep in the big muddy: A study of escalating commitment to a chosen course of action. Organizational Behavior and Human Performance, 16(1), 27–44.

    Article  Google Scholar 

  • Staw, B. M., & Hoang, H. (1995). Sunk costs in the NBA: Why draft order affects playing time and survival in professional basketball. Administrative Science Quarterly, 40, 474–494.

    Article  Google Scholar 

  • Strike, V. M., Berrone, P., Sapp, S. G., & Congiu, L. (2015). A socioemotional wealth approach to CEO career horizons in family firms. Journal of Management Studies., 52, 555–583.

    Article  Google Scholar 

  • Thomas, J., & Graves, C. (2005). Internationalization of the family firm: The contribution of an entrepreneurial orientation. Journal of Business and Entrepreneurship, 17(2), 91.

    Google Scholar 

  • Tsang, E. W. (2001). Internationalizing the family firm: A case study of a Chinese family business. Journal of Small Business Management, 39(1), 88–93.

    Article  Google Scholar 

  • Villalonga, B., & Amit, R. (2010). Family control of firms and industries. Financial Management, 39(3), 863–904.

    Article  Google Scholar 

  • Westhead, P., Cowling, M., & Howorth, C. (2001). The development of family companies:Management and ownership imperatives. Family Business Review, 14(4), 369–385.

    Google Scholar 

  • White, J. M. (1991). Dynamics of family development: A theoretical perspective. New York: Guilford Press.

    Google Scholar 

  • Wiseman, R. M., & Gomez-Mejia, L. R. (1998). A behavioral agency model of managerial risk taking. Academy of Management Review, 23(1), 133–153.

    Article  Google Scholar 

  • Woods, J. A., Dalziel, T., & Barton, S. L. (2012). Escalation of commitment in private family businesses: The influence of outside board members. Journal of Family Business Strategy, 3(1), 18–27.

    Article  Google Scholar 

  • Zellweger, T. M., & Nason, R. S. (2008). A stakeholder perspective on family firm performance. Family Business Review, 21(3), 203–216.

    Article  Google Scholar 

  • Zellweger, T. M., Nason, R. S., Nordqvist, M., & Brush, C. G. (2013). Why do family firms strive for nonfinancial goals? An organizational identity perspective. Entrepreneurship Theory and Practice, 37(2), 229–248.

    Article  Google Scholar 

Download references

Acknowledgments

The authors kindly acknowledge the comments and suggestions they received at the “Theories of Family Enterprise” 2016 conference and the support of the “Excellence Initiative” Program—University of Bergamo.

Author information

Authors and Affiliations

  1. Department of Business and Management, LUISS University, Rome, Italy

    Claudia Pongelli

  2. Department of Business, Law, Economics and Consumer Behavior, IULM University, Milan, Italy

    Salvatore Sciascia

  3. Center for Young and Family Enterprise, University of Bergamo, Dalmine (BG), Italy

    Tommaso Minola

Authors
  1. Claudia Pongelli
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Salvatore Sciascia
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Tommaso Minola
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Salvatore Sciascia .

Editor information

Editors and Affiliations

  1. Bryan School of Business and Economics, University of North Carolina-Greensboro, Greensboro, NC, USA

    Esra Memili

  2. School of Business Administration, The University of Mississippi, University, MS, USA

    Clay Dibrell

Rights and permissions

Reprints and permissions

Copyright information

© 2019 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Pongelli, C., Sciascia, S., Minola, T. (2019). Do We Really Want to Cut Out the Deadwood? Family-Centered Noneconomic Goals, Restructuring Aversion, and Escalation of Commitment. In: Memili, E., Dibrell, C. (eds) The Palgrave Handbook of Heterogeneity among Family Firms. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-77676-7_18

Download citation

Publish with us

Policies and ethics

Search

Navigation