Behavioural theory and the family business

Fifty years have passed since Cyert and March’s 1963 A Behavioral Theory of the Firm. During this time, BTOF has been adopted across different research domains to investigate how organizations set goals, how they determine aspirations and how they finally react to performance aspiration discrepancies. Cyert and March’s framework has also recently emerged as one of the dominant paradigms to understand the ways in which family business organizations make decisions. In this chapter, I review the theoretical development and empirical results of BTOF and its application in the family business field of study in order to identify theoretical and empirical gaps and propose suggestions for future research. The conclusions suggest that BTOF is both a theoretically and empirically valid perspective in family business research, particularly when combined with other theoretical frameworks. The principal recommendation is to apply behavioral theory to enhance scholarly understanding of  how family organisations define their aspiration levels and respond to organizational problems. 

Corporate reputation and the family business

Corporate reputation is a largely neglected topic in the family firm literature. That neglect is surprising because corporate reputation is found to be an important source of competitive advantage and can therefore be an explanatory factor for firm performance and behaviour. The purpose of this chapter is to contribute to the field of family business by demonstrating the potential of the reputation research in this field. The chapter first introduces the corporate reputation construct and how this construct and the related constructs of image and reputation capital are approached in the literature from different disciplines. The second part of the chapter provides a review of the current family business literature on this topic. Three approaches of corporate reputation have been identified: 1. Reputation of family firms as an assessment by stakeholders. 2. Reputation as a managerial goal to preserve socioemotional wealth. 3. Reputation as a communication goal or strategy of family firms. The discussion of the literature identifies major gaps in our knowledge and in our methodological orientation that represent opportunities for future research.

Introducing theoretical perspectives on family business

As the field of family business has grown immensely over the last couple of decades, a multitude of theories from different fields has been introduced. However, there are surprisingly few attempts to provide an overview of theories that may be of particular interest for the family business scholar. Thus, this introduction chapter gives a critical overview of theoretical perspectives, before taking a closer look at the use of theories in family business studies. Regarding the current state of the family business field, the authors argue for putting more effort in building theory from family business research as well as a stronger emphasis on ‘giving back’ to theories borrowed from other fields. Lastly, the chapter describes the development of the book and introduces the 13 chapters and their contributions.