Value Creation in Family Firms: A Model of Fit

We propose a framework describing how family ownership can create or destroy value depending on the goals, resources, and governance of the family firm, which are each influenced by the family owners. Taking a contingency perspective, we suggest that a fit is required for all three elements – family- influenced goals, resources, and governance – for the family firm to flourish over generations. We conclude with a suggested research agenda indicating research opportunities at the nexus of these identified elements. Further we provide some guiding questions for practitioners that might stimulate fruitful discussions among family firm owners and managers about how to realize ‘‘fit.’’

Identity, incentives and the value of information

We examine the impact of identity preferences on the interrelation between incentives and performance measurement. In our model, a manager identifies with an organization and loses utility to the extent that his actions conflict with effort-standards issued by the principal. Contrary to prior arguments in the literature, we find conditions under which a manager who identifies strongly with the organization receives stronger incentives and faces more performance evaluation reports than a manager who does not identify with the organization. Our theory predicts that managers who experience events that boost their identification with the firm can decrease their effort in short-term value creation. We also find that firms are more likely to employ less precise but more congruent performance measures, such as stock prices, when contracting with managers who identify little with the organization. In contrast, they use more precise but less congruent measures, such as accounting earnings, when contracting with managers who identify strongly with the firm.

How Firms Make Friends: Communities in Private-Collective Innovation

When firms contribute to open source projects, they in fact invest into public goods which may be used by everyone, even by their competitors. This seemingly paradoxical behavior can be explained by the model of private-collective innovation where private investors participate in collective action. Previous literature has shown that companies benefit through the production process providing them with unique incentives such as learning and reputation effects. By contributing to open source projects firms are able to build a network of external individuals and organizations participating in the creation and development of the software. As will be shown in this doctoral dissertation firm-sponsored communities involve the formation of interorganizational relationships which eventually may lead to a source of sustained competitive advantage. However, managing a largely independent open source community is a challenging balancing act between exertion of control to appropriate value creation, and openness in order to gain and preserve credibility and motivate external contributions. Therefore, this dissertation consisting of an introductory chapter and three separate research papers analyzes characteristics of firm-driven open source communities, finds reasons why and mechanisms by which companies facilitate the creation of such networks, and shows how firms can benefit most from their communities.

How much Entrepreneurial Orientation (EO) is needed for Long-term Success?

According to the STEP research framework, entrepreneurial orientation (EO) is one key element of transgenerational value creation. EO refers to key entrepreneurial processes in a company, i.e. to the methods, practices and decision-making styles managers use to act entrepreneurially. 3 EO consists of five main dimensions and several sub dimensions. However, there is a puzzle. Many studies suggest that the higher EO, the more successful a company is. But this seems not always to be true. Just think of many of the dot.com firms at the end of the 1990s. Firm members could act very autonomously, the companies were very innovative, took high risks, were very proactive and very aggressive in the market. However, most of them were not able to survive for more than a few years. So how entrepreneurial has a firm to be in order to achieve long-term success?

Animal model for percutaneous creation of traumatic thoracic aortic transection

PURPOSE: This study was conducted to create an animal model for thoracic aortic transection that is suitable for thoracic endograft research. MATERIALS AND METHODS: Percutaneous aortic transection creation was attempted in 12 sheep. A custom collapsible circumferential cutting device was inserted into the proximal descending thoracic aorta via a femoral approach with an 11-F delivery catheter. The device was deployed 2 cm distal to the left subclavian artery origin and rotated 20 times to create aortic transection. Aortic diameters, mean aortic pressures, and heart rates were tested for degrees of difference between measurements before and after the creation of transection. On necropsy, the extent of aortic damage was classified as none, nontransmural, or transmural, and aortic transection was classified as none, partial, or circumferential. RESULTS: On angiography, creation of transmural thoracic aortic transection was successful in 91.7% (11/12) of animals. Aortic transection was circumferential in 54.4% (6/11) of animals and partial in 45.6% (5/11) of animals. Mean aortic diameter was 19.6 +/- 3.4 mm (range 12-24 mm) pre-transection and 25.8 +/- 4.5 mm (range 17.8-33 mm) post-transection (P = .0003). Pre-transection, mean aortic pressure was 79 +/- 13.8 mmHg, and 64.6 +/- 15.8 mmHg 15 min post-transection (P = .041). Pre-transection, mean heart rate was 94.5 +/- 17.2 beats per minute (bpm), and 105.8 +/- 17.2 bpm 15 min post-transection (P = .0057). CONCLUSIONS: Thoracic aortic transection was successfully created percutaneously in most animals. The animals remained in hemodynamically stable condition for as long as 240 minutes after the creation of aortic injury. This percutaneous animal model is straightforward and may be of potential value for future thoracic endograft research.