Media Impact

FAMILY BUSINESS SUCCESSION: FROM DREAM TO REALITY

#Entreprises Familiales, #Impact en Presse

Contributors

BERNHARD Fabian, PhD

Associate Professor

Emotional dynamics in family businesses, moral emotions, Education and preparation of next generational family business leaders, Psychological...

Christian Haddad, PhD

Research Engineer

Entrepreneurial finance, banking and corporate finance

Djibrilla MOUSSA OUSSEINI, PHD

Research Engineer

Governance, Financing

DU Yan, PhD

Associate Professor

Management Control Systems, Corporate Governance and Performance

LABAKI Rania, PhD

Head of EDHEC Family Business Centre - Academic Director of the Family Business Global Executive MBA - Associate Professor

Family Business

SALAMEH Elie, PhD

Associate Professor

Financial and Legal Performance

EDHEC - Forbes india

 

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Dans une tribune parue dans Les Echos Solutions,  Rania Labaki, Directrice de L'EDHEC Family Business Centre donne 3 bonnes raisons aux entreprises familiales de développer un projet philanthropique et révèle le modus operandi pour en maximiser l'impact.

 

 

Lire l'article en intégralité

 

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Dans une tribune parue dans Les Echos Solutions,  Rania Labaki, Directrice de L'EDHEC Family Business Centre donne 3 bonnes raisons aux entreprises familiales de développer un projet philanthropique et révèle le modus operandi pour en maximiser l'impact.

 

 

Lire l'article en intégralité

 

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Rania Labaki
Professeur Associé et Directrice de l' EDHEC Family Business Center, EDHEC Business School

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Les Echos Solutions

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Dans une tribune parue dans Les Echos Solutions,  Rania Labaki, Directrice de L'EDHEC Family Business Centre donne 3 bonnes raisons aux entreprises familiales de développer un projet philanthropique et révèle le modus operandi pour en maximiser l'impact.

 

 

Lire l'article en intégralité

 

" ["summary"]=> string(0) "" ["format"]=> string(9) "full_html" ["safe_value"]=> string(1533) "

 

Dans une tribune parue dans Les Echos Solutions,  Rania Labaki, Directrice de L'EDHEC Family Business Centre donne 3 bonnes raisons aux entreprises familiales de développer un projet philanthropique et révèle le modus operandi pour en maximiser l'impact.

 

 

Lire l'article en intégralité

 

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Dans une tribune parue dans Les Echos Solutions,  Rania Labaki, Directrice de L'EDHEC Family Business Centre donne 3 bonnes raisons aux entreprises familiales de développer un projet philanthropique et révèle le modus operandi pour en maximiser l'impact.

 

 

Lire l'article en intégralité

 

" ["summary"]=> string(0) "" ["format"]=> string(9) "full_html" ["safe_value"]=> string(1533) "

 

Dans une tribune parue dans Les Echos Solutions,  Rania Labaki, Directrice de L'EDHEC Family Business Centre donne 3 bonnes raisons aux entreprises familiales de développer un projet philanthropique et révèle le modus operandi pour en maximiser l'impact.

 

 

Lire l'article en intégralité

 

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Rania Labaki
Professeur Associé et Directrice de l' EDHEC Family Business Center, EDHEC Business School

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Les Echos Solutions

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Dans une tribune parue dans Les Echos Solutions,  Rania Labaki, Directrice de L'EDHEC Family Business Centre donne 3 bonnes raisons aux entreprises familiales de développer un projet philanthropique et révèle le modus operandi pour en maximiser l'impact.

 

 

Lire l'article en intégralité

 

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Dans une tribune parue dans Les Echos Solutions,  Rania Labaki, Directrice de L'EDHEC Family Business Centre donne 3 bonnes raisons aux entreprises familiales de développer un projet philanthropique et révèle le modus operandi pour en maximiser l'impact.

 

 

Lire l'article en intégralité

 

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Professeur Associé et Directrice de l' EDHEC Family Business Center, EDHEC Business School

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The best performing board I’ve been on is one I’m on now, a family owned company, with four outside directors, two family shareholders and the CEO.

(Jim McHugh---Director at Southworth International Group, Inc. and Kennebec Technologies, Inc.)

Family businesses tend to be reluctant to recruit outside directors given their particular culture. Their long-term focus and significant emotional attachment of the owning family to the firm could often collide with the outsiders’ perspectives. However, today many private family businesses are adding outside directors to their boards. So why would a private family company want to recruit an outside member on their boards?

Family businesses are increasingly aware of the risks they face. Many of them fail to transfer the business to the second generation, and most of them do not survive beyond two generations. Poor operational management, lack of governance standards, family conflicts and a conservative attitude to risk-taking are just a few reasons they break down.

Contributions of outside directors to family businesses

Today the practice of including outside directors in private family businesses is widely recommended by corporate governance codes for private firms (e.g., Code Buysse in Belgium; Corporate Governance Guidance and Principles for Unlisted Companies in the UK; Guidelines for improving Corporate Governance of unlisted companies in Finland). The proponents argue that outside directors bring new knowledge and networks, provide unbiased advice, and assure the credibility of the company.

Notwithstanding the potential contribution of outside directors, not every family business benefits from appointing outside directors. In their study of private family firms, Cabrera-Suárez and Martín-Santana find that the presence of outside directors even hinders the firm’s profitability. This raises the question of when or under which conditions outside directors add value to private family businesses. According to Forbes and Milliken, boards are decision-making groups, and they are more effective when group members (directors) interact with each other to perform the directorship role. Cristina Bettinelli, in her study of 90 Italian family businesses find that boards are more effective when the goals of outside and inside directors are aligned, when a CEO is willing to listen to the board, and when outside directors are actively engaged with boards’ activities.

The need for family business-specific information

Apart from being actively engaged, outside directors need firm-specific information to do their jobs properly. Without firm-specific information, outside directors can neither question the actions of the management nor give valuable advice.

Yet private family businesses are largely left alone with respect to information disclosure. Unlike publicly listed businesses which are under pressure by activist shareholders, private family businesses are flexible in disclosing firm-specific information to public.

Are private family firms willing to share firm-specific information with outside directors? Several corporate governance scandals in family companies, from Parmalat in Italy, Takata Corp. in Japan, to The News Corporation in the U.S., suggest that sharing information is not automatic.

The biggest issue with many private family businesses is that adding outside directors leads them towards greater secrecy: owning families prefer to maintain control; to protect their privacy and do not like to expose their conflicts to outsiders. For these reasons, they have difficulties trusting outside directors.

A recent research work[1] at the EDHEC Family Business Center investigates how outside directors could add value in private family businesses. Survey data from 421 private family businesses in Belgium have been collected. The results show that private family firms disclose less information when outside directors are present, in comparison to private nonfamily firms. This leads us to question the wisdom of including outside directors on the board of private family businesses, as recommended by corporate governance codes.

Interestingly, around 25% of private family firms in our survey answered that they never disclosed nonfinancial information (e.g., information about strategy, product markets, internal process and innovation) to the board. Only financial information is disclosed to the board as it is required by law. So in these firms, boards are just rubber stamps set up to fulfil the legal requirement. In fact, the appointment of outside directors in these firms is just to make sure “house in order”.

Meanwhile how do family shareholders acquire information and discuss strategic issues with managers? They do it informally. Discussions in the kitchen or at Christmas parties are examples of occasions where they are informed.

Despite the insufficient information disclosure in many private family businesses, managers of the most successful businesses in the survey make an open, honest attitude and conscious effort to inform the board.

Taken together, for family-controlled firms wanting to take advantage of outsider directors’ expertise, merely appointing them on the board without providing them firm-specific information is not effective. Controlling families should have a trusting view and are willing to share information.

As private family businesses gain more attention, there is a need to have a structured governance system aimed at engaging outside directors to exchange ideas with management, express different viewpoints, and build trust among directors and managers. An overall commitment from owning families towards using the board actively in strategic decision-making is the prerequisite for good corporate governance.

Cited references

Bettinelli, C. (2011). Boards of directors in family firms: An exploratory study of structure and group process. Family Business Review, 24: 151-169.

Cabrera-Suárez, M. K. and Martin-Santana, J. D. (2015). Board composition and performance in Spanish non-listed family firms: The influence of type of directors and CEO duality. BRQ Business Research Quarterly, 18, 213-229.

Forbes, D.P. & Milliken, F.J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24: 489-505.

 


[1] This is a joint research project with Yan Du, Lorraine Uhlaner (EDHEC Business School) and Ann Jorissen (University of Antwerp), under the financial support from the Flemish Agency for Innovation by Science and Technology (IWT).

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The best performing board I’ve been on is one I’m on now, a family owned company, with four outside directors, two family shareholders and the CEO.

(Jim McHugh---Director at Southworth International Group, Inc. and Kennebec Technologies, Inc.)

Family businesses tend to be reluctant to recruit outside directors given their particular culture. Their long-term focus and significant emotional attachment of the owning family to the firm could often collide with the outsiders’ perspectives. However, today many private family businesses are adding outside directors to their boards. So why would a private family company want to recruit an outside member on their boards?

Family businesses are increasingly aware of the risks they face. Many of them fail to transfer the business to the second generation, and most of them do not survive beyond two generations. Poor operational management, lack of governance standards, family conflicts and a conservative attitude to risk-taking are just a few reasons they break down.

Contributions of outside directors to family businesses

Today the practice of including outside directors in private family businesses is widely recommended by corporate governance codes for private firms (e.g., Code Buysse in Belgium; Corporate Governance Guidance and Principles for Unlisted Companies in the UK; Guidelines for improving Corporate Governance of unlisted companies in Finland). The proponents argue that outside directors bring new knowledge and networks, provide unbiased advice, and assure the credibility of the company.

Notwithstanding the potential contribution of outside directors, not every family business benefits from appointing outside directors. In their study of private family firms, Cabrera-Suárez and Martín-Santana find that the presence of outside directors even hinders the firm’s profitability. This raises the question of when or under which conditions outside directors add value to private family businesses. According to Forbes and Milliken, boards are decision-making groups, and they are more effective when group members (directors) interact with each other to perform the directorship role. Cristina Bettinelli, in her study of 90 Italian family businesses find that boards are more effective when the goals of outside and inside directors are aligned, when a CEO is willing to listen to the board, and when outside directors are actively engaged with boards’ activities.

The need for family business-specific information

Apart from being actively engaged, outside directors need firm-specific information to do their jobs properly. Without firm-specific information, outside directors can neither question the actions of the management nor give valuable advice.

Yet private family businesses are largely left alone with respect to information disclosure. Unlike publicly listed businesses which are under pressure by activist shareholders, private family businesses are flexible in disclosing firm-specific information to public.

Are private family firms willing to share firm-specific information with outside directors? Several corporate governance scandals in family companies, from Parmalat in Italy, Takata Corp. in Japan, to The News Corporation in the U.S., suggest that sharing information is not automatic.

The biggest issue with many private family businesses is that adding outside directors leads them towards greater secrecy: owning families prefer to maintain control; to protect their privacy and do not like to expose their conflicts to outsiders. For these reasons, they have difficulties trusting outside directors.

A recent research work[1] at the EDHEC Family Business Center investigates how outside directors could add value in private family businesses. Survey data from 421 private family businesses in Belgium have been collected. The results show that private family firms disclose less information when outside directors are present, in comparison to private nonfamily firms. This leads us to question the wisdom of including outside directors on the board of private family businesses, as recommended by corporate governance codes.

Interestingly, around 25% of private family firms in our survey answered that they never disclosed nonfinancial information (e.g., information about strategy, product markets, internal process and innovation) to the board. Only financial information is disclosed to the board as it is required by law. So in these firms, boards are just rubber stamps set up to fulfil the legal requirement. In fact, the appointment of outside directors in these firms is just to make sure “house in order”.

Meanwhile how do family shareholders acquire information and discuss strategic issues with managers? They do it informally. Discussions in the kitchen or at Christmas parties are examples of occasions where they are informed.

Despite the insufficient information disclosure in many private family businesses, managers of the most successful businesses in the survey make an open, honest attitude and conscious effort to inform the board.

Taken together, for family-controlled firms wanting to take advantage of outsider directors’ expertise, merely appointing them on the board without providing them firm-specific information is not effective. Controlling families should have a trusting view and are willing to share information.

As private family businesses gain more attention, there is a need to have a structured governance system aimed at engaging outside directors to exchange ideas with management, express different viewpoints, and build trust among directors and managers. An overall commitment from owning families towards using the board actively in strategic decision-making is the prerequisite for good corporate governance.

Cited references

Bettinelli, C. (2011). Boards of directors in family firms: An exploratory study of structure and group process. Family Business Review, 24: 151-169.

Cabrera-Suárez, M. K. and Martin-Santana, J. D. (2015). Board composition and performance in Spanish non-listed family firms: The influence of type of directors and CEO duality. BRQ Business Research Quarterly, 18, 213-229.

Forbes, D.P. & Milliken, F.J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24: 489-505.

 


[1] This is a joint research project with Yan Du, Lorraine Uhlaner (EDHEC Business School) and Ann Jorissen (University of Antwerp), under the financial support from the Flemish Agency for Innovation by Science and Technology (IWT).

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Yan Du
Associate Professor & Member of EDHEC Family Business Center, EDHEC Business School

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The best performing board I’ve been on is one I’m on now, a family owned company, with four outside directors, two family shareholders and the CEO.

(Jim McHugh---Director at Southworth International Group, Inc. and Kennebec Technologies, Inc.)

Family businesses tend to be reluctant to recruit outside directors given their particular culture. Their long-term focus and significant emotional attachment of the owning family to the firm could often collide with the outsiders’ perspectives. However, today many private family businesses are adding outside directors to their boards. So why would a private family company want to recruit an outside member on their boards?

Family businesses are increasingly aware of the risks they face. Many of them fail to transfer the business to the second generation, and most of them do not survive beyond two generations. Poor operational management, lack of governance standards, family conflicts and a conservative attitude to risk-taking are just a few reasons they break down.

Contributions of outside directors to family businesses

Today the practice of including outside directors in private family businesses is widely recommended by corporate governance codes for private firms (e.g., Code Buysse in Belgium; Corporate Governance Guidance and Principles for Unlisted Companies in the UK; Guidelines for improving Corporate Governance of unlisted companies in Finland). The proponents argue that outside directors bring new knowledge and networks, provide unbiased advice, and assure the credibility of the company.

Notwithstanding the potential contribution of outside directors, not every family business benefits from appointing outside directors. In their study of private family firms, Cabrera-Suárez and Martín-Santana find that the presence of outside directors even hinders the firm’s profitability. This raises the question of when or under which conditions outside directors add value to private family businesses. According to Forbes and Milliken, boards are decision-making groups, and they are more effective when group members (directors) interact with each other to perform the directorship role. Cristina Bettinelli, in her study of 90 Italian family businesses find that boards are more effective when the goals of outside and inside directors are aligned, when a CEO is willing to listen to the board, and when outside directors are actively engaged with boards’ activities.

The need for family business-specific information

Apart from being actively engaged, outside directors need firm-specific information to do their jobs properly. Without firm-specific information, outside directors can neither question the actions of the management nor give valuable advice.

Yet private family businesses are largely left alone with respect to information disclosure. Unlike publicly listed businesses which are under pressure by activist shareholders, private family businesses are flexible in disclosing firm-specific information to public.

Are private family firms willing to share firm-specific information with outside directors? Several corporate governance scandals in family companies, from Parmalat in Italy, Takata Corp. in Japan, to The News Corporation in the U.S., suggest that sharing information is not automatic.

The biggest issue with many private family businesses is that adding outside directors leads them towards greater secrecy: owning families prefer to maintain control; to protect their privacy and do not like to expose their conflicts to outsiders. For these reasons, they have difficulties trusting outside directors.

A recent research work[1] at the EDHEC Family Business Center investigates how outside directors could add value in private family businesses. Survey data from 421 private family businesses in Belgium have been collected. The results show that private family firms disclose less information when outside directors are present, in comparison to private nonfamily firms. This leads us to question the wisdom of including outside directors on the board of private family businesses, as recommended by corporate governance codes.

Interestingly, around 25% of private family firms in our survey answered that they never disclosed nonfinancial information (e.g., information about strategy, product markets, internal process and innovation) to the board. Only financial information is disclosed to the board as it is required by law. So in these firms, boards are just rubber stamps set up to fulfil the legal requirement. In fact, the appointment of outside directors in these firms is just to make sure “house in order”.

Meanwhile how do family shareholders acquire information and discuss strategic issues with managers? They do it informally. Discussions in the kitchen or at Christmas parties are examples of occasions where they are informed.

Despite the insufficient information disclosure in many private family businesses, managers of the most successful businesses in the survey make an open, honest attitude and conscious effort to inform the board.

Taken together, for family-controlled firms wanting to take advantage of outsider directors’ expertise, merely appointing them on the board without providing them firm-specific information is not effective. Controlling families should have a trusting view and are willing to share information.

As private family businesses gain more attention, there is a need to have a structured governance system aimed at engaging outside directors to exchange ideas with management, express different viewpoints, and build trust among directors and managers. An overall commitment from owning families towards using the board actively in strategic decision-making is the prerequisite for good corporate governance.

Cited references

Bettinelli, C. (2011). Boards of directors in family firms: An exploratory study of structure and group process. Family Business Review, 24: 151-169.

Cabrera-Suárez, M. K. and Martin-Santana, J. D. (2015). Board composition and performance in Spanish non-listed family firms: The influence of type of directors and CEO duality. BRQ Business Research Quarterly, 18, 213-229.

Forbes, D.P. & Milliken, F.J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24: 489-505.

 


[1] This is a joint research project with Yan Du, Lorraine Uhlaner (EDHEC Business School) and Ann Jorissen (University of Antwerp), under the financial support from the Flemish Agency for Innovation by Science and Technology (IWT).

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The best performing board I’ve been on is one I’m on now, a family owned company, with four outside directors, two family shareholders and the CEO.

(Jim McHugh---Director at Southworth International Group, Inc. and Kennebec Technologies, Inc.)

Family businesses tend to be reluctant to recruit outside directors given their particular culture. Their long-term focus and significant emotional attachment of the owning family to the firm could often collide with the outsiders’ perspectives. However, today many private family businesses are adding outside directors to their boards. So why would a private family company want to recruit an outside member on their boards?

Family businesses are increasingly aware of the risks they face. Many of them fail to transfer the business to the second generation, and most of them do not survive beyond two generations. Poor operational management, lack of governance standards, family conflicts and a conservative attitude to risk-taking are just a few reasons they break down.

Contributions of outside directors to family businesses

Today the practice of including outside directors in private family businesses is widely recommended by corporate governance codes for private firms (e.g., Code Buysse in Belgium; Corporate Governance Guidance and Principles for Unlisted Companies in the UK; Guidelines for improving Corporate Governance of unlisted companies in Finland). The proponents argue that outside directors bring new knowledge and networks, provide unbiased advice, and assure the credibility of the company.

Notwithstanding the potential contribution of outside directors, not every family business benefits from appointing outside directors. In their study of private family firms, Cabrera-Suárez and Martín-Santana find that the presence of outside directors even hinders the firm’s profitability. This raises the question of when or under which conditions outside directors add value to private family businesses. According to Forbes and Milliken, boards are decision-making groups, and they are more effective when group members (directors) interact with each other to perform the directorship role. Cristina Bettinelli, in her study of 90 Italian family businesses find that boards are more effective when the goals of outside and inside directors are aligned, when a CEO is willing to listen to the board, and when outside directors are actively engaged with boards’ activities.

The need for family business-specific information

Apart from being actively engaged, outside directors need firm-specific information to do their jobs properly. Without firm-specific information, outside directors can neither question the actions of the management nor give valuable advice.

Yet private family businesses are largely left alone with respect to information disclosure. Unlike publicly listed businesses which are under pressure by activist shareholders, private family businesses are flexible in disclosing firm-specific information to public.

Are private family firms willing to share firm-specific information with outside directors? Several corporate governance scandals in family companies, from Parmalat in Italy, Takata Corp. in Japan, to The News Corporation in the U.S., suggest that sharing information is not automatic.

The biggest issue with many private family businesses is that adding outside directors leads them towards greater secrecy: owning families prefer to maintain control; to protect their privacy and do not like to expose their conflicts to outsiders. For these reasons, they have difficulties trusting outside directors.

A recent research work[1] at the EDHEC Family Business Center investigates how outside directors could add value in private family businesses. Survey data from 421 private family businesses in Belgium have been collected. The results show that private family firms disclose less information when outside directors are present, in comparison to private nonfamily firms. This leads us to question the wisdom of including outside directors on the board of private family businesses, as recommended by corporate governance codes.

Interestingly, around 25% of private family firms in our survey answered that they never disclosed nonfinancial information (e.g., information about strategy, product markets, internal process and innovation) to the board. Only financial information is disclosed to the board as it is required by law. So in these firms, boards are just rubber stamps set up to fulfil the legal requirement. In fact, the appointment of outside directors in these firms is just to make sure “house in order”.

Meanwhile how do family shareholders acquire information and discuss strategic issues with managers? They do it informally. Discussions in the kitchen or at Christmas parties are examples of occasions where they are informed.

Despite the insufficient information disclosure in many private family businesses, managers of the most successful businesses in the survey make an open, honest attitude and conscious effort to inform the board.

Taken together, for family-controlled firms wanting to take advantage of outsider directors’ expertise, merely appointing them on the board without providing them firm-specific information is not effective. Controlling families should have a trusting view and are willing to share information.

As private family businesses gain more attention, there is a need to have a structured governance system aimed at engaging outside directors to exchange ideas with management, express different viewpoints, and build trust among directors and managers. An overall commitment from owning families towards using the board actively in strategic decision-making is the prerequisite for good corporate governance.

Cited references

Bettinelli, C. (2011). Boards of directors in family firms: An exploratory study of structure and group process. Family Business Review, 24: 151-169.

Cabrera-Suárez, M. K. and Martin-Santana, J. D. (2015). Board composition and performance in Spanish non-listed family firms: The influence of type of directors and CEO duality. BRQ Business Research Quarterly, 18, 213-229.

Forbes, D.P. & Milliken, F.J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24: 489-505.

 


[1] This is a joint research project with Yan Du, Lorraine Uhlaner (EDHEC Business School) and Ann Jorissen (University of Antwerp), under the financial support from the Flemish Agency for Innovation by Science and Technology (IWT).

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The best performing board I’ve been on is one I’m on now, a family owned company, with four outside directors, two family shareholders and the CEO.

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The best performing board I’ve been on is one I’m on now, a family owned company, with four outside directors, two family shareholders and the CEO.

(Jim McHugh---Director at Southworth International Group, Inc. and Kennebec Technologies, Inc.)

Family businesses tend to be reluctant to recruit outside directors given their particular culture. Their long-term focus and significant emotional attachment of the owning family to the firm could often collide with the outsiders’ perspectives. However, today many private family businesses are adding outside directors to their boards. So why would a private family company want to recruit an outside member on their boards?

Family businesses are increasingly aware of the risks they face. Many of them fail to transfer the business to the second generation, and most of them do not survive beyond two generations. Poor operational management, lack of governance standards, family conflicts and a conservative attitude to risk-taking are just a few reasons they break down.

Contributions of outside directors to family businesses

Today the practice of including outside directors in private family businesses is widely recommended by corporate governance codes for private firms (e.g., Code Buysse in Belgium; Corporate Governance Guidance and Principles for Unlisted Companies in the UK; Guidelines for improving Corporate Governance of unlisted companies in Finland). The proponents argue that outside directors bring new knowledge and networks, provide unbiased advice, and assure the credibility of the company.

Notwithstanding the potential contribution of outside directors, not every family business benefits from appointing outside directors. In their study of private family firms, Cabrera-Suárez and Martín-Santana find that the presence of outside directors even hinders the firm’s profitability. This raises the question of when or under which conditions outside directors add value to private family businesses. According to Forbes and Milliken, boards are decision-making groups, and they are more effective when group members (directors) interact with each other to perform the directorship role. Cristina Bettinelli, in her study of 90 Italian family businesses find that boards are more effective when the goals of outside and inside directors are aligned, when a CEO is willing to listen to the board, and when outside directors are actively engaged with boards’ activities.

The need for family business-specific information

Apart from being actively engaged, outside directors need firm-specific information to do their jobs properly. Without firm-specific information, outside directors can neither question the actions of the management nor give valuable advice.

Yet private family businesses are largely left alone with respect to information disclosure. Unlike publicly listed businesses which are under pressure by activist shareholders, private family businesses are flexible in disclosing firm-specific information to public.

Are private family firms willing to share firm-specific information with outside directors? Several corporate governance scandals in family companies, from Parmalat in Italy, Takata Corp. in Japan, to The News Corporation in the U.S., suggest that sharing information is not automatic.

The biggest issue with many private family businesses is that adding outside directors leads them towards greater secrecy: owning families prefer to maintain control; to protect their privacy and do not like to expose their conflicts to outsiders. For these reasons, they have difficulties trusting outside directors.

A recent research work[1] at the EDHEC Family Business Center investigates how outside directors could add value in private family businesses. Survey data from 421 private family businesses in Belgium have been collected. The results show that private family firms disclose less information when outside directors are present, in comparison to private nonfamily firms. This leads us to question the wisdom of including outside directors on the board of private family businesses, as recommended by corporate governance codes.

Interestingly, around 25% of private family firms in our survey answered that they never disclosed nonfinancial information (e.g., information about strategy, product markets, internal process and innovation) to the board. Only financial information is disclosed to the board as it is required by law. So in these firms, boards are just rubber stamps set up to fulfil the legal requirement. In fact, the appointment of outside directors in these firms is just to make sure “house in order”.

Meanwhile how do family shareholders acquire information and discuss strategic issues with managers? They do it informally. Discussions in the kitchen or at Christmas parties are examples of occasions where they are informed.

Despite the insufficient information disclosure in many private family businesses, managers of the most successful businesses in the survey make an open, honest attitude and conscious effort to inform the board.

Taken together, for family-controlled firms wanting to take advantage of outsider directors’ expertise, merely appointing them on the board without providing them firm-specific information is not effective. Controlling families should have a trusting view and are willing to share information.

As private family businesses gain more attention, there is a need to have a structured governance system aimed at engaging outside directors to exchange ideas with management, express different viewpoints, and build trust among directors and managers. An overall commitment from owning families towards using the board actively in strategic decision-making is the prerequisite for good corporate governance.

Cited references

Bettinelli, C. (2011). Boards of directors in family firms: An exploratory study of structure and group process. Family Business Review, 24: 151-169.

Cabrera-Suárez, M. K. and Martin-Santana, J. D. (2015). Board composition and performance in Spanish non-listed family firms: The influence of type of directors and CEO duality. BRQ Business Research Quarterly, 18, 213-229.

Forbes, D.P. & Milliken, F.J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24: 489-505.

 


[1] This is a joint research project with Yan Du, Lorraine Uhlaner (EDHEC Business School) and Ann Jorissen (University of Antwerp), under the financial support from the Flemish Agency for Innovation by Science and Technology (IWT).

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The best performing board I’ve been on is one I’m on now, a family owned company, with four outside directors, two family shareholders and the CEO.

(Jim McHugh---Director at Southworth International Group, Inc. and Kennebec Technologies, Inc.)

Family businesses tend to be reluctant to recruit outside directors given their particular culture. Their long-term focus and significant emotional attachment of the owning family to the firm could often collide with the outsiders’ perspectives. However, today many private family businesses are adding outside directors to their boards. So why would a private family company want to recruit an outside member on their boards?

Family businesses are increasingly aware of the risks they face. Many of them fail to transfer the business to the second generation, and most of them do not survive beyond two generations. Poor operational management, lack of governance standards, family conflicts and a conservative attitude to risk-taking are just a few reasons they break down.

Contributions of outside directors to family businesses

Today the practice of including outside directors in private family businesses is widely recommended by corporate governance codes for private firms (e.g., Code Buysse in Belgium; Corporate Governance Guidance and Principles for Unlisted Companies in the UK; Guidelines for improving Corporate Governance of unlisted companies in Finland). The proponents argue that outside directors bring new knowledge and networks, provide unbiased advice, and assure the credibility of the company.

Notwithstanding the potential contribution of outside directors, not every family business benefits from appointing outside directors. In their study of private family firms, Cabrera-Suárez and Martín-Santana find that the presence of outside directors even hinders the firm’s profitability. This raises the question of when or under which conditions outside directors add value to private family businesses. According to Forbes and Milliken, boards are decision-making groups, and they are more effective when group members (directors) interact with each other to perform the directorship role. Cristina Bettinelli, in her study of 90 Italian family businesses find that boards are more effective when the goals of outside and inside directors are aligned, when a CEO is willing to listen to the board, and when outside directors are actively engaged with boards’ activities.

The need for family business-specific information

Apart from being actively engaged, outside directors need firm-specific information to do their jobs properly. Without firm-specific information, outside directors can neither question the actions of the management nor give valuable advice.

Yet private family businesses are largely left alone with respect to information disclosure. Unlike publicly listed businesses which are under pressure by activist shareholders, private family businesses are flexible in disclosing firm-specific information to public.

Are private family firms willing to share firm-specific information with outside directors? Several corporate governance scandals in family companies, from Parmalat in Italy, Takata Corp. in Japan, to The News Corporation in the U.S., suggest that sharing information is not automatic.

The biggest issue with many private family businesses is that adding outside directors leads them towards greater secrecy: owning families prefer to maintain control; to protect their privacy and do not like to expose their conflicts to outsiders. For these reasons, they have difficulties trusting outside directors.

A recent research work[1] at the EDHEC Family Business Center investigates how outside directors could add value in private family businesses. Survey data from 421 private family businesses in Belgium have been collected. The results show that private family firms disclose less information when outside directors are present, in comparison to private nonfamily firms. This leads us to question the wisdom of including outside directors on the board of private family businesses, as recommended by corporate governance codes.

Interestingly, around 25% of private family firms in our survey answered that they never disclosed nonfinancial information (e.g., information about strategy, product markets, internal process and innovation) to the board. Only financial information is disclosed to the board as it is required by law. So in these firms, boards are just rubber stamps set up to fulfil the legal requirement. In fact, the appointment of outside directors in these firms is just to make sure “house in order”.

Meanwhile how do family shareholders acquire information and discuss strategic issues with managers? They do it informally. Discussions in the kitchen or at Christmas parties are examples of occasions where they are informed.

Despite the insufficient information disclosure in many private family businesses, managers of the most successful businesses in the survey make an open, honest attitude and conscious effort to inform the board.

Taken together, for family-controlled firms wanting to take advantage of outsider directors’ expertise, merely appointing them on the board without providing them firm-specific information is not effective. Controlling families should have a trusting view and are willing to share information.

As private family businesses gain more attention, there is a need to have a structured governance system aimed at engaging outside directors to exchange ideas with management, express different viewpoints, and build trust among directors and managers. An overall commitment from owning families towards using the board actively in strategic decision-making is the prerequisite for good corporate governance.

Cited references

Bettinelli, C. (2011). Boards of directors in family firms: An exploratory study of structure and group process. Family Business Review, 24: 151-169.

Cabrera-Suárez, M. K. and Martin-Santana, J. D. (2015). Board composition and performance in Spanish non-listed family firms: The influence of type of directors and CEO duality. BRQ Business Research Quarterly, 18, 213-229.

Forbes, D.P. & Milliken, F.J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24: 489-505.

 


[1] This is a joint research project with Yan Du, Lorraine Uhlaner (EDHEC Business School) and Ann Jorissen (University of Antwerp), under the financial support from the Flemish Agency for Innovation by Science and Technology (IWT).

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Yan Du
Associate Professor & Member of EDHEC Family Business Center, EDHEC Business School

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The best performing board I’ve been on is one I’m on now, a family owned company, with four outside directors, two family shareholders and the CEO.

(Jim McHugh---Director at Southworth International Group, Inc. and Kennebec Technologies, Inc.)

Family businesses tend to be reluctant to recruit outside directors given their particular culture. Their long-term focus and significant emotional attachment of the owning family to the firm could often collide with the outsiders’ perspectives. However, today many private family businesses are adding outside directors to their boards. So why would a private family company want to recruit an outside member on their boards?

Family businesses are increasingly aware of the risks they face. Many of them fail to transfer the business to the second generation, and most of them do not survive beyond two generations. Poor operational management, lack of governance standards, family conflicts and a conservative attitude to risk-taking are just a few reasons they break down.

Contributions of outside directors to family businesses

Today the practice of including outside directors in private family businesses is widely recommended by corporate governance codes for private firms (e.g., Code Buysse in Belgium; Corporate Governance Guidance and Principles for Unlisted Companies in the UK; Guidelines for improving Corporate Governance of unlisted companies in Finland). The proponents argue that outside directors bring new knowledge and networks, provide unbiased advice, and assure the credibility of the company.

Notwithstanding the potential contribution of outside directors, not every family business benefits from appointing outside directors. In their study of private family firms, Cabrera-Suárez and Martín-Santana find that the presence of outside directors even hinders the firm’s profitability. This raises the question of when or under which conditions outside directors add value to private family businesses. According to Forbes and Milliken, boards are decision-making groups, and they are more effective when group members (directors) interact with each other to perform the directorship role. Cristina Bettinelli, in her study of 90 Italian family businesses find that boards are more effective when the goals of outside and inside directors are aligned, when a CEO is willing to listen to the board, and when outside directors are actively engaged with boards’ activities.

The need for family business-specific information

Apart from being actively engaged, outside directors need firm-specific information to do their jobs properly. Without firm-specific information, outside directors can neither question the actions of the management nor give valuable advice.

Yet private family businesses are largely left alone with respect to information disclosure. Unlike publicly listed businesses which are under pressure by activist shareholders, private family businesses are flexible in disclosing firm-specific information to public.

Are private family firms willing to share firm-specific information with outside directors? Several corporate governance scandals in family companies, from Parmalat in Italy, Takata Corp. in Japan, to The News Corporation in the U.S., suggest that sharing information is not automatic.

The biggest issue with many private family businesses is that adding outside directors leads them towards greater secrecy: owning families prefer to maintain control; to protect their privacy and do not like to expose their conflicts to outsiders. For these reasons, they have difficulties trusting outside directors.

A recent research work[1] at the EDHEC Family Business Center investigates how outside directors could add value in private family businesses. Survey data from 421 private family businesses in Belgium have been collected. The results show that private family firms disclose less information when outside directors are present, in comparison to private nonfamily firms. This leads us to question the wisdom of including outside directors on the board of private family businesses, as recommended by corporate governance codes.

Interestingly, around 25% of private family firms in our survey answered that they never disclosed nonfinancial information (e.g., information about strategy, product markets, internal process and innovation) to the board. Only financial information is disclosed to the board as it is required by law. So in these firms, boards are just rubber stamps set up to fulfil the legal requirement. In fact, the appointment of outside directors in these firms is just to make sure “house in order”.

Meanwhile how do family shareholders acquire information and discuss strategic issues with managers? They do it informally. Discussions in the kitchen or at Christmas parties are examples of occasions where they are informed.

Despite the insufficient information disclosure in many private family businesses, managers of the most successful businesses in the survey make an open, honest attitude and conscious effort to inform the board.

Taken together, for family-controlled firms wanting to take advantage of outsider directors’ expertise, merely appointing them on the board without providing them firm-specific information is not effective. Controlling families should have a trusting view and are willing to share information.

As private family businesses gain more attention, there is a need to have a structured governance system aimed at engaging outside directors to exchange ideas with management, express different viewpoints, and build trust among directors and managers. An overall commitment from owning families towards using the board actively in strategic decision-making is the prerequisite for good corporate governance.

Cited references

Bettinelli, C. (2011). Boards of directors in family firms: An exploratory study of structure and group process. Family Business Review, 24: 151-169.

Cabrera-Suárez, M. K. and Martin-Santana, J. D. (2015). Board composition and performance in Spanish non-listed family firms: The influence of type of directors and CEO duality. BRQ Business Research Quarterly, 18, 213-229.

Forbes, D.P. & Milliken, F.J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24: 489-505.

 


[1] This is a joint research project with Yan Du, Lorraine Uhlaner (EDHEC Business School) and Ann Jorissen (University of Antwerp), under the financial support from the Flemish Agency for Innovation by Science and Technology (IWT).

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The best performing board I’ve been on is one I’m on now, a family owned company, with four outside directors, two family shareholders and the CEO.

(Jim McHugh---Director at Southworth International Group, Inc. and Kennebec Technologies, Inc.)

Family businesses tend to be reluctant to recruit outside directors given their particular culture. Their long-term focus and significant emotional attachment of the owning family to the firm could often collide with the outsiders’ perspectives. However, today many private family businesses are adding outside directors to their boards. So why would a private family company want to recruit an outside member on their boards?

Family businesses are increasingly aware of the risks they face. Many of them fail to transfer the business to the second generation, and most of them do not survive beyond two generations. Poor operational management, lack of governance standards, family conflicts and a conservative attitude to risk-taking are just a few reasons they break down.

Contributions of outside directors to family businesses

Today the practice of including outside directors in private family businesses is widely recommended by corporate governance codes for private firms (e.g., Code Buysse in Belgium; Corporate Governance Guidance and Principles for Unlisted Companies in the UK; Guidelines for improving Corporate Governance of unlisted companies in Finland). The proponents argue that outside directors bring new knowledge and networks, provide unbiased advice, and assure the credibility of the company.

Notwithstanding the potential contribution of outside directors, not every family business benefits from appointing outside directors. In their study of private family firms, Cabrera-Suárez and Martín-Santana find that the presence of outside directors even hinders the firm’s profitability. This raises the question of when or under which conditions outside directors add value to private family businesses. According to Forbes and Milliken, boards are decision-making groups, and they are more effective when group members (directors) interact with each other to perform the directorship role. Cristina Bettinelli, in her study of 90 Italian family businesses find that boards are more effective when the goals of outside and inside directors are aligned, when a CEO is willing to listen to the board, and when outside directors are actively engaged with boards’ activities.

The need for family business-specific information

Apart from being actively engaged, outside directors need firm-specific information to do their jobs properly. Without firm-specific information, outside directors can neither question the actions of the management nor give valuable advice.

Yet private family businesses are largely left alone with respect to information disclosure. Unlike publicly listed businesses which are under pressure by activist shareholders, private family businesses are flexible in disclosing firm-specific information to public.

Are private family firms willing to share firm-specific information with outside directors? Several corporate governance scandals in family companies, from Parmalat in Italy, Takata Corp. in Japan, to The News Corporation in the U.S., suggest that sharing information is not automatic.

The biggest issue with many private family businesses is that adding outside directors leads them towards greater secrecy: owning families prefer to maintain control; to protect their privacy and do not like to expose their conflicts to outsiders. For these reasons, they have difficulties trusting outside directors.

A recent research work[1] at the EDHEC Family Business Center investigates how outside directors could add value in private family businesses. Survey data from 421 private family businesses in Belgium have been collected. The results show that private family firms disclose less information when outside directors are present, in comparison to private nonfamily firms. This leads us to question the wisdom of including outside directors on the board of private family businesses, as recommended by corporate governance codes.

Interestingly, around 25% of private family firms in our survey answered that they never disclosed nonfinancial information (e.g., information about strategy, product markets, internal process and innovation) to the board. Only financial information is disclosed to the board as it is required by law. So in these firms, boards are just rubber stamps set up to fulfil the legal requirement. In fact, the appointment of outside directors in these firms is just to make sure “house in order”.

Meanwhile how do family shareholders acquire information and discuss strategic issues with managers? They do it informally. Discussions in the kitchen or at Christmas parties are examples of occasions where they are informed.

Despite the insufficient information disclosure in many private family businesses, managers of the most successful businesses in the survey make an open, honest attitude and conscious effort to inform the board.

Taken together, for family-controlled firms wanting to take advantage of outsider directors’ expertise, merely appointing them on the board without providing them firm-specific information is not effective. Controlling families should have a trusting view and are willing to share information.

As private family businesses gain more attention, there is a need to have a structured governance system aimed at engaging outside directors to exchange ideas with management, express different viewpoints, and build trust among directors and managers. An overall commitment from owning families towards using the board actively in strategic decision-making is the prerequisite for good corporate governance.

Cited references

Bettinelli, C. (2011). Boards of directors in family firms: An exploratory study of structure and group process. Family Business Review, 24: 151-169.

Cabrera-Suárez, M. K. and Martin-Santana, J. D. (2015). Board composition and performance in Spanish non-listed family firms: The influence of type of directors and CEO duality. BRQ Business Research Quarterly, 18, 213-229.

Forbes, D.P. & Milliken, F.J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24: 489-505.

 


[1] This is a joint research project with Yan Du, Lorraine Uhlaner (EDHEC Business School) and Ann Jorissen (University of Antwerp), under the financial support from the Flemish Agency for Innovation by Science and Technology (IWT).

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Yan Du
Associate Professor & Member of EDHEC Family Business Center, EDHEC Business School

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Family businesses still represent the backbone of the economy worldwide despite ongoing uncertainties. These businesses do not represent a homogeneous group of organizations as they have distinctive characteristics mainly relative to their size. Where do they stand in terms of innovation and what practices could they learn from each other to foster innovation in increasingly competitive markets?

INNOVATION IN FAMILY BUSINESS: what do we know?

Looking into the output of innovation as being the usage of new systems, policy, service, or product, makes us question to what extent it is the product of more R&D expenditures in family businesses. Broekaert et al., (2016) found that family businesses are less involved in R&D. However, the family business’ particular structure enables to develop new products taking advantage of their organization flexibility. Moreover, scholars in family business investigated the innovation factor as a determinant of growth and economic development in a company (Nieto et al. 2015; De Massis et al. 2015). Alberti and Pizzurno (2013) show that innovation has a positive impact on firms’ long-term performance, while De Massis et al. (2016) show that beyond the performance aspect the rate of innovation in a company ensures its survival against competitors.

Within the same vein, Werner et al. (2018) investigate the innovation factors in both family and non-family businesses in Germany.  Using a large sample of 1 870 SMEs their results highlight that long-term perspective positively affects innovation output in small family business. Their findings are also interesting when it comes to succeeding generations of family firm leaders; the authors provide evidence that innovation’s output continuously decreases from generation to generation. The last result seems a little puzzling regarding the literature related to family businesses and innovation. It is well documented that family businesses have specific characteristics that make their business much more complex than any other form of businesses (Neubauer & lank, 1998). This being said, the past studies lack to explain the innovation within the family businesses with respective to their size.

TAKING INTO ACCOUNT THE BUSINESS SIZE EFFECT

It is the dream of every family business to grow and flourish, however there is a dark side related to the size of the business. When new market opportunity emerges, innovation could be the key of success to satisfy the demand of the market. Having a solid and rigid infrastructure may act as a barrier to innovation. In this sense, small businesses will have the advantage of quick decision-making as a response to market changes especially in a world of uncertainty.

In contrast, large family businesses may be affected by the agency costs problems, especially when the CEO is an outsider. In such a situation, the CEO may have short-term value creation strategies unlike the business shareholders who have a long-term vision. This particularly reflects the complexity of large family businesses with weaker governance mechanism.

Better corporate and family governance is one way to balance interests. While the CEO may implement daily operational decisions, the board of directors lead strategically the decision-making in line with the shareholders’ interests including the family. Having a large board of directors may decrease the innovation output due to the complexity of the organization or voting on new procedures or systems implementations. More recently, De Massis et al. (2018) focused on family firms governance and their involvment in control to show that family involvement in the board of directors have a negative impact on innovation, adding an additional dimension of complexity. The innovation output may be therefore viewed a proxy for better governance in family businesses. Large family businesses should be enticed to implement flexible units with decision-making power to deal with the new market opportunities (products, services, systems) in addition to good family and corporate governance practices, which will increase their competitiveness in the market.

To illustrate, De Massis et al. (2018) investigate the German Mittelstand businesses, owned and controlled by families, and their implication in innovation. They observe that Mittelstand firms generate more patents than German non-Mittelstand firms. Building on the above discussion, PWM, world leading manufacturer of the price signs used by gas stations, illustrate the Mittelstand’s focus on innovation. Despite its relatively small size, the family business company succeeded to innovate from generation to generation applying the family governance with a long-term investment view. Another success story of the entrepreneurial spirit is the case of MANE Group, a 4th generation family business, which was founded in 1871 by Victor Mane. Starting as a small French producer of fragrant materials from regional flowers and plants, the family business grew successfully to become one of the leading companies worldwide and has been run continuously by the Mane family. A key point for the MANE Group governance vision and objectives relies on the intense investment in R&D by having 40 different R&D centres all across the World (PwC, 2016).  In the same vein, Jahn (2016) found a positive link between the presence of Mittelsland firms and patent activity, highlighting the importance of Mittelstand firms to the country’s innovativeness.

REFERENCES

Berlemann, M., and V.  Jahn.  (2016).  Regional importance of Mittelstand firms and innovation   performance, Regional Studies, 50, 1819–33

Broekaert W., Andries P., and Debackere K. (2016). Innovation processes in family firms: The relevance of organizational flexibility, Small Business Economics, 47, 771-785

De Massis, A., Audretsch D., Uhlaner L., and Kammerlander N. (2018). Innovation with Limited Resources: Management Lessons from the German Mittelstand, Journal of Product Innovation Management, 35, 125-146

De Massis A., Frattini F., Pizzurno E., Cassia L., (2015). Product innovation in family versus non family firms: An exploratory analysis, Journal of Small Business Management, 53, 1-36

De Massis, A., Frattini, F., Kotlar, J., Messeni-Petruzzelli, A. and Wright, M. (2016). Innovation through tradition: Lessons from innovative family businesses and directions for future research, Academy of Management Perspectives, 30, 93-116

Neubauer, F. and Lank, A. (1998). The Family Business: Its Governance for Sustainability. MacMillan Press Ltd., Houndmills, 65-67

Nieto, M.J., Santamaria, L. and Fernandez, Z. (2015). Understanding the innovation behavior of family firms. Journal of Small Business Management, 53, 382-399

Pizzurno E., and Alberti F., (2013). Technology innovation and performance in family firms, International Journal of Entrepreneurship and Innovation Management, 17, 142-161

PwC Family business survey report 2016, available at: https://www.pwc.com/gx/en/services/family-business/family-business-survey-2016/innovation-and-internationalisation-in-france.html

Rondi E., De Massis A., and Kotlar J. (2018). Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system, Journal of Family Business Strategy, forthcoming

Werner A., Schröder, C. and Chlosta, S. (2018). Driving factors of innovation in family and non-family SMEs, Small Business Economics, 50, 201-218

 

 

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Where do family businesses stand in terms of innovation?

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Family businesses still represent the backbone of the economy worldwide despite ongoing uncertainties. These businesses do not represent a homogeneous group of organizations as they have distinctive characteristics mainly relative to their size. Where do they stand in terms of innovation and what practices could they learn from each other to foster innovation in increasingly competitive markets?

INNOVATION IN FAMILY BUSINESS: what do we know?

Looking into the output of innovation as being the usage of new systems, policy, service, or product, makes us question to what extent it is the product of more R&D expenditures in family businesses. Broekaert et al., (2016) found that family businesses are less involved in R&D. However, the family business’ particular structure enables to develop new products taking advantage of their organization flexibility. Moreover, scholars in family business investigated the innovation factor as a determinant of growth and economic development in a company (Nieto et al. 2015; De Massis et al. 2015). Alberti and Pizzurno (2013) show that innovation has a positive impact on firms’ long-term performance, while De Massis et al. (2016) show that beyond the performance aspect the rate of innovation in a company ensures its survival against competitors.

Within the same vein, Werner et al. (2018) investigate the innovation factors in both family and non-family businesses in Germany.  Using a large sample of 1 870 SMEs their results highlight that long-term perspective positively affects innovation output in small family business. Their findings are also interesting when it comes to succeeding generations of family firm leaders; the authors provide evidence that innovation’s output continuously decreases from generation to generation. The last result seems a little puzzling regarding the literature related to family businesses and innovation. It is well documented that family businesses have specific characteristics that make their business much more complex than any other form of businesses (Neubauer & lank, 1998). This being said, the past studies lack to explain the innovation within the family businesses with respective to their size.

TAKING INTO ACCOUNT THE BUSINESS SIZE EFFECT

It is the dream of every family business to grow and flourish, however there is a dark side related to the size of the business. When new market opportunity emerges, innovation could be the key of success to satisfy the demand of the market. Having a solid and rigid infrastructure may act as a barrier to innovation. In this sense, small businesses will have the advantage of quick decision-making as a response to market changes especially in a world of uncertainty.

In contrast, large family businesses may be affected by the agency costs problems, especially when the CEO is an outsider. In such a situation, the CEO may have short-term value creation strategies unlike the business shareholders who have a long-term vision. This particularly reflects the complexity of large family businesses with weaker governance mechanism.

Better corporate and family governance is one way to balance interests. While the CEO may implement daily operational decisions, the board of directors lead strategically the decision-making in line with the shareholders’ interests including the family. Having a large board of directors may decrease the innovation output due to the complexity of the organization or voting on new procedures or systems implementations. More recently, De Massis et al. (2018) focused on family firms governance and their involvment in control to show that family involvement in the board of directors have a negative impact on innovation, adding an additional dimension of complexity. The innovation output may be therefore viewed a proxy for better governance in family businesses. Large family businesses should be enticed to implement flexible units with decision-making power to deal with the new market opportunities (products, services, systems) in addition to good family and corporate governance practices, which will increase their competitiveness in the market.

To illustrate, De Massis et al. (2018) investigate the German Mittelstand businesses, owned and controlled by families, and their implication in innovation. They observe that Mittelstand firms generate more patents than German non-Mittelstand firms. Building on the above discussion, PWM, world leading manufacturer of the price signs used by gas stations, illustrate the Mittelstand’s focus on innovation. Despite its relatively small size, the family business company succeeded to innovate from generation to generation applying the family governance with a long-term investment view. Another success story of the entrepreneurial spirit is the case of MANE Group, a 4th generation family business, which was founded in 1871 by Victor Mane. Starting as a small French producer of fragrant materials from regional flowers and plants, the family business grew successfully to become one of the leading companies worldwide and has been run continuously by the Mane family. A key point for the MANE Group governance vision and objectives relies on the intense investment in R&D by having 40 different R&D centres all across the World (PwC, 2016).  In the same vein, Jahn (2016) found a positive link between the presence of Mittelsland firms and patent activity, highlighting the importance of Mittelstand firms to the country’s innovativeness.

REFERENCES

Berlemann, M., and V.  Jahn.  (2016).  Regional importance of Mittelstand firms and innovation   performance, Regional Studies, 50, 1819–33

Broekaert W., Andries P., and Debackere K. (2016). Innovation processes in family firms: The relevance of organizational flexibility, Small Business Economics, 47, 771-785

De Massis, A., Audretsch D., Uhlaner L., and Kammerlander N. (2018). Innovation with Limited Resources: Management Lessons from the German Mittelstand, Journal of Product Innovation Management, 35, 125-146

De Massis A., Frattini F., Pizzurno E., Cassia L., (2015). Product innovation in family versus non family firms: An exploratory analysis, Journal of Small Business Management, 53, 1-36

De Massis, A., Frattini, F., Kotlar, J., Messeni-Petruzzelli, A. and Wright, M. (2016). Innovation through tradition: Lessons from innovative family businesses and directions for future research, Academy of Management Perspectives, 30, 93-116

Neubauer, F. and Lank, A. (1998). The Family Business: Its Governance for Sustainability. MacMillan Press Ltd., Houndmills, 65-67

Nieto, M.J., Santamaria, L. and Fernandez, Z. (2015). Understanding the innovation behavior of family firms. Journal of Small Business Management, 53, 382-399

Pizzurno E., and Alberti F., (2013). Technology innovation and performance in family firms, International Journal of Entrepreneurship and Innovation Management, 17, 142-161

PwC Family business survey report 2016, available at: https://www.pwc.com/gx/en/services/family-business/family-business-survey-2016/innovation-and-internationalisation-in-france.html

Rondi E., De Massis A., and Kotlar J. (2018). Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system, Journal of Family Business Strategy, forthcoming

Werner A., Schröder, C. and Chlosta, S. (2018). Driving factors of innovation in family and non-family SMEs, Small Business Economics, 50, 201-218

 

 

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Christian Haddad
Research Engineer, EDHEC Family Business Center, EDHEC Business School

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Family businesses still represent the backbone of the economy worldwide despite ongoing uncertainties. These businesses do not represent a homogeneous group of organizations as they have distinctive characteristics mainly relative to their size. Where do they stand in terms of innovation and what practices could they learn from each other to foster innovation in increasingly competitive markets?

INNOVATION IN FAMILY BUSINESS: what do we know?

Looking into the output of innovation as being the usage of new systems, policy, service, or product, makes us question to what extent it is the product of more R&D expenditures in family businesses. Broekaert et al., (2016) found that family businesses are less involved in R&D. However, the family business’ particular structure enables to develop new products taking advantage of their organization flexibility. Moreover, scholars in family business investigated the innovation factor as a determinant of growth and economic development in a company (Nieto et al. 2015; De Massis et al. 2015). Alberti and Pizzurno (2013) show that innovation has a positive impact on firms’ long-term performance, while De Massis et al. (2016) show that beyond the performance aspect the rate of innovation in a company ensures its survival against competitors.

Within the same vein, Werner et al. (2018) investigate the innovation factors in both family and non-family businesses in Germany.  Using a large sample of 1 870 SMEs their results highlight that long-term perspective positively affects innovation output in small family business. Their findings are also interesting when it comes to succeeding generations of family firm leaders; the authors provide evidence that innovation’s output continuously decreases from generation to generation. The last result seems a little puzzling regarding the literature related to family businesses and innovation. It is well documented that family businesses have specific characteristics that make their business much more complex than any other form of businesses (Neubauer & lank, 1998). This being said, the past studies lack to explain the innovation within the family businesses with respective to their size.

TAKING INTO ACCOUNT THE BUSINESS SIZE EFFECT

It is the dream of every family business to grow and flourish, however there is a dark side related to the size of the business. When new market opportunity emerges, innovation could be the key of success to satisfy the demand of the market. Having a solid and rigid infrastructure may act as a barrier to innovation. In this sense, small businesses will have the advantage of quick decision-making as a response to market changes especially in a world of uncertainty.

In contrast, large family businesses may be affected by the agency costs problems, especially when the CEO is an outsider. In such a situation, the CEO may have short-term value creation strategies unlike the business shareholders who have a long-term vision. This particularly reflects the complexity of large family businesses with weaker governance mechanism.

Better corporate and family governance is one way to balance interests. While the CEO may implement daily operational decisions, the board of directors lead strategically the decision-making in line with the shareholders’ interests including the family. Having a large board of directors may decrease the innovation output due to the complexity of the organization or voting on new procedures or systems implementations. More recently, De Massis et al. (2018) focused on family firms governance and their involvment in control to show that family involvement in the board of directors have a negative impact on innovation, adding an additional dimension of complexity. The innovation output may be therefore viewed a proxy for better governance in family businesses. Large family businesses should be enticed to implement flexible units with decision-making power to deal with the new market opportunities (products, services, systems) in addition to good family and corporate governance practices, which will increase their competitiveness in the market.

To illustrate, De Massis et al. (2018) investigate the German Mittelstand businesses, owned and controlled by families, and their implication in innovation. They observe that Mittelstand firms generate more patents than German non-Mittelstand firms. Building on the above discussion, PWM, world leading manufacturer of the price signs used by gas stations, illustrate the Mittelstand’s focus on innovation. Despite its relatively small size, the family business company succeeded to innovate from generation to generation applying the family governance with a long-term investment view. Another success story of the entrepreneurial spirit is the case of MANE Group, a 4th generation family business, which was founded in 1871 by Victor Mane. Starting as a small French producer of fragrant materials from regional flowers and plants, the family business grew successfully to become one of the leading companies worldwide and has been run continuously by the Mane family. A key point for the MANE Group governance vision and objectives relies on the intense investment in R&D by having 40 different R&D centres all across the World (PwC, 2016).  In the same vein, Jahn (2016) found a positive link between the presence of Mittelsland firms and patent activity, highlighting the importance of Mittelstand firms to the country’s innovativeness.

REFERENCES

Berlemann, M., and V.  Jahn.  (2016).  Regional importance of Mittelstand firms and innovation   performance, Regional Studies, 50, 1819–33

Broekaert W., Andries P., and Debackere K. (2016). Innovation processes in family firms: The relevance of organizational flexibility, Small Business Economics, 47, 771-785

De Massis, A., Audretsch D., Uhlaner L., and Kammerlander N. (2018). Innovation with Limited Resources: Management Lessons from the German Mittelstand, Journal of Product Innovation Management, 35, 125-146

De Massis A., Frattini F., Pizzurno E., Cassia L., (2015). Product innovation in family versus non family firms: An exploratory analysis, Journal of Small Business Management, 53, 1-36

De Massis, A., Frattini, F., Kotlar, J., Messeni-Petruzzelli, A. and Wright, M. (2016). Innovation through tradition: Lessons from innovative family businesses and directions for future research, Academy of Management Perspectives, 30, 93-116

Neubauer, F. and Lank, A. (1998). The Family Business: Its Governance for Sustainability. MacMillan Press Ltd., Houndmills, 65-67

Nieto, M.J., Santamaria, L. and Fernandez, Z. (2015). Understanding the innovation behavior of family firms. Journal of Small Business Management, 53, 382-399

Pizzurno E., and Alberti F., (2013). Technology innovation and performance in family firms, International Journal of Entrepreneurship and Innovation Management, 17, 142-161

PwC Family business survey report 2016, available at: https://www.pwc.com/gx/en/services/family-business/family-business-survey-2016/innovation-and-internationalisation-in-france.html

Rondi E., De Massis A., and Kotlar J. (2018). Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system, Journal of Family Business Strategy, forthcoming

Werner A., Schröder, C. and Chlosta, S. (2018). Driving factors of innovation in family and non-family SMEs, Small Business Economics, 50, 201-218

 

 

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Where do family businesses stand in terms of innovation?

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Family businesses still represent the backbone of the economy worldwide despite ongoing uncertainties. These businesses do not represent a homogeneous group of organizations as they have distinctive characteristics mainly relative to their size. Where do they stand in terms of innovation and what practices could they learn from each other to foster innovation in increasingly competitive markets?

INNOVATION IN FAMILY BUSINESS: what do we know?

Looking into the output of innovation as being the usage of new systems, policy, service, or product, makes us question to what extent it is the product of more R&D expenditures in family businesses. Broekaert et al., (2016) found that family businesses are less involved in R&D. However, the family business’ particular structure enables to develop new products taking advantage of their organization flexibility. Moreover, scholars in family business investigated the innovation factor as a determinant of growth and economic development in a company (Nieto et al. 2015; De Massis et al. 2015). Alberti and Pizzurno (2013) show that innovation has a positive impact on firms’ long-term performance, while De Massis et al. (2016) show that beyond the performance aspect the rate of innovation in a company ensures its survival against competitors.

Within the same vein, Werner et al. (2018) investigate the innovation factors in both family and non-family businesses in Germany.  Using a large sample of 1 870 SMEs their results highlight that long-term perspective positively affects innovation output in small family business. Their findings are also interesting when it comes to succeeding generations of family firm leaders; the authors provide evidence that innovation’s output continuously decreases from generation to generation. The last result seems a little puzzling regarding the literature related to family businesses and innovation. It is well documented that family businesses have specific characteristics that make their business much more complex than any other form of businesses (Neubauer & lank, 1998). This being said, the past studies lack to explain the innovation within the family businesses with respective to their size.

TAKING INTO ACCOUNT THE BUSINESS SIZE EFFECT

It is the dream of every family business to grow and flourish, however there is a dark side related to the size of the business. When new market opportunity emerges, innovation could be the key of success to satisfy the demand of the market. Having a solid and rigid infrastructure may act as a barrier to innovation. In this sense, small businesses will have the advantage of quick decision-making as a response to market changes especially in a world of uncertainty.

In contrast, large family businesses may be affected by the agency costs problems, especially when the CEO is an outsider. In such a situation, the CEO may have short-term value creation strategies unlike the business shareholders who have a long-term vision. This particularly reflects the complexity of large family businesses with weaker governance mechanism.

Better corporate and family governance is one way to balance interests. While the CEO may implement daily operational decisions, the board of directors lead strategically the decision-making in line with the shareholders’ interests including the family. Having a large board of directors may decrease the innovation output due to the complexity of the organization or voting on new procedures or systems implementations. More recently, De Massis et al. (2018) focused on family firms governance and their involvment in control to show that family involvement in the board of directors have a negative impact on innovation, adding an additional dimension of complexity. The innovation output may be therefore viewed a proxy for better governance in family businesses. Large family businesses should be enticed to implement flexible units with decision-making power to deal with the new market opportunities (products, services, systems) in addition to good family and corporate governance practices, which will increase their competitiveness in the market.

To illustrate, De Massis et al. (2018) investigate the German Mittelstand businesses, owned and controlled by families, and their implication in innovation. They observe that Mittelstand firms generate more patents than German non-Mittelstand firms. Building on the above discussion, PWM, world leading manufacturer of the price signs used by gas stations, illustrate the Mittelstand’s focus on innovation. Despite its relatively small size, the family business company succeeded to innovate from generation to generation applying the family governance with a long-term investment view. Another success story of the entrepreneurial spirit is the case of MANE Group, a 4th generation family business, which was founded in 1871 by Victor Mane. Starting as a small French producer of fragrant materials from regional flowers and plants, the family business grew successfully to become one of the leading companies worldwide and has been run continuously by the Mane family. A key point for the MANE Group governance vision and objectives relies on the intense investment in R&D by having 40 different R&D centres all across the World (PwC, 2016).  In the same vein, Jahn (2016) found a positive link between the presence of Mittelsland firms and patent activity, highlighting the importance of Mittelstand firms to the country’s innovativeness.

REFERENCES

Berlemann, M., and V.  Jahn.  (2016).  Regional importance of Mittelstand firms and innovation   performance, Regional Studies, 50, 1819–33

Broekaert W., Andries P., and Debackere K. (2016). Innovation processes in family firms: The relevance of organizational flexibility, Small Business Economics, 47, 771-785

De Massis, A., Audretsch D., Uhlaner L., and Kammerlander N. (2018). Innovation with Limited Resources: Management Lessons from the German Mittelstand, Journal of Product Innovation Management, 35, 125-146

De Massis A., Frattini F., Pizzurno E., Cassia L., (2015). Product innovation in family versus non family firms: An exploratory analysis, Journal of Small Business Management, 53, 1-36

De Massis, A., Frattini, F., Kotlar, J., Messeni-Petruzzelli, A. and Wright, M. (2016). Innovation through tradition: Lessons from innovative family businesses and directions for future research, Academy of Management Perspectives, 30, 93-116

Neubauer, F. and Lank, A. (1998). The Family Business: Its Governance for Sustainability. MacMillan Press Ltd., Houndmills, 65-67

Nieto, M.J., Santamaria, L. and Fernandez, Z. (2015). Understanding the innovation behavior of family firms. Journal of Small Business Management, 53, 382-399

Pizzurno E., and Alberti F., (2013). Technology innovation and performance in family firms, International Journal of Entrepreneurship and Innovation Management, 17, 142-161

PwC Family business survey report 2016, available at: https://www.pwc.com/gx/en/services/family-business/family-business-survey-2016/innovation-and-internationalisation-in-france.html

Rondi E., De Massis A., and Kotlar J. (2018). Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system, Journal of Family Business Strategy, forthcoming

Werner A., Schröder, C. and Chlosta, S. (2018). Driving factors of innovation in family and non-family SMEs, Small Business Economics, 50, 201-218

 

 

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Where do family businesses stand in terms of innovation?

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Family businesses still represent the backbone of the economy worldwide despite ongoing uncertainties. These businesses do not represent a homogeneous group of organizations as they have distinctive characteristics mainly relative to their size. Where do they stand in terms of innovation and what practices could they learn from each other to foster innovation in increasingly competitive markets?

INNOVATION IN FAMILY BUSINESS: what do we know?

Looking into the output of innovation as being the usage of new systems, policy, service, or product, makes us question to what extent it is the product of more R&D expenditures in family businesses. Broekaert et al., (2016) found that family businesses are less involved in R&D. However, the family business’ particular structure enables to develop new products taking advantage of their organization flexibility. Moreover, scholars in family business investigated the innovation factor as a determinant of growth and economic development in a company (Nieto et al. 2015; De Massis et al. 2015). Alberti and Pizzurno (2013) show that innovation has a positive impact on firms’ long-term performance, while De Massis et al. (2016) show that beyond the performance aspect the rate of innovation in a company ensures its survival against competitors.

Within the same vein, Werner et al. (2018) investigate the innovation factors in both family and non-family businesses in Germany.  Using a large sample of 1 870 SMEs their results highlight that long-term perspective positively affects innovation output in small family business. Their findings are also interesting when it comes to succeeding generations of family firm leaders; the authors provide evidence that innovation’s output continuously decreases from generation to generation. The last result seems a little puzzling regarding the literature related to family businesses and innovation. It is well documented that family businesses have specific characteristics that make their business much more complex than any other form of businesses (Neubauer & lank, 1998). This being said, the past studies lack to explain the innovation within the family businesses with respective to their size.

TAKING INTO ACCOUNT THE BUSINESS SIZE EFFECT

It is the dream of every family business to grow and flourish, however there is a dark side related to the size of the business. When new market opportunity emerges, innovation could be the key of success to satisfy the demand of the market. Having a solid and rigid infrastructure may act as a barrier to innovation. In this sense, small businesses will have the advantage of quick decision-making as a response to market changes especially in a world of uncertainty.

In contrast, large family businesses may be affected by the agency costs problems, especially when the CEO is an outsider. In such a situation, the CEO may have short-term value creation strategies unlike the business shareholders who have a long-term vision. This particularly reflects the complexity of large family businesses with weaker governance mechanism.

Better corporate and family governance is one way to balance interests. While the CEO may implement daily operational decisions, the board of directors lead strategically the decision-making in line with the shareholders’ interests including the family. Having a large board of directors may decrease the innovation output due to the complexity of the organization or voting on new procedures or systems implementations. More recently, De Massis et al. (2018) focused on family firms governance and their involvment in control to show that family involvement in the board of directors have a negative impact on innovation, adding an additional dimension of complexity. The innovation output may be therefore viewed a proxy for better governance in family businesses. Large family businesses should be enticed to implement flexible units with decision-making power to deal with the new market opportunities (products, services, systems) in addition to good family and corporate governance practices, which will increase their competitiveness in the market.

To illustrate, De Massis et al. (2018) investigate the German Mittelstand businesses, owned and controlled by families, and their implication in innovation. They observe that Mittelstand firms generate more patents than German non-Mittelstand firms. Building on the above discussion, PWM, world leading manufacturer of the price signs used by gas stations, illustrate the Mittelstand’s focus on innovation. Despite its relatively small size, the family business company succeeded to innovate from generation to generation applying the family governance with a long-term investment view. Another success story of the entrepreneurial spirit is the case of MANE Group, a 4th generation family business, which was founded in 1871 by Victor Mane. Starting as a small French producer of fragrant materials from regional flowers and plants, the family business grew successfully to become one of the leading companies worldwide and has been run continuously by the Mane family. A key point for the MANE Group governance vision and objectives relies on the intense investment in R&D by having 40 different R&D centres all across the World (PwC, 2016).  In the same vein, Jahn (2016) found a positive link between the presence of Mittelsland firms and patent activity, highlighting the importance of Mittelstand firms to the country’s innovativeness.

REFERENCES

Berlemann, M., and V.  Jahn.  (2016).  Regional importance of Mittelstand firms and innovation   performance, Regional Studies, 50, 1819–33

Broekaert W., Andries P., and Debackere K. (2016). Innovation processes in family firms: The relevance of organizational flexibility, Small Business Economics, 47, 771-785

De Massis, A., Audretsch D., Uhlaner L., and Kammerlander N. (2018). Innovation with Limited Resources: Management Lessons from the German Mittelstand, Journal of Product Innovation Management, 35, 125-146

De Massis A., Frattini F., Pizzurno E., Cassia L., (2015). Product innovation in family versus non family firms: An exploratory analysis, Journal of Small Business Management, 53, 1-36

De Massis, A., Frattini, F., Kotlar, J., Messeni-Petruzzelli, A. and Wright, M. (2016). Innovation through tradition: Lessons from innovative family businesses and directions for future research, Academy of Management Perspectives, 30, 93-116

Neubauer, F. and Lank, A. (1998). The Family Business: Its Governance for Sustainability. MacMillan Press Ltd., Houndmills, 65-67

Nieto, M.J., Santamaria, L. and Fernandez, Z. (2015). Understanding the innovation behavior of family firms. Journal of Small Business Management, 53, 382-399

Pizzurno E., and Alberti F., (2013). Technology innovation and performance in family firms, International Journal of Entrepreneurship and Innovation Management, 17, 142-161

PwC Family business survey report 2016, available at: https://www.pwc.com/gx/en/services/family-business/family-business-survey-2016/innovation-and-internationalisation-in-france.html

Rondi E., De Massis A., and Kotlar J. (2018). Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system, Journal of Family Business Strategy, forthcoming

Werner A., Schröder, C. and Chlosta, S. (2018). Driving factors of innovation in family and non-family SMEs, Small Business Economics, 50, 201-218

 

 

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Where do family businesses stand in terms of innovation?

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Family businesses still represent the backbone of the economy worldwide despite ongoing uncertainties. These businesses do not represent a homogeneous group of organizations as they have distinctive characteristics mainly relative to their size. Where do they stand in terms of innovation and what practices could they learn from each other to foster innovation in increasingly competitive markets?

INNOVATION IN FAMILY BUSINESS: what do we know?

Looking into the output of innovation as being the usage of new systems, policy, service, or product, makes us question to what extent it is the product of more R&D expenditures in family businesses. Broekaert et al., (2016) found that family businesses are less involved in R&D. However, the family business’ particular structure enables to develop new products taking advantage of their organization flexibility. Moreover, scholars in family business investigated the innovation factor as a determinant of growth and economic development in a company (Nieto et al. 2015; De Massis et al. 2015). Alberti and Pizzurno (2013) show that innovation has a positive impact on firms’ long-term performance, while De Massis et al. (2016) show that beyond the performance aspect the rate of innovation in a company ensures its survival against competitors.

Within the same vein, Werner et al. (2018) investigate the innovation factors in both family and non-family businesses in Germany.  Using a large sample of 1 870 SMEs their results highlight that long-term perspective positively affects innovation output in small family business. Their findings are also interesting when it comes to succeeding generations of family firm leaders; the authors provide evidence that innovation’s output continuously decreases from generation to generation. The last result seems a little puzzling regarding the literature related to family businesses and innovation. It is well documented that family businesses have specific characteristics that make their business much more complex than any other form of businesses (Neubauer & lank, 1998). This being said, the past studies lack to explain the innovation within the family businesses with respective to their size.

TAKING INTO ACCOUNT THE BUSINESS SIZE EFFECT

It is the dream of every family business to grow and flourish, however there is a dark side related to the size of the business. When new market opportunity emerges, innovation could be the key of success to satisfy the demand of the market. Having a solid and rigid infrastructure may act as a barrier to innovation. In this sense, small businesses will have the advantage of quick decision-making as a response to market changes especially in a world of uncertainty.

In contrast, large family businesses may be affected by the agency costs problems, especially when the CEO is an outsider. In such a situation, the CEO may have short-term value creation strategies unlike the business shareholders who have a long-term vision. This particularly reflects the complexity of large family businesses with weaker governance mechanism.

Better corporate and family governance is one way to balance interests. While the CEO may implement daily operational decisions, the board of directors lead strategically the decision-making in line with the shareholders’ interests including the family. Having a large board of directors may decrease the innovation output due to the complexity of the organization or voting on new procedures or systems implementations. More recently, De Massis et al. (2018) focused on family firms governance and their involvment in control to show that family involvement in the board of directors have a negative impact on innovation, adding an additional dimension of complexity. The innovation output may be therefore viewed a proxy for better governance in family businesses. Large family businesses should be enticed to implement flexible units with decision-making power to deal with the new market opportunities (products, services, systems) in addition to good family and corporate governance practices, which will increase their competitiveness in the market.

To illustrate, De Massis et al. (2018) investigate the German Mittelstand businesses, owned and controlled by families, and their implication in innovation. They observe that Mittelstand firms generate more patents than German non-Mittelstand firms. Building on the above discussion, PWM, world leading manufacturer of the price signs used by gas stations, illustrate the Mittelstand’s focus on innovation. Despite its relatively small size, the family business company succeeded to innovate from generation to generation applying the family governance with a long-term investment view. Another success story of the entrepreneurial spirit is the case of MANE Group, a 4th generation family business, which was founded in 1871 by Victor Mane. Starting as a small French producer of fragrant materials from regional flowers and plants, the family business grew successfully to become one of the leading companies worldwide and has been run continuously by the Mane family. A key point for the MANE Group governance vision and objectives relies on the intense investment in R&D by having 40 different R&D centres all across the World (PwC, 2016).  In the same vein, Jahn (2016) found a positive link between the presence of Mittelsland firms and patent activity, highlighting the importance of Mittelstand firms to the country’s innovativeness.

REFERENCES

Berlemann, M., and V.  Jahn.  (2016).  Regional importance of Mittelstand firms and innovation   performance, Regional Studies, 50, 1819–33

Broekaert W., Andries P., and Debackere K. (2016). Innovation processes in family firms: The relevance of organizational flexibility, Small Business Economics, 47, 771-785

De Massis, A., Audretsch D., Uhlaner L., and Kammerlander N. (2018). Innovation with Limited Resources: Management Lessons from the German Mittelstand, Journal of Product Innovation Management, 35, 125-146

De Massis A., Frattini F., Pizzurno E., Cassia L., (2015). Product innovation in family versus non family firms: An exploratory analysis, Journal of Small Business Management, 53, 1-36

De Massis, A., Frattini, F., Kotlar, J., Messeni-Petruzzelli, A. and Wright, M. (2016). Innovation through tradition: Lessons from innovative family businesses and directions for future research, Academy of Management Perspectives, 30, 93-116

Neubauer, F. and Lank, A. (1998). The Family Business: Its Governance for Sustainability. MacMillan Press Ltd., Houndmills, 65-67

Nieto, M.J., Santamaria, L. and Fernandez, Z. (2015). Understanding the innovation behavior of family firms. Journal of Small Business Management, 53, 382-399

Pizzurno E., and Alberti F., (2013). Technology innovation and performance in family firms, International Journal of Entrepreneurship and Innovation Management, 17, 142-161

PwC Family business survey report 2016, available at: https://www.pwc.com/gx/en/services/family-business/family-business-survey-2016/innovation-and-internationalisation-in-france.html

Rondi E., De Massis A., and Kotlar J. (2018). Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system, Journal of Family Business Strategy, forthcoming

Werner A., Schröder, C. and Chlosta, S. (2018). Driving factors of innovation in family and non-family SMEs, Small Business Economics, 50, 201-218

 

 

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Where do family businesses stand in terms of innovation?

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Christian Haddad
Research Engineer, EDHEC Family Business Center, EDHEC Business School

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Family businesses still represent the backbone of the economy worldwide despite ongoing uncertainties. These businesses do not represent a homogeneous group of organizations as they have distinctive characteristics mainly relative to their size. Where do they stand in terms of innovation and what practices could they learn from each other to foster innovation in increasingly competitive markets?

INNOVATION IN FAMILY BUSINESS: what do we know?

Looking into the output of innovation as being the usage of new systems, policy, service, or product, makes us question to what extent it is the product of more R&D expenditures in family businesses. Broekaert et al., (2016) found that family businesses are less involved in R&D. However, the family business’ particular structure enables to develop new products taking advantage of their organization flexibility. Moreover, scholars in family business investigated the innovation factor as a determinant of growth and economic development in a company (Nieto et al. 2015; De Massis et al. 2015). Alberti and Pizzurno (2013) show that innovation has a positive impact on firms’ long-term performance, while De Massis et al. (2016) show that beyond the performance aspect the rate of innovation in a company ensures its survival against competitors.

Within the same vein, Werner et al. (2018) investigate the innovation factors in both family and non-family businesses in Germany.  Using a large sample of 1 870 SMEs their results highlight that long-term perspective positively affects innovation output in small family business. Their findings are also interesting when it comes to succeeding generations of family firm leaders; the authors provide evidence that innovation’s output continuously decreases from generation to generation. The last result seems a little puzzling regarding the literature related to family businesses and innovation. It is well documented that family businesses have specific characteristics that make their business much more complex than any other form of businesses (Neubauer & lank, 1998). This being said, the past studies lack to explain the innovation within the family businesses with respective to their size.

TAKING INTO ACCOUNT THE BUSINESS SIZE EFFECT

It is the dream of every family business to grow and flourish, however there is a dark side related to the size of the business. When new market opportunity emerges, innovation could be the key of success to satisfy the demand of the market. Having a solid and rigid infrastructure may act as a barrier to innovation. In this sense, small businesses will have the advantage of quick decision-making as a response to market changes especially in a world of uncertainty.

In contrast, large family businesses may be affected by the agency costs problems, especially when the CEO is an outsider. In such a situation, the CEO may have short-term value creation strategies unlike the business shareholders who have a long-term vision. This particularly reflects the complexity of large family businesses with weaker governance mechanism.

Better corporate and family governance is one way to balance interests. While the CEO may implement daily operational decisions, the board of directors lead strategically the decision-making in line with the shareholders’ interests including the family. Having a large board of directors may decrease the innovation output due to the complexity of the organization or voting on new procedures or systems implementations. More recently, De Massis et al. (2018) focused on family firms governance and their involvment in control to show that family involvement in the board of directors have a negative impact on innovation, adding an additional dimension of complexity. The innovation output may be therefore viewed a proxy for better governance in family businesses. Large family businesses should be enticed to implement flexible units with decision-making power to deal with the new market opportunities (products, services, systems) in addition to good family and corporate governance practices, which will increase their competitiveness in the market.

To illustrate, De Massis et al. (2018) investigate the German Mittelstand businesses, owned and controlled by families, and their implication in innovation. They observe that Mittelstand firms generate more patents than German non-Mittelstand firms. Building on the above discussion, PWM, world leading manufacturer of the price signs used by gas stations, illustrate the Mittelstand’s focus on innovation. Despite its relatively small size, the family business company succeeded to innovate from generation to generation applying the family governance with a long-term investment view. Another success story of the entrepreneurial spirit is the case of MANE Group, a 4th generation family business, which was founded in 1871 by Victor Mane. Starting as a small French producer of fragrant materials from regional flowers and plants, the family business grew successfully to become one of the leading companies worldwide and has been run continuously by the Mane family. A key point for the MANE Group governance vision and objectives relies on the intense investment in R&D by having 40 different R&D centres all across the World (PwC, 2016).  In the same vein, Jahn (2016) found a positive link between the presence of Mittelsland firms and patent activity, highlighting the importance of Mittelstand firms to the country’s innovativeness.

REFERENCES

Berlemann, M., and V.  Jahn.  (2016).  Regional importance of Mittelstand firms and innovation   performance, Regional Studies, 50, 1819–33

Broekaert W., Andries P., and Debackere K. (2016). Innovation processes in family firms: The relevance of organizational flexibility, Small Business Economics, 47, 771-785

De Massis, A., Audretsch D., Uhlaner L., and Kammerlander N. (2018). Innovation with Limited Resources: Management Lessons from the German Mittelstand, Journal of Product Innovation Management, 35, 125-146

De Massis A., Frattini F., Pizzurno E., Cassia L., (2015). Product innovation in family versus non family firms: An exploratory analysis, Journal of Small Business Management, 53, 1-36

De Massis, A., Frattini, F., Kotlar, J., Messeni-Petruzzelli, A. and Wright, M. (2016). Innovation through tradition: Lessons from innovative family businesses and directions for future research, Academy of Management Perspectives, 30, 93-116

Neubauer, F. and Lank, A. (1998). The Family Business: Its Governance for Sustainability. MacMillan Press Ltd., Houndmills, 65-67

Nieto, M.J., Santamaria, L. and Fernandez, Z. (2015). Understanding the innovation behavior of family firms. Journal of Small Business Management, 53, 382-399

Pizzurno E., and Alberti F., (2013). Technology innovation and performance in family firms, International Journal of Entrepreneurship and Innovation Management, 17, 142-161

PwC Family business survey report 2016, available at: https://www.pwc.com/gx/en/services/family-business/family-business-survey-2016/innovation-and-internationalisation-in-france.html

Rondi E., De Massis A., and Kotlar J. (2018). Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system, Journal of Family Business Strategy, forthcoming

Werner A., Schröder, C. and Chlosta, S. (2018). Driving factors of innovation in family and non-family SMEs, Small Business Economics, 50, 201-218

 

 

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Where do family businesses stand in terms of innovation?

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Family businesses still represent the backbone of the economy worldwide despite ongoing uncertainties. These businesses do not represent a homogeneous group of organizations as they have distinctive characteristics mainly relative to their size. Where do they stand in terms of innovation and what practices could they learn from each other to foster innovation in increasingly competitive markets?

INNOVATION IN FAMILY BUSINESS: what do we know?

Looking into the output of innovation as being the usage of new systems, policy, service, or product, makes us question to what extent it is the product of more R&D expenditures in family businesses. Broekaert et al., (2016) found that family businesses are less involved in R&D. However, the family business’ particular structure enables to develop new products taking advantage of their organization flexibility. Moreover, scholars in family business investigated the innovation factor as a determinant of growth and economic development in a company (Nieto et al. 2015; De Massis et al. 2015). Alberti and Pizzurno (2013) show that innovation has a positive impact on firms’ long-term performance, while De Massis et al. (2016) show that beyond the performance aspect the rate of innovation in a company ensures its survival against competitors.

Within the same vein, Werner et al. (2018) investigate the innovation factors in both family and non-family businesses in Germany.  Using a large sample of 1 870 SMEs their results highlight that long-term perspective positively affects innovation output in small family business. Their findings are also interesting when it comes to succeeding generations of family firm leaders; the authors provide evidence that innovation’s output continuously decreases from generation to generation. The last result seems a little puzzling regarding the literature related to family businesses and innovation. It is well documented that family businesses have specific characteristics that make their business much more complex than any other form of businesses (Neubauer & lank, 1998). This being said, the past studies lack to explain the innovation within the family businesses with respective to their size.

TAKING INTO ACCOUNT THE BUSINESS SIZE EFFECT

It is the dream of every family business to grow and flourish, however there is a dark side related to the size of the business. When new market opportunity emerges, innovation could be the key of success to satisfy the demand of the market. Having a solid and rigid infrastructure may act as a barrier to innovation. In this sense, small businesses will have the advantage of quick decision-making as a response to market changes especially in a world of uncertainty.

In contrast, large family businesses may be affected by the agency costs problems, especially when the CEO is an outsider. In such a situation, the CEO may have short-term value creation strategies unlike the business shareholders who have a long-term vision. This particularly reflects the complexity of large family businesses with weaker governance mechanism.

Better corporate and family governance is one way to balance interests. While the CEO may implement daily operational decisions, the board of directors lead strategically the decision-making in line with the shareholders’ interests including the family. Having a large board of directors may decrease the innovation output due to the complexity of the organization or voting on new procedures or systems implementations. More recently, De Massis et al. (2018) focused on family firms governance and their involvment in control to show that family involvement in the board of directors have a negative impact on innovation, adding an additional dimension of complexity. The innovation output may be therefore viewed a proxy for better governance in family businesses. Large family businesses should be enticed to implement flexible units with decision-making power to deal with the new market opportunities (products, services, systems) in addition to good family and corporate governance practices, which will increase their competitiveness in the market.

To illustrate, De Massis et al. (2018) investigate the German Mittelstand businesses, owned and controlled by families, and their implication in innovation. They observe that Mittelstand firms generate more patents than German non-Mittelstand firms. Building on the above discussion, PWM, world leading manufacturer of the price signs used by gas stations, illustrate the Mittelstand’s focus on innovation. Despite its relatively small size, the family business company succeeded to innovate from generation to generation applying the family governance with a long-term investment view. Another success story of the entrepreneurial spirit is the case of MANE Group, a 4th generation family business, which was founded in 1871 by Victor Mane. Starting as a small French producer of fragrant materials from regional flowers and plants, the family business grew successfully to become one of the leading companies worldwide and has been run continuously by the Mane family. A key point for the MANE Group governance vision and objectives relies on the intense investment in R&D by having 40 different R&D centres all across the World (PwC, 2016).  In the same vein, Jahn (2016) found a positive link between the presence of Mittelsland firms and patent activity, highlighting the importance of Mittelstand firms to the country’s innovativeness.

REFERENCES

Berlemann, M., and V.  Jahn.  (2016).  Regional importance of Mittelstand firms and innovation   performance, Regional Studies, 50, 1819–33

Broekaert W., Andries P., and Debackere K. (2016). Innovation processes in family firms: The relevance of organizational flexibility, Small Business Economics, 47, 771-785

De Massis, A., Audretsch D., Uhlaner L., and Kammerlander N. (2018). Innovation with Limited Resources: Management Lessons from the German Mittelstand, Journal of Product Innovation Management, 35, 125-146

De Massis A., Frattini F., Pizzurno E., Cassia L., (2015). Product innovation in family versus non family firms: An exploratory analysis, Journal of Small Business Management, 53, 1-36

De Massis, A., Frattini, F., Kotlar, J., Messeni-Petruzzelli, A. and Wright, M. (2016). Innovation through tradition: Lessons from innovative family businesses and directions for future research, Academy of Management Perspectives, 30, 93-116

Neubauer, F. and Lank, A. (1998). The Family Business: Its Governance for Sustainability. MacMillan Press Ltd., Houndmills, 65-67

Nieto, M.J., Santamaria, L. and Fernandez, Z. (2015). Understanding the innovation behavior of family firms. Journal of Small Business Management, 53, 382-399

Pizzurno E., and Alberti F., (2013). Technology innovation and performance in family firms, International Journal of Entrepreneurship and Innovation Management, 17, 142-161

PwC Family business survey report 2016, available at: https://www.pwc.com/gx/en/services/family-business/family-business-survey-2016/innovation-and-internationalisation-in-france.html

Rondi E., De Massis A., and Kotlar J. (2018). Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system, Journal of Family Business Strategy, forthcoming

Werner A., Schröder, C. and Chlosta, S. (2018). Driving factors of innovation in family and non-family SMEs, Small Business Economics, 50, 201-218

 

 

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques et l'absence de sens voire l'erreur stratégique que peut constituer une démarche consistant à raconter des histoires en s'appuyant sur  la fiction et non sur l'Histoire. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette signé par Ludovic Cailluet, Professeur de Management Stratégique, d'Histoire du Business à l'EDHEC Business School et chercheur à l'EDHEC Family Business Centre.

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette.

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques et l'absence de sens voire l'erreur stratégique que peut constituer une démarche consistant à raconter des histoires en s'appuyant sur  la fiction et non sur l'Histoire. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette signé par Ludovic Cailluet, Professeur de Management Stratégique, d'Histoire du Business à l'EDHEC Business School et chercheur à l'EDHEC Family Business Centre.

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques et l'absence de sens voire l'erreur stratégique que peut constituer une démarche consistant à raconter des histoires en s'appuyant sur  la fiction et non sur l'Histoire. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette signé par Ludovic Cailluet, Professeur de Management Stratégique, d'Histoire du Business à l'EDHEC Business School et chercheur à l'EDHEC Family Business Centre.

Lire l'article en intégralité

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette.

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques et l'absence de sens voire l'erreur stratégique que peut constituer une démarche consistant à raconter des histoires en s'appuyant sur  la fiction et non sur l'Histoire. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette signé par Ludovic Cailluet, Professeur de Management Stratégique, d'Histoire du Business à l'EDHEC Business School et chercheur à l'EDHEC Family Business Centre.

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques et l'absence de sens voire l'erreur stratégique que peut constituer une démarche consistant à raconter des histoires en s'appuyant sur  la fiction et non sur l'Histoire. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette signé par Ludovic Cailluet, Professeur de Management Stratégique, d'Histoire du Business à l'EDHEC Business School et chercheur à l'EDHEC Family Business Centre.

Lire l'article en intégralité

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette.

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques et l'absence de sens voire l'erreur stratégique que peut constituer une démarche consistant à raconter des histoires en s'appuyant sur  la fiction et non sur l'Histoire. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette signé par Ludovic Cailluet, Professeur de Management Stratégique, d'Histoire du Business à l'EDHEC Business School et chercheur à l'EDHEC Family Business Centre.

Lire l'article en intégralité

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques et l'absence de sens voire l'erreur stratégique que peut constituer une démarche consistant à raconter des histoires en s'appuyant sur  la fiction et non sur l'Histoire. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette signé par Ludovic Cailluet, Professeur de Management Stratégique, d'Histoire du Business à l'EDHEC Business School et chercheur à l'EDHEC Family Business Centre.

Lire l'article en intégralité

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette.

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques et l'absence de sens voire l'erreur stratégique que peut constituer une démarche consistant à raconter des histoires en s'appuyant sur  la fiction et non sur l'Histoire. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette signé par Ludovic Cailluet, Professeur de Management Stratégique, d'Histoire du Business à l'EDHEC Business School et chercheur à l'EDHEC Family Business Centre.

Lire l'article en intégralité

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Une tribune dans les Echos prônant l'importance de l'authenticité dans les stratégies de storytelling des marques. Un point de vue documenté et illustré par l'exemple des Galeries Lafayette.

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

As an example, Auchan holding stands as an unlisted firm with a strong family ownership culture. The company needs to regularly access the debt-capital markets and is assigned a credit rating by Standard & Poor's. Financial communication at Auchan is conducted regularly on a voluntary basis in order to give the financial community a better visibility of the company and its projects.

Broadly speaking, managers possess a large set of information regarding the firm’s activities and economic position. They must determine what information is to be incorporated in the financial communication and how they can communicate financially, as transparently as possible, to a wide range of internal and external stakeholders. In family firms, concerns over reputation and long term viability of the firm require paying particular attention to financial communication. Therefore, it is worth examining whether the financial communication components of family firms differ from those of non-family firms.

Which framework for financial communication?

In general, the framework that organizes the financial communication process contains several elements. The major element of financial communication is the information content. There is a natural tension between the managers’ desire to provide full information and the need to be careful about the level of disclosure. Historical quantitative financial data are not usually an issue because firms are mandated by law to provide such data in their financial statements. Should then firms simply communicate results and let those results “tell the story”? In spite of increasing attempts to limit companies’ latitude, regulations still give them considerable scope in presenting their results. That’s why firms need to contribute beyond the basics, giving some meaningful amplification and interpretation. Financial reports by their very nature are background looking, and they are inadequate for gauging performance, especially in industries undergoing dramatic change. Family firms are usually more reluctant to disclose forward-looking information that can help to clarify the impact of a new strategic choice on financial data because they need to protect themselves from litigation in case they provide stakeholders with ammunition for lawsuits or they fear leaking information to competitors.

Another important element impacting considerably the financial communication is stakeholder composition. Firms interact with a diverse set of stakeholders and the goal of financial communication is to inform these stakeholders about the economic status of the firm. The optimal method of communicating varies with the composition of the stakeholder base although equity investors are often considered as the primary audience for these communications.

Two other factors can potentially influence the financial communication. These factors are firm visibility and management credibility. Low firm visibility, due to limited knowledge of the firm’s existence, narrows the group that can be influenced by an information package. Even a perfectly designed information package will be ineffective if it does not reach its intended audience. On the other side, lack of management credibility can reduce the response to financial communication even if information content and visibility issues have been overcome. When outsiders have faith in management, they are much more willing to accept management’s interpretation of the firm’s current situation.

Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information

 

Financial communication in family firms: a controversial issue

The unique characteristics of family firms including the concentrated ownership in the hands of a controlling family and the involvement of the family in the governance or the management of the firm, limit the need for elaborated financial communication. The influential shareholders (the controlling family) have all the information they need to assess the risk and return of their investment in the company and take investment decisions. Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information. In addition, family shareholders generally act as entrepreneurs who are keen to keep the secret of their competitive advantage.

However, companies should be also clear in communicating what their overall philosophy is in respect to other stakeholders. Firms should mainly consider non-financial market stakeholders who use firms’ financial communication and often have quite different goals from equity investors. They should consider other equity financing providers (employees), debt financing providers (bondholders & banks), trade creditors, customers and other stakeholders.

If family firms “think and act differently” then we expect differences in their financial communication practices when compared to non-family businesses. The impact of their unique characteristics and the relevance of non-economic factors such as reputation and the long-term survival for family firms is significantly higher, in this regard, than in the case of non-family firms.

References

The Observatoire de la Communication Financière, Financial Communication: Framework and Practices., 2017.

Ali, Ashiq, Tai-Yuan Chen, and Suresh Radhakrishnan. 2007. “Corporate Disclosure by Family Firms.” Journal of Accounting and Economics 44 (1/2): 238-286.

Ghosh,  Aloke, and Charles Y. Tang. 2015. “Assessing Financial Reporting Quality of Family Firms: The Auditors’ Perspective.” Journal of Accounting and Economics 60:95-116.

 

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

" ["format"]=> string(9) "full_html" ["safe_value"]=> string(7339) "

Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

As an example, Auchan holding stands as an unlisted firm with a strong family ownership culture. The company needs to regularly access the debt-capital markets and is assigned a credit rating by Standard & Poor's. Financial communication at Auchan is conducted regularly on a voluntary basis in order to give the financial community a better visibility of the company and its projects.

Broadly speaking, managers possess a large set of information regarding the firm’s activities and economic position. They must determine what information is to be incorporated in the financial communication and how they can communicate financially, as transparently as possible, to a wide range of internal and external stakeholders. In family firms, concerns over reputation and long term viability of the firm require paying particular attention to financial communication. Therefore, it is worth examining whether the financial communication components of family firms differ from those of non-family firms.

Which framework for financial communication?

In general, the framework that organizes the financial communication process contains several elements. The major element of financial communication is the information content. There is a natural tension between the managers’ desire to provide full information and the need to be careful about the level of disclosure. Historical quantitative financial data are not usually an issue because firms are mandated by law to provide such data in their financial statements. Should then firms simply communicate results and let those results “tell the story”? In spite of increasing attempts to limit companies’ latitude, regulations still give them considerable scope in presenting their results. That’s why firms need to contribute beyond the basics, giving some meaningful amplification and interpretation. Financial reports by their very nature are background looking, and they are inadequate for gauging performance, especially in industries undergoing dramatic change. Family firms are usually more reluctant to disclose forward-looking information that can help to clarify the impact of a new strategic choice on financial data because they need to protect themselves from litigation in case they provide stakeholders with ammunition for lawsuits or they fear leaking information to competitors.

Another important element impacting considerably the financial communication is stakeholder composition. Firms interact with a diverse set of stakeholders and the goal of financial communication is to inform these stakeholders about the economic status of the firm. The optimal method of communicating varies with the composition of the stakeholder base although equity investors are often considered as the primary audience for these communications.

Two other factors can potentially influence the financial communication. These factors are firm visibility and management credibility. Low firm visibility, due to limited knowledge of the firm’s existence, narrows the group that can be influenced by an information package. Even a perfectly designed information package will be ineffective if it does not reach its intended audience. On the other side, lack of management credibility can reduce the response to financial communication even if information content and visibility issues have been overcome. When outsiders have faith in management, they are much more willing to accept management’s interpretation of the firm’s current situation.

Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information

 

Financial communication in family firms: a controversial issue

The unique characteristics of family firms including the concentrated ownership in the hands of a controlling family and the involvement of the family in the governance or the management of the firm, limit the need for elaborated financial communication. The influential shareholders (the controlling family) have all the information they need to assess the risk and return of their investment in the company and take investment decisions. Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information. In addition, family shareholders generally act as entrepreneurs who are keen to keep the secret of their competitive advantage.

However, companies should be also clear in communicating what their overall philosophy is in respect to other stakeholders. Firms should mainly consider non-financial market stakeholders who use firms’ financial communication and often have quite different goals from equity investors. They should consider other equity financing providers (employees), debt financing providers (bondholders & banks), trade creditors, customers and other stakeholders.

If family firms “think and act differently” then we expect differences in their financial communication practices when compared to non-family businesses. The impact of their unique characteristics and the relevance of non-economic factors such as reputation and the long-term survival for family firms is significantly higher, in this regard, than in the case of non-family firms.

References

The Observatoire de la Communication Financière, Financial Communication: Framework and Practices., 2017.

Ali, Ashiq, Tai-Yuan Chen, and Suresh Radhakrishnan. 2007. “Corporate Disclosure by Family Firms.” Journal of Accounting and Economics 44 (1/2): 238-286.

Ghosh,  Aloke, and Charles Y. Tang. 2015. “Assessing Financial Reporting Quality of Family Firms: The Auditors’ Perspective.” Journal of Accounting and Economics 60:95-116.

 

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

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Elie Salameh
Associate Professor and member of the EDHEC Family Business Centre, EDHEC Business School

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

As an example, Auchan holding stands as an unlisted firm with a strong family ownership culture. The company needs to regularly access the debt-capital markets and is assigned a credit rating by Standard & Poor's. Financial communication at Auchan is conducted regularly on a voluntary basis in order to give the financial community a better visibility of the company and its projects.

Broadly speaking, managers possess a large set of information regarding the firm’s activities and economic position. They must determine what information is to be incorporated in the financial communication and how they can communicate financially, as transparently as possible, to a wide range of internal and external stakeholders. In family firms, concerns over reputation and long term viability of the firm require paying particular attention to financial communication. Therefore, it is worth examining whether the financial communication components of family firms differ from those of non-family firms.

Which framework for financial communication?

In general, the framework that organizes the financial communication process contains several elements. The major element of financial communication is the information content. There is a natural tension between the managers’ desire to provide full information and the need to be careful about the level of disclosure. Historical quantitative financial data are not usually an issue because firms are mandated by law to provide such data in their financial statements. Should then firms simply communicate results and let those results “tell the story”? In spite of increasing attempts to limit companies’ latitude, regulations still give them considerable scope in presenting their results. That’s why firms need to contribute beyond the basics, giving some meaningful amplification and interpretation. Financial reports by their very nature are background looking, and they are inadequate for gauging performance, especially in industries undergoing dramatic change. Family firms are usually more reluctant to disclose forward-looking information that can help to clarify the impact of a new strategic choice on financial data because they need to protect themselves from litigation in case they provide stakeholders with ammunition for lawsuits or they fear leaking information to competitors.

Another important element impacting considerably the financial communication is stakeholder composition. Firms interact with a diverse set of stakeholders and the goal of financial communication is to inform these stakeholders about the economic status of the firm. The optimal method of communicating varies with the composition of the stakeholder base although equity investors are often considered as the primary audience for these communications.

Two other factors can potentially influence the financial communication. These factors are firm visibility and management credibility. Low firm visibility, due to limited knowledge of the firm’s existence, narrows the group that can be influenced by an information package. Even a perfectly designed information package will be ineffective if it does not reach its intended audience. On the other side, lack of management credibility can reduce the response to financial communication even if information content and visibility issues have been overcome. When outsiders have faith in management, they are much more willing to accept management’s interpretation of the firm’s current situation.

Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information

 

Financial communication in family firms: a controversial issue

The unique characteristics of family firms including the concentrated ownership in the hands of a controlling family and the involvement of the family in the governance or the management of the firm, limit the need for elaborated financial communication. The influential shareholders (the controlling family) have all the information they need to assess the risk and return of their investment in the company and take investment decisions. Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information. In addition, family shareholders generally act as entrepreneurs who are keen to keep the secret of their competitive advantage.

However, companies should be also clear in communicating what their overall philosophy is in respect to other stakeholders. Firms should mainly consider non-financial market stakeholders who use firms’ financial communication and often have quite different goals from equity investors. They should consider other equity financing providers (employees), debt financing providers (bondholders & banks), trade creditors, customers and other stakeholders.

If family firms “think and act differently” then we expect differences in their financial communication practices when compared to non-family businesses. The impact of their unique characteristics and the relevance of non-economic factors such as reputation and the long-term survival for family firms is significantly higher, in this regard, than in the case of non-family firms.

References

The Observatoire de la Communication Financière, Financial Communication: Framework and Practices., 2017.

Ali, Ashiq, Tai-Yuan Chen, and Suresh Radhakrishnan. 2007. “Corporate Disclosure by Family Firms.” Journal of Accounting and Economics 44 (1/2): 238-286.

Ghosh,  Aloke, and Charles Y. Tang. 2015. “Assessing Financial Reporting Quality of Family Firms: The Auditors’ Perspective.” Journal of Accounting and Economics 60:95-116.

 

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

As an example, Auchan holding stands as an unlisted firm with a strong family ownership culture. The company needs to regularly access the debt-capital markets and is assigned a credit rating by Standard & Poor's. Financial communication at Auchan is conducted regularly on a voluntary basis in order to give the financial community a better visibility of the company and its projects.

Broadly speaking, managers possess a large set of information regarding the firm’s activities and economic position. They must determine what information is to be incorporated in the financial communication and how they can communicate financially, as transparently as possible, to a wide range of internal and external stakeholders. In family firms, concerns over reputation and long term viability of the firm require paying particular attention to financial communication. Therefore, it is worth examining whether the financial communication components of family firms differ from those of non-family firms.

Which framework for financial communication?

In general, the framework that organizes the financial communication process contains several elements. The major element of financial communication is the information content. There is a natural tension between the managers’ desire to provide full information and the need to be careful about the level of disclosure. Historical quantitative financial data are not usually an issue because firms are mandated by law to provide such data in their financial statements. Should then firms simply communicate results and let those results “tell the story”? In spite of increasing attempts to limit companies’ latitude, regulations still give them considerable scope in presenting their results. That’s why firms need to contribute beyond the basics, giving some meaningful amplification and interpretation. Financial reports by their very nature are background looking, and they are inadequate for gauging performance, especially in industries undergoing dramatic change. Family firms are usually more reluctant to disclose forward-looking information that can help to clarify the impact of a new strategic choice on financial data because they need to protect themselves from litigation in case they provide stakeholders with ammunition for lawsuits or they fear leaking information to competitors.

Another important element impacting considerably the financial communication is stakeholder composition. Firms interact with a diverse set of stakeholders and the goal of financial communication is to inform these stakeholders about the economic status of the firm. The optimal method of communicating varies with the composition of the stakeholder base although equity investors are often considered as the primary audience for these communications.

Two other factors can potentially influence the financial communication. These factors are firm visibility and management credibility. Low firm visibility, due to limited knowledge of the firm’s existence, narrows the group that can be influenced by an information package. Even a perfectly designed information package will be ineffective if it does not reach its intended audience. On the other side, lack of management credibility can reduce the response to financial communication even if information content and visibility issues have been overcome. When outsiders have faith in management, they are much more willing to accept management’s interpretation of the firm’s current situation.

Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information

 

Financial communication in family firms: a controversial issue

The unique characteristics of family firms including the concentrated ownership in the hands of a controlling family and the involvement of the family in the governance or the management of the firm, limit the need for elaborated financial communication. The influential shareholders (the controlling family) have all the information they need to assess the risk and return of their investment in the company and take investment decisions. Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information. In addition, family shareholders generally act as entrepreneurs who are keen to keep the secret of their competitive advantage.

However, companies should be also clear in communicating what their overall philosophy is in respect to other stakeholders. Firms should mainly consider non-financial market stakeholders who use firms’ financial communication and often have quite different goals from equity investors. They should consider other equity financing providers (employees), debt financing providers (bondholders & banks), trade creditors, customers and other stakeholders.

If family firms “think and act differently” then we expect differences in their financial communication practices when compared to non-family businesses. The impact of their unique characteristics and the relevance of non-economic factors such as reputation and the long-term survival for family firms is significantly higher, in this regard, than in the case of non-family firms.

References

The Observatoire de la Communication Financière, Financial Communication: Framework and Practices., 2017.

Ali, Ashiq, Tai-Yuan Chen, and Suresh Radhakrishnan. 2007. “Corporate Disclosure by Family Firms.” Journal of Accounting and Economics 44 (1/2): 238-286.

Ghosh,  Aloke, and Charles Y. Tang. 2015. “Assessing Financial Reporting Quality of Family Firms: The Auditors’ Perspective.” Journal of Accounting and Economics 60:95-116.

 

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

As an example, Auchan holding stands as an unlisted firm with a strong family ownership culture. The company needs to regularly access the debt-capital markets and is assigned a credit rating by Standard & Poor's. Financial communication at Auchan is conducted regularly on a voluntary basis in order to give the financial community a better visibility of the company and its projects.

Broadly speaking, managers possess a large set of information regarding the firm’s activities and economic position. They must determine what information is to be incorporated in the financial communication and how they can communicate financially, as transparently as possible, to a wide range of internal and external stakeholders. In family firms, concerns over reputation and long term viability of the firm require paying particular attention to financial communication. Therefore, it is worth examining whether the financial communication components of family firms differ from those of non-family firms.

Which framework for financial communication?

In general, the framework that organizes the financial communication process contains several elements. The major element of financial communication is the information content. There is a natural tension between the managers’ desire to provide full information and the need to be careful about the level of disclosure. Historical quantitative financial data are not usually an issue because firms are mandated by law to provide such data in their financial statements. Should then firms simply communicate results and let those results “tell the story”? In spite of increasing attempts to limit companies’ latitude, regulations still give them considerable scope in presenting their results. That’s why firms need to contribute beyond the basics, giving some meaningful amplification and interpretation. Financial reports by their very nature are background looking, and they are inadequate for gauging performance, especially in industries undergoing dramatic change. Family firms are usually more reluctant to disclose forward-looking information that can help to clarify the impact of a new strategic choice on financial data because they need to protect themselves from litigation in case they provide stakeholders with ammunition for lawsuits or they fear leaking information to competitors.

Another important element impacting considerably the financial communication is stakeholder composition. Firms interact with a diverse set of stakeholders and the goal of financial communication is to inform these stakeholders about the economic status of the firm. The optimal method of communicating varies with the composition of the stakeholder base although equity investors are often considered as the primary audience for these communications.

Two other factors can potentially influence the financial communication. These factors are firm visibility and management credibility. Low firm visibility, due to limited knowledge of the firm’s existence, narrows the group that can be influenced by an information package. Even a perfectly designed information package will be ineffective if it does not reach its intended audience. On the other side, lack of management credibility can reduce the response to financial communication even if information content and visibility issues have been overcome. When outsiders have faith in management, they are much more willing to accept management’s interpretation of the firm’s current situation.

Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information

 

Financial communication in family firms: a controversial issue

The unique characteristics of family firms including the concentrated ownership in the hands of a controlling family and the involvement of the family in the governance or the management of the firm, limit the need for elaborated financial communication. The influential shareholders (the controlling family) have all the information they need to assess the risk and return of their investment in the company and take investment decisions. Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information. In addition, family shareholders generally act as entrepreneurs who are keen to keep the secret of their competitive advantage.

However, companies should be also clear in communicating what their overall philosophy is in respect to other stakeholders. Firms should mainly consider non-financial market stakeholders who use firms’ financial communication and often have quite different goals from equity investors. They should consider other equity financing providers (employees), debt financing providers (bondholders & banks), trade creditors, customers and other stakeholders.

If family firms “think and act differently” then we expect differences in their financial communication practices when compared to non-family businesses. The impact of their unique characteristics and the relevance of non-economic factors such as reputation and the long-term survival for family firms is significantly higher, in this regard, than in the case of non-family firms.

References

The Observatoire de la Communication Financière, Financial Communication: Framework and Practices., 2017.

Ali, Ashiq, Tai-Yuan Chen, and Suresh Radhakrishnan. 2007. “Corporate Disclosure by Family Firms.” Journal of Accounting and Economics 44 (1/2): 238-286.

Ghosh,  Aloke, and Charles Y. Tang. 2015. “Assessing Financial Reporting Quality of Family Firms: The Auditors’ Perspective.” Journal of Accounting and Economics 60:95-116.

 

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

" ["format"]=> string(9) "full_html" ["safe_value"]=> string(7339) "

Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

As an example, Auchan holding stands as an unlisted firm with a strong family ownership culture. The company needs to regularly access the debt-capital markets and is assigned a credit rating by Standard & Poor's. Financial communication at Auchan is conducted regularly on a voluntary basis in order to give the financial community a better visibility of the company and its projects.

Broadly speaking, managers possess a large set of information regarding the firm’s activities and economic position. They must determine what information is to be incorporated in the financial communication and how they can communicate financially, as transparently as possible, to a wide range of internal and external stakeholders. In family firms, concerns over reputation and long term viability of the firm require paying particular attention to financial communication. Therefore, it is worth examining whether the financial communication components of family firms differ from those of non-family firms.

Which framework for financial communication?

In general, the framework that organizes the financial communication process contains several elements. The major element of financial communication is the information content. There is a natural tension between the managers’ desire to provide full information and the need to be careful about the level of disclosure. Historical quantitative financial data are not usually an issue because firms are mandated by law to provide such data in their financial statements. Should then firms simply communicate results and let those results “tell the story”? In spite of increasing attempts to limit companies’ latitude, regulations still give them considerable scope in presenting their results. That’s why firms need to contribute beyond the basics, giving some meaningful amplification and interpretation. Financial reports by their very nature are background looking, and they are inadequate for gauging performance, especially in industries undergoing dramatic change. Family firms are usually more reluctant to disclose forward-looking information that can help to clarify the impact of a new strategic choice on financial data because they need to protect themselves from litigation in case they provide stakeholders with ammunition for lawsuits or they fear leaking information to competitors.

Another important element impacting considerably the financial communication is stakeholder composition. Firms interact with a diverse set of stakeholders and the goal of financial communication is to inform these stakeholders about the economic status of the firm. The optimal method of communicating varies with the composition of the stakeholder base although equity investors are often considered as the primary audience for these communications.

Two other factors can potentially influence the financial communication. These factors are firm visibility and management credibility. Low firm visibility, due to limited knowledge of the firm’s existence, narrows the group that can be influenced by an information package. Even a perfectly designed information package will be ineffective if it does not reach its intended audience. On the other side, lack of management credibility can reduce the response to financial communication even if information content and visibility issues have been overcome. When outsiders have faith in management, they are much more willing to accept management’s interpretation of the firm’s current situation.

Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information

 

Financial communication in family firms: a controversial issue

The unique characteristics of family firms including the concentrated ownership in the hands of a controlling family and the involvement of the family in the governance or the management of the firm, limit the need for elaborated financial communication. The influential shareholders (the controlling family) have all the information they need to assess the risk and return of their investment in the company and take investment decisions. Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information. In addition, family shareholders generally act as entrepreneurs who are keen to keep the secret of their competitive advantage.

However, companies should be also clear in communicating what their overall philosophy is in respect to other stakeholders. Firms should mainly consider non-financial market stakeholders who use firms’ financial communication and often have quite different goals from equity investors. They should consider other equity financing providers (employees), debt financing providers (bondholders & banks), trade creditors, customers and other stakeholders.

If family firms “think and act differently” then we expect differences in their financial communication practices when compared to non-family businesses. The impact of their unique characteristics and the relevance of non-economic factors such as reputation and the long-term survival for family firms is significantly higher, in this regard, than in the case of non-family firms.

References

The Observatoire de la Communication Financière, Financial Communication: Framework and Practices., 2017.

Ali, Ashiq, Tai-Yuan Chen, and Suresh Radhakrishnan. 2007. “Corporate Disclosure by Family Firms.” Journal of Accounting and Economics 44 (1/2): 238-286.

Ghosh,  Aloke, and Charles Y. Tang. 2015. “Assessing Financial Reporting Quality of Family Firms: The Auditors’ Perspective.” Journal of Accounting and Economics 60:95-116.

 

" ["safe_summary"]=> string(468) "

Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

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Associate Professor and member of the EDHEC Family Business Centre, EDHEC Business School" ["format"]=> string(9) "full_html" ["safe_value"]=> string(265) "

Elie Salameh
Associate Professor and member of the EDHEC Family Business Centre, EDHEC Business School

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

As an example, Auchan holding stands as an unlisted firm with a strong family ownership culture. The company needs to regularly access the debt-capital markets and is assigned a credit rating by Standard & Poor's. Financial communication at Auchan is conducted regularly on a voluntary basis in order to give the financial community a better visibility of the company and its projects.

Broadly speaking, managers possess a large set of information regarding the firm’s activities and economic position. They must determine what information is to be incorporated in the financial communication and how they can communicate financially, as transparently as possible, to a wide range of internal and external stakeholders. In family firms, concerns over reputation and long term viability of the firm require paying particular attention to financial communication. Therefore, it is worth examining whether the financial communication components of family firms differ from those of non-family firms.

Which framework for financial communication?

In general, the framework that organizes the financial communication process contains several elements. The major element of financial communication is the information content. There is a natural tension between the managers’ desire to provide full information and the need to be careful about the level of disclosure. Historical quantitative financial data are not usually an issue because firms are mandated by law to provide such data in their financial statements. Should then firms simply communicate results and let those results “tell the story”? In spite of increasing attempts to limit companies’ latitude, regulations still give them considerable scope in presenting their results. That’s why firms need to contribute beyond the basics, giving some meaningful amplification and interpretation. Financial reports by their very nature are background looking, and they are inadequate for gauging performance, especially in industries undergoing dramatic change. Family firms are usually more reluctant to disclose forward-looking information that can help to clarify the impact of a new strategic choice on financial data because they need to protect themselves from litigation in case they provide stakeholders with ammunition for lawsuits or they fear leaking information to competitors.

Another important element impacting considerably the financial communication is stakeholder composition. Firms interact with a diverse set of stakeholders and the goal of financial communication is to inform these stakeholders about the economic status of the firm. The optimal method of communicating varies with the composition of the stakeholder base although equity investors are often considered as the primary audience for these communications.

Two other factors can potentially influence the financial communication. These factors are firm visibility and management credibility. Low firm visibility, due to limited knowledge of the firm’s existence, narrows the group that can be influenced by an information package. Even a perfectly designed information package will be ineffective if it does not reach its intended audience. On the other side, lack of management credibility can reduce the response to financial communication even if information content and visibility issues have been overcome. When outsiders have faith in management, they are much more willing to accept management’s interpretation of the firm’s current situation.

Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information

 

Financial communication in family firms: a controversial issue

The unique characteristics of family firms including the concentrated ownership in the hands of a controlling family and the involvement of the family in the governance or the management of the firm, limit the need for elaborated financial communication. The influential shareholders (the controlling family) have all the information they need to assess the risk and return of their investment in the company and take investment decisions. Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information. In addition, family shareholders generally act as entrepreneurs who are keen to keep the secret of their competitive advantage.

However, companies should be also clear in communicating what their overall philosophy is in respect to other stakeholders. Firms should mainly consider non-financial market stakeholders who use firms’ financial communication and often have quite different goals from equity investors. They should consider other equity financing providers (employees), debt financing providers (bondholders & banks), trade creditors, customers and other stakeholders.

If family firms “think and act differently” then we expect differences in their financial communication practices when compared to non-family businesses. The impact of their unique characteristics and the relevance of non-economic factors such as reputation and the long-term survival for family firms is significantly higher, in this regard, than in the case of non-family firms.

References

The Observatoire de la Communication Financière, Financial Communication: Framework and Practices., 2017.

Ali, Ashiq, Tai-Yuan Chen, and Suresh Radhakrishnan. 2007. “Corporate Disclosure by Family Firms.” Journal of Accounting and Economics 44 (1/2): 238-286.

Ghosh,  Aloke, and Charles Y. Tang. 2015. “Assessing Financial Reporting Quality of Family Firms: The Auditors’ Perspective.” Journal of Accounting and Economics 60:95-116.

 

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

" ["format"]=> string(9) "full_html" ["safe_value"]=> string(7339) "

Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

As an example, Auchan holding stands as an unlisted firm with a strong family ownership culture. The company needs to regularly access the debt-capital markets and is assigned a credit rating by Standard & Poor's. Financial communication at Auchan is conducted regularly on a voluntary basis in order to give the financial community a better visibility of the company and its projects.

Broadly speaking, managers possess a large set of information regarding the firm’s activities and economic position. They must determine what information is to be incorporated in the financial communication and how they can communicate financially, as transparently as possible, to a wide range of internal and external stakeholders. In family firms, concerns over reputation and long term viability of the firm require paying particular attention to financial communication. Therefore, it is worth examining whether the financial communication components of family firms differ from those of non-family firms.

Which framework for financial communication?

In general, the framework that organizes the financial communication process contains several elements. The major element of financial communication is the information content. There is a natural tension between the managers’ desire to provide full information and the need to be careful about the level of disclosure. Historical quantitative financial data are not usually an issue because firms are mandated by law to provide such data in their financial statements. Should then firms simply communicate results and let those results “tell the story”? In spite of increasing attempts to limit companies’ latitude, regulations still give them considerable scope in presenting their results. That’s why firms need to contribute beyond the basics, giving some meaningful amplification and interpretation. Financial reports by their very nature are background looking, and they are inadequate for gauging performance, especially in industries undergoing dramatic change. Family firms are usually more reluctant to disclose forward-looking information that can help to clarify the impact of a new strategic choice on financial data because they need to protect themselves from litigation in case they provide stakeholders with ammunition for lawsuits or they fear leaking information to competitors.

Another important element impacting considerably the financial communication is stakeholder composition. Firms interact with a diverse set of stakeholders and the goal of financial communication is to inform these stakeholders about the economic status of the firm. The optimal method of communicating varies with the composition of the stakeholder base although equity investors are often considered as the primary audience for these communications.

Two other factors can potentially influence the financial communication. These factors are firm visibility and management credibility. Low firm visibility, due to limited knowledge of the firm’s existence, narrows the group that can be influenced by an information package. Even a perfectly designed information package will be ineffective if it does not reach its intended audience. On the other side, lack of management credibility can reduce the response to financial communication even if information content and visibility issues have been overcome. When outsiders have faith in management, they are much more willing to accept management’s interpretation of the firm’s current situation.

Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information

 

Financial communication in family firms: a controversial issue

The unique characteristics of family firms including the concentrated ownership in the hands of a controlling family and the involvement of the family in the governance or the management of the firm, limit the need for elaborated financial communication. The influential shareholders (the controlling family) have all the information they need to assess the risk and return of their investment in the company and take investment decisions. Companies controlled by a family tend to provide little external information since the main capital provider (the family) already has this information. In addition, family shareholders generally act as entrepreneurs who are keen to keep the secret of their competitive advantage.

However, companies should be also clear in communicating what their overall philosophy is in respect to other stakeholders. Firms should mainly consider non-financial market stakeholders who use firms’ financial communication and often have quite different goals from equity investors. They should consider other equity financing providers (employees), debt financing providers (bondholders & banks), trade creditors, customers and other stakeholders.

If family firms “think and act differently” then we expect differences in their financial communication practices when compared to non-family businesses. The impact of their unique characteristics and the relevance of non-economic factors such as reputation and the long-term survival for family firms is significantly higher, in this regard, than in the case of non-family firms.

References

The Observatoire de la Communication Financière, Financial Communication: Framework and Practices., 2017.

Ali, Ashiq, Tai-Yuan Chen, and Suresh Radhakrishnan. 2007. “Corporate Disclosure by Family Firms.” Journal of Accounting and Economics 44 (1/2): 238-286.

Ghosh,  Aloke, and Charles Y. Tang. 2015. “Assessing Financial Reporting Quality of Family Firms: The Auditors’ Perspective.” Journal of Accounting and Economics 60:95-116.

 

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Financial communication is mainly used by companies that publicly trade their shares on a stock exchange, to interface with current and potential financial stakeholders such as retail and institutional investors and financial analysts. A prevailing belief is that unlisted firms with a closed family shareholding community has no need to publish financial information, apart from its statutory accounts. This leads us to question to what extent is it the case?

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Elie Salameh
Associate Professor and member of the EDHEC Family Business Centre, EDHEC Business School

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Battre les records de croissance et se hisser sur la première marche du podium tout en restant 100% familial et totalement indépendant (aucun financement bancaire), c’est ce qu’a réussi à faire la Société des établissements Bougro (SODEBO). Grâce à l’innovation, à la culture de l’esprit familial, et surtout à un contrôle total de la chaîne de production (zéro sous-traitance), l’entreprise familiale (EF) a plus que doublé de taille. Les co-présidentes, Patricia Brochard, Marie-Laurence Gouraud et Bénédicte Mercier, ont toutes grandi dans l’entreprise en travaillant aux côtés de leurs parents, Simone et Joseph Bougro, les fondateurs. Un peu sur le modèle des Mulliez, les Bougro espèrent intégrer la croissance de la famille à celle de l’entreprise, en favorisant la participation des membres familiaux (époux, enfants, gendres, etc.) au capital et au management. La mise en œuvre des stratégies de croissance (développement de nouveaux produits et/ou marchés, internationalisation, diversification, etc.), dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder alors pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

La croissance de l’entreprise familiale impose un double choix d’investissement et de financement

Faut-il investir dans le développement de l’activité de l’entreprise par ses propres moyens (croissance organique) ou par l’acquisition d’entreprises existantes ou de fonds de commerce (croissance externe) ? Faut-il financer cette croissance par les bénéfices non distribués (autofinancement), du crédit auprès des banques et partenaires divers (endettement), de nouvelles participations familiales (fonds propres familiaux), ou par l’ouverture du capital (fonds propres externes) ? La spécificité de ce double choix tient aux enjeux, à la fois économiques et financiers, socio-psychologiques et de gouvernance, qui y sont liés. En termes d’investissement, la création de nouvelles unités au lieu du développement de l’ancienne unité d’origine, pourrait, par exemple, permettre de limiter les conflits entre successeurs potentiels, ou entre les différentes générations en cas d’entreprise familiale multigénérationnelle. Il n’est en effet pas rare, aujourd’hui, de voir des entreprises familiales qui regroupent jusqu’à quatre générations. Dans ces cas, il conviendra de tenir compte des besoins de chaque génération. D’autre part, le rachat de petites unités familiales sans successeurs ou à la recherche de groupe à qui s’adosser, peut constituer une opportunité de couverture géographique. Cependant, afin de ne pas dégrader la richesse socio-émotionnelle du groupe, il faudrait qu’elles soient bien implantées localement, aient une excellente réputation et que leurs dirigeants s’engagent à accompagner le groupe afin de conserver le fonds de commerce. Côté financement, même s’il est vrai que les bénéfices non distribués peuvent renforcer l’indépendance de l’entreprise familiale, c’est surtout le choix entre ouvrir ou ne pas ouvrir le capital qui mérite d’être éclairé. Si l’ouverture du capital constitue un moyen de partager les risques avec un investisseur extérieur, de bénéficier de ses réseaux et de ses conseils, de renforcer les capitaux propres, elle peut aussi signifier le désengagement familial, une perte d’autonomie et d’indépendance, un risque d’exposition des affaires familiales, le partage du pouvoir, et un risque de perte du contrôle familial. Aussi, l’ouverture du capital peut être une solution lorsque les fonds propres familiaux sont insuffisants, et permet de conserver un patrimoine familial équilibré dans le cadre d’une stratégie de diversification externe.

Les nouveaux liens familiaux tels que ceux issus des mariages et naissances[...] peuvent  permettre de mesurer la croissance du capital social [...] un vrai actif pour l’entreprise familiale.

La croissance de l’Entreprise Familiale doit s’accompagner d’une bonne stratégie de diversification des risques

Il convient ici de distinguer la diversification interne (développement de plusieurs activités au sein de l’entreprise familiale) de la diversification externe (maintien d’une certaine part du patrimoine familial en dehors de l’entreprise familiale). D’une part, l’entreprise familiale peut être précocement tentée de vouloir développer de nouvelles activités ou de conquérir de nouveaux marchés, au détriment de la consolidation de ses activités et marchés de base, et encourir ainsi le risque de la désintégration. Il est important de savoir qu’un repli sectoriel n’empêche pas une ouverture géographique. D’autre part, le souci de la croissance peut conduire au maintien d’une part trop importante du patrimoine familial au sein de l’entreprise familiale. Il peut obliger la famille à augmenter sa participation au capital, au fur et à mesure de la croissance, par l’apport de fonds familiaux nouveaux, ou à limiter excessivement la distribution de dividendes. Ce qui peut constituer un piège redoutable pour l’actionnariat familial. A cet égard, l’équilibre du patrimoine familial s’avère être crucial afin d’éviter de mettre en danger l’avenir des héritiers, et de limiter la frustration des membres passifs et les prélèvements non fondés des membres actifs.

L’Entreprise Familiale doit veiller aussi bien à la croissance de l’entreprise qu’à celle de la famille

Parce que les forces et les faiblesses de l’entreprise familiale résident aussi bien dans son capital économique que dans son capital social, celle-ci ne doit pas s’atteler à mesurer sa performance avec des critères exclusivement quantitatifs. L’évolution du chiffre d’affaires, de l’effectif salarié ou du total bilan, très souvent utilisée dans les analyses et prévisions financières, ne tient pas compte du cercle familial, composante essentielle de l’entreprise familiale. Il est nécessaire d’intégrer des critères beaucoup plus qualitatifs. Les nouveaux liens familiaux tels que ceux issus des mariages et naissances, l’augmentation de la capacité du groupe familial à mobiliser des réseaux, et surtout la qualité de ces relations, peuvent ainsi permettre de mesurer la croissance du capital social qui peut constituer un vrai actif pour l’entreprise familiale. Il convient toutefois de remarquer que lorsque la famille grandit, des conflits peuvent apparaître entre les successeurs potentiels, et aussi, que certains parents en âge avancé peuvent adopter une attitude favorable au statu quo et paralyser la croissance de l’entreprise.

 

La croissance de l’Entreprise Familiale ne doit pas détruire plus qu’elle ne crée

La valeur de l’entreprise familiale n’est en effet pas que financière (satisfaction des besoins économiques), elle est aussi socio-émotionnelle (satisfaction des besoins affectifs). Dès lors, la prudence doit être de mise afin d’éviter une « création destructive ». En effet, la maximisation de la valeur financière de l’entreprise familiale peut bien souvent passer par l’adoption de stratégies et pratiques managériales éloignées du style familial et ne tenant pas compte des besoins affectifs des membres familiaux. Les changements organisationnels liés à la mise en œuvre de ces stratégies de croissance, peuvent certes limiter les comportements d’altruisme et de népotisme inhérents au caractère familial, mais peuvent aussi fragiliser la flexibilité, la solidité, la résilience et la capacité à adopter une vision à long-terme qui font la force de l’entreprise familiale et de son mode de gestion. Par ailleurs, il importe également d’accorder une attention particulière à la distance, non seulement hiérarchique, mais aussi en termes de vision et de valeurs, qui peut s’accentuer entre les tenants du contrôle familial et les agents non familiaux de l’entreprise, générant ainsi une asymétrie d’information et des coûts d’agence.

" ["summary"]=> string(273) "

La mise en œuvre des stratégies de croissance dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

" ["format"]=> string(9) "full_html" ["safe_value"]=> string(8757) "

Battre les records de croissance et se hisser sur la première marche du podium tout en restant 100% familial et totalement indépendant (aucun financement bancaire), c’est ce qu’a réussi à faire la Société des établissements Bougro (SODEBO). Grâce à l’innovation, à la culture de l’esprit familial, et surtout à un contrôle total de la chaîne de production (zéro sous-traitance), l’entreprise familiale (EF) a plus que doublé de taille. Les co-présidentes, Patricia Brochard, Marie-Laurence Gouraud et Bénédicte Mercier, ont toutes grandi dans l’entreprise en travaillant aux côtés de leurs parents, Simone et Joseph Bougro, les fondateurs. Un peu sur le modèle des Mulliez, les Bougro espèrent intégrer la croissance de la famille à celle de l’entreprise, en favorisant la participation des membres familiaux (époux, enfants, gendres, etc.) au capital et au management. La mise en œuvre des stratégies de croissance (développement de nouveaux produits et/ou marchés, internationalisation, diversification, etc.), dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder alors pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

La croissance de l’entreprise familiale impose un double choix d’investissement et de financement

Faut-il investir dans le développement de l’activité de l’entreprise par ses propres moyens (croissance organique) ou par l’acquisition d’entreprises existantes ou de fonds de commerce (croissance externe) ? Faut-il financer cette croissance par les bénéfices non distribués (autofinancement), du crédit auprès des banques et partenaires divers (endettement), de nouvelles participations familiales (fonds propres familiaux), ou par l’ouverture du capital (fonds propres externes) ? La spécificité de ce double choix tient aux enjeux, à la fois économiques et financiers, socio-psychologiques et de gouvernance, qui y sont liés. En termes d’investissement, la création de nouvelles unités au lieu du développement de l’ancienne unité d’origine, pourrait, par exemple, permettre de limiter les conflits entre successeurs potentiels, ou entre les différentes générations en cas d’entreprise familiale multigénérationnelle. Il n’est en effet pas rare, aujourd’hui, de voir des entreprises familiales qui regroupent jusqu’à quatre générations. Dans ces cas, il conviendra de tenir compte des besoins de chaque génération. D’autre part, le rachat de petites unités familiales sans successeurs ou à la recherche de groupe à qui s’adosser, peut constituer une opportunité de couverture géographique. Cependant, afin de ne pas dégrader la richesse socio-émotionnelle du groupe, il faudrait qu’elles soient bien implantées localement, aient une excellente réputation et que leurs dirigeants s’engagent à accompagner le groupe afin de conserver le fonds de commerce. Côté financement, même s’il est vrai que les bénéfices non distribués peuvent renforcer l’indépendance de l’entreprise familiale, c’est surtout le choix entre ouvrir ou ne pas ouvrir le capital qui mérite d’être éclairé. Si l’ouverture du capital constitue un moyen de partager les risques avec un investisseur extérieur, de bénéficier de ses réseaux et de ses conseils, de renforcer les capitaux propres, elle peut aussi signifier le désengagement familial, une perte d’autonomie et d’indépendance, un risque d’exposition des affaires familiales, le partage du pouvoir, et un risque de perte du contrôle familial. Aussi, l’ouverture du capital peut être une solution lorsque les fonds propres familiaux sont insuffisants, et permet de conserver un patrimoine familial équilibré dans le cadre d’une stratégie de diversification externe.

Les nouveaux liens familiaux tels que ceux issus des mariages et naissances[...] peuvent  permettre de mesurer la croissance du capital social [...] un vrai actif pour l’entreprise familiale.

La croissance de l’Entreprise Familiale doit s’accompagner d’une bonne stratégie de diversification des risques

Il convient ici de distinguer la diversification interne (développement de plusieurs activités au sein de l’entreprise familiale) de la diversification externe (maintien d’une certaine part du patrimoine familial en dehors de l’entreprise familiale). D’une part, l’entreprise familiale peut être précocement tentée de vouloir développer de nouvelles activités ou de conquérir de nouveaux marchés, au détriment de la consolidation de ses activités et marchés de base, et encourir ainsi le risque de la désintégration. Il est important de savoir qu’un repli sectoriel n’empêche pas une ouverture géographique. D’autre part, le souci de la croissance peut conduire au maintien d’une part trop importante du patrimoine familial au sein de l’entreprise familiale. Il peut obliger la famille à augmenter sa participation au capital, au fur et à mesure de la croissance, par l’apport de fonds familiaux nouveaux, ou à limiter excessivement la distribution de dividendes. Ce qui peut constituer un piège redoutable pour l’actionnariat familial. A cet égard, l’équilibre du patrimoine familial s’avère être crucial afin d’éviter de mettre en danger l’avenir des héritiers, et de limiter la frustration des membres passifs et les prélèvements non fondés des membres actifs.

L’Entreprise Familiale doit veiller aussi bien à la croissance de l’entreprise qu’à celle de la famille

Parce que les forces et les faiblesses de l’entreprise familiale résident aussi bien dans son capital économique que dans son capital social, celle-ci ne doit pas s’atteler à mesurer sa performance avec des critères exclusivement quantitatifs. L’évolution du chiffre d’affaires, de l’effectif salarié ou du total bilan, très souvent utilisée dans les analyses et prévisions financières, ne tient pas compte du cercle familial, composante essentielle de l’entreprise familiale. Il est nécessaire d’intégrer des critères beaucoup plus qualitatifs. Les nouveaux liens familiaux tels que ceux issus des mariages et naissances, l’augmentation de la capacité du groupe familial à mobiliser des réseaux, et surtout la qualité de ces relations, peuvent ainsi permettre de mesurer la croissance du capital social qui peut constituer un vrai actif pour l’entreprise familiale. Il convient toutefois de remarquer que lorsque la famille grandit, des conflits peuvent apparaître entre les successeurs potentiels, et aussi, que certains parents en âge avancé peuvent adopter une attitude favorable au statu quo et paralyser la croissance de l’entreprise.

 

La croissance de l’Entreprise Familiale ne doit pas détruire plus qu’elle ne crée

La valeur de l’entreprise familiale n’est en effet pas que financière (satisfaction des besoins économiques), elle est aussi socio-émotionnelle (satisfaction des besoins affectifs). Dès lors, la prudence doit être de mise afin d’éviter une « création destructive ». En effet, la maximisation de la valeur financière de l’entreprise familiale peut bien souvent passer par l’adoption de stratégies et pratiques managériales éloignées du style familial et ne tenant pas compte des besoins affectifs des membres familiaux. Les changements organisationnels liés à la mise en œuvre de ces stratégies de croissance, peuvent certes limiter les comportements d’altruisme et de népotisme inhérents au caractère familial, mais peuvent aussi fragiliser la flexibilité, la solidité, la résilience et la capacité à adopter une vision à long-terme qui font la force de l’entreprise familiale et de son mode de gestion. Par ailleurs, il importe également d’accorder une attention particulière à la distance, non seulement hiérarchique, mais aussi en termes de vision et de valeurs, qui peut s’accentuer entre les tenants du contrôle familial et les agents non familiaux de l’entreprise, générant ainsi une asymétrie d’information et des coûts d’agence.

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La mise en œuvre des stratégies de croissance dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

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Djibrilla Moussa Ousseini
Ingénieur de recherche, Family Business Center, EDHEC Business School

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Battre les records de croissance et se hisser sur la première marche du podium tout en restant 100% familial et totalement indépendant (aucun financement bancaire), c’est ce qu’a réussi à faire la Société des établissements Bougro (SODEBO). Grâce à l’innovation, à la culture de l’esprit familial, et surtout à un contrôle total de la chaîne de production (zéro sous-traitance), l’entreprise familiale (EF) a plus que doublé de taille. Les co-présidentes, Patricia Brochard, Marie-Laurence Gouraud et Bénédicte Mercier, ont toutes grandi dans l’entreprise en travaillant aux côtés de leurs parents, Simone et Joseph Bougro, les fondateurs. Un peu sur le modèle des Mulliez, les Bougro espèrent intégrer la croissance de la famille à celle de l’entreprise, en favorisant la participation des membres familiaux (époux, enfants, gendres, etc.) au capital et au management. La mise en œuvre des stratégies de croissance (développement de nouveaux produits et/ou marchés, internationalisation, diversification, etc.), dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder alors pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

La croissance de l’entreprise familiale impose un double choix d’investissement et de financement

Faut-il investir dans le développement de l’activité de l’entreprise par ses propres moyens (croissance organique) ou par l’acquisition d’entreprises existantes ou de fonds de commerce (croissance externe) ? Faut-il financer cette croissance par les bénéfices non distribués (autofinancement), du crédit auprès des banques et partenaires divers (endettement), de nouvelles participations familiales (fonds propres familiaux), ou par l’ouverture du capital (fonds propres externes) ? La spécificité de ce double choix tient aux enjeux, à la fois économiques et financiers, socio-psychologiques et de gouvernance, qui y sont liés. En termes d’investissement, la création de nouvelles unités au lieu du développement de l’ancienne unité d’origine, pourrait, par exemple, permettre de limiter les conflits entre successeurs potentiels, ou entre les différentes générations en cas d’entreprise familiale multigénérationnelle. Il n’est en effet pas rare, aujourd’hui, de voir des entreprises familiales qui regroupent jusqu’à quatre générations. Dans ces cas, il conviendra de tenir compte des besoins de chaque génération. D’autre part, le rachat de petites unités familiales sans successeurs ou à la recherche de groupe à qui s’adosser, peut constituer une opportunité de couverture géographique. Cependant, afin de ne pas dégrader la richesse socio-émotionnelle du groupe, il faudrait qu’elles soient bien implantées localement, aient une excellente réputation et que leurs dirigeants s’engagent à accompagner le groupe afin de conserver le fonds de commerce. Côté financement, même s’il est vrai que les bénéfices non distribués peuvent renforcer l’indépendance de l’entreprise familiale, c’est surtout le choix entre ouvrir ou ne pas ouvrir le capital qui mérite d’être éclairé. Si l’ouverture du capital constitue un moyen de partager les risques avec un investisseur extérieur, de bénéficier de ses réseaux et de ses conseils, de renforcer les capitaux propres, elle peut aussi signifier le désengagement familial, une perte d’autonomie et d’indépendance, un risque d’exposition des affaires familiales, le partage du pouvoir, et un risque de perte du contrôle familial. Aussi, l’ouverture du capital peut être une solution lorsque les fonds propres familiaux sont insuffisants, et permet de conserver un patrimoine familial équilibré dans le cadre d’une stratégie de diversification externe.

Les nouveaux liens familiaux tels que ceux issus des mariages et naissances[...] peuvent  permettre de mesurer la croissance du capital social [...] un vrai actif pour l’entreprise familiale.

La croissance de l’Entreprise Familiale doit s’accompagner d’une bonne stratégie de diversification des risques

Il convient ici de distinguer la diversification interne (développement de plusieurs activités au sein de l’entreprise familiale) de la diversification externe (maintien d’une certaine part du patrimoine familial en dehors de l’entreprise familiale). D’une part, l’entreprise familiale peut être précocement tentée de vouloir développer de nouvelles activités ou de conquérir de nouveaux marchés, au détriment de la consolidation de ses activités et marchés de base, et encourir ainsi le risque de la désintégration. Il est important de savoir qu’un repli sectoriel n’empêche pas une ouverture géographique. D’autre part, le souci de la croissance peut conduire au maintien d’une part trop importante du patrimoine familial au sein de l’entreprise familiale. Il peut obliger la famille à augmenter sa participation au capital, au fur et à mesure de la croissance, par l’apport de fonds familiaux nouveaux, ou à limiter excessivement la distribution de dividendes. Ce qui peut constituer un piège redoutable pour l’actionnariat familial. A cet égard, l’équilibre du patrimoine familial s’avère être crucial afin d’éviter de mettre en danger l’avenir des héritiers, et de limiter la frustration des membres passifs et les prélèvements non fondés des membres actifs.

L’Entreprise Familiale doit veiller aussi bien à la croissance de l’entreprise qu’à celle de la famille

Parce que les forces et les faiblesses de l’entreprise familiale résident aussi bien dans son capital économique que dans son capital social, celle-ci ne doit pas s’atteler à mesurer sa performance avec des critères exclusivement quantitatifs. L’évolution du chiffre d’affaires, de l’effectif salarié ou du total bilan, très souvent utilisée dans les analyses et prévisions financières, ne tient pas compte du cercle familial, composante essentielle de l’entreprise familiale. Il est nécessaire d’intégrer des critères beaucoup plus qualitatifs. Les nouveaux liens familiaux tels que ceux issus des mariages et naissances, l’augmentation de la capacité du groupe familial à mobiliser des réseaux, et surtout la qualité de ces relations, peuvent ainsi permettre de mesurer la croissance du capital social qui peut constituer un vrai actif pour l’entreprise familiale. Il convient toutefois de remarquer que lorsque la famille grandit, des conflits peuvent apparaître entre les successeurs potentiels, et aussi, que certains parents en âge avancé peuvent adopter une attitude favorable au statu quo et paralyser la croissance de l’entreprise.

 

La croissance de l’Entreprise Familiale ne doit pas détruire plus qu’elle ne crée

La valeur de l’entreprise familiale n’est en effet pas que financière (satisfaction des besoins économiques), elle est aussi socio-émotionnelle (satisfaction des besoins affectifs). Dès lors, la prudence doit être de mise afin d’éviter une « création destructive ». En effet, la maximisation de la valeur financière de l’entreprise familiale peut bien souvent passer par l’adoption de stratégies et pratiques managériales éloignées du style familial et ne tenant pas compte des besoins affectifs des membres familiaux. Les changements organisationnels liés à la mise en œuvre de ces stratégies de croissance, peuvent certes limiter les comportements d’altruisme et de népotisme inhérents au caractère familial, mais peuvent aussi fragiliser la flexibilité, la solidité, la résilience et la capacité à adopter une vision à long-terme qui font la force de l’entreprise familiale et de son mode de gestion. Par ailleurs, il importe également d’accorder une attention particulière à la distance, non seulement hiérarchique, mais aussi en termes de vision et de valeurs, qui peut s’accentuer entre les tenants du contrôle familial et les agents non familiaux de l’entreprise, générant ainsi une asymétrie d’information et des coûts d’agence.

" ["summary"]=> string(273) "

La mise en œuvre des stratégies de croissance dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

" ["format"]=> string(9) "full_html" ["safe_value"]=> string(8757) "

Battre les records de croissance et se hisser sur la première marche du podium tout en restant 100% familial et totalement indépendant (aucun financement bancaire), c’est ce qu’a réussi à faire la Société des établissements Bougro (SODEBO). Grâce à l’innovation, à la culture de l’esprit familial, et surtout à un contrôle total de la chaîne de production (zéro sous-traitance), l’entreprise familiale (EF) a plus que doublé de taille. Les co-présidentes, Patricia Brochard, Marie-Laurence Gouraud et Bénédicte Mercier, ont toutes grandi dans l’entreprise en travaillant aux côtés de leurs parents, Simone et Joseph Bougro, les fondateurs. Un peu sur le modèle des Mulliez, les Bougro espèrent intégrer la croissance de la famille à celle de l’entreprise, en favorisant la participation des membres familiaux (époux, enfants, gendres, etc.) au capital et au management. La mise en œuvre des stratégies de croissance (développement de nouveaux produits et/ou marchés, internationalisation, diversification, etc.), dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder alors pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

La croissance de l’entreprise familiale impose un double choix d’investissement et de financement

Faut-il investir dans le développement de l’activité de l’entreprise par ses propres moyens (croissance organique) ou par l’acquisition d’entreprises existantes ou de fonds de commerce (croissance externe) ? Faut-il financer cette croissance par les bénéfices non distribués (autofinancement), du crédit auprès des banques et partenaires divers (endettement), de nouvelles participations familiales (fonds propres familiaux), ou par l’ouverture du capital (fonds propres externes) ? La spécificité de ce double choix tient aux enjeux, à la fois économiques et financiers, socio-psychologiques et de gouvernance, qui y sont liés. En termes d’investissement, la création de nouvelles unités au lieu du développement de l’ancienne unité d’origine, pourrait, par exemple, permettre de limiter les conflits entre successeurs potentiels, ou entre les différentes générations en cas d’entreprise familiale multigénérationnelle. Il n’est en effet pas rare, aujourd’hui, de voir des entreprises familiales qui regroupent jusqu’à quatre générations. Dans ces cas, il conviendra de tenir compte des besoins de chaque génération. D’autre part, le rachat de petites unités familiales sans successeurs ou à la recherche de groupe à qui s’adosser, peut constituer une opportunité de couverture géographique. Cependant, afin de ne pas dégrader la richesse socio-émotionnelle du groupe, il faudrait qu’elles soient bien implantées localement, aient une excellente réputation et que leurs dirigeants s’engagent à accompagner le groupe afin de conserver le fonds de commerce. Côté financement, même s’il est vrai que les bénéfices non distribués peuvent renforcer l’indépendance de l’entreprise familiale, c’est surtout le choix entre ouvrir ou ne pas ouvrir le capital qui mérite d’être éclairé. Si l’ouverture du capital constitue un moyen de partager les risques avec un investisseur extérieur, de bénéficier de ses réseaux et de ses conseils, de renforcer les capitaux propres, elle peut aussi signifier le désengagement familial, une perte d’autonomie et d’indépendance, un risque d’exposition des affaires familiales, le partage du pouvoir, et un risque de perte du contrôle familial. Aussi, l’ouverture du capital peut être une solution lorsque les fonds propres familiaux sont insuffisants, et permet de conserver un patrimoine familial équilibré dans le cadre d’une stratégie de diversification externe.

Les nouveaux liens familiaux tels que ceux issus des mariages et naissances[...] peuvent  permettre de mesurer la croissance du capital social [...] un vrai actif pour l’entreprise familiale.

La croissance de l’Entreprise Familiale doit s’accompagner d’une bonne stratégie de diversification des risques

Il convient ici de distinguer la diversification interne (développement de plusieurs activités au sein de l’entreprise familiale) de la diversification externe (maintien d’une certaine part du patrimoine familial en dehors de l’entreprise familiale). D’une part, l’entreprise familiale peut être précocement tentée de vouloir développer de nouvelles activités ou de conquérir de nouveaux marchés, au détriment de la consolidation de ses activités et marchés de base, et encourir ainsi le risque de la désintégration. Il est important de savoir qu’un repli sectoriel n’empêche pas une ouverture géographique. D’autre part, le souci de la croissance peut conduire au maintien d’une part trop importante du patrimoine familial au sein de l’entreprise familiale. Il peut obliger la famille à augmenter sa participation au capital, au fur et à mesure de la croissance, par l’apport de fonds familiaux nouveaux, ou à limiter excessivement la distribution de dividendes. Ce qui peut constituer un piège redoutable pour l’actionnariat familial. A cet égard, l’équilibre du patrimoine familial s’avère être crucial afin d’éviter de mettre en danger l’avenir des héritiers, et de limiter la frustration des membres passifs et les prélèvements non fondés des membres actifs.

L’Entreprise Familiale doit veiller aussi bien à la croissance de l’entreprise qu’à celle de la famille

Parce que les forces et les faiblesses de l’entreprise familiale résident aussi bien dans son capital économique que dans son capital social, celle-ci ne doit pas s’atteler à mesurer sa performance avec des critères exclusivement quantitatifs. L’évolution du chiffre d’affaires, de l’effectif salarié ou du total bilan, très souvent utilisée dans les analyses et prévisions financières, ne tient pas compte du cercle familial, composante essentielle de l’entreprise familiale. Il est nécessaire d’intégrer des critères beaucoup plus qualitatifs. Les nouveaux liens familiaux tels que ceux issus des mariages et naissances, l’augmentation de la capacité du groupe familial à mobiliser des réseaux, et surtout la qualité de ces relations, peuvent ainsi permettre de mesurer la croissance du capital social qui peut constituer un vrai actif pour l’entreprise familiale. Il convient toutefois de remarquer que lorsque la famille grandit, des conflits peuvent apparaître entre les successeurs potentiels, et aussi, que certains parents en âge avancé peuvent adopter une attitude favorable au statu quo et paralyser la croissance de l’entreprise.

 

La croissance de l’Entreprise Familiale ne doit pas détruire plus qu’elle ne crée

La valeur de l’entreprise familiale n’est en effet pas que financière (satisfaction des besoins économiques), elle est aussi socio-émotionnelle (satisfaction des besoins affectifs). Dès lors, la prudence doit être de mise afin d’éviter une « création destructive ». En effet, la maximisation de la valeur financière de l’entreprise familiale peut bien souvent passer par l’adoption de stratégies et pratiques managériales éloignées du style familial et ne tenant pas compte des besoins affectifs des membres familiaux. Les changements organisationnels liés à la mise en œuvre de ces stratégies de croissance, peuvent certes limiter les comportements d’altruisme et de népotisme inhérents au caractère familial, mais peuvent aussi fragiliser la flexibilité, la solidité, la résilience et la capacité à adopter une vision à long-terme qui font la force de l’entreprise familiale et de son mode de gestion. Par ailleurs, il importe également d’accorder une attention particulière à la distance, non seulement hiérarchique, mais aussi en termes de vision et de valeurs, qui peut s’accentuer entre les tenants du contrôle familial et les agents non familiaux de l’entreprise, générant ainsi une asymétrie d’information et des coûts d’agence.

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Battre les records de croissance et se hisser sur la première marche du podium tout en restant 100% familial et totalement indépendant (aucun financement bancaire), c’est ce qu’a réussi à faire la Société des établissements Bougro (SODEBO). Grâce à l’innovation, à la culture de l’esprit familial, et surtout à un contrôle total de la chaîne de production (zéro sous-traitance), l’entreprise familiale (EF) a plus que doublé de taille. Les co-présidentes, Patricia Brochard, Marie-Laurence Gouraud et Bénédicte Mercier, ont toutes grandi dans l’entreprise en travaillant aux côtés de leurs parents, Simone et Joseph Bougro, les fondateurs. Un peu sur le modèle des Mulliez, les Bougro espèrent intégrer la croissance de la famille à celle de l’entreprise, en favorisant la participation des membres familiaux (époux, enfants, gendres, etc.) au capital et au management. La mise en œuvre des stratégies de croissance (développement de nouveaux produits et/ou marchés, internationalisation, diversification, etc.), dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder alors pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

La croissance de l’entreprise familiale impose un double choix d’investissement et de financement

Faut-il investir dans le développement de l’activité de l’entreprise par ses propres moyens (croissance organique) ou par l’acquisition d’entreprises existantes ou de fonds de commerce (croissance externe) ? Faut-il financer cette croissance par les bénéfices non distribués (autofinancement), du crédit auprès des banques et partenaires divers (endettement), de nouvelles participations familiales (fonds propres familiaux), ou par l’ouverture du capital (fonds propres externes) ? La spécificité de ce double choix tient aux enjeux, à la fois économiques et financiers, socio-psychologiques et de gouvernance, qui y sont liés. En termes d’investissement, la création de nouvelles unités au lieu du développement de l’ancienne unité d’origine, pourrait, par exemple, permettre de limiter les conflits entre successeurs potentiels, ou entre les différentes générations en cas d’entreprise familiale multigénérationnelle. Il n’est en effet pas rare, aujourd’hui, de voir des entreprises familiales qui regroupent jusqu’à quatre générations. Dans ces cas, il conviendra de tenir compte des besoins de chaque génération. D’autre part, le rachat de petites unités familiales sans successeurs ou à la recherche de groupe à qui s’adosser, peut constituer une opportunité de couverture géographique. Cependant, afin de ne pas dégrader la richesse socio-émotionnelle du groupe, il faudrait qu’elles soient bien implantées localement, aient une excellente réputation et que leurs dirigeants s’engagent à accompagner le groupe afin de conserver le fonds de commerce. Côté financement, même s’il est vrai que les bénéfices non distribués peuvent renforcer l’indépendance de l’entreprise familiale, c’est surtout le choix entre ouvrir ou ne pas ouvrir le capital qui mérite d’être éclairé. Si l’ouverture du capital constitue un moyen de partager les risques avec un investisseur extérieur, de bénéficier de ses réseaux et de ses conseils, de renforcer les capitaux propres, elle peut aussi signifier le désengagement familial, une perte d’autonomie et d’indépendance, un risque d’exposition des affaires familiales, le partage du pouvoir, et un risque de perte du contrôle familial. Aussi, l’ouverture du capital peut être une solution lorsque les fonds propres familiaux sont insuffisants, et permet de conserver un patrimoine familial équilibré dans le cadre d’une stratégie de diversification externe.

Les nouveaux liens familiaux tels que ceux issus des mariages et naissances[...] peuvent  permettre de mesurer la croissance du capital social [...] un vrai actif pour l’entreprise familiale.

La croissance de l’Entreprise Familiale doit s’accompagner d’une bonne stratégie de diversification des risques

Il convient ici de distinguer la diversification interne (développement de plusieurs activités au sein de l’entreprise familiale) de la diversification externe (maintien d’une certaine part du patrimoine familial en dehors de l’entreprise familiale). D’une part, l’entreprise familiale peut être précocement tentée de vouloir développer de nouvelles activités ou de conquérir de nouveaux marchés, au détriment de la consolidation de ses activités et marchés de base, et encourir ainsi le risque de la désintégration. Il est important de savoir qu’un repli sectoriel n’empêche pas une ouverture géographique. D’autre part, le souci de la croissance peut conduire au maintien d’une part trop importante du patrimoine familial au sein de l’entreprise familiale. Il peut obliger la famille à augmenter sa participation au capital, au fur et à mesure de la croissance, par l’apport de fonds familiaux nouveaux, ou à limiter excessivement la distribution de dividendes. Ce qui peut constituer un piège redoutable pour l’actionnariat familial. A cet égard, l’équilibre du patrimoine familial s’avère être crucial afin d’éviter de mettre en danger l’avenir des héritiers, et de limiter la frustration des membres passifs et les prélèvements non fondés des membres actifs.

L’Entreprise Familiale doit veiller aussi bien à la croissance de l’entreprise qu’à celle de la famille

Parce que les forces et les faiblesses de l’entreprise familiale résident aussi bien dans son capital économique que dans son capital social, celle-ci ne doit pas s’atteler à mesurer sa performance avec des critères exclusivement quantitatifs. L’évolution du chiffre d’affaires, de l’effectif salarié ou du total bilan, très souvent utilisée dans les analyses et prévisions financières, ne tient pas compte du cercle familial, composante essentielle de l’entreprise familiale. Il est nécessaire d’intégrer des critères beaucoup plus qualitatifs. Les nouveaux liens familiaux tels que ceux issus des mariages et naissances, l’augmentation de la capacité du groupe familial à mobiliser des réseaux, et surtout la qualité de ces relations, peuvent ainsi permettre de mesurer la croissance du capital social qui peut constituer un vrai actif pour l’entreprise familiale. Il convient toutefois de remarquer que lorsque la famille grandit, des conflits peuvent apparaître entre les successeurs potentiels, et aussi, que certains parents en âge avancé peuvent adopter une attitude favorable au statu quo et paralyser la croissance de l’entreprise.

 

La croissance de l’Entreprise Familiale ne doit pas détruire plus qu’elle ne crée

La valeur de l’entreprise familiale n’est en effet pas que financière (satisfaction des besoins économiques), elle est aussi socio-émotionnelle (satisfaction des besoins affectifs). Dès lors, la prudence doit être de mise afin d’éviter une « création destructive ». En effet, la maximisation de la valeur financière de l’entreprise familiale peut bien souvent passer par l’adoption de stratégies et pratiques managériales éloignées du style familial et ne tenant pas compte des besoins affectifs des membres familiaux. Les changements organisationnels liés à la mise en œuvre de ces stratégies de croissance, peuvent certes limiter les comportements d’altruisme et de népotisme inhérents au caractère familial, mais peuvent aussi fragiliser la flexibilité, la solidité, la résilience et la capacité à adopter une vision à long-terme qui font la force de l’entreprise familiale et de son mode de gestion. Par ailleurs, il importe également d’accorder une attention particulière à la distance, non seulement hiérarchique, mais aussi en termes de vision et de valeurs, qui peut s’accentuer entre les tenants du contrôle familial et les agents non familiaux de l’entreprise, générant ainsi une asymétrie d’information et des coûts d’agence.

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La mise en œuvre des stratégies de croissance dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

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Battre les records de croissance et se hisser sur la première marche du podium tout en restant 100% familial et totalement indépendant (aucun financement bancaire), c’est ce qu’a réussi à faire la Société des établissements Bougro (SODEBO). Grâce à l’innovation, à la culture de l’esprit familial, et surtout à un contrôle total de la chaîne de production (zéro sous-traitance), l’entreprise familiale (EF) a plus que doublé de taille. Les co-présidentes, Patricia Brochard, Marie-Laurence Gouraud et Bénédicte Mercier, ont toutes grandi dans l’entreprise en travaillant aux côtés de leurs parents, Simone et Joseph Bougro, les fondateurs. Un peu sur le modèle des Mulliez, les Bougro espèrent intégrer la croissance de la famille à celle de l’entreprise, en favorisant la participation des membres familiaux (époux, enfants, gendres, etc.) au capital et au management. La mise en œuvre des stratégies de croissance (développement de nouveaux produits et/ou marchés, internationalisation, diversification, etc.), dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder alors pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

La croissance de l’entreprise familiale impose un double choix d’investissement et de financement

Faut-il investir dans le développement de l’activité de l’entreprise par ses propres moyens (croissance organique) ou par l’acquisition d’entreprises existantes ou de fonds de commerce (croissance externe) ? Faut-il financer cette croissance par les bénéfices non distribués (autofinancement), du crédit auprès des banques et partenaires divers (endettement), de nouvelles participations familiales (fonds propres familiaux), ou par l’ouverture du capital (fonds propres externes) ? La spécificité de ce double choix tient aux enjeux, à la fois économiques et financiers, socio-psychologiques et de gouvernance, qui y sont liés. En termes d’investissement, la création de nouvelles unités au lieu du développement de l’ancienne unité d’origine, pourrait, par exemple, permettre de limiter les conflits entre successeurs potentiels, ou entre les différentes générations en cas d’entreprise familiale multigénérationnelle. Il n’est en effet pas rare, aujourd’hui, de voir des entreprises familiales qui regroupent jusqu’à quatre générations. Dans ces cas, il conviendra de tenir compte des besoins de chaque génération. D’autre part, le rachat de petites unités familiales sans successeurs ou à la recherche de groupe à qui s’adosser, peut constituer une opportunité de couverture géographique. Cependant, afin de ne pas dégrader la richesse socio-émotionnelle du groupe, il faudrait qu’elles soient bien implantées localement, aient une excellente réputation et que leurs dirigeants s’engagent à accompagner le groupe afin de conserver le fonds de commerce. Côté financement, même s’il est vrai que les bénéfices non distribués peuvent renforcer l’indépendance de l’entreprise familiale, c’est surtout le choix entre ouvrir ou ne pas ouvrir le capital qui mérite d’être éclairé. Si l’ouverture du capital constitue un moyen de partager les risques avec un investisseur extérieur, de bénéficier de ses réseaux et de ses conseils, de renforcer les capitaux propres, elle peut aussi signifier le désengagement familial, une perte d’autonomie et d’indépendance, un risque d’exposition des affaires familiales, le partage du pouvoir, et un risque de perte du contrôle familial. Aussi, l’ouverture du capital peut être une solution lorsque les fonds propres familiaux sont insuffisants, et permet de conserver un patrimoine familial équilibré dans le cadre d’une stratégie de diversification externe.

Les nouveaux liens familiaux tels que ceux issus des mariages et naissances[...] peuvent  permettre de mesurer la croissance du capital social [...] un vrai actif pour l’entreprise familiale.

La croissance de l’Entreprise Familiale doit s’accompagner d’une bonne stratégie de diversification des risques

Il convient ici de distinguer la diversification interne (développement de plusieurs activités au sein de l’entreprise familiale) de la diversification externe (maintien d’une certaine part du patrimoine familial en dehors de l’entreprise familiale). D’une part, l’entreprise familiale peut être précocement tentée de vouloir développer de nouvelles activités ou de conquérir de nouveaux marchés, au détriment de la consolidation de ses activités et marchés de base, et encourir ainsi le risque de la désintégration. Il est important de savoir qu’un repli sectoriel n’empêche pas une ouverture géographique. D’autre part, le souci de la croissance peut conduire au maintien d’une part trop importante du patrimoine familial au sein de l’entreprise familiale. Il peut obliger la famille à augmenter sa participation au capital, au fur et à mesure de la croissance, par l’apport de fonds familiaux nouveaux, ou à limiter excessivement la distribution de dividendes. Ce qui peut constituer un piège redoutable pour l’actionnariat familial. A cet égard, l’équilibre du patrimoine familial s’avère être crucial afin d’éviter de mettre en danger l’avenir des héritiers, et de limiter la frustration des membres passifs et les prélèvements non fondés des membres actifs.

L’Entreprise Familiale doit veiller aussi bien à la croissance de l’entreprise qu’à celle de la famille

Parce que les forces et les faiblesses de l’entreprise familiale résident aussi bien dans son capital économique que dans son capital social, celle-ci ne doit pas s’atteler à mesurer sa performance avec des critères exclusivement quantitatifs. L’évolution du chiffre d’affaires, de l’effectif salarié ou du total bilan, très souvent utilisée dans les analyses et prévisions financières, ne tient pas compte du cercle familial, composante essentielle de l’entreprise familiale. Il est nécessaire d’intégrer des critères beaucoup plus qualitatifs. Les nouveaux liens familiaux tels que ceux issus des mariages et naissances, l’augmentation de la capacité du groupe familial à mobiliser des réseaux, et surtout la qualité de ces relations, peuvent ainsi permettre de mesurer la croissance du capital social qui peut constituer un vrai actif pour l’entreprise familiale. Il convient toutefois de remarquer que lorsque la famille grandit, des conflits peuvent apparaître entre les successeurs potentiels, et aussi, que certains parents en âge avancé peuvent adopter une attitude favorable au statu quo et paralyser la croissance de l’entreprise.

 

La croissance de l’Entreprise Familiale ne doit pas détruire plus qu’elle ne crée

La valeur de l’entreprise familiale n’est en effet pas que financière (satisfaction des besoins économiques), elle est aussi socio-émotionnelle (satisfaction des besoins affectifs). Dès lors, la prudence doit être de mise afin d’éviter une « création destructive ». En effet, la maximisation de la valeur financière de l’entreprise familiale peut bien souvent passer par l’adoption de stratégies et pratiques managériales éloignées du style familial et ne tenant pas compte des besoins affectifs des membres familiaux. Les changements organisationnels liés à la mise en œuvre de ces stratégies de croissance, peuvent certes limiter les comportements d’altruisme et de népotisme inhérents au caractère familial, mais peuvent aussi fragiliser la flexibilité, la solidité, la résilience et la capacité à adopter une vision à long-terme qui font la force de l’entreprise familiale et de son mode de gestion. Par ailleurs, il importe également d’accorder une attention particulière à la distance, non seulement hiérarchique, mais aussi en termes de vision et de valeurs, qui peut s’accentuer entre les tenants du contrôle familial et les agents non familiaux de l’entreprise, générant ainsi une asymétrie d’information et des coûts d’agence.

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La mise en œuvre des stratégies de croissance dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

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Djibrilla Moussa Ousseini
Ingénieur de recherche, Family Business Center, EDHEC Business School

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Battre les records de croissance et se hisser sur la première marche du podium tout en restant 100% familial et totalement indépendant (aucun financement bancaire), c’est ce qu’a réussi à faire la Société des établissements Bougro (SODEBO). Grâce à l’innovation, à la culture de l’esprit familial, et surtout à un contrôle total de la chaîne de production (zéro sous-traitance), l’entreprise familiale (EF) a plus que doublé de taille. Les co-présidentes, Patricia Brochard, Marie-Laurence Gouraud et Bénédicte Mercier, ont toutes grandi dans l’entreprise en travaillant aux côtés de leurs parents, Simone et Joseph Bougro, les fondateurs. Un peu sur le modèle des Mulliez, les Bougro espèrent intégrer la croissance de la famille à celle de l’entreprise, en favorisant la participation des membres familiaux (époux, enfants, gendres, etc.) au capital et au management. La mise en œuvre des stratégies de croissance (développement de nouveaux produits et/ou marchés, internationalisation, diversification, etc.), dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder alors pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

La croissance de l’entreprise familiale impose un double choix d’investissement et de financement

Faut-il investir dans le développement de l’activité de l’entreprise par ses propres moyens (croissance organique) ou par l’acquisition d’entreprises existantes ou de fonds de commerce (croissance externe) ? Faut-il financer cette croissance par les bénéfices non distribués (autofinancement), du crédit auprès des banques et partenaires divers (endettement), de nouvelles participations familiales (fonds propres familiaux), ou par l’ouverture du capital (fonds propres externes) ? La spécificité de ce double choix tient aux enjeux, à la fois économiques et financiers, socio-psychologiques et de gouvernance, qui y sont liés. En termes d’investissement, la création de nouvelles unités au lieu du développement de l’ancienne unité d’origine, pourrait, par exemple, permettre de limiter les conflits entre successeurs potentiels, ou entre les différentes générations en cas d’entreprise familiale multigénérationnelle. Il n’est en effet pas rare, aujourd’hui, de voir des entreprises familiales qui regroupent jusqu’à quatre générations. Dans ces cas, il conviendra de tenir compte des besoins de chaque génération. D’autre part, le rachat de petites unités familiales sans successeurs ou à la recherche de groupe à qui s’adosser, peut constituer une opportunité de couverture géographique. Cependant, afin de ne pas dégrader la richesse socio-émotionnelle du groupe, il faudrait qu’elles soient bien implantées localement, aient une excellente réputation et que leurs dirigeants s’engagent à accompagner le groupe afin de conserver le fonds de commerce. Côté financement, même s’il est vrai que les bénéfices non distribués peuvent renforcer l’indépendance de l’entreprise familiale, c’est surtout le choix entre ouvrir ou ne pas ouvrir le capital qui mérite d’être éclairé. Si l’ouverture du capital constitue un moyen de partager les risques avec un investisseur extérieur, de bénéficier de ses réseaux et de ses conseils, de renforcer les capitaux propres, elle peut aussi signifier le désengagement familial, une perte d’autonomie et d’indépendance, un risque d’exposition des affaires familiales, le partage du pouvoir, et un risque de perte du contrôle familial. Aussi, l’ouverture du capital peut être une solution lorsque les fonds propres familiaux sont insuffisants, et permet de conserver un patrimoine familial équilibré dans le cadre d’une stratégie de diversification externe.

Les nouveaux liens familiaux tels que ceux issus des mariages et naissances[...] peuvent  permettre de mesurer la croissance du capital social [...] un vrai actif pour l’entreprise familiale.

La croissance de l’Entreprise Familiale doit s’accompagner d’une bonne stratégie de diversification des risques

Il convient ici de distinguer la diversification interne (développement de plusieurs activités au sein de l’entreprise familiale) de la diversification externe (maintien d’une certaine part du patrimoine familial en dehors de l’entreprise familiale). D’une part, l’entreprise familiale peut être précocement tentée de vouloir développer de nouvelles activités ou de conquérir de nouveaux marchés, au détriment de la consolidation de ses activités et marchés de base, et encourir ainsi le risque de la désintégration. Il est important de savoir qu’un repli sectoriel n’empêche pas une ouverture géographique. D’autre part, le souci de la croissance peut conduire au maintien d’une part trop importante du patrimoine familial au sein de l’entreprise familiale. Il peut obliger la famille à augmenter sa participation au capital, au fur et à mesure de la croissance, par l’apport de fonds familiaux nouveaux, ou à limiter excessivement la distribution de dividendes. Ce qui peut constituer un piège redoutable pour l’actionnariat familial. A cet égard, l’équilibre du patrimoine familial s’avère être crucial afin d’éviter de mettre en danger l’avenir des héritiers, et de limiter la frustration des membres passifs et les prélèvements non fondés des membres actifs.

L’Entreprise Familiale doit veiller aussi bien à la croissance de l’entreprise qu’à celle de la famille

Parce que les forces et les faiblesses de l’entreprise familiale résident aussi bien dans son capital économique que dans son capital social, celle-ci ne doit pas s’atteler à mesurer sa performance avec des critères exclusivement quantitatifs. L’évolution du chiffre d’affaires, de l’effectif salarié ou du total bilan, très souvent utilisée dans les analyses et prévisions financières, ne tient pas compte du cercle familial, composante essentielle de l’entreprise familiale. Il est nécessaire d’intégrer des critères beaucoup plus qualitatifs. Les nouveaux liens familiaux tels que ceux issus des mariages et naissances, l’augmentation de la capacité du groupe familial à mobiliser des réseaux, et surtout la qualité de ces relations, peuvent ainsi permettre de mesurer la croissance du capital social qui peut constituer un vrai actif pour l’entreprise familiale. Il convient toutefois de remarquer que lorsque la famille grandit, des conflits peuvent apparaître entre les successeurs potentiels, et aussi, que certains parents en âge avancé peuvent adopter une attitude favorable au statu quo et paralyser la croissance de l’entreprise.

 

La croissance de l’Entreprise Familiale ne doit pas détruire plus qu’elle ne crée

La valeur de l’entreprise familiale n’est en effet pas que financière (satisfaction des besoins économiques), elle est aussi socio-émotionnelle (satisfaction des besoins affectifs). Dès lors, la prudence doit être de mise afin d’éviter une « création destructive ». En effet, la maximisation de la valeur financière de l’entreprise familiale peut bien souvent passer par l’adoption de stratégies et pratiques managériales éloignées du style familial et ne tenant pas compte des besoins affectifs des membres familiaux. Les changements organisationnels liés à la mise en œuvre de ces stratégies de croissance, peuvent certes limiter les comportements d’altruisme et de népotisme inhérents au caractère familial, mais peuvent aussi fragiliser la flexibilité, la solidité, la résilience et la capacité à adopter une vision à long-terme qui font la force de l’entreprise familiale et de son mode de gestion. Par ailleurs, il importe également d’accorder une attention particulière à la distance, non seulement hiérarchique, mais aussi en termes de vision et de valeurs, qui peut s’accentuer entre les tenants du contrôle familial et les agents non familiaux de l’entreprise, générant ainsi une asymétrie d’information et des coûts d’agence.

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La mise en œuvre des stratégies de croissance dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

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Battre les records de croissance et se hisser sur la première marche du podium tout en restant 100% familial et totalement indépendant (aucun financement bancaire), c’est ce qu’a réussi à faire la Société des établissements Bougro (SODEBO). Grâce à l’innovation, à la culture de l’esprit familial, et surtout à un contrôle total de la chaîne de production (zéro sous-traitance), l’entreprise familiale (EF) a plus que doublé de taille. Les co-présidentes, Patricia Brochard, Marie-Laurence Gouraud et Bénédicte Mercier, ont toutes grandi dans l’entreprise en travaillant aux côtés de leurs parents, Simone et Joseph Bougro, les fondateurs. Un peu sur le modèle des Mulliez, les Bougro espèrent intégrer la croissance de la famille à celle de l’entreprise, en favorisant la participation des membres familiaux (époux, enfants, gendres, etc.) au capital et au management. La mise en œuvre des stratégies de croissance (développement de nouveaux produits et/ou marchés, internationalisation, diversification, etc.), dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder alors pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

La croissance de l’entreprise familiale impose un double choix d’investissement et de financement

Faut-il investir dans le développement de l’activité de l’entreprise par ses propres moyens (croissance organique) ou par l’acquisition d’entreprises existantes ou de fonds de commerce (croissance externe) ? Faut-il financer cette croissance par les bénéfices non distribués (autofinancement), du crédit auprès des banques et partenaires divers (endettement), de nouvelles participations familiales (fonds propres familiaux), ou par l’ouverture du capital (fonds propres externes) ? La spécificité de ce double choix tient aux enjeux, à la fois économiques et financiers, socio-psychologiques et de gouvernance, qui y sont liés. En termes d’investissement, la création de nouvelles unités au lieu du développement de l’ancienne unité d’origine, pourrait, par exemple, permettre de limiter les conflits entre successeurs potentiels, ou entre les différentes générations en cas d’entreprise familiale multigénérationnelle. Il n’est en effet pas rare, aujourd’hui, de voir des entreprises familiales qui regroupent jusqu’à quatre générations. Dans ces cas, il conviendra de tenir compte des besoins de chaque génération. D’autre part, le rachat de petites unités familiales sans successeurs ou à la recherche de groupe à qui s’adosser, peut constituer une opportunité de couverture géographique. Cependant, afin de ne pas dégrader la richesse socio-émotionnelle du groupe, il faudrait qu’elles soient bien implantées localement, aient une excellente réputation et que leurs dirigeants s’engagent à accompagner le groupe afin de conserver le fonds de commerce. Côté financement, même s’il est vrai que les bénéfices non distribués peuvent renforcer l’indépendance de l’entreprise familiale, c’est surtout le choix entre ouvrir ou ne pas ouvrir le capital qui mérite d’être éclairé. Si l’ouverture du capital constitue un moyen de partager les risques avec un investisseur extérieur, de bénéficier de ses réseaux et de ses conseils, de renforcer les capitaux propres, elle peut aussi signifier le désengagement familial, une perte d’autonomie et d’indépendance, un risque d’exposition des affaires familiales, le partage du pouvoir, et un risque de perte du contrôle familial. Aussi, l’ouverture du capital peut être une solution lorsque les fonds propres familiaux sont insuffisants, et permet de conserver un patrimoine familial équilibré dans le cadre d’une stratégie de diversification externe.

Les nouveaux liens familiaux tels que ceux issus des mariages et naissances[...] peuvent  permettre de mesurer la croissance du capital social [...] un vrai actif pour l’entreprise familiale.

La croissance de l’Entreprise Familiale doit s’accompagner d’une bonne stratégie de diversification des risques

Il convient ici de distinguer la diversification interne (développement de plusieurs activités au sein de l’entreprise familiale) de la diversification externe (maintien d’une certaine part du patrimoine familial en dehors de l’entreprise familiale). D’une part, l’entreprise familiale peut être précocement tentée de vouloir développer de nouvelles activités ou de conquérir de nouveaux marchés, au détriment de la consolidation de ses activités et marchés de base, et encourir ainsi le risque de la désintégration. Il est important de savoir qu’un repli sectoriel n’empêche pas une ouverture géographique. D’autre part, le souci de la croissance peut conduire au maintien d’une part trop importante du patrimoine familial au sein de l’entreprise familiale. Il peut obliger la famille à augmenter sa participation au capital, au fur et à mesure de la croissance, par l’apport de fonds familiaux nouveaux, ou à limiter excessivement la distribution de dividendes. Ce qui peut constituer un piège redoutable pour l’actionnariat familial. A cet égard, l’équilibre du patrimoine familial s’avère être crucial afin d’éviter de mettre en danger l’avenir des héritiers, et de limiter la frustration des membres passifs et les prélèvements non fondés des membres actifs.

L’Entreprise Familiale doit veiller aussi bien à la croissance de l’entreprise qu’à celle de la famille

Parce que les forces et les faiblesses de l’entreprise familiale résident aussi bien dans son capital économique que dans son capital social, celle-ci ne doit pas s’atteler à mesurer sa performance avec des critères exclusivement quantitatifs. L’évolution du chiffre d’affaires, de l’effectif salarié ou du total bilan, très souvent utilisée dans les analyses et prévisions financières, ne tient pas compte du cercle familial, composante essentielle de l’entreprise familiale. Il est nécessaire d’intégrer des critères beaucoup plus qualitatifs. Les nouveaux liens familiaux tels que ceux issus des mariages et naissances, l’augmentation de la capacité du groupe familial à mobiliser des réseaux, et surtout la qualité de ces relations, peuvent ainsi permettre de mesurer la croissance du capital social qui peut constituer un vrai actif pour l’entreprise familiale. Il convient toutefois de remarquer que lorsque la famille grandit, des conflits peuvent apparaître entre les successeurs potentiels, et aussi, que certains parents en âge avancé peuvent adopter une attitude favorable au statu quo et paralyser la croissance de l’entreprise.

 

La croissance de l’Entreprise Familiale ne doit pas détruire plus qu’elle ne crée

La valeur de l’entreprise familiale n’est en effet pas que financière (satisfaction des besoins économiques), elle est aussi socio-émotionnelle (satisfaction des besoins affectifs). Dès lors, la prudence doit être de mise afin d’éviter une « création destructive ». En effet, la maximisation de la valeur financière de l’entreprise familiale peut bien souvent passer par l’adoption de stratégies et pratiques managériales éloignées du style familial et ne tenant pas compte des besoins affectifs des membres familiaux. Les changements organisationnels liés à la mise en œuvre de ces stratégies de croissance, peuvent certes limiter les comportements d’altruisme et de népotisme inhérents au caractère familial, mais peuvent aussi fragiliser la flexibilité, la solidité, la résilience et la capacité à adopter une vision à long-terme qui font la force de l’entreprise familiale et de son mode de gestion. Par ailleurs, il importe également d’accorder une attention particulière à la distance, non seulement hiérarchique, mais aussi en termes de vision et de valeurs, qui peut s’accentuer entre les tenants du contrôle familial et les agents non familiaux de l’entreprise, générant ainsi une asymétrie d’information et des coûts d’agence.

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La mise en œuvre des stratégies de croissance dans l’entreprise familiale, est influencée par certains objectifs et besoins familiaux. Comment procéder pour faire passer l’entreprise familiale à l’étape supérieure, dans les conditions optimales ?

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Rania Labaki
Associate Professor and Director of Family Business Centre, EDHEC Business School

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Take a moment and try to remember the last time you had an exceptional idea. How did you feel in that very moment, just before the spark of creativity hit you? Did this emotional state influence you in your creativity? And do you have a general tendency to feel this emotion?

These are essential questions for understanding the connection between emotions and creativity. Organizations in need for creative employees are interested in finding answers to them. Because if it holds true that certain emotions make us more inventive, then companies would certainly be eager to have their employees experience them. They could then foster an organizational climate prone to such beneficial emotions. Accordingly, there is need to for more insights on the emotional conditions under which employees tend to be particularly innovative.

Most research on this topic has answered by pointing towards positive emotions. Positive affectivity, positive psychological states, and positive moods are believed to stimulate creativity and innovativeness. The practical implications become obvious when you take a look at modern organizations in creative industries. Google, Facebook, and other Silicon Valley companies have tried to set up workplaces that establish fun and happiness at work. Similarly, followers of the positive psychology movement have stressed the positive effects of happiness at work and condemned negative emotions.

Positivity has been praised all around. Only few and more recent studies build notable exceptions to this view and show the advantageous effects of negative emotions. Some of my research work at the EDHEC Family Business Center[1] questions the generally pessimistic view most research has drawn of negative emotions. In five studies, the purpose was to learn more of what some specific negative feelings can do with us. The effects of the so-called self-conscious emotions were examined, such as guilt, shame, embarrassment. Different from basic emotions (anger, disgust, fear, happiness, sadness, and surprise), self-conscious emotions relate to our sense of self and our conscious of others’ reactions to our behavior. They are ‘social’ emotions and particularly interesting as they come to existence only relatively late in the development during our childhood. Their emergence differs across cultural settings.

The research project focused on the feelings of guilt and shame, which both are recognized as dysphoric, negative emotions following a failure to fulfill expectations. In a first step of the work, the study participants were asked to tell when they have felt guilty or ashamed. We then measured by means of psychological surveys participants’ likelihood to experience guilt and shame in their daily lives, i.e. whether they are guilt-prone or shame-prone. As a next step, the participants completed several creative tasks, such as drawing pictures or coming up with new ideas in creativity exercises. The outcomes of the study revealed surprising effects of the negative emotions. Different from what most people would think, guilt-prone people displayed significantly high levels of creativity, while shame-prone people were much less creative. In other words, those who easily feel guilty in daily life were much more innovative in their behavior than others. And those who felt easily ashamed did perform poorly in creative tasks. The study was replicated by observing people’s creativity after they were in guilt- and shameful situations. The findings remained relatively stable across a total of five studies. Shame decreased while guilt increased innovativeness.

How can we benefit from these insights?

While this stream of research is still in progress, there are already some preliminary conclusions to be drawn. The implications from the effects of different self-conscious emotions may be of interest to managers in organizations. For example, if recruitment officers found ways to become aware of candidates’ guilt- and shame-proneness, hiring efforts could be better directed when screening for innovative workforce. Also, managers might strive to establish an organizational climate of guilt-proneness rather than shame-proneness. This seems particularly relevant for family businesses where the owning family has strong influence on the organizational culture and climate. This type of organization is known for their elevated level of complexity due to the emotional flows between the family and the business. Accordingly, a family culture coined by guilt-proneness might benefit the business side as well. For example, the Swiss Firmenich International SA, the largest privately held manufacturer of flavors and fragrances, has established a culture of avoiding blaming for shame. Instead they encourage guilt-type of behaviors. This includes making up for failures by continued experimentation, which would be in line with its family founder. Nowadays the creativity of Firmenich is well recognized and received industry accolades by winning the most prestigious awards on innovativeness (Perfume Extraordinaire of the Year, Fragrance Hall of Fame, etc.).

Leaders, who would like to use guilt as a constructive form of reaction to failure, are recommended to implement certain practices (e.g. autonomy, outcome interdependence, etc.) that in turn create an environment where employees are more likely to react with guilt responses rather than shame responses. For example, we can argue that by giving employees a very specific feedback to failures, they are more likely to experience feelings of guilt than shame. Yet “managing” emotions and especially intentionally inducing negative emotions whether in employees or in family business members may be not only challenging, but should also be discussed from an ethical perspective.

Lastly, also educators, professors, parents, and all the other people who exert influence on the socialization and development of young people’s self-conscious emotions should be interested in these findings. By educating (and potentially conditioning) children, such as the next generation members of family businesses, to take personal failures rather as a wrong-doing than as a wrong-being, they can prevent them from falling into the shame-trap. With the suitable emotional tendencies their creativity might be boosted.

We all make mistakes. But when we react to these shortcomings with guilt rather than with shame we remain more creative and innovative in the long run.

 


[1] Research conducted and led by Fabian Bernhard within the EDHEC Family Business Center.

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Take a moment and try to remember the last time you had an exceptional idea. How did you feel in that very moment, just before the spark of creativity hit you? Did this emotional state influence you in your creativity? And do you have a general tendency to feel this emotion?

These are essential questions for understanding the connection between emotions and creativity. Organizations in need for creative employees are interested in finding answers to them. Because if it holds true that certain emotions make us more inventive, then companies would certainly be eager to have their employees experience them. They could then foster an organizational climate prone to such beneficial emotions. Accordingly, there is need to for more insights on the emotional conditions under which employees tend to be particularly innovative.

Most research on this topic has answered by pointing towards positive emotions. Positive affectivity, positive psychological states, and positive moods are believed to stimulate creativity and innovativeness. The practical implications become obvious when you take a look at modern organizations in creative industries. Google, Facebook, and other Silicon Valley companies have tried to set up workplaces that establish fun and happiness at work. Similarly, followers of the positive psychology movement have stressed the positive effects of happiness at work and condemned negative emotions.

Positivity has been praised all around. Only few and more recent studies build notable exceptions to this view and show the advantageous effects of negative emotions. Some of my research work at the EDHEC Family Business Center[1] questions the generally pessimistic view most research has drawn of negative emotions. In five studies, the purpose was to learn more of what some specific negative feelings can do with us. The effects of the so-called self-conscious emotions were examined, such as guilt, shame, embarrassment. Different from basic emotions (anger, disgust, fear, happiness, sadness, and surprise), self-conscious emotions relate to our sense of self and our conscious of others’ reactions to our behavior. They are ‘social’ emotions and particularly interesting as they come to existence only relatively late in the development during our childhood. Their emergence differs across cultural settings.

The research project focused on the feelings of guilt and shame, which both are recognized as dysphoric, negative emotions following a failure to fulfill expectations. In a first step of the work, the study participants were asked to tell when they have felt guilty or ashamed. We then measured by means of psychological surveys participants’ likelihood to experience guilt and shame in their daily lives, i.e. whether they are guilt-prone or shame-prone. As a next step, the participants completed several creative tasks, such as drawing pictures or coming up with new ideas in creativity exercises. The outcomes of the study revealed surprising effects of the negative emotions. Different from what most people would think, guilt-prone people displayed significantly high levels of creativity, while shame-prone people were much less creative. In other words, those who easily feel guilty in daily life were much more innovative in their behavior than others. And those who felt easily ashamed did perform poorly in creative tasks. The study was replicated by observing people’s creativity after they were in guilt- and shameful situations. The findings remained relatively stable across a total of five studies. Shame decreased while guilt increased innovativeness.

How can we benefit from these insights?

While this stream of research is still in progress, there are already some preliminary conclusions to be drawn. The implications from the effects of different self-conscious emotions may be of interest to managers in organizations. For example, if recruitment officers found ways to become aware of candidates’ guilt- and shame-proneness, hiring efforts could be better directed when screening for innovative workforce. Also, managers might strive to establish an organizational climate of guilt-proneness rather than shame-proneness. This seems particularly relevant for family businesses where the owning family has strong influence on the organizational culture and climate. This type of organization is known for their elevated level of complexity due to the emotional flows between the family and the business. Accordingly, a family culture coined by guilt-proneness might benefit the business side as well. For example, the Swiss Firmenich International SA, the largest privately held manufacturer of flavors and fragrances, has established a culture of avoiding blaming for shame. Instead they encourage guilt-type of behaviors. This includes making up for failures by continued experimentation, which would be in line with its family founder. Nowadays the creativity of Firmenich is well recognized and received industry accolades by winning the most prestigious awards on innovativeness (Perfume Extraordinaire of the Year, Fragrance Hall of Fame, etc.).

Leaders, who would like to use guilt as a constructive form of reaction to failure, are recommended to implement certain practices (e.g. autonomy, outcome interdependence, etc.) that in turn create an environment where employees are more likely to react with guilt responses rather than shame responses. For example, we can argue that by giving employees a very specific feedback to failures, they are more likely to experience feelings of guilt than shame. Yet “managing” emotions and especially intentionally inducing negative emotions whether in employees or in family business members may be not only challenging, but should also be discussed from an ethical perspective.

Lastly, also educators, professors, parents, and all the other people who exert influence on the socialization and development of young people’s self-conscious emotions should be interested in these findings. By educating (and potentially conditioning) children, such as the next generation members of family businesses, to take personal failures rather as a wrong-doing than as a wrong-being, they can prevent them from falling into the shame-trap. With the suitable emotional tendencies their creativity might be boosted.

We all make mistakes. But when we react to these shortcomings with guilt rather than with shame we remain more creative and innovative in the long run.

 


[1] Research conducted and led by Fabian Bernhard within the EDHEC Family Business Center.

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Fabian Bernhard
Associate Professor, Family Business & Organizational Behaviour , Family Business Center, EDHEC Business School

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Take a moment and try to remember the last time you had an exceptional idea. How did you feel in that very moment, just before the spark of creativity hit you? Did this emotional state influence you in your creativity? And do you have a general tendency to feel this emotion?

These are essential questions for understanding the connection between emotions and creativity. Organizations in need for creative employees are interested in finding answers to them. Because if it holds true that certain emotions make us more inventive, then companies would certainly be eager to have their employees experience them. They could then foster an organizational climate prone to such beneficial emotions. Accordingly, there is need to for more insights on the emotional conditions under which employees tend to be particularly innovative.

Most research on this topic has answered by pointing towards positive emotions. Positive affectivity, positive psychological states, and positive moods are believed to stimulate creativity and innovativeness. The practical implications become obvious when you take a look at modern organizations in creative industries. Google, Facebook, and other Silicon Valley companies have tried to set up workplaces that establish fun and happiness at work. Similarly, followers of the positive psychology movement have stressed the positive effects of happiness at work and condemned negative emotions.

Positivity has been praised all around. Only few and more recent studies build notable exceptions to this view and show the advantageous effects of negative emotions. Some of my research work at the EDHEC Family Business Center[1] questions the generally pessimistic view most research has drawn of negative emotions. In five studies, the purpose was to learn more of what some specific negative feelings can do with us. The effects of the so-called self-conscious emotions were examined, such as guilt, shame, embarrassment. Different from basic emotions (anger, disgust, fear, happiness, sadness, and surprise), self-conscious emotions relate to our sense of self and our conscious of others’ reactions to our behavior. They are ‘social’ emotions and particularly interesting as they come to existence only relatively late in the development during our childhood. Their emergence differs across cultural settings.

The research project focused on the feelings of guilt and shame, which both are recognized as dysphoric, negative emotions following a failure to fulfill expectations. In a first step of the work, the study participants were asked to tell when they have felt guilty or ashamed. We then measured by means of psychological surveys participants’ likelihood to experience guilt and shame in their daily lives, i.e. whether they are guilt-prone or shame-prone. As a next step, the participants completed several creative tasks, such as drawing pictures or coming up with new ideas in creativity exercises. The outcomes of the study revealed surprising effects of the negative emotions. Different from what most people would think, guilt-prone people displayed significantly high levels of creativity, while shame-prone people were much less creative. In other words, those who easily feel guilty in daily life were much more innovative in their behavior than others. And those who felt easily ashamed did perform poorly in creative tasks. The study was replicated by observing people’s creativity after they were in guilt- and shameful situations. The findings remained relatively stable across a total of five studies. Shame decreased while guilt increased innovativeness.

How can we benefit from these insights?

While this stream of research is still in progress, there are already some preliminary conclusions to be drawn. The implications from the effects of different self-conscious emotions may be of interest to managers in organizations. For example, if recruitment officers found ways to become aware of candidates’ guilt- and shame-proneness, hiring efforts could be better directed when screening for innovative workforce. Also, managers might strive to establish an organizational climate of guilt-proneness rather than shame-proneness. This seems particularly relevant for family businesses where the owning family has strong influence on the organizational culture and climate. This type of organization is known for their elevated level of complexity due to the emotional flows between the family and the business. Accordingly, a family culture coined by guilt-proneness might benefit the business side as well. For example, the Swiss Firmenich International SA, the largest privately held manufacturer of flavors and fragrances, has established a culture of avoiding blaming for shame. Instead they encourage guilt-type of behaviors. This includes making up for failures by continued experimentation, which would be in line with its family founder. Nowadays the creativity of Firmenich is well recognized and received industry accolades by winning the most prestigious awards on innovativeness (Perfume Extraordinaire of the Year, Fragrance Hall of Fame, etc.).

Leaders, who would like to use guilt as a constructive form of reaction to failure, are recommended to implement certain practices (e.g. autonomy, outcome interdependence, etc.) that in turn create an environment where employees are more likely to react with guilt responses rather than shame responses. For example, we can argue that by giving employees a very specific feedback to failures, they are more likely to experience feelings of guilt than shame. Yet “managing” emotions and especially intentionally inducing negative emotions whether in employees or in family business members may be not only challenging, but should also be discussed from an ethical perspective.

Lastly, also educators, professors, parents, and all the other people who exert influence on the socialization and development of young people’s self-conscious emotions should be interested in these findings. By educating (and potentially conditioning) children, such as the next generation members of family businesses, to take personal failures rather as a wrong-doing than as a wrong-being, they can prevent them from falling into the shame-trap. With the suitable emotional tendencies their creativity might be boosted.

We all make mistakes. But when we react to these shortcomings with guilt rather than with shame we remain more creative and innovative in the long run.

 


[1] Research conducted and led by Fabian Bernhard within the EDHEC Family Business Center.

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Take a moment and try to remember the last time you had an exceptional idea. How did you feel in that very moment, just before the spark of creativity hit you? Did this emotional state influence you in your creativity? And do you have a general tendency to feel this emotion?

These are essential questions for understanding the connection between emotions and creativity. Organizations in need for creative employees are interested in finding answers to them. Because if it holds true that certain emotions make us more inventive, then companies would certainly be eager to have their employees experience them. They could then foster an organizational climate prone to such beneficial emotions. Accordingly, there is need to for more insights on the emotional conditions under which employees tend to be particularly innovative.

Most research on this topic has answered by pointing towards positive emotions. Positive affectivity, positive psychological states, and positive moods are believed to stimulate creativity and innovativeness. The practical implications become obvious when you take a look at modern organizations in creative industries. Google, Facebook, and other Silicon Valley companies have tried to set up workplaces that establish fun and happiness at work. Similarly, followers of the positive psychology movement have stressed the positive effects of happiness at work and condemned negative emotions.

Positivity has been praised all around. Only few and more recent studies build notable exceptions to this view and show the advantageous effects of negative emotions. Some of my research work at the EDHEC Family Business Center[1] questions the generally pessimistic view most research has drawn of negative emotions. In five studies, the purpose was to learn more of what some specific negative feelings can do with us. The effects of the so-called self-conscious emotions were examined, such as guilt, shame, embarrassment. Different from basic emotions (anger, disgust, fear, happiness, sadness, and surprise), self-conscious emotions relate to our sense of self and our conscious of others’ reactions to our behavior. They are ‘social’ emotions and particularly interesting as they come to existence only relatively late in the development during our childhood. Their emergence differs across cultural settings.

The research project focused on the feelings of guilt and shame, which both are recognized as dysphoric, negative emotions following a failure to fulfill expectations. In a first step of the work, the study participants were asked to tell when they have felt guilty or ashamed. We then measured by means of psychological surveys participants’ likelihood to experience guilt and shame in their daily lives, i.e. whether they are guilt-prone or shame-prone. As a next step, the participants completed several creative tasks, such as drawing pictures or coming up with new ideas in creativity exercises. The outcomes of the study revealed surprising effects of the negative emotions. Different from what most people would think, guilt-prone people displayed significantly high levels of creativity, while shame-prone people were much less creative. In other words, those who easily feel guilty in daily life were much more innovative in their behavior than others. And those who felt easily ashamed did perform poorly in creative tasks. The study was replicated by observing people’s creativity after they were in guilt- and shameful situations. The findings remained relatively stable across a total of five studies. Shame decreased while guilt increased innovativeness.

How can we benefit from these insights?

While this stream of research is still in progress, there are already some preliminary conclusions to be drawn. The implications from the effects of different self-conscious emotions may be of interest to managers in organizations. For example, if recruitment officers found ways to become aware of candidates’ guilt- and shame-proneness, hiring efforts could be better directed when screening for innovative workforce. Also, managers might strive to establish an organizational climate of guilt-proneness rather than shame-proneness. This seems particularly relevant for family businesses where the owning family has strong influence on the organizational culture and climate. This type of organization is known for their elevated level of complexity due to the emotional flows between the family and the business. Accordingly, a family culture coined by guilt-proneness might benefit the business side as well. For example, the Swiss Firmenich International SA, the largest privately held manufacturer of flavors and fragrances, has established a culture of avoiding blaming for shame. Instead they encourage guilt-type of behaviors. This includes making up for failures by continued experimentation, which would be in line with its family founder. Nowadays the creativity of Firmenich is well recognized and received industry accolades by winning the most prestigious awards on innovativeness (Perfume Extraordinaire of the Year, Fragrance Hall of Fame, etc.).

Leaders, who would like to use guilt as a constructive form of reaction to failure, are recommended to implement certain practices (e.g. autonomy, outcome interdependence, etc.) that in turn create an environment where employees are more likely to react with guilt responses rather than shame responses. For example, we can argue that by giving employees a very specific feedback to failures, they are more likely to experience feelings of guilt than shame. Yet “managing” emotions and especially intentionally inducing negative emotions whether in employees or in family business members may be not only challenging, but should also be discussed from an ethical perspective.

Lastly, also educators, professors, parents, and all the other people who exert influence on the socialization and development of young people’s self-conscious emotions should be interested in these findings. By educating (and potentially conditioning) children, such as the next generation members of family businesses, to take personal failures rather as a wrong-doing than as a wrong-being, they can prevent them from falling into the shame-trap. With the suitable emotional tendencies their creativity might be boosted.

We all make mistakes. But when we react to these shortcomings with guilt rather than with shame we remain more creative and innovative in the long run.

 


[1] Research conducted and led by Fabian Bernhard within the EDHEC Family Business Center.

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Take a moment and try to remember the last time you had an exceptional idea. How did you feel in that very moment, just before the spark of creativity hit you? Did this emotional state influence you in your creativity?

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Take a moment and try to remember the last time you had an exceptional idea. How did you feel in that very moment, just before the spark of creativity hit you? Did this emotional state influence you in your creativity? And do you have a general tendency to feel this emotion?

These are essential questions for understanding the connection between emotions and creativity. Organizations in need for creative employees are interested in finding answers to them. Because if it holds true that certain emotions make us more inventive, then companies would certainly be eager to have their employees experience them. They could then foster an organizational climate prone to such beneficial emotions. Accordingly, there is need to for more insights on the emotional conditions under which employees tend to be particularly innovative.

Most research on this topic has answered by pointing towards positive emotions. Positive affectivity, positive psychological states, and positive moods are believed to stimulate creativity and innovativeness. The practical implications become obvious when you take a look at modern organizations in creative industries. Google, Facebook, and other Silicon Valley companies have tried to set up workplaces that establish fun and happiness at work. Similarly, followers of the positive psychology movement have stressed the positive effects of happiness at work and condemned negative emotions.

Positivity has been praised all around. Only few and more recent studies build notable exceptions to this view and show the advantageous effects of negative emotions. Some of my research work at the EDHEC Family Business Center[1] questions the generally pessimistic view most research has drawn of negative emotions. In five studies, the purpose was to learn more of what some specific negative feelings can do with us. The effects of the so-called self-conscious emotions were examined, such as guilt, shame, embarrassment. Different from basic emotions (anger, disgust, fear, happiness, sadness, and surprise), self-conscious emotions relate to our sense of self and our conscious of others’ reactions to our behavior. They are ‘social’ emotions and particularly interesting as they come to existence only relatively late in the development during our childhood. Their emergence differs across cultural settings.

The research project focused on the feelings of guilt and shame, which both are recognized as dysphoric, negative emotions following a failure to fulfill expectations. In a first step of the work, the study participants were asked to tell when they have felt guilty or ashamed. We then measured by means of psychological surveys participants’ likelihood to experience guilt and shame in their daily lives, i.e. whether they are guilt-prone or shame-prone. As a next step, the participants completed several creative tasks, such as drawing pictures or coming up with new ideas in creativity exercises. The outcomes of the study revealed surprising effects of the negative emotions. Different from what most people would think, guilt-prone people displayed significantly high levels of creativity, while shame-prone people were much less creative. In other words, those who easily feel guilty in daily life were much more innovative in their behavior than others. And those who felt easily ashamed did perform poorly in creative tasks. The study was replicated by observing people’s creativity after they were in guilt- and shameful situations. The findings remained relatively stable across a total of five studies. Shame decreased while guilt increased innovativeness.

How can we benefit from these insights?

While this stream of research is still in progress, there are already some preliminary conclusions to be drawn. The implications from the effects of different self-conscious emotions may be of interest to managers in organizations. For example, if recruitment officers found ways to become aware of candidates’ guilt- and shame-proneness, hiring efforts could be better directed when screening for innovative workforce. Also, managers might strive to establish an organizational climate of guilt-proneness rather than shame-proneness. This seems particularly relevant for family businesses where the owning family has strong influence on the organizational culture and climate. This type of organization is known for their elevated level of complexity due to the emotional flows between the family and the business. Accordingly, a family culture coined by guilt-proneness might benefit the business side as well. For example, the Swiss Firmenich International SA, the largest privately held manufacturer of flavors and fragrances, has established a culture of avoiding blaming for shame. Instead they encourage guilt-type of behaviors. This includes making up for failures by continued experimentation, which would be in line with its family founder. Nowadays the creativity of Firmenich is well recognized and received industry accolades by winning the most prestigious awards on innovativeness (Perfume Extraordinaire of the Year, Fragrance Hall of Fame, etc.).

Leaders, who would like to use guilt as a constructive form of reaction to failure, are recommended to implement certain practices (e.g. autonomy, outcome interdependence, etc.) that in turn create an environment where employees are more likely to react with guilt responses rather than shame responses. For example, we can argue that by giving employees a very specific feedback to failures, they are more likely to experience feelings of guilt than shame. Yet “managing” emotions and especially intentionally inducing negative emotions whether in employees or in family business members may be not only challenging, but should also be discussed from an ethical perspective.

Lastly, also educators, professors, parents, and all the other people who exert influence on the socialization and development of young people’s self-conscious emotions should be interested in these findings. By educating (and potentially conditioning) children, such as the next generation members of family businesses, to take personal failures rather as a wrong-doing than as a wrong-being, they can prevent them from falling into the shame-trap. With the suitable emotional tendencies their creativity might be boosted.

We all make mistakes. But when we react to these shortcomings with guilt rather than with shame we remain more creative and innovative in the long run.

 


[1] Research conducted and led by Fabian Bernhard within the EDHEC Family Business Center.

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Take a moment and try to remember the last time you had an exceptional idea. How did you feel in that very moment, just before the spark of creativity hit you? Did this emotional state influence you in your creativity? And do you have a general tendency to feel this emotion?

These are essential questions for understanding the connection between emotions and creativity. Organizations in need for creative employees are interested in finding answers to them. Because if it holds true that certain emotions make us more inventive, then companies would certainly be eager to have their employees experience them. They could then foster an organizational climate prone to such beneficial emotions. Accordingly, there is need to for more insights on the emotional conditions under which employees tend to be particularly innovative.

Most research on this topic has answered by pointing towards positive emotions. Positive affectivity, positive psychological states, and positive moods are believed to stimulate creativity and innovativeness. The practical implications become obvious when you take a look at modern organizations in creative industries. Google, Facebook, and other Silicon Valley companies have tried to set up workplaces that establish fun and happiness at work. Similarly, followers of the positive psychology movement have stressed the positive effects of happiness at work and condemned negative emotions.

Positivity has been praised all around. Only few and more recent studies build notable exceptions to this view and show the advantageous effects of negative emotions. Some of my research work at the EDHEC Family Business Center[1] questions the generally pessimistic view most research has drawn of negative emotions. In five studies, the purpose was to learn more of what some specific negative feelings can do with us. The effects of the so-called self-conscious emotions were examined, such as guilt, shame, embarrassment. Different from basic emotions (anger, disgust, fear, happiness, sadness, and surprise), self-conscious emotions relate to our sense of self and our conscious of others’ reactions to our behavior. They are ‘social’ emotions and particularly interesting as they come to existence only relatively late in the development during our childhood. Their emergence differs across cultural settings.

The research project focused on the feelings of guilt and shame, which both are recognized as dysphoric, negative emotions following a failure to fulfill expectations. In a first step of the work, the study participants were asked to tell when they have felt guilty or ashamed. We then measured by means of psychological surveys participants’ likelihood to experience guilt and shame in their daily lives, i.e. whether they are guilt-prone or shame-prone. As a next step, the participants completed several creative tasks, such as drawing pictures or coming up with new ideas in creativity exercises. The outcomes of the study revealed surprising effects of the negative emotions. Different from what most people would think, guilt-prone people displayed significantly high levels of creativity, while shame-prone people were much less creative. In other words, those who easily feel guilty in daily life were much more innovative in their behavior than others. And those who felt easily ashamed did perform poorly in creative tasks. The study was replicated by observing people’s creativity after they were in guilt- and shameful situations. The findings remained relatively stable across a total of five studies. Shame decreased while guilt increased innovativeness.

How can we benefit from these insights?

While this stream of research is still in progress, there are already some preliminary conclusions to be drawn. The implications from the effects of different self-conscious emotions may be of interest to managers in organizations. For example, if recruitment officers found ways to become aware of candidates’ guilt- and shame-proneness, hiring efforts could be better directed when screening for innovative workforce. Also, managers might strive to establish an organizational climate of guilt-proneness rather than shame-proneness. This seems particularly relevant for family businesses where the owning family has strong influence on the organizational culture and climate. This type of organization is known for their elevated level of complexity due to the emotional flows between the family and the business. Accordingly, a family culture coined by guilt-proneness might benefit the business side as well. For example, the Swiss Firmenich International SA, the largest privately held manufacturer of flavors and fragrances, has established a culture of avoiding blaming for shame. Instead they encourage guilt-type of behaviors. This includes making up for failures by continued experimentation, which would be in line with its family founder. Nowadays the creativity of Firmenich is well recognized and received industry accolades by winning the most prestigious awards on innovativeness (Perfume Extraordinaire of the Year, Fragrance Hall of Fame, etc.).

Leaders, who would like to use guilt as a constructive form of reaction to failure, are recommended to implement certain practices (e.g. autonomy, outcome interdependence, etc.) that in turn create an environment where employees are more likely to react with guilt responses rather than shame responses. For example, we can argue that by giving employees a very specific feedback to failures, they are more likely to experience feelings of guilt than shame. Yet “managing” emotions and especially intentionally inducing negative emotions whether in employees or in family business members may be not only challenging, but should also be discussed from an ethical perspective.

Lastly, also educators, professors, parents, and all the other people who exert influence on the socialization and development of young people’s self-conscious emotions should be interested in these findings. By educating (and potentially conditioning) children, such as the next generation members of family businesses, to take personal failures rather as a wrong-doing than as a wrong-being, they can prevent them from falling into the shame-trap. With the suitable emotional tendencies their creativity might be boosted.

We all make mistakes. But when we react to these shortcomings with guilt rather than with shame we remain more creative and innovative in the long run.

 


[1] Research conducted and led by Fabian Bernhard within the EDHEC Family Business Center.

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Fabian Bernhard
Associate Professor, Family Business & Organizational Behaviour , Family Business Center, EDHEC Business School

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Take a moment and try to remember the last time you had an exceptional idea. How did you feel in that very moment, just before the spark of creativity hit you? Did this emotional state influence you in your creativity? And do you have a general tendency to feel this emotion?

These are essential questions for understanding the connection between emotions and creativity. Organizations in need for creative employees are interested in finding answers to them. Because if it holds true that certain emotions make us more inventive, then companies would certainly be eager to have their employees experience them. They could then foster an organizational climate prone to such beneficial emotions. Accordingly, there is need to for more insights on the emotional conditions under which employees tend to be particularly innovative.

Most research on this topic has answered by pointing towards positive emotions. Positive affectivity, positive psychological states, and positive moods are believed to stimulate creativity and innovativeness. The practical implications become obvious when you take a look at modern organizations in creative industries. Google, Facebook, and other Silicon Valley companies have tried to set up workplaces that establish fun and happiness at work. Similarly, followers of the positive psychology movement have stressed the positive effects of happiness at work and condemned negative emotions.

Positivity has been praised all around. Only few and more recent studies build notable exceptions to this view and show the advantageous effects of negative emotions. Some of my research work at the EDHEC Family Business Center[1] questions the generally pessimistic view most research has drawn of negative emotions. In five studies, the purpose was to learn more of what some specific negative feelings can do with us. The effects of the so-called self-conscious emotions were examined, such as guilt, shame, embarrassment. Different from basic emotions (anger, disgust, fear, happiness, sadness, and surprise), self-conscious emotions relate to our sense of self and our conscious of others’ reactions to our behavior. They are ‘social’ emotions and particularly interesting as they come to existence only relatively late in the development during our childhood. Their emergence differs across cultural settings.

The research project focused on the feelings of guilt and shame, which both are recognized as dysphoric, negative emotions following a failure to fulfill expectations. In a first step of the work, the study participants were asked to tell when they have felt guilty or ashamed. We then measured by means of psychological surveys participants’ likelihood to experience guilt and shame in their daily lives, i.e. whether they are guilt-prone or shame-prone. As a next step, the participants completed several creative tasks, such as drawing pictures or coming up with new ideas in creativity exercises. The outcomes of the study revealed surprising effects of the negative emotions. Different from what most people would think, guilt-prone people displayed significantly high levels of creativity, while shame-prone people were much less creative. In other words, those who easily feel guilty in daily life were much more innovative in their behavior than others. And those who felt easily ashamed did perform poorly in creative tasks. The study was replicated by observing people’s creativity after they were in guilt- and shameful situations. The findings remained relatively stable across a total of five studies. Shame decreased while guilt increased innovativeness.

How can we benefit from these insights?

While this stream of research is still in progress, there are already some preliminary conclusions to be drawn. The implications from the effects of different self-conscious emotions may be of interest to managers in organizations. For example, if recruitment officers found ways to become aware of candidates’ guilt- and shame-proneness, hiring efforts could be better directed when screening for innovative workforce. Also, managers might strive to establish an organizational climate of guilt-proneness rather than shame-proneness. This seems particularly relevant for family businesses where the owning family has strong influence on the organizational culture and climate. This type of organization is known for their elevated level of complexity due to the emotional flows between the family and the business. Accordingly, a family culture coined by guilt-proneness might benefit the business side as well. For example, the Swiss Firmenich International SA, the largest privately held manufacturer of flavors and fragrances, has established a culture of avoiding blaming for shame. Instead they encourage guilt-type of behaviors. This includes making up for failures by continued experimentation, which would be in line with its family founder. Nowadays the creativity of Firmenich is well recognized and received industry accolades by winning the most prestigious awards on innovativeness (Perfume Extraordinaire of the Year, Fragrance Hall of Fame, etc.).

Leaders, who would like to use guilt as a constructive form of reaction to failure, are recommended to implement certain practices (e.g. autonomy, outcome interdependence, etc.) that in turn create an environment where employees are more likely to react with guilt responses rather than shame responses. For example, we can argue that by giving employees a very specific feedback to failures, they are more likely to experience feelings of guilt than shame. Yet “managing” emotions and especially intentionally inducing negative emotions whether in employees or in family business members may be not only challenging, but should also be discussed from an ethical perspective.

Lastly, also educators, professors, parents, and all the other people who exert influence on the socialization and development of young people’s self-conscious emotions should be interested in these findings. By educating (and potentially conditioning) children, such as the next generation members of family businesses, to take personal failures rather as a wrong-doing than as a wrong-being, they can prevent them from falling into the shame-trap. With the suitable emotional tendencies their creativity might be boosted.

We all make mistakes. But when we react to these shortcomings with guilt rather than with shame we remain more creative and innovative in the long run.

 


[1] Research conducted and led by Fabian Bernhard within the EDHEC Family Business Center.

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Take a moment and try to remember the last time you had an exceptional idea. How did you feel in that very moment, just before the spark of creativity hit you? Did this emotional state influence you in your creativity? And do you have a general tendency to feel this emotion?

These are essential questions for understanding the connection between emotions and creativity. Organizations in need for creative employees are interested in finding answers to them. Because if it holds true that certain emotions make us more inventive, then companies would certainly be eager to have their employees experience them. They could then foster an organizational climate prone to such beneficial emotions. Accordingly, there is need to for more insights on the emotional conditions under which employees tend to be particularly innovative.

Most research on this topic has answered by pointing towards positive emotions. Positive affectivity, positive psychological states, and positive moods are believed to stimulate creativity and innovativeness. The practical implications become obvious when you take a look at modern organizations in creative industries. Google, Facebook, and other Silicon Valley companies have tried to set up workplaces that establish fun and happiness at work. Similarly, followers of the positive psychology movement have stressed the positive effects of happiness at work and condemned negative emotions.

Positivity has been praised all around. Only few and more recent studies build notable exceptions to this view and show the advantageous effects of negative emotions. Some of my research work at the EDHEC Family Business Center[1] questions the generally pessimistic view most research has drawn of negative emotions. In five studies, the purpose was to learn more of what some specific negative feelings can do with us. The effects of the so-called self-conscious emotions were examined, such as guilt, shame, embarrassment. Different from basic emotions (anger, disgust, fear, happiness, sadness, and surprise), self-conscious emotions relate to our sense of self and our conscious of others’ reactions to our behavior. They are ‘social’ emotions and particularly interesting as they come to existence only relatively late in the development during our childhood. Their emergence differs across cultural settings.

The research project focused on the feelings of guilt and shame, which both are recognized as dysphoric, negative emotions following a failure to fulfill expectations. In a first step of the work, the study participants were asked to tell when they have felt guilty or ashamed. We then measured by means of psychological surveys participants’ likelihood to experience guilt and shame in their daily lives, i.e. whether they are guilt-prone or shame-prone. As a next step, the participants completed several creative tasks, such as drawing pictures or coming up with new ideas in creativity exercises. The outcomes of the study revealed surprising effects of the negative emotions. Different from what most people would think, guilt-prone people displayed significantly high levels of creativity, while shame-prone people were much less creative. In other words, those who easily feel guilty in daily life were much more innovative in their behavior than others. And those who felt easily ashamed did perform poorly in creative tasks. The study was replicated by observing people’s creativity after they were in guilt- and shameful situations. The findings remained relatively stable across a total of five studies. Shame decreased while guilt increased innovativeness.

How can we benefit from these insights?

While this stream of research is still in progress, there are already some preliminary conclusions to be drawn. The implications from the effects of different self-conscious emotions may be of interest to managers in organizations. For example, if recruitment officers found ways to become aware of candidates’ guilt- and shame-proneness, hiring efforts could be better directed when screening for innovative workforce. Also, managers might strive to establish an organizational climate of guilt-proneness rather than shame-proneness. This seems particularly relevant for family businesses where the owning family has strong influence on the organizational culture and climate. This type of organization is known for their elevated level of complexity due to the emotional flows between the family and the business. Accordingly, a family culture coined by guilt-proneness might benefit the business side as well. For example, the Swiss Firmenich International SA, the largest privately held manufacturer of flavors and fragrances, has established a culture of avoiding blaming for shame. Instead they encourage guilt-type of behaviors. This includes making up for failures by continued experimentation, which would be in line with its family founder. Nowadays the creativity of Firmenich is well recognized and received industry accolades by winning the most prestigious awards on innovativeness (Perfume Extraordinaire of the Year, Fragrance Hall of Fame, etc.).

Leaders, who would like to use guilt as a constructive form of reaction to failure, are recommended to implement certain practices (e.g. autonomy, outcome interdependence, etc.) that in turn create an environment where employees are more likely to react with guilt responses rather than shame responses. For example, we can argue that by giving employees a very specific feedback to failures, they are more likely to experience feelings of guilt than shame. Yet “managing” emotions and especially intentionally inducing negative emotions whether in employees or in family business members may be not only challenging, but should also be discussed from an ethical perspective.

Lastly, also educators, professors, parents, and all the other people who exert influence on the socialization and development of young people’s self-conscious emotions should be interested in these findings. By educating (and potentially conditioning) children, such as the next generation members of family businesses, to take personal failures rather as a wrong-doing than as a wrong-being, they can prevent them from falling into the shame-trap. With the suitable emotional tendencies their creativity might be boosted.

We all make mistakes. But when we react to these shortcomings with guilt rather than with shame we remain more creative and innovative in the long run.

 


[1] Research conducted and led by Fabian Bernhard within the EDHEC Family Business Center.

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Associate Professor, Family Business & Organizational Behaviour , Family Business Center, EDHEC Business School

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In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

A recent study [1] by the EDHEC Family Business Centre shows that the rate of intra-family business succession in France is below 20%. While the tax environment exerts a significant impact on the low rate of family succession, it represents only the tip of the iceberg. For further understanding, we need to deep-dive below the surface to explore the “Emotional Nexus” binding the business and the family. Family businesses represent a unique form of organization characterized by the emotional interaction of the family and business systems, to different extents. Researchers agree that succession is undeniably the most emotionally charged process in the lifecycle of family businesses, turning it into the most critical for the business continuity in the family’s hands.

Traditionally, understanding what processes lead to a specific human behavior has been subject to debate by thought leaders beyond the world of family businesses. The Nobel Prize winner in economics Daniel Kahneman offers an analysis of our “Thinking, Fast and Slow”, revealing that our economic decisions are not made emotionless and that our behavior is governed by two cognitive systems: fast and intuitive on one side, slow and deliberate on the other side. In a similar line of thought, the bestselling author Malcom Gladwell argues that a “Blink” (intuition) is by far more effective than a cautious decision. Added to this, the Professor of psychology and behavioral economics Dan Ariely suggests that positive and negative behavior can be “Predictably Irrational” while the award-winning business reporter Charles Duhigg observes that “The Power of Habit” can derive its sources from emotional rewards and lead to unintended consequences. Moving to the macroeconomic perspective of Gladwell’s “Tipping Point”, we learn that a small change can have unforeseen effects. In the same line, the tipping point of the professor of positivity Barbara Fredrickson’s suggests that an individual’s positive to negative emotions ratio marks the difference between human flourishing and floundering.

The family patterns are one of the key factors triggering or hindering the succession process.

Transposing those insights into family businesses makes us wonder whether the family succession behavior is a product of well-thought of steps allowing to successfully move from the dream to reality or whether the latter is simply a product of imagination or instinct.

My recent study in collaboration with FBN France’s scientific council analyzes the succession process, from the development of the intention for succession by the generation in power to its accomplishment through passing on the baton to the next generation. Building on the perceptions of the senior generation, it shows that the family patterns are one of the key factors triggering or hindering the succession process. Tracing back the family history helps understanding the current generation’s behavior in regards with succession.

According to Bowen’s Family Systems Theory, families are multigenerational units where emotionally charged patterns can be transferred across generations, some of which can be largely dysfunctional. Understanding the origins of certain patterns in the past and present is an important preliminary stage for the family to deal with existing dysfunctional behavior of succession where it might be stuck.

One example of functional patterns could be the traditional rituals shared and passed on over generations, charged with pride and respect. As such, they contribute to triggering early on the intention for succession. As an interviewed family manager puts it, “We all knew it since childhood. Our destiny is sealed in the cradle. “You will be in the family business, my Son!” That’s what my father used to tell me. That’s what I tell my children as well”.

Unspoken thoughts about succession, however, represent a typical example of dysfunctional patterns, which can be charged with frustration, disappointment, anger or envy. As such, they tend to lead to major difficulties in achieving a smooth succession in the family despite the high levels of performance and competitiveness of the business. The bankruptcy of the Steinberg family business in Canada or the loss of business control by the Italian Gucci and the American Anheuser-Busch families allow us to draw lessons on the impact of emotionally charged patterns on leading organizations in their respective industries. A quote from a family business member in our study emphasizes this phenomenon as follows: “I always dreamt to take over the family business. I used to admire my father but he never expressed his intention for succession. Still, I was convinced that I would take over. However when the time has come, he choose someone else as successor. My destiny was contradicted…”.

Connecting the research dots with the “Power of Habit” allows us to reflect on how a family habit, driven by an emotional reward, may inform the family’s self-image. Once the emotional sources of habit are acknowledged, it becomes easier for the family to consider their positive or negative potential and change the habit towards more functional outcomes if needed.

As Lao Tzu inspires us, “If you do not change direction, you may end up where you are heading”. For the change to happen, family members need to learn about their historical emotional baggage before choosing to engage in a new direction. Still, the question of the direction to opt for and the tipping point to consider is rather a challenging one.

Notwithstanding Aristotle’s arguments about “things happening due to chance or luck”, the behavioral patterns inform the business family about the proper timing and direction of change considering its tipping point. The insights of this article are in favor of taking action to break the dysfunctional patterns towards the realization of the succession dream.

[1] https://www.edhec.edu/en/publications/transmission-challenge-what-determines-family-business-transmission  

Cited References:

Ariely, D. (2008). Predictably irrational: HarperCollins New York.

Bowen, M. (1978). Family therapy in clinical practice (2004 ed.). Maryland: Rowman & Littlefield Publishers.

Duhigg, C. (2012). The power of habit: Why we do what we do in life and business, Random House.

Fredrickson, B. L., & Kurtz, L. E. (2011). Cultivating positive emotions to enhance human flourishing. Applied positive psychology: Improving everyday life, health, schools, work, and society, 35-47.

Gibbon, A., & Hadekel, P. (1990). Steinberg: The breakup of a family empire: MacMillan of Canada.

Gladwell, M. (2007). Blink: The Power of Thinking Without Thinking: Little, Brown and Company.

Gladwell, M. (2006). The tipping point: How little things can make a big difference: Little, Brown and Company.

Gucci, P. (2016). In the name of Gucci: A memoir, C. Archetype Ed.

Kahneman, D. (2011). Thinking, fast and slow: Macmillan.

Lopez De Silanez, F., Dufour, C., & Franz, P. (2016). The Transmission Challenge: What Determines Family Business Transmission?, Position Paper, EDHEC Family Business Centre.

MacIntosh, J. (2011). Dethroning the King: The hostile takeover of Anheuser-Busch: John Wiley & Sons

Mair, V. H., & Tzu, L. (2012). Tao te ching: The classic book of integrity and the way: Bantam.

Labaki, R., Michael-Tsabari, N., & Zachary, R. K. (2013). Exploring the Emotional Nexus in Cogent Family Business Archetypes. Entrepreneurship Research Journal, 3(3), 301–330.

Labaki, R., & Conseil Scientifique FBN France. (2017). La transmission intrafamiliale: De l'intention à la réalité, Rapport d’étude, FBN France Ed.

 

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In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

A recent study [1] by the EDHEC Family Business Centre shows that the rate of intra-family business succession in France is below 20%. While the tax environment exerts a significant impact on the low rate of family succession, it represents only the tip of the iceberg. For further understanding, we need to deep-dive below the surface to explore the “Emotional Nexus” binding the business and the family. Family businesses represent a unique form of organization characterized by the emotional interaction of the family and business systems, to different extents. Researchers agree that succession is undeniably the most emotionally charged process in the lifecycle of family businesses, turning it into the most critical for the business continuity in the family’s hands.

Traditionally, understanding what processes lead to a specific human behavior has been subject to debate by thought leaders beyond the world of family businesses. The Nobel Prize winner in economics Daniel Kahneman offers an analysis of our “Thinking, Fast and Slow”, revealing that our economic decisions are not made emotionless and that our behavior is governed by two cognitive systems: fast and intuitive on one side, slow and deliberate on the other side. In a similar line of thought, the bestselling author Malcom Gladwell argues that a “Blink” (intuition) is by far more effective than a cautious decision. Added to this, the Professor of psychology and behavioral economics Dan Ariely suggests that positive and negative behavior can be “Predictably Irrational” while the award-winning business reporter Charles Duhigg observes that “The Power of Habit” can derive its sources from emotional rewards and lead to unintended consequences. Moving to the macroeconomic perspective of Gladwell’s “Tipping Point”, we learn that a small change can have unforeseen effects. In the same line, the tipping point of the professor of positivity Barbara Fredrickson’s suggests that an individual’s positive to negative emotions ratio marks the difference between human flourishing and floundering.

The family patterns are one of the key factors triggering or hindering the succession process.

Transposing those insights into family businesses makes us wonder whether the family succession behavior is a product of well-thought of steps allowing to successfully move from the dream to reality or whether the latter is simply a product of imagination or instinct.

My recent study in collaboration with FBN France’s scientific council analyzes the succession process, from the development of the intention for succession by the generation in power to its accomplishment through passing on the baton to the next generation. Building on the perceptions of the senior generation, it shows that the family patterns are one of the key factors triggering or hindering the succession process. Tracing back the family history helps understanding the current generation’s behavior in regards with succession.

According to Bowen’s Family Systems Theory, families are multigenerational units where emotionally charged patterns can be transferred across generations, some of which can be largely dysfunctional. Understanding the origins of certain patterns in the past and present is an important preliminary stage for the family to deal with existing dysfunctional behavior of succession where it might be stuck.

One example of functional patterns could be the traditional rituals shared and passed on over generations, charged with pride and respect. As such, they contribute to triggering early on the intention for succession. As an interviewed family manager puts it, “We all knew it since childhood. Our destiny is sealed in the cradle. “You will be in the family business, my Son!” That’s what my father used to tell me. That’s what I tell my children as well”.

Unspoken thoughts about succession, however, represent a typical example of dysfunctional patterns, which can be charged with frustration, disappointment, anger or envy. As such, they tend to lead to major difficulties in achieving a smooth succession in the family despite the high levels of performance and competitiveness of the business. The bankruptcy of the Steinberg family business in Canada or the loss of business control by the Italian Gucci and the American Anheuser-Busch families allow us to draw lessons on the impact of emotionally charged patterns on leading organizations in their respective industries. A quote from a family business member in our study emphasizes this phenomenon as follows: “I always dreamt to take over the family business. I used to admire my father but he never expressed his intention for succession. Still, I was convinced that I would take over. However when the time has come, he choose someone else as successor. My destiny was contradicted…”.

Connecting the research dots with the “Power of Habit” allows us to reflect on how a family habit, driven by an emotional reward, may inform the family’s self-image. Once the emotional sources of habit are acknowledged, it becomes easier for the family to consider their positive or negative potential and change the habit towards more functional outcomes if needed.

As Lao Tzu inspires us, “If you do not change direction, you may end up where you are heading”. For the change to happen, family members need to learn about their historical emotional baggage before choosing to engage in a new direction. Still, the question of the direction to opt for and the tipping point to consider is rather a challenging one.

Notwithstanding Aristotle’s arguments about “things happening due to chance or luck”, the behavioral patterns inform the business family about the proper timing and direction of change considering its tipping point. The insights of this article are in favor of taking action to break the dysfunctional patterns towards the realization of the succession dream.

[1] https://www.edhec.edu/en/publications/transmission-challenge-what-determines-family-business-transmission  

Cited References:

Ariely, D. (2008). Predictably irrational: HarperCollins New York.

Bowen, M. (1978). Family therapy in clinical practice (2004 ed.). Maryland: Rowman & Littlefield Publishers.

Duhigg, C. (2012). The power of habit: Why we do what we do in life and business, Random House.

Fredrickson, B. L., & Kurtz, L. E. (2011). Cultivating positive emotions to enhance human flourishing. Applied positive psychology: Improving everyday life, health, schools, work, and society, 35-47.

Gibbon, A., & Hadekel, P. (1990). Steinberg: The breakup of a family empire: MacMillan of Canada.

Gladwell, M. (2007). Blink: The Power of Thinking Without Thinking: Little, Brown and Company.

Gladwell, M. (2006). The tipping point: How little things can make a big difference: Little, Brown and Company.

Gucci, P. (2016). In the name of Gucci: A memoir, C. Archetype Ed.

Kahneman, D. (2011). Thinking, fast and slow: Macmillan.

Lopez De Silanez, F., Dufour, C., & Franz, P. (2016). The Transmission Challenge: What Determines Family Business Transmission?, Position Paper, EDHEC Family Business Centre.

MacIntosh, J. (2011). Dethroning the King: The hostile takeover of Anheuser-Busch: John Wiley & Sons

Mair, V. H., & Tzu, L. (2012). Tao te ching: The classic book of integrity and the way: Bantam.

Labaki, R., Michael-Tsabari, N., & Zachary, R. K. (2013). Exploring the Emotional Nexus in Cogent Family Business Archetypes. Entrepreneurship Research Journal, 3(3), 301–330.

Labaki, R., & Conseil Scientifique FBN France. (2017). La transmission intrafamiliale: De l'intention à la réalité, Rapport d’étude, FBN France Ed.

 

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Rania Labaki
Associate Professor and Director of Family Business Center, EDHEC Business School

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In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

A recent study [1] by the EDHEC Family Business Centre shows that the rate of intra-family business succession in France is below 20%. While the tax environment exerts a significant impact on the low rate of family succession, it represents only the tip of the iceberg. For further understanding, we need to deep-dive below the surface to explore the “Emotional Nexus” binding the business and the family. Family businesses represent a unique form of organization characterized by the emotional interaction of the family and business systems, to different extents. Researchers agree that succession is undeniably the most emotionally charged process in the lifecycle of family businesses, turning it into the most critical for the business continuity in the family’s hands.

Traditionally, understanding what processes lead to a specific human behavior has been subject to debate by thought leaders beyond the world of family businesses. The Nobel Prize winner in economics Daniel Kahneman offers an analysis of our “Thinking, Fast and Slow”, revealing that our economic decisions are not made emotionless and that our behavior is governed by two cognitive systems: fast and intuitive on one side, slow and deliberate on the other side. In a similar line of thought, the bestselling author Malcom Gladwell argues that a “Blink” (intuition) is by far more effective than a cautious decision. Added to this, the Professor of psychology and behavioral economics Dan Ariely suggests that positive and negative behavior can be “Predictably Irrational” while the award-winning business reporter Charles Duhigg observes that “The Power of Habit” can derive its sources from emotional rewards and lead to unintended consequences. Moving to the macroeconomic perspective of Gladwell’s “Tipping Point”, we learn that a small change can have unforeseen effects. In the same line, the tipping point of the professor of positivity Barbara Fredrickson’s suggests that an individual’s positive to negative emotions ratio marks the difference between human flourishing and floundering.

The family patterns are one of the key factors triggering or hindering the succession process.

Transposing those insights into family businesses makes us wonder whether the family succession behavior is a product of well-thought of steps allowing to successfully move from the dream to reality or whether the latter is simply a product of imagination or instinct.

My recent study in collaboration with FBN France’s scientific council analyzes the succession process, from the development of the intention for succession by the generation in power to its accomplishment through passing on the baton to the next generation. Building on the perceptions of the senior generation, it shows that the family patterns are one of the key factors triggering or hindering the succession process. Tracing back the family history helps understanding the current generation’s behavior in regards with succession.

According to Bowen’s Family Systems Theory, families are multigenerational units where emotionally charged patterns can be transferred across generations, some of which can be largely dysfunctional. Understanding the origins of certain patterns in the past and present is an important preliminary stage for the family to deal with existing dysfunctional behavior of succession where it might be stuck.

One example of functional patterns could be the traditional rituals shared and passed on over generations, charged with pride and respect. As such, they contribute to triggering early on the intention for succession. As an interviewed family manager puts it, “We all knew it since childhood. Our destiny is sealed in the cradle. “You will be in the family business, my Son!” That’s what my father used to tell me. That’s what I tell my children as well”.

Unspoken thoughts about succession, however, represent a typical example of dysfunctional patterns, which can be charged with frustration, disappointment, anger or envy. As such, they tend to lead to major difficulties in achieving a smooth succession in the family despite the high levels of performance and competitiveness of the business. The bankruptcy of the Steinberg family business in Canada or the loss of business control by the Italian Gucci and the American Anheuser-Busch families allow us to draw lessons on the impact of emotionally charged patterns on leading organizations in their respective industries. A quote from a family business member in our study emphasizes this phenomenon as follows: “I always dreamt to take over the family business. I used to admire my father but he never expressed his intention for succession. Still, I was convinced that I would take over. However when the time has come, he choose someone else as successor. My destiny was contradicted…”.

Connecting the research dots with the “Power of Habit” allows us to reflect on how a family habit, driven by an emotional reward, may inform the family’s self-image. Once the emotional sources of habit are acknowledged, it becomes easier for the family to consider their positive or negative potential and change the habit towards more functional outcomes if needed.

As Lao Tzu inspires us, “If you do not change direction, you may end up where you are heading”. For the change to happen, family members need to learn about their historical emotional baggage before choosing to engage in a new direction. Still, the question of the direction to opt for and the tipping point to consider is rather a challenging one.

Notwithstanding Aristotle’s arguments about “things happening due to chance or luck”, the behavioral patterns inform the business family about the proper timing and direction of change considering its tipping point. The insights of this article are in favor of taking action to break the dysfunctional patterns towards the realization of the succession dream.

[1] https://www.edhec.edu/en/publications/transmission-challenge-what-determines-family-business-transmission  

Cited References:

Ariely, D. (2008). Predictably irrational: HarperCollins New York.

Bowen, M. (1978). Family therapy in clinical practice (2004 ed.). Maryland: Rowman & Littlefield Publishers.

Duhigg, C. (2012). The power of habit: Why we do what we do in life and business, Random House.

Fredrickson, B. L., & Kurtz, L. E. (2011). Cultivating positive emotions to enhance human flourishing. Applied positive psychology: Improving everyday life, health, schools, work, and society, 35-47.

Gibbon, A., & Hadekel, P. (1990). Steinberg: The breakup of a family empire: MacMillan of Canada.

Gladwell, M. (2007). Blink: The Power of Thinking Without Thinking: Little, Brown and Company.

Gladwell, M. (2006). The tipping point: How little things can make a big difference: Little, Brown and Company.

Gucci, P. (2016). In the name of Gucci: A memoir, C. Archetype Ed.

Kahneman, D. (2011). Thinking, fast and slow: Macmillan.

Lopez De Silanez, F., Dufour, C., & Franz, P. (2016). The Transmission Challenge: What Determines Family Business Transmission?, Position Paper, EDHEC Family Business Centre.

MacIntosh, J. (2011). Dethroning the King: The hostile takeover of Anheuser-Busch: John Wiley & Sons

Mair, V. H., & Tzu, L. (2012). Tao te ching: The classic book of integrity and the way: Bantam.

Labaki, R., Michael-Tsabari, N., & Zachary, R. K. (2013). Exploring the Emotional Nexus in Cogent Family Business Archetypes. Entrepreneurship Research Journal, 3(3), 301–330.

Labaki, R., & Conseil Scientifique FBN France. (2017). La transmission intrafamiliale: De l'intention à la réalité, Rapport d’étude, FBN France Ed.

 

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“In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

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In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

A recent study [1] by the EDHEC Family Business Centre shows that the rate of intra-family business succession in France is below 20%. While the tax environment exerts a significant impact on the low rate of family succession, it represents only the tip of the iceberg. For further understanding, we need to deep-dive below the surface to explore the “Emotional Nexus” binding the business and the family. Family businesses represent a unique form of organization characterized by the emotional interaction of the family and business systems, to different extents. Researchers agree that succession is undeniably the most emotionally charged process in the lifecycle of family businesses, turning it into the most critical for the business continuity in the family’s hands.

Traditionally, understanding what processes lead to a specific human behavior has been subject to debate by thought leaders beyond the world of family businesses. The Nobel Prize winner in economics Daniel Kahneman offers an analysis of our “Thinking, Fast and Slow”, revealing that our economic decisions are not made emotionless and that our behavior is governed by two cognitive systems: fast and intuitive on one side, slow and deliberate on the other side. In a similar line of thought, the bestselling author Malcom Gladwell argues that a “Blink” (intuition) is by far more effective than a cautious decision. Added to this, the Professor of psychology and behavioral economics Dan Ariely suggests that positive and negative behavior can be “Predictably Irrational” while the award-winning business reporter Charles Duhigg observes that “The Power of Habit” can derive its sources from emotional rewards and lead to unintended consequences. Moving to the macroeconomic perspective of Gladwell’s “Tipping Point”, we learn that a small change can have unforeseen effects. In the same line, the tipping point of the professor of positivity Barbara Fredrickson’s suggests that an individual’s positive to negative emotions ratio marks the difference between human flourishing and floundering.

The family patterns are one of the key factors triggering or hindering the succession process.

Transposing those insights into family businesses makes us wonder whether the family succession behavior is a product of well-thought of steps allowing to successfully move from the dream to reality or whether the latter is simply a product of imagination or instinct.

My recent study in collaboration with FBN France’s scientific council analyzes the succession process, from the development of the intention for succession by the generation in power to its accomplishment through passing on the baton to the next generation. Building on the perceptions of the senior generation, it shows that the family patterns are one of the key factors triggering or hindering the succession process. Tracing back the family history helps understanding the current generation’s behavior in regards with succession.

According to Bowen’s Family Systems Theory, families are multigenerational units where emotionally charged patterns can be transferred across generations, some of which can be largely dysfunctional. Understanding the origins of certain patterns in the past and present is an important preliminary stage for the family to deal with existing dysfunctional behavior of succession where it might be stuck.

One example of functional patterns could be the traditional rituals shared and passed on over generations, charged with pride and respect. As such, they contribute to triggering early on the intention for succession. As an interviewed family manager puts it, “We all knew it since childhood. Our destiny is sealed in the cradle. “You will be in the family business, my Son!” That’s what my father used to tell me. That’s what I tell my children as well”.

Unspoken thoughts about succession, however, represent a typical example of dysfunctional patterns, which can be charged with frustration, disappointment, anger or envy. As such, they tend to lead to major difficulties in achieving a smooth succession in the family despite the high levels of performance and competitiveness of the business. The bankruptcy of the Steinberg family business in Canada or the loss of business control by the Italian Gucci and the American Anheuser-Busch families allow us to draw lessons on the impact of emotionally charged patterns on leading organizations in their respective industries. A quote from a family business member in our study emphasizes this phenomenon as follows: “I always dreamt to take over the family business. I used to admire my father but he never expressed his intention for succession. Still, I was convinced that I would take over. However when the time has come, he choose someone else as successor. My destiny was contradicted…”.

Connecting the research dots with the “Power of Habit” allows us to reflect on how a family habit, driven by an emotional reward, may inform the family’s self-image. Once the emotional sources of habit are acknowledged, it becomes easier for the family to consider their positive or negative potential and change the habit towards more functional outcomes if needed.

As Lao Tzu inspires us, “If you do not change direction, you may end up where you are heading”. For the change to happen, family members need to learn about their historical emotional baggage before choosing to engage in a new direction. Still, the question of the direction to opt for and the tipping point to consider is rather a challenging one.

Notwithstanding Aristotle’s arguments about “things happening due to chance or luck”, the behavioral patterns inform the business family about the proper timing and direction of change considering its tipping point. The insights of this article are in favor of taking action to break the dysfunctional patterns towards the realization of the succession dream.

[1] https://www.edhec.edu/en/publications/transmission-challenge-what-determines-family-business-transmission  

Cited References:

Ariely, D. (2008). Predictably irrational: HarperCollins New York.

Bowen, M. (1978). Family therapy in clinical practice (2004 ed.). Maryland: Rowman & Littlefield Publishers.

Duhigg, C. (2012). The power of habit: Why we do what we do in life and business, Random House.

Fredrickson, B. L., & Kurtz, L. E. (2011). Cultivating positive emotions to enhance human flourishing. Applied positive psychology: Improving everyday life, health, schools, work, and society, 35-47.

Gibbon, A., & Hadekel, P. (1990). Steinberg: The breakup of a family empire: MacMillan of Canada.

Gladwell, M. (2007). Blink: The Power of Thinking Without Thinking: Little, Brown and Company.

Gladwell, M. (2006). The tipping point: How little things can make a big difference: Little, Brown and Company.

Gucci, P. (2016). In the name of Gucci: A memoir, C. Archetype Ed.

Kahneman, D. (2011). Thinking, fast and slow: Macmillan.

Lopez De Silanez, F., Dufour, C., & Franz, P. (2016). The Transmission Challenge: What Determines Family Business Transmission?, Position Paper, EDHEC Family Business Centre.

MacIntosh, J. (2011). Dethroning the King: The hostile takeover of Anheuser-Busch: John Wiley & Sons

Mair, V. H., & Tzu, L. (2012). Tao te ching: The classic book of integrity and the way: Bantam.

Labaki, R., Michael-Tsabari, N., & Zachary, R. K. (2013). Exploring the Emotional Nexus in Cogent Family Business Archetypes. Entrepreneurship Research Journal, 3(3), 301–330.

Labaki, R., & Conseil Scientifique FBN France. (2017). La transmission intrafamiliale: De l'intention à la réalité, Rapport d’étude, FBN France Ed.

 

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In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

A recent study [1] by the EDHEC Family Business Centre shows that the rate of intra-family business succession in France is below 20%. While the tax environment exerts a significant impact on the low rate of family succession, it represents only the tip of the iceberg. For further understanding, we need to deep-dive below the surface to explore the “Emotional Nexus” binding the business and the family. Family businesses represent a unique form of organization characterized by the emotional interaction of the family and business systems, to different extents. Researchers agree that succession is undeniably the most emotionally charged process in the lifecycle of family businesses, turning it into the most critical for the business continuity in the family’s hands.

Traditionally, understanding what processes lead to a specific human behavior has been subject to debate by thought leaders beyond the world of family businesses. The Nobel Prize winner in economics Daniel Kahneman offers an analysis of our “Thinking, Fast and Slow”, revealing that our economic decisions are not made emotionless and that our behavior is governed by two cognitive systems: fast and intuitive on one side, slow and deliberate on the other side. In a similar line of thought, the bestselling author Malcom Gladwell argues that a “Blink” (intuition) is by far more effective than a cautious decision. Added to this, the Professor of psychology and behavioral economics Dan Ariely suggests that positive and negative behavior can be “Predictably Irrational” while the award-winning business reporter Charles Duhigg observes that “The Power of Habit” can derive its sources from emotional rewards and lead to unintended consequences. Moving to the macroeconomic perspective of Gladwell’s “Tipping Point”, we learn that a small change can have unforeseen effects. In the same line, the tipping point of the professor of positivity Barbara Fredrickson’s suggests that an individual’s positive to negative emotions ratio marks the difference between human flourishing and floundering.

The family patterns are one of the key factors triggering or hindering the succession process.

Transposing those insights into family businesses makes us wonder whether the family succession behavior is a product of well-thought of steps allowing to successfully move from the dream to reality or whether the latter is simply a product of imagination or instinct.

My recent study in collaboration with FBN France’s scientific council analyzes the succession process, from the development of the intention for succession by the generation in power to its accomplishment through passing on the baton to the next generation. Building on the perceptions of the senior generation, it shows that the family patterns are one of the key factors triggering or hindering the succession process. Tracing back the family history helps understanding the current generation’s behavior in regards with succession.

According to Bowen’s Family Systems Theory, families are multigenerational units where emotionally charged patterns can be transferred across generations, some of which can be largely dysfunctional. Understanding the origins of certain patterns in the past and present is an important preliminary stage for the family to deal with existing dysfunctional behavior of succession where it might be stuck.

One example of functional patterns could be the traditional rituals shared and passed on over generations, charged with pride and respect. As such, they contribute to triggering early on the intention for succession. As an interviewed family manager puts it, “We all knew it since childhood. Our destiny is sealed in the cradle. “You will be in the family business, my Son!” That’s what my father used to tell me. That’s what I tell my children as well”.

Unspoken thoughts about succession, however, represent a typical example of dysfunctional patterns, which can be charged with frustration, disappointment, anger or envy. As such, they tend to lead to major difficulties in achieving a smooth succession in the family despite the high levels of performance and competitiveness of the business. The bankruptcy of the Steinberg family business in Canada or the loss of business control by the Italian Gucci and the American Anheuser-Busch families allow us to draw lessons on the impact of emotionally charged patterns on leading organizations in their respective industries. A quote from a family business member in our study emphasizes this phenomenon as follows: “I always dreamt to take over the family business. I used to admire my father but he never expressed his intention for succession. Still, I was convinced that I would take over. However when the time has come, he choose someone else as successor. My destiny was contradicted…”.

Connecting the research dots with the “Power of Habit” allows us to reflect on how a family habit, driven by an emotional reward, may inform the family’s self-image. Once the emotional sources of habit are acknowledged, it becomes easier for the family to consider their positive or negative potential and change the habit towards more functional outcomes if needed.

As Lao Tzu inspires us, “If you do not change direction, you may end up where you are heading”. For the change to happen, family members need to learn about their historical emotional baggage before choosing to engage in a new direction. Still, the question of the direction to opt for and the tipping point to consider is rather a challenging one.

Notwithstanding Aristotle’s arguments about “things happening due to chance or luck”, the behavioral patterns inform the business family about the proper timing and direction of change considering its tipping point. The insights of this article are in favor of taking action to break the dysfunctional patterns towards the realization of the succession dream.

[1] https://www.edhec.edu/en/publications/transmission-challenge-what-determines-family-business-transmission  

Cited References:

Ariely, D. (2008). Predictably irrational: HarperCollins New York.

Bowen, M. (1978). Family therapy in clinical practice (2004 ed.). Maryland: Rowman & Littlefield Publishers.

Duhigg, C. (2012). The power of habit: Why we do what we do in life and business, Random House.

Fredrickson, B. L., & Kurtz, L. E. (2011). Cultivating positive emotions to enhance human flourishing. Applied positive psychology: Improving everyday life, health, schools, work, and society, 35-47.

Gibbon, A., & Hadekel, P. (1990). Steinberg: The breakup of a family empire: MacMillan of Canada.

Gladwell, M. (2007). Blink: The Power of Thinking Without Thinking: Little, Brown and Company.

Gladwell, M. (2006). The tipping point: How little things can make a big difference: Little, Brown and Company.

Gucci, P. (2016). In the name of Gucci: A memoir, C. Archetype Ed.

Kahneman, D. (2011). Thinking, fast and slow: Macmillan.

Lopez De Silanez, F., Dufour, C., & Franz, P. (2016). The Transmission Challenge: What Determines Family Business Transmission?, Position Paper, EDHEC Family Business Centre.

MacIntosh, J. (2011). Dethroning the King: The hostile takeover of Anheuser-Busch: John Wiley & Sons

Mair, V. H., & Tzu, L. (2012). Tao te ching: The classic book of integrity and the way: Bantam.

Labaki, R., Michael-Tsabari, N., & Zachary, R. K. (2013). Exploring the Emotional Nexus in Cogent Family Business Archetypes. Entrepreneurship Research Journal, 3(3), 301–330.

Labaki, R., & Conseil Scientifique FBN France. (2017). La transmission intrafamiliale: De l'intention à la réalité, Rapport d’étude, FBN France Ed.

 

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“In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

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In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

A recent study [1] by the EDHEC Family Business Centre shows that the rate of intra-family business succession in France is below 20%. While the tax environment exerts a significant impact on the low rate of family succession, it represents only the tip of the iceberg. For further understanding, we need to deep-dive below the surface to explore the “Emotional Nexus” binding the business and the family. Family businesses represent a unique form of organization characterized by the emotional interaction of the family and business systems, to different extents. Researchers agree that succession is undeniably the most emotionally charged process in the lifecycle of family businesses, turning it into the most critical for the business continuity in the family’s hands.

Traditionally, understanding what processes lead to a specific human behavior has been subject to debate by thought leaders beyond the world of family businesses. The Nobel Prize winner in economics Daniel Kahneman offers an analysis of our “Thinking, Fast and Slow”, revealing that our economic decisions are not made emotionless and that our behavior is governed by two cognitive systems: fast and intuitive on one side, slow and deliberate on the other side. In a similar line of thought, the bestselling author Malcom Gladwell argues that a “Blink” (intuition) is by far more effective than a cautious decision. Added to this, the Professor of psychology and behavioral economics Dan Ariely suggests that positive and negative behavior can be “Predictably Irrational” while the award-winning business reporter Charles Duhigg observes that “The Power of Habit” can derive its sources from emotional rewards and lead to unintended consequences. Moving to the macroeconomic perspective of Gladwell’s “Tipping Point”, we learn that a small change can have unforeseen effects. In the same line, the tipping point of the professor of positivity Barbara Fredrickson’s suggests that an individual’s positive to negative emotions ratio marks the difference between human flourishing and floundering.

The family patterns are one of the key factors triggering or hindering the succession process.

Transposing those insights into family businesses makes us wonder whether the family succession behavior is a product of well-thought of steps allowing to successfully move from the dream to reality or whether the latter is simply a product of imagination or instinct.

My recent study in collaboration with FBN France’s scientific council analyzes the succession process, from the development of the intention for succession by the generation in power to its accomplishment through passing on the baton to the next generation. Building on the perceptions of the senior generation, it shows that the family patterns are one of the key factors triggering or hindering the succession process. Tracing back the family history helps understanding the current generation’s behavior in regards with succession.

According to Bowen’s Family Systems Theory, families are multigenerational units where emotionally charged patterns can be transferred across generations, some of which can be largely dysfunctional. Understanding the origins of certain patterns in the past and present is an important preliminary stage for the family to deal with existing dysfunctional behavior of succession where it might be stuck.

One example of functional patterns could be the traditional rituals shared and passed on over generations, charged with pride and respect. As such, they contribute to triggering early on the intention for succession. As an interviewed family manager puts it, “We all knew it since childhood. Our destiny is sealed in the cradle. “You will be in the family business, my Son!” That’s what my father used to tell me. That’s what I tell my children as well”.

Unspoken thoughts about succession, however, represent a typical example of dysfunctional patterns, which can be charged with frustration, disappointment, anger or envy. As such, they tend to lead to major difficulties in achieving a smooth succession in the family despite the high levels of performance and competitiveness of the business. The bankruptcy of the Steinberg family business in Canada or the loss of business control by the Italian Gucci and the American Anheuser-Busch families allow us to draw lessons on the impact of emotionally charged patterns on leading organizations in their respective industries. A quote from a family business member in our study emphasizes this phenomenon as follows: “I always dreamt to take over the family business. I used to admire my father but he never expressed his intention for succession. Still, I was convinced that I would take over. However when the time has come, he choose someone else as successor. My destiny was contradicted…”.

Connecting the research dots with the “Power of Habit” allows us to reflect on how a family habit, driven by an emotional reward, may inform the family’s self-image. Once the emotional sources of habit are acknowledged, it becomes easier for the family to consider their positive or negative potential and change the habit towards more functional outcomes if needed.

As Lao Tzu inspires us, “If you do not change direction, you may end up where you are heading”. For the change to happen, family members need to learn about their historical emotional baggage before choosing to engage in a new direction. Still, the question of the direction to opt for and the tipping point to consider is rather a challenging one.

Notwithstanding Aristotle’s arguments about “things happening due to chance or luck”, the behavioral patterns inform the business family about the proper timing and direction of change considering its tipping point. The insights of this article are in favor of taking action to break the dysfunctional patterns towards the realization of the succession dream.

[1] https://www.edhec.edu/en/publications/transmission-challenge-what-determines-family-business-transmission  

Cited References:

Ariely, D. (2008). Predictably irrational: HarperCollins New York.

Bowen, M. (1978). Family therapy in clinical practice (2004 ed.). Maryland: Rowman & Littlefield Publishers.

Duhigg, C. (2012). The power of habit: Why we do what we do in life and business, Random House.

Fredrickson, B. L., & Kurtz, L. E. (2011). Cultivating positive emotions to enhance human flourishing. Applied positive psychology: Improving everyday life, health, schools, work, and society, 35-47.

Gibbon, A., & Hadekel, P. (1990). Steinberg: The breakup of a family empire: MacMillan of Canada.

Gladwell, M. (2007). Blink: The Power of Thinking Without Thinking: Little, Brown and Company.

Gladwell, M. (2006). The tipping point: How little things can make a big difference: Little, Brown and Company.

Gucci, P. (2016). In the name of Gucci: A memoir, C. Archetype Ed.

Kahneman, D. (2011). Thinking, fast and slow: Macmillan.

Lopez De Silanez, F., Dufour, C., & Franz, P. (2016). The Transmission Challenge: What Determines Family Business Transmission?, Position Paper, EDHEC Family Business Centre.

MacIntosh, J. (2011). Dethroning the King: The hostile takeover of Anheuser-Busch: John Wiley & Sons

Mair, V. H., & Tzu, L. (2012). Tao te ching: The classic book of integrity and the way: Bantam.

Labaki, R., Michael-Tsabari, N., & Zachary, R. K. (2013). Exploring the Emotional Nexus in Cogent Family Business Archetypes. Entrepreneurship Research Journal, 3(3), 301–330.

Labaki, R., & Conseil Scientifique FBN France. (2017). La transmission intrafamiliale: De l'intention à la réalité, Rapport d’étude, FBN France Ed.

 

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“In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

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In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

A recent study [1] by the EDHEC Family Business Centre shows that the rate of intra-family business succession in France is below 20%. While the tax environment exerts a significant impact on the low rate of family succession, it represents only the tip of the iceberg. For further understanding, we need to deep-dive below the surface to explore the “Emotional Nexus” binding the business and the family. Family businesses represent a unique form of organization characterized by the emotional interaction of the family and business systems, to different extents. Researchers agree that succession is undeniably the most emotionally charged process in the lifecycle of family businesses, turning it into the most critical for the business continuity in the family’s hands.

Traditionally, understanding what processes lead to a specific human behavior has been subject to debate by thought leaders beyond the world of family businesses. The Nobel Prize winner in economics Daniel Kahneman offers an analysis of our “Thinking, Fast and Slow”, revealing that our economic decisions are not made emotionless and that our behavior is governed by two cognitive systems: fast and intuitive on one side, slow and deliberate on the other side. In a similar line of thought, the bestselling author Malcom Gladwell argues that a “Blink” (intuition) is by far more effective than a cautious decision. Added to this, the Professor of psychology and behavioral economics Dan Ariely suggests that positive and negative behavior can be “Predictably Irrational” while the award-winning business reporter Charles Duhigg observes that “The Power of Habit” can derive its sources from emotional rewards and lead to unintended consequences. Moving to the macroeconomic perspective of Gladwell’s “Tipping Point”, we learn that a small change can have unforeseen effects. In the same line, the tipping point of the professor of positivity Barbara Fredrickson’s suggests that an individual’s positive to negative emotions ratio marks the difference between human flourishing and floundering.

The family patterns are one of the key factors triggering or hindering the succession process.

Transposing those insights into family businesses makes us wonder whether the family succession behavior is a product of well-thought of steps allowing to successfully move from the dream to reality or whether the latter is simply a product of imagination or instinct.

My recent study in collaboration with FBN France’s scientific council analyzes the succession process, from the development of the intention for succession by the generation in power to its accomplishment through passing on the baton to the next generation. Building on the perceptions of the senior generation, it shows that the family patterns are one of the key factors triggering or hindering the succession process. Tracing back the family history helps understanding the current generation’s behavior in regards with succession.

According to Bowen’s Family Systems Theory, families are multigenerational units where emotionally charged patterns can be transferred across generations, some of which can be largely dysfunctional. Understanding the origins of certain patterns in the past and present is an important preliminary stage for the family to deal with existing dysfunctional behavior of succession where it might be stuck.

One example of functional patterns could be the traditional rituals shared and passed on over generations, charged with pride and respect. As such, they contribute to triggering early on the intention for succession. As an interviewed family manager puts it, “We all knew it since childhood. Our destiny is sealed in the cradle. “You will be in the family business, my Son!” That’s what my father used to tell me. That’s what I tell my children as well”.

Unspoken thoughts about succession, however, represent a typical example of dysfunctional patterns, which can be charged with frustration, disappointment, anger or envy. As such, they tend to lead to major difficulties in achieving a smooth succession in the family despite the high levels of performance and competitiveness of the business. The bankruptcy of the Steinberg family business in Canada or the loss of business control by the Italian Gucci and the American Anheuser-Busch families allow us to draw lessons on the impact of emotionally charged patterns on leading organizations in their respective industries. A quote from a family business member in our study emphasizes this phenomenon as follows: “I always dreamt to take over the family business. I used to admire my father but he never expressed his intention for succession. Still, I was convinced that I would take over. However when the time has come, he choose someone else as successor. My destiny was contradicted…”.

Connecting the research dots with the “Power of Habit” allows us to reflect on how a family habit, driven by an emotional reward, may inform the family’s self-image. Once the emotional sources of habit are acknowledged, it becomes easier for the family to consider their positive or negative potential and change the habit towards more functional outcomes if needed.

As Lao Tzu inspires us, “If you do not change direction, you may end up where you are heading”. For the change to happen, family members need to learn about their historical emotional baggage before choosing to engage in a new direction. Still, the question of the direction to opt for and the tipping point to consider is rather a challenging one.

Notwithstanding Aristotle’s arguments about “things happening due to chance or luck”, the behavioral patterns inform the business family about the proper timing and direction of change considering its tipping point. The insights of this article are in favor of taking action to break the dysfunctional patterns towards the realization of the succession dream.

[1] https://www.edhec.edu/en/publications/transmission-challenge-what-determines-family-business-transmission  

Cited References:

Ariely, D. (2008). Predictably irrational: HarperCollins New York.

Bowen, M. (1978). Family therapy in clinical practice (2004 ed.). Maryland: Rowman & Littlefield Publishers.

Duhigg, C. (2012). The power of habit: Why we do what we do in life and business, Random House.

Fredrickson, B. L., & Kurtz, L. E. (2011). Cultivating positive emotions to enhance human flourishing. Applied positive psychology: Improving everyday life, health, schools, work, and society, 35-47.

Gibbon, A., & Hadekel, P. (1990). Steinberg: The breakup of a family empire: MacMillan of Canada.

Gladwell, M. (2007). Blink: The Power of Thinking Without Thinking: Little, Brown and Company.

Gladwell, M. (2006). The tipping point: How little things can make a big difference: Little, Brown and Company.

Gucci, P. (2016). In the name of Gucci: A memoir, C. Archetype Ed.

Kahneman, D. (2011). Thinking, fast and slow: Macmillan.

Lopez De Silanez, F., Dufour, C., & Franz, P. (2016). The Transmission Challenge: What Determines Family Business Transmission?, Position Paper, EDHEC Family Business Centre.

MacIntosh, J. (2011). Dethroning the King: The hostile takeover of Anheuser-Busch: John Wiley & Sons

Mair, V. H., & Tzu, L. (2012). Tao te ching: The classic book of integrity and the way: Bantam.

Labaki, R., Michael-Tsabari, N., & Zachary, R. K. (2013). Exploring the Emotional Nexus in Cogent Family Business Archetypes. Entrepreneurship Research Journal, 3(3), 301–330.

Labaki, R., & Conseil Scientifique FBN France. (2017). La transmission intrafamiliale: De l'intention à la réalité, Rapport d’étude, FBN France Ed.

 

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“In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

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In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

A recent study [1] by the EDHEC Family Business Centre shows that the rate of intra-family business succession in France is below 20%. While the tax environment exerts a significant impact on the low rate of family succession, it represents only the tip of the iceberg. For further understanding, we need to deep-dive below the surface to explore the “Emotional Nexus” binding the business and the family. Family businesses represent a unique form of organization characterized by the emotional interaction of the family and business systems, to different extents. Researchers agree that succession is undeniably the most emotionally charged process in the lifecycle of family businesses, turning it into the most critical for the business continuity in the family’s hands.

Traditionally, understanding what processes lead to a specific human behavior has been subject to debate by thought leaders beyond the world of family businesses. The Nobel Prize winner in economics Daniel Kahneman offers an analysis of our “Thinking, Fast and Slow”, revealing that our economic decisions are not made emotionless and that our behavior is governed by two cognitive systems: fast and intuitive on one side, slow and deliberate on the other side. In a similar line of thought, the bestselling author Malcom Gladwell argues that a “Blink” (intuition) is by far more effective than a cautious decision. Added to this, the Professor of psychology and behavioral economics Dan Ariely suggests that positive and negative behavior can be “Predictably Irrational” while the award-winning business reporter Charles Duhigg observes that “The Power of Habit” can derive its sources from emotional rewards and lead to unintended consequences. Moving to the macroeconomic perspective of Gladwell’s “Tipping Point”, we learn that a small change can have unforeseen effects. In the same line, the tipping point of the professor of positivity Barbara Fredrickson’s suggests that an individual’s positive to negative emotions ratio marks the difference between human flourishing and floundering.

The family patterns are one of the key factors triggering or hindering the succession process.

Transposing those insights into family businesses makes us wonder whether the family succession behavior is a product of well-thought of steps allowing to successfully move from the dream to reality or whether the latter is simply a product of imagination or instinct.

My recent study in collaboration with FBN France’s scientific council analyzes the succession process, from the development of the intention for succession by the generation in power to its accomplishment through passing on the baton to the next generation. Building on the perceptions of the senior generation, it shows that the family patterns are one of the key factors triggering or hindering the succession process. Tracing back the family history helps understanding the current generation’s behavior in regards with succession.

According to Bowen’s Family Systems Theory, families are multigenerational units where emotionally charged patterns can be transferred across generations, some of which can be largely dysfunctional. Understanding the origins of certain patterns in the past and present is an important preliminary stage for the family to deal with existing dysfunctional behavior of succession where it might be stuck.

One example of functional patterns could be the traditional rituals shared and passed on over generations, charged with pride and respect. As such, they contribute to triggering early on the intention for succession. As an interviewed family manager puts it, “We all knew it since childhood. Our destiny is sealed in the cradle. “You will be in the family business, my Son!” That’s what my father used to tell me. That’s what I tell my children as well”.

Unspoken thoughts about succession, however, represent a typical example of dysfunctional patterns, which can be charged with frustration, disappointment, anger or envy. As such, they tend to lead to major difficulties in achieving a smooth succession in the family despite the high levels of performance and competitiveness of the business. The bankruptcy of the Steinberg family business in Canada or the loss of business control by the Italian Gucci and the American Anheuser-Busch families allow us to draw lessons on the impact of emotionally charged patterns on leading organizations in their respective industries. A quote from a family business member in our study emphasizes this phenomenon as follows: “I always dreamt to take over the family business. I used to admire my father but he never expressed his intention for succession. Still, I was convinced that I would take over. However when the time has come, he choose someone else as successor. My destiny was contradicted…”.

Connecting the research dots with the “Power of Habit” allows us to reflect on how a family habit, driven by an emotional reward, may inform the family’s self-image. Once the emotional sources of habit are acknowledged, it becomes easier for the family to consider their positive or negative potential and change the habit towards more functional outcomes if needed.

As Lao Tzu inspires us, “If you do not change direction, you may end up where you are heading”. For the change to happen, family members need to learn about their historical emotional baggage before choosing to engage in a new direction. Still, the question of the direction to opt for and the tipping point to consider is rather a challenging one.

Notwithstanding Aristotle’s arguments about “things happening due to chance or luck”, the behavioral patterns inform the business family about the proper timing and direction of change considering its tipping point. The insights of this article are in favor of taking action to break the dysfunctional patterns towards the realization of the succession dream.

[1] https://www.edhec.edu/en/publications/transmission-challenge-what-determines-family-business-transmission  

Cited References:

Ariely, D. (2008). Predictably irrational: HarperCollins New York.

Bowen, M. (1978). Family therapy in clinical practice (2004 ed.). Maryland: Rowman & Littlefield Publishers.

Duhigg, C. (2012). The power of habit: Why we do what we do in life and business, Random House.

Fredrickson, B. L., & Kurtz, L. E. (2011). Cultivating positive emotions to enhance human flourishing. Applied positive psychology: Improving everyday life, health, schools, work, and society, 35-47.

Gibbon, A., & Hadekel, P. (1990). Steinberg: The breakup of a family empire: MacMillan of Canada.

Gladwell, M. (2007). Blink: The Power of Thinking Without Thinking: Little, Brown and Company.

Gladwell, M. (2006). The tipping point: How little things can make a big difference: Little, Brown and Company.

Gucci, P. (2016). In the name of Gucci: A memoir, C. Archetype Ed.

Kahneman, D. (2011). Thinking, fast and slow: Macmillan.

Lopez De Silanez, F., Dufour, C., & Franz, P. (2016). The Transmission Challenge: What Determines Family Business Transmission?, Position Paper, EDHEC Family Business Centre.

MacIntosh, J. (2011). Dethroning the King: The hostile takeover of Anheuser-Busch: John Wiley & Sons

Mair, V. H., & Tzu, L. (2012). Tao te ching: The classic book of integrity and the way: Bantam.

Labaki, R., Michael-Tsabari, N., & Zachary, R. K. (2013). Exploring the Emotional Nexus in Cogent Family Business Archetypes. Entrepreneurship Research Journal, 3(3), 301–330.

Labaki, R., & Conseil Scientifique FBN France. (2017). La transmission intrafamiliale: De l'intention à la réalité, Rapport d’étude, FBN France Ed.

 

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“In the name of Gucci”, “Steinberg: The breakup of a family empire” or “Dethroning the King: The hostile takeover of Anheuser-Busch” to cite a few, are documented books about the success and failure of emblematic business families. Standalone from the facts, what strikes the reader most is the key role played by emotions in shaping the family and business behavior along the succession process.

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Associate Professor and Director of Family Business Center, EDHEC Business School" ["format"]=> string(9) "full_html" ["safe_value"]=> string(244) "

Rania Labaki
Associate Professor and Director of Family Business Center, EDHEC Business School

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Le milieu des années 1980 a connu un phénomène de mode managériale avec la mise en avant de la culture d'entreprise comme facteur de performance. Dès lors on a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture « maison ». Cela correspondait souvent à des anniversaires, le dernier XIXème siècle ayant vu l'émergence de nombreuses entreprises à l'occasion de la seconde révolution industrielle, par exemple dans le domaine de l'électricité ou de la chimie. Parallèlement à la suite des travaux de Chandler à la Harvard Business School, la "business history", l'histoire des entreprises ou histoire des affaires a acquis également ses lettres de noblesses dans le champ académique en particulier en France autour de la revue Entreprises et Histoire.

On a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture "maison". 

Parmi les entreprises ayant investi sérieusement dans la recherche sur leur histoire certaines ont persisté comme Saint-Gobain qui a fêté il y a peu son 350ème anniversaire. D'autres, ayant investi la recherche sur l'histoire de leur secteur, ont parfois disparu en tant qu'entreprise indépendante, comme Pechiney un des fleurons de l'industrie française du XXème siècle. Enfin, si certaines entreprises ont disparu comme marque commerciale comme le Crédit Lyonnais, camouflé sous les initiales LCL puis avalé par le Crédit Agricole, leur patrimoine reste valorisé par des archives ouvertes aux chercheurs.

6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire

 Il y a de nombreux usages de l'histoire et nombreux sont ceux qui sont tentés de la mobiliser dans des buts divers comme le montrent les débats actuels autour du roman national ou de l'excellent ouvrage dirigé par Patrick Boucheron, Histoire mondiale de la France (Seuil, 2017). Pour l'entreprise familiale, deux usages possibles, au sein de la famille, de l'entreprise ou à l'extérieur de celle-ci.

Intégrer et renforcer les liens

Au sein de la communauté familiale, l'histoire peut être utilisée pour intégrer de nouveaux venus, comme les conjoints ou les plus jeunes (les NextGen). Elle peut servir à renforcer les liens entre les générations ou vers les branches plus ou moins éloignées de la famille. Cela peut être étendu aux managers et aux dirigeants non familiaux ou aux employés des Family Office pour s'assurer de leur bonne compréhension des attentes de leurs parties prenantes principales.

Susciter l’engagement

Il existe également un fort potentiel de création de valeur à mobiliser l'histoire pour créer un engagement chez les collaborateurs de manière générale, faciliter le transfert de connaissances en formalisant les pratiques spécifiques à l'entreprise pendant la formation. L'entreprise familiale est un milieu particulier au sein duquel les individus valorisent souvent l'idée de "travailler pour quelqu'un" plutôt que pour des actionnaires anonymes ou des dirigeants "mercenaires" peu attachés à l'organisation. Enfin, l'entreprise familiale, plus que d'autres, est très fréquemment rattachée à un territoire, à un espace physique, la région, le village, l'usine. L'entreprise familiale marque de son histoire un espace concret, par ses bâtiments et ses infrastructures. L'architecture est un levier fort de transmission patrimoniale et symbolique, voire même d'exploitation directe dans le cadre du tourisme industriel.

S’adapter à l’environnement

Pour la famille et pour l'entreprise, l'histoire permet aussi de répondre aux attentes et aux exigences imposées à l'organisation par son environnement afin de s'engager avec les parties prenantes externes. Les clients bien sûr mais aussi les partenaires prestataires de service ou fournisseurs et les communautés locales.

Construire le présent et le futur

L'histoire n'est pas seulement le passé. Afin d'élaborer une stratégie efficace, les membres de la famille et les dirigeants doivent comprendre les contraintes et les opportunités liées aux voies de développement suivies précédemment par la famille et l'entreprise. Ce que les théoriciens appellent "la dépendance de sentier"[1] est un élément central de la réflexion stratégique.

Persuader, Communiquer

La valeur de l'histoire en tant que ressource stratégique repose en grande partie sur sa capacité à évoquer et à persuader. Le plus souvent, l'histoire crée cette persuasion efficace à travers l'effet "pedigree", celui produit par le sentiment d'une lignée obtenue à partir d'une présence de longue date dans les affaires. Cette fameuse enseigne "banque fondée en..." qui souligne la résilience et le sérieux et donne confiance à l'épargnant.

Produire

Les entreprises familiales durables peuvent utiliser efficacement l'histoire pour promouvoir leurs services et leurs produits grâce à des récits historiques d'une part, mais également à la rétro-conception ou au relancement de modèles emblématiques.

Comment les entreprises familiales en font toute une histoire ?

Avant d’être une ressource, l’histoire est le fruit d’une construction. Pour autant, il est difficile de faire une généralisation quand à la manière dont les entreprises familiales élaborent leur histoire. Certaines familles ont une attitude très informelle vis-à-vis de la transmission et elles le font d'individus à individus. Ce processus favorise la transmission de récits quasi mythologiques entre les générations, en mettant l'accent sur des moments héroïques ou des tournants. Il dépend fortement de la mémoire personnelle et n'est pas à l'abri de l'oubli sélectif.

Quand les entreprises et les familles s'étendent, ou deviennent multi-générationnelles, avec de nombreux cousins par exemple, elles ont tendance à être plus professionnelles dans le processus. Elles font appel à un archiviste pour trier les documents d'archives et éventuellement un historien professionnel pour rédiger une histoire problématisée. En effet, il est important d'étudier rigoureusement l'histoire de la famille et de l'entreprise. Un historien professionnel ne sera pas impliqué dans la dimension émotionnelle et aura plus de réflexivité face aux évènements historiques et à l'archive. L'historien est capable, de part sa formation scientifique, de contextualiser, de mettre les différents événements dans une perspective plus large (l’industrie, le territoire, l'évolution technologique ou celle des mœurs ou des habitudes de consommation). Il peut par ailleurs faire le lien entre les développements survenus au sein de la famille et la stratégie de l'entreprise.

Pour autant les entreprises et les familles peuvent être tentées de souligner, de réinventer et même de créer un récit historique pour l'instrumentaliser. Il faut comprendre qu'il existe une forte différence entre le passé (l'ensemble des évènements ayant eu lieu avant aujourd'hui), la mémoire (ce qui reste dans les esprits) et l'histoire.

L'histoire est une «construction sociale et rhétorique qui peut être façonnée et manipulée pour motiver, persuader et encadrer les actions à l'intérieur et à l'extérieur d'une organisation» (R. Suddaby). Dans cette optique, l'écriture de l'histoire est hautement politique et stratégique au sein de la famille et de l'entreprise. Cette écriture change avec le temps et dépend des préoccupations actuelles des personnes qui contrôlent cette histoire et de leur vision pour l'avenir.
 

L'histoire est un matériau très plastique


Les entreprises familiales ont été étudiées dans leur utilisation du passé en tant que ressource stratégique et pour développer leur patrimoine de marque ou d'entreprise. À cet égard, l'histoire peut être considérée comme une source d'avantage compétitif. Plus précisément, une histoire de l'entreprise écrite dans un contexte de succession mettra l'accent sur le changement. Il convient aussi de faire leur place aux mentalités et aux priorités du moment. Ainsi, les familles au milieu du vingtième siècle s'intéressaient beaucoup moins à l'environnement, à la durabilité ou aux opportunités professionnelles pour les femmes au sein de l'organisation. Les échecs sont également rarement mentionnés. C'est dommage car les entreprises peuvent apprendre beaucoup d'une autopsie rigoureuse d'un projet avorté ou d'une aventure coûteuse !

Naturellement, les familles changent beaucoup avec le temps et la définition de ce qui appartient à l'histoire de la famille fait l'objet de débats. Dans une récente exposition consacrée à l'histoire d'une entreprise familiale, certains cousins ont été retirés de l'arbre généalogique parce qu'ils avaient vendu leurs parts dans l'entreprise après une querelle familiale... L'histoire est un matériau très plastique.

 

 

En Savoir plus

Il nous paraît important d'en savoir plus sur les interactions entre l'histoire et la stratégie dans les entreprises familiales. Les historiens sont peu habitués à une recherche conjointe avec des chercheurs en gestion ou en entreprise familiale. C'est pourquoi le Family Business Center de l'Edhec Business School a intégré l'histoire comme l'un de ses objectifs de recherche.
Il existe peu d'études sur l'influence mutuelle entre les émotions et l'histoire et leur impact sur la viabilité des entreprises familiales. Les 11 et 12 mai prochains, le Family Business Centre organise une conférence internationale rassemblant des historiens, des entreprises familiales, des praticiens et des chercheurs pour partager et connaître ce sujet.

Pour avoir plus d’informations sur la Conférence Entreprises Familiales EDHEC 2017, rendez-vous sur la page de l'événement


 

 

 

 

 

 

 

 

 

 


[1] Une théorie expliquant comment un ensemble de décisions passées peut influer sur les décisions futures.

" ["summary"]=> string(85) "

6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire.

" ["format"]=> string(9) "full_html" ["safe_value"]=> string(11378) "

Le milieu des années 1980 a connu un phénomène de mode managériale avec la mise en avant de la culture d'entreprise comme facteur de performance. Dès lors on a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture « maison ». Cela correspondait souvent à des anniversaires, le dernier XIXème siècle ayant vu l'émergence de nombreuses entreprises à l'occasion de la seconde révolution industrielle, par exemple dans le domaine de l'électricité ou de la chimie. Parallèlement à la suite des travaux de Chandler à la Harvard Business School, la "business history", l'histoire des entreprises ou histoire des affaires a acquis également ses lettres de noblesses dans le champ académique en particulier en France autour de la revue Entreprises et Histoire.

On a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture "maison". 

Parmi les entreprises ayant investi sérieusement dans la recherche sur leur histoire certaines ont persisté comme Saint-Gobain qui a fêté il y a peu son 350ème anniversaire. D'autres, ayant investi la recherche sur l'histoire de leur secteur, ont parfois disparu en tant qu'entreprise indépendante, comme Pechiney un des fleurons de l'industrie française du XXème siècle. Enfin, si certaines entreprises ont disparu comme marque commerciale comme le Crédit Lyonnais, camouflé sous les initiales LCL puis avalé par le Crédit Agricole, leur patrimoine reste valorisé par des archives ouvertes aux chercheurs.

6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire

 Il y a de nombreux usages de l'histoire et nombreux sont ceux qui sont tentés de la mobiliser dans des buts divers comme le montrent les débats actuels autour du roman national ou de l'excellent ouvrage dirigé par Patrick Boucheron, Histoire mondiale de la France (Seuil, 2017). Pour l'entreprise familiale, deux usages possibles, au sein de la famille, de l'entreprise ou à l'extérieur de celle-ci.

Intégrer et renforcer les liens

Au sein de la communauté familiale, l'histoire peut être utilisée pour intégrer de nouveaux venus, comme les conjoints ou les plus jeunes (les NextGen). Elle peut servir à renforcer les liens entre les générations ou vers les branches plus ou moins éloignées de la famille. Cela peut être étendu aux managers et aux dirigeants non familiaux ou aux employés des Family Office pour s'assurer de leur bonne compréhension des attentes de leurs parties prenantes principales.

Susciter l’engagement

Il existe également un fort potentiel de création de valeur à mobiliser l'histoire pour créer un engagement chez les collaborateurs de manière générale, faciliter le transfert de connaissances en formalisant les pratiques spécifiques à l'entreprise pendant la formation. L'entreprise familiale est un milieu particulier au sein duquel les individus valorisent souvent l'idée de "travailler pour quelqu'un" plutôt que pour des actionnaires anonymes ou des dirigeants "mercenaires" peu attachés à l'organisation. Enfin, l'entreprise familiale, plus que d'autres, est très fréquemment rattachée à un territoire, à un espace physique, la région, le village, l'usine. L'entreprise familiale marque de son histoire un espace concret, par ses bâtiments et ses infrastructures. L'architecture est un levier fort de transmission patrimoniale et symbolique, voire même d'exploitation directe dans le cadre du tourisme industriel.

S’adapter à l’environnement

Pour la famille et pour l'entreprise, l'histoire permet aussi de répondre aux attentes et aux exigences imposées à l'organisation par son environnement afin de s'engager avec les parties prenantes externes. Les clients bien sûr mais aussi les partenaires prestataires de service ou fournisseurs et les communautés locales.

Construire le présent et le futur

L'histoire n'est pas seulement le passé. Afin d'élaborer une stratégie efficace, les membres de la famille et les dirigeants doivent comprendre les contraintes et les opportunités liées aux voies de développement suivies précédemment par la famille et l'entreprise. Ce que les théoriciens appellent "la dépendance de sentier"[1] est un élément central de la réflexion stratégique.

Persuader, Communiquer

La valeur de l'histoire en tant que ressource stratégique repose en grande partie sur sa capacité à évoquer et à persuader. Le plus souvent, l'histoire crée cette persuasion efficace à travers l'effet "pedigree", celui produit par le sentiment d'une lignée obtenue à partir d'une présence de longue date dans les affaires. Cette fameuse enseigne "banque fondée en..." qui souligne la résilience et le sérieux et donne confiance à l'épargnant.

Produire

Les entreprises familiales durables peuvent utiliser efficacement l'histoire pour promouvoir leurs services et leurs produits grâce à des récits historiques d'une part, mais également à la rétro-conception ou au relancement de modèles emblématiques.

Comment les entreprises familiales en font toute une histoire ?

Avant d’être une ressource, l’histoire est le fruit d’une construction. Pour autant, il est difficile de faire une généralisation quand à la manière dont les entreprises familiales élaborent leur histoire. Certaines familles ont une attitude très informelle vis-à-vis de la transmission et elles le font d'individus à individus. Ce processus favorise la transmission de récits quasi mythologiques entre les générations, en mettant l'accent sur des moments héroïques ou des tournants. Il dépend fortement de la mémoire personnelle et n'est pas à l'abri de l'oubli sélectif.

Quand les entreprises et les familles s'étendent, ou deviennent multi-générationnelles, avec de nombreux cousins par exemple, elles ont tendance à être plus professionnelles dans le processus. Elles font appel à un archiviste pour trier les documents d'archives et éventuellement un historien professionnel pour rédiger une histoire problématisée. En effet, il est important d'étudier rigoureusement l'histoire de la famille et de l'entreprise. Un historien professionnel ne sera pas impliqué dans la dimension émotionnelle et aura plus de réflexivité face aux évènements historiques et à l'archive. L'historien est capable, de part sa formation scientifique, de contextualiser, de mettre les différents événements dans une perspective plus large (l’industrie, le territoire, l'évolution technologique ou celle des mœurs ou des habitudes de consommation). Il peut par ailleurs faire le lien entre les développements survenus au sein de la famille et la stratégie de l'entreprise.

Pour autant les entreprises et les familles peuvent être tentées de souligner, de réinventer et même de créer un récit historique pour l'instrumentaliser. Il faut comprendre qu'il existe une forte différence entre le passé (l'ensemble des évènements ayant eu lieu avant aujourd'hui), la mémoire (ce qui reste dans les esprits) et l'histoire.

L'histoire est une «construction sociale et rhétorique qui peut être façonnée et manipulée pour motiver, persuader et encadrer les actions à l'intérieur et à l'extérieur d'une organisation» (R. Suddaby). Dans cette optique, l'écriture de l'histoire est hautement politique et stratégique au sein de la famille et de l'entreprise. Cette écriture change avec le temps et dépend des préoccupations actuelles des personnes qui contrôlent cette histoire et de leur vision pour l'avenir.
 

L'histoire est un matériau très plastique

Les entreprises familiales ont été étudiées dans leur utilisation du passé en tant que ressource stratégique et pour développer leur patrimoine de marque ou d'entreprise. À cet égard, l'histoire peut être considérée comme une source d'avantage compétitif. Plus précisément, une histoire de l'entreprise écrite dans un contexte de succession mettra l'accent sur le changement. Il convient aussi de faire leur place aux mentalités et aux priorités du moment. Ainsi, les familles au milieu du vingtième siècle s'intéressaient beaucoup moins à l'environnement, à la durabilité ou aux opportunités professionnelles pour les femmes au sein de l'organisation. Les échecs sont également rarement mentionnés. C'est dommage car les entreprises peuvent apprendre beaucoup d'une autopsie rigoureuse d'un projet avorté ou d'une aventure coûteuse !

Naturellement, les familles changent beaucoup avec le temps et la définition de ce qui appartient à l'histoire de la famille fait l'objet de débats. Dans une récente exposition consacrée à l'histoire d'une entreprise familiale, certains cousins ont été retirés de l'arbre généalogique parce qu'ils avaient vendu leurs parts dans l'entreprise après une querelle familiale... L'histoire est un matériau très plastique.

 

 

En Savoir plus

Il nous paraît important d'en savoir plus sur les interactions entre l'histoire et la stratégie dans les entreprises familiales. Les historiens sont peu habitués à une recherche conjointe avec des chercheurs en gestion ou en entreprise familiale. C'est pourquoi le Family Business Center de l'Edhec Business School a intégré l'histoire comme l'un de ses objectifs de recherche.
Il existe peu d'études sur l'influence mutuelle entre les émotions et l'histoire et leur impact sur la viabilité des entreprises familiales. Les 11 et 12 mai prochains, le Family Business Centre organise une conférence internationale rassemblant des historiens, des entreprises familiales, des praticiens et des chercheurs pour partager et connaître ce sujet.

Pour avoir plus d’informations sur la Conférence Entreprises Familiales EDHEC 2017, rendez-vous sur la page de l'événement

 

 

 

 

 

 

 

 

 

 


[1] Une théorie expliquant comment un ensemble de décisions passées peut influer sur les décisions futures.

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6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire.

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Ludovic Cailluet
Professeur, Strategic Management & Business History, Family Business Center, EDHEC Business School

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Le milieu des années 1980 a connu un phénomène de mode managériale avec la mise en avant de la culture d'entreprise comme facteur de performance. Dès lors on a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture « maison ». Cela correspondait souvent à des anniversaires, le dernier XIXème siècle ayant vu l'émergence de nombreuses entreprises à l'occasion de la seconde révolution industrielle, par exemple dans le domaine de l'électricité ou de la chimie. Parallèlement à la suite des travaux de Chandler à la Harvard Business School, la "business history", l'histoire des entreprises ou histoire des affaires a acquis également ses lettres de noblesses dans le champ académique en particulier en France autour de la revue Entreprises et Histoire.

On a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture "maison". 

Parmi les entreprises ayant investi sérieusement dans la recherche sur leur histoire certaines ont persisté comme Saint-Gobain qui a fêté il y a peu son 350ème anniversaire. D'autres, ayant investi la recherche sur l'histoire de leur secteur, ont parfois disparu en tant qu'entreprise indépendante, comme Pechiney un des fleurons de l'industrie française du XXème siècle. Enfin, si certaines entreprises ont disparu comme marque commerciale comme le Crédit Lyonnais, camouflé sous les initiales LCL puis avalé par le Crédit Agricole, leur patrimoine reste valorisé par des archives ouvertes aux chercheurs.

6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire

 Il y a de nombreux usages de l'histoire et nombreux sont ceux qui sont tentés de la mobiliser dans des buts divers comme le montrent les débats actuels autour du roman national ou de l'excellent ouvrage dirigé par Patrick Boucheron, Histoire mondiale de la France (Seuil, 2017). Pour l'entreprise familiale, deux usages possibles, au sein de la famille, de l'entreprise ou à l'extérieur de celle-ci.

Intégrer et renforcer les liens

Au sein de la communauté familiale, l'histoire peut être utilisée pour intégrer de nouveaux venus, comme les conjoints ou les plus jeunes (les NextGen). Elle peut servir à renforcer les liens entre les générations ou vers les branches plus ou moins éloignées de la famille. Cela peut être étendu aux managers et aux dirigeants non familiaux ou aux employés des Family Office pour s'assurer de leur bonne compréhension des attentes de leurs parties prenantes principales.

Susciter l’engagement

Il existe également un fort potentiel de création de valeur à mobiliser l'histoire pour créer un engagement chez les collaborateurs de manière générale, faciliter le transfert de connaissances en formalisant les pratiques spécifiques à l'entreprise pendant la formation. L'entreprise familiale est un milieu particulier au sein duquel les individus valorisent souvent l'idée de "travailler pour quelqu'un" plutôt que pour des actionnaires anonymes ou des dirigeants "mercenaires" peu attachés à l'organisation. Enfin, l'entreprise familiale, plus que d'autres, est très fréquemment rattachée à un territoire, à un espace physique, la région, le village, l'usine. L'entreprise familiale marque de son histoire un espace concret, par ses bâtiments et ses infrastructures. L'architecture est un levier fort de transmission patrimoniale et symbolique, voire même d'exploitation directe dans le cadre du tourisme industriel.

S’adapter à l’environnement

Pour la famille et pour l'entreprise, l'histoire permet aussi de répondre aux attentes et aux exigences imposées à l'organisation par son environnement afin de s'engager avec les parties prenantes externes. Les clients bien sûr mais aussi les partenaires prestataires de service ou fournisseurs et les communautés locales.

Construire le présent et le futur

L'histoire n'est pas seulement le passé. Afin d'élaborer une stratégie efficace, les membres de la famille et les dirigeants doivent comprendre les contraintes et les opportunités liées aux voies de développement suivies précédemment par la famille et l'entreprise. Ce que les théoriciens appellent "la dépendance de sentier"[1] est un élément central de la réflexion stratégique.

Persuader, Communiquer

La valeur de l'histoire en tant que ressource stratégique repose en grande partie sur sa capacité à évoquer et à persuader. Le plus souvent, l'histoire crée cette persuasion efficace à travers l'effet "pedigree", celui produit par le sentiment d'une lignée obtenue à partir d'une présence de longue date dans les affaires. Cette fameuse enseigne "banque fondée en..." qui souligne la résilience et le sérieux et donne confiance à l'épargnant.

Produire

Les entreprises familiales durables peuvent utiliser efficacement l'histoire pour promouvoir leurs services et leurs produits grâce à des récits historiques d'une part, mais également à la rétro-conception ou au relancement de modèles emblématiques.

Comment les entreprises familiales en font toute une histoire ?

Avant d’être une ressource, l’histoire est le fruit d’une construction. Pour autant, il est difficile de faire une généralisation quand à la manière dont les entreprises familiales élaborent leur histoire. Certaines familles ont une attitude très informelle vis-à-vis de la transmission et elles le font d'individus à individus. Ce processus favorise la transmission de récits quasi mythologiques entre les générations, en mettant l'accent sur des moments héroïques ou des tournants. Il dépend fortement de la mémoire personnelle et n'est pas à l'abri de l'oubli sélectif.

Quand les entreprises et les familles s'étendent, ou deviennent multi-générationnelles, avec de nombreux cousins par exemple, elles ont tendance à être plus professionnelles dans le processus. Elles font appel à un archiviste pour trier les documents d'archives et éventuellement un historien professionnel pour rédiger une histoire problématisée. En effet, il est important d'étudier rigoureusement l'histoire de la famille et de l'entreprise. Un historien professionnel ne sera pas impliqué dans la dimension émotionnelle et aura plus de réflexivité face aux évènements historiques et à l'archive. L'historien est capable, de part sa formation scientifique, de contextualiser, de mettre les différents événements dans une perspective plus large (l’industrie, le territoire, l'évolution technologique ou celle des mœurs ou des habitudes de consommation). Il peut par ailleurs faire le lien entre les développements survenus au sein de la famille et la stratégie de l'entreprise.

Pour autant les entreprises et les familles peuvent être tentées de souligner, de réinventer et même de créer un récit historique pour l'instrumentaliser. Il faut comprendre qu'il existe une forte différence entre le passé (l'ensemble des évènements ayant eu lieu avant aujourd'hui), la mémoire (ce qui reste dans les esprits) et l'histoire.

L'histoire est une «construction sociale et rhétorique qui peut être façonnée et manipulée pour motiver, persuader et encadrer les actions à l'intérieur et à l'extérieur d'une organisation» (R. Suddaby). Dans cette optique, l'écriture de l'histoire est hautement politique et stratégique au sein de la famille et de l'entreprise. Cette écriture change avec le temps et dépend des préoccupations actuelles des personnes qui contrôlent cette histoire et de leur vision pour l'avenir.
 

L'histoire est un matériau très plastique


Les entreprises familiales ont été étudiées dans leur utilisation du passé en tant que ressource stratégique et pour développer leur patrimoine de marque ou d'entreprise. À cet égard, l'histoire peut être considérée comme une source d'avantage compétitif. Plus précisément, une histoire de l'entreprise écrite dans un contexte de succession mettra l'accent sur le changement. Il convient aussi de faire leur place aux mentalités et aux priorités du moment. Ainsi, les familles au milieu du vingtième siècle s'intéressaient beaucoup moins à l'environnement, à la durabilité ou aux opportunités professionnelles pour les femmes au sein de l'organisation. Les échecs sont également rarement mentionnés. C'est dommage car les entreprises peuvent apprendre beaucoup d'une autopsie rigoureuse d'un projet avorté ou d'une aventure coûteuse !

Naturellement, les familles changent beaucoup avec le temps et la définition de ce qui appartient à l'histoire de la famille fait l'objet de débats. Dans une récente exposition consacrée à l'histoire d'une entreprise familiale, certains cousins ont été retirés de l'arbre généalogique parce qu'ils avaient vendu leurs parts dans l'entreprise après une querelle familiale... L'histoire est un matériau très plastique.

 

 

En Savoir plus

Il nous paraît important d'en savoir plus sur les interactions entre l'histoire et la stratégie dans les entreprises familiales. Les historiens sont peu habitués à une recherche conjointe avec des chercheurs en gestion ou en entreprise familiale. C'est pourquoi le Family Business Center de l'Edhec Business School a intégré l'histoire comme l'un de ses objectifs de recherche.
Il existe peu d'études sur l'influence mutuelle entre les émotions et l'histoire et leur impact sur la viabilité des entreprises familiales. Les 11 et 12 mai prochains, le Family Business Centre organise une conférence internationale rassemblant des historiens, des entreprises familiales, des praticiens et des chercheurs pour partager et connaître ce sujet.

Pour avoir plus d’informations sur la Conférence Entreprises Familiales EDHEC 2017, rendez-vous sur la page de l'événement


 

 

 

 

 

 

 

 

 

 


[1] Une théorie expliquant comment un ensemble de décisions passées peut influer sur les décisions futures.

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6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire.

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Le milieu des années 1980 a connu un phénomène de mode managériale avec la mise en avant de la culture d'entreprise comme facteur de performance. Dès lors on a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture « maison ». Cela correspondait souvent à des anniversaires, le dernier XIXème siècle ayant vu l'émergence de nombreuses entreprises à l'occasion de la seconde révolution industrielle, par exemple dans le domaine de l'électricité ou de la chimie. Parallèlement à la suite des travaux de Chandler à la Harvard Business School, la "business history", l'histoire des entreprises ou histoire des affaires a acquis également ses lettres de noblesses dans le champ académique en particulier en France autour de la revue Entreprises et Histoire.

On a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture "maison". 

Parmi les entreprises ayant investi sérieusement dans la recherche sur leur histoire certaines ont persisté comme Saint-Gobain qui a fêté il y a peu son 350ème anniversaire. D'autres, ayant investi la recherche sur l'histoire de leur secteur, ont parfois disparu en tant qu'entreprise indépendante, comme Pechiney un des fleurons de l'industrie française du XXème siècle. Enfin, si certaines entreprises ont disparu comme marque commerciale comme le Crédit Lyonnais, camouflé sous les initiales LCL puis avalé par le Crédit Agricole, leur patrimoine reste valorisé par des archives ouvertes aux chercheurs.

6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire

 Il y a de nombreux usages de l'histoire et nombreux sont ceux qui sont tentés de la mobiliser dans des buts divers comme le montrent les débats actuels autour du roman national ou de l'excellent ouvrage dirigé par Patrick Boucheron, Histoire mondiale de la France (Seuil, 2017). Pour l'entreprise familiale, deux usages possibles, au sein de la famille, de l'entreprise ou à l'extérieur de celle-ci.

Intégrer et renforcer les liens

Au sein de la communauté familiale, l'histoire peut être utilisée pour intégrer de nouveaux venus, comme les conjoints ou les plus jeunes (les NextGen). Elle peut servir à renforcer les liens entre les générations ou vers les branches plus ou moins éloignées de la famille. Cela peut être étendu aux managers et aux dirigeants non familiaux ou aux employés des Family Office pour s'assurer de leur bonne compréhension des attentes de leurs parties prenantes principales.

Susciter l’engagement

Il existe également un fort potentiel de création de valeur à mobiliser l'histoire pour créer un engagement chez les collaborateurs de manière générale, faciliter le transfert de connaissances en formalisant les pratiques spécifiques à l'entreprise pendant la formation. L'entreprise familiale est un milieu particulier au sein duquel les individus valorisent souvent l'idée de "travailler pour quelqu'un" plutôt que pour des actionnaires anonymes ou des dirigeants "mercenaires" peu attachés à l'organisation. Enfin, l'entreprise familiale, plus que d'autres, est très fréquemment rattachée à un territoire, à un espace physique, la région, le village, l'usine. L'entreprise familiale marque de son histoire un espace concret, par ses bâtiments et ses infrastructures. L'architecture est un levier fort de transmission patrimoniale et symbolique, voire même d'exploitation directe dans le cadre du tourisme industriel.

S’adapter à l’environnement

Pour la famille et pour l'entreprise, l'histoire permet aussi de répondre aux attentes et aux exigences imposées à l'organisation par son environnement afin de s'engager avec les parties prenantes externes. Les clients bien sûr mais aussi les partenaires prestataires de service ou fournisseurs et les communautés locales.

Construire le présent et le futur

L'histoire n'est pas seulement le passé. Afin d'élaborer une stratégie efficace, les membres de la famille et les dirigeants doivent comprendre les contraintes et les opportunités liées aux voies de développement suivies précédemment par la famille et l'entreprise. Ce que les théoriciens appellent "la dépendance de sentier"[1] est un élément central de la réflexion stratégique.

Persuader, Communiquer

La valeur de l'histoire en tant que ressource stratégique repose en grande partie sur sa capacité à évoquer et à persuader. Le plus souvent, l'histoire crée cette persuasion efficace à travers l'effet "pedigree", celui produit par le sentiment d'une lignée obtenue à partir d'une présence de longue date dans les affaires. Cette fameuse enseigne "banque fondée en..." qui souligne la résilience et le sérieux et donne confiance à l'épargnant.

Produire

Les entreprises familiales durables peuvent utiliser efficacement l'histoire pour promouvoir leurs services et leurs produits grâce à des récits historiques d'une part, mais également à la rétro-conception ou au relancement de modèles emblématiques.

Comment les entreprises familiales en font toute une histoire ?

Avant d’être une ressource, l’histoire est le fruit d’une construction. Pour autant, il est difficile de faire une généralisation quand à la manière dont les entreprises familiales élaborent leur histoire. Certaines familles ont une attitude très informelle vis-à-vis de la transmission et elles le font d'individus à individus. Ce processus favorise la transmission de récits quasi mythologiques entre les générations, en mettant l'accent sur des moments héroïques ou des tournants. Il dépend fortement de la mémoire personnelle et n'est pas à l'abri de l'oubli sélectif.

Quand les entreprises et les familles s'étendent, ou deviennent multi-générationnelles, avec de nombreux cousins par exemple, elles ont tendance à être plus professionnelles dans le processus. Elles font appel à un archiviste pour trier les documents d'archives et éventuellement un historien professionnel pour rédiger une histoire problématisée. En effet, il est important d'étudier rigoureusement l'histoire de la famille et de l'entreprise. Un historien professionnel ne sera pas impliqué dans la dimension émotionnelle et aura plus de réflexivité face aux évènements historiques et à l'archive. L'historien est capable, de part sa formation scientifique, de contextualiser, de mettre les différents événements dans une perspective plus large (l’industrie, le territoire, l'évolution technologique ou celle des mœurs ou des habitudes de consommation). Il peut par ailleurs faire le lien entre les développements survenus au sein de la famille et la stratégie de l'entreprise.

Pour autant les entreprises et les familles peuvent être tentées de souligner, de réinventer et même de créer un récit historique pour l'instrumentaliser. Il faut comprendre qu'il existe une forte différence entre le passé (l'ensemble des évènements ayant eu lieu avant aujourd'hui), la mémoire (ce qui reste dans les esprits) et l'histoire.

L'histoire est une «construction sociale et rhétorique qui peut être façonnée et manipulée pour motiver, persuader et encadrer les actions à l'intérieur et à l'extérieur d'une organisation» (R. Suddaby). Dans cette optique, l'écriture de l'histoire est hautement politique et stratégique au sein de la famille et de l'entreprise. Cette écriture change avec le temps et dépend des préoccupations actuelles des personnes qui contrôlent cette histoire et de leur vision pour l'avenir.
 

L'histoire est un matériau très plastique

Les entreprises familiales ont été étudiées dans leur utilisation du passé en tant que ressource stratégique et pour développer leur patrimoine de marque ou d'entreprise. À cet égard, l'histoire peut être considérée comme une source d'avantage compétitif. Plus précisément, une histoire de l'entreprise écrite dans un contexte de succession mettra l'accent sur le changement. Il convient aussi de faire leur place aux mentalités et aux priorités du moment. Ainsi, les familles au milieu du vingtième siècle s'intéressaient beaucoup moins à l'environnement, à la durabilité ou aux opportunités professionnelles pour les femmes au sein de l'organisation. Les échecs sont également rarement mentionnés. C'est dommage car les entreprises peuvent apprendre beaucoup d'une autopsie rigoureuse d'un projet avorté ou d'une aventure coûteuse !

Naturellement, les familles changent beaucoup avec le temps et la définition de ce qui appartient à l'histoire de la famille fait l'objet de débats. Dans une récente exposition consacrée à l'histoire d'une entreprise familiale, certains cousins ont été retirés de l'arbre généalogique parce qu'ils avaient vendu leurs parts dans l'entreprise après une querelle familiale... L'histoire est un matériau très plastique.

 

 

En Savoir plus

Il nous paraît important d'en savoir plus sur les interactions entre l'histoire et la stratégie dans les entreprises familiales. Les historiens sont peu habitués à une recherche conjointe avec des chercheurs en gestion ou en entreprise familiale. C'est pourquoi le Family Business Center de l'Edhec Business School a intégré l'histoire comme l'un de ses objectifs de recherche.
Il existe peu d'études sur l'influence mutuelle entre les émotions et l'histoire et leur impact sur la viabilité des entreprises familiales. Les 11 et 12 mai prochains, le Family Business Centre organise une conférence internationale rassemblant des historiens, des entreprises familiales, des praticiens et des chercheurs pour partager et connaître ce sujet.

Pour avoir plus d’informations sur la Conférence Entreprises Familiales EDHEC 2017, rendez-vous sur la page de l'événement

 

 

 

 

 

 

 

 

 

 


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6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire.

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Le milieu des années 1980 a connu un phénomène de mode managériale avec la mise en avant de la culture d'entreprise comme facteur de performance. Dès lors on a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture « maison ». Cela correspondait souvent à des anniversaires, le dernier XIXème siècle ayant vu l'émergence de nombreuses entreprises à l'occasion de la seconde révolution industrielle, par exemple dans le domaine de l'électricité ou de la chimie. Parallèlement à la suite des travaux de Chandler à la Harvard Business School, la "business history", l'histoire des entreprises ou histoire des affaires a acquis également ses lettres de noblesses dans le champ académique en particulier en France autour de la revue Entreprises et Histoire.

On a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture "maison". 

Parmi les entreprises ayant investi sérieusement dans la recherche sur leur histoire certaines ont persisté comme Saint-Gobain qui a fêté il y a peu son 350ème anniversaire. D'autres, ayant investi la recherche sur l'histoire de leur secteur, ont parfois disparu en tant qu'entreprise indépendante, comme Pechiney un des fleurons de l'industrie française du XXème siècle. Enfin, si certaines entreprises ont disparu comme marque commerciale comme le Crédit Lyonnais, camouflé sous les initiales LCL puis avalé par le Crédit Agricole, leur patrimoine reste valorisé par des archives ouvertes aux chercheurs.

6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire

 Il y a de nombreux usages de l'histoire et nombreux sont ceux qui sont tentés de la mobiliser dans des buts divers comme le montrent les débats actuels autour du roman national ou de l'excellent ouvrage dirigé par Patrick Boucheron, Histoire mondiale de la France (Seuil, 2017). Pour l'entreprise familiale, deux usages possibles, au sein de la famille, de l'entreprise ou à l'extérieur de celle-ci.

Intégrer et renforcer les liens

Au sein de la communauté familiale, l'histoire peut être utilisée pour intégrer de nouveaux venus, comme les conjoints ou les plus jeunes (les NextGen). Elle peut servir à renforcer les liens entre les générations ou vers les branches plus ou moins éloignées de la famille. Cela peut être étendu aux managers et aux dirigeants non familiaux ou aux employés des Family Office pour s'assurer de leur bonne compréhension des attentes de leurs parties prenantes principales.

Susciter l’engagement

Il existe également un fort potentiel de création de valeur à mobiliser l'histoire pour créer un engagement chez les collaborateurs de manière générale, faciliter le transfert de connaissances en formalisant les pratiques spécifiques à l'entreprise pendant la formation. L'entreprise familiale est un milieu particulier au sein duquel les individus valorisent souvent l'idée de "travailler pour quelqu'un" plutôt que pour des actionnaires anonymes ou des dirigeants "mercenaires" peu attachés à l'organisation. Enfin, l'entreprise familiale, plus que d'autres, est très fréquemment rattachée à un territoire, à un espace physique, la région, le village, l'usine. L'entreprise familiale marque de son histoire un espace concret, par ses bâtiments et ses infrastructures. L'architecture est un levier fort de transmission patrimoniale et symbolique, voire même d'exploitation directe dans le cadre du tourisme industriel.

S’adapter à l’environnement

Pour la famille et pour l'entreprise, l'histoire permet aussi de répondre aux attentes et aux exigences imposées à l'organisation par son environnement afin de s'engager avec les parties prenantes externes. Les clients bien sûr mais aussi les partenaires prestataires de service ou fournisseurs et les communautés locales.

Construire le présent et le futur

L'histoire n'est pas seulement le passé. Afin d'élaborer une stratégie efficace, les membres de la famille et les dirigeants doivent comprendre les contraintes et les opportunités liées aux voies de développement suivies précédemment par la famille et l'entreprise. Ce que les théoriciens appellent "la dépendance de sentier"[1] est un élément central de la réflexion stratégique.

Persuader, Communiquer

La valeur de l'histoire en tant que ressource stratégique repose en grande partie sur sa capacité à évoquer et à persuader. Le plus souvent, l'histoire crée cette persuasion efficace à travers l'effet "pedigree", celui produit par le sentiment d'une lignée obtenue à partir d'une présence de longue date dans les affaires. Cette fameuse enseigne "banque fondée en..." qui souligne la résilience et le sérieux et donne confiance à l'épargnant.

Produire

Les entreprises familiales durables peuvent utiliser efficacement l'histoire pour promouvoir leurs services et leurs produits grâce à des récits historiques d'une part, mais également à la rétro-conception ou au relancement de modèles emblématiques.

Comment les entreprises familiales en font toute une histoire ?

Avant d’être une ressource, l’histoire est le fruit d’une construction. Pour autant, il est difficile de faire une généralisation quand à la manière dont les entreprises familiales élaborent leur histoire. Certaines familles ont une attitude très informelle vis-à-vis de la transmission et elles le font d'individus à individus. Ce processus favorise la transmission de récits quasi mythologiques entre les générations, en mettant l'accent sur des moments héroïques ou des tournants. Il dépend fortement de la mémoire personnelle et n'est pas à l'abri de l'oubli sélectif.

Quand les entreprises et les familles s'étendent, ou deviennent multi-générationnelles, avec de nombreux cousins par exemple, elles ont tendance à être plus professionnelles dans le processus. Elles font appel à un archiviste pour trier les documents d'archives et éventuellement un historien professionnel pour rédiger une histoire problématisée. En effet, il est important d'étudier rigoureusement l'histoire de la famille et de l'entreprise. Un historien professionnel ne sera pas impliqué dans la dimension émotionnelle et aura plus de réflexivité face aux évènements historiques et à l'archive. L'historien est capable, de part sa formation scientifique, de contextualiser, de mettre les différents événements dans une perspective plus large (l’industrie, le territoire, l'évolution technologique ou celle des mœurs ou des habitudes de consommation). Il peut par ailleurs faire le lien entre les développements survenus au sein de la famille et la stratégie de l'entreprise.

Pour autant les entreprises et les familles peuvent être tentées de souligner, de réinventer et même de créer un récit historique pour l'instrumentaliser. Il faut comprendre qu'il existe une forte différence entre le passé (l'ensemble des évènements ayant eu lieu avant aujourd'hui), la mémoire (ce qui reste dans les esprits) et l'histoire.

L'histoire est une «construction sociale et rhétorique qui peut être façonnée et manipulée pour motiver, persuader et encadrer les actions à l'intérieur et à l'extérieur d'une organisation» (R. Suddaby). Dans cette optique, l'écriture de l'histoire est hautement politique et stratégique au sein de la famille et de l'entreprise. Cette écriture change avec le temps et dépend des préoccupations actuelles des personnes qui contrôlent cette histoire et de leur vision pour l'avenir.
 

L'histoire est un matériau très plastique


Les entreprises familiales ont été étudiées dans leur utilisation du passé en tant que ressource stratégique et pour développer leur patrimoine de marque ou d'entreprise. À cet égard, l'histoire peut être considérée comme une source d'avantage compétitif. Plus précisément, une histoire de l'entreprise écrite dans un contexte de succession mettra l'accent sur le changement. Il convient aussi de faire leur place aux mentalités et aux priorités du moment. Ainsi, les familles au milieu du vingtième siècle s'intéressaient beaucoup moins à l'environnement, à la durabilité ou aux opportunités professionnelles pour les femmes au sein de l'organisation. Les échecs sont également rarement mentionnés. C'est dommage car les entreprises peuvent apprendre beaucoup d'une autopsie rigoureuse d'un projet avorté ou d'une aventure coûteuse !

Naturellement, les familles changent beaucoup avec le temps et la définition de ce qui appartient à l'histoire de la famille fait l'objet de débats. Dans une récente exposition consacrée à l'histoire d'une entreprise familiale, certains cousins ont été retirés de l'arbre généalogique parce qu'ils avaient vendu leurs parts dans l'entreprise après une querelle familiale... L'histoire est un matériau très plastique.

 

 

En Savoir plus

Il nous paraît important d'en savoir plus sur les interactions entre l'histoire et la stratégie dans les entreprises familiales. Les historiens sont peu habitués à une recherche conjointe avec des chercheurs en gestion ou en entreprise familiale. C'est pourquoi le Family Business Center de l'Edhec Business School a intégré l'histoire comme l'un de ses objectifs de recherche.
Il existe peu d'études sur l'influence mutuelle entre les émotions et l'histoire et leur impact sur la viabilité des entreprises familiales. Les 11 et 12 mai prochains, le Family Business Centre organise une conférence internationale rassemblant des historiens, des entreprises familiales, des praticiens et des chercheurs pour partager et connaître ce sujet.

Pour avoir plus d’informations sur la Conférence Entreprises Familiales EDHEC 2017, rendez-vous sur la page de l'événement


 

 

 

 

 

 

 

 

 

 


[1] Une théorie expliquant comment un ensemble de décisions passées peut influer sur les décisions futures.

" ["summary"]=> string(85) "

6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire.

" ["format"]=> string(9) "full_html" ["safe_value"]=> string(11378) "

Le milieu des années 1980 a connu un phénomène de mode managériale avec la mise en avant de la culture d'entreprise comme facteur de performance. Dès lors on a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture « maison ». Cela correspondait souvent à des anniversaires, le dernier XIXème siècle ayant vu l'émergence de nombreuses entreprises à l'occasion de la seconde révolution industrielle, par exemple dans le domaine de l'électricité ou de la chimie. Parallèlement à la suite des travaux de Chandler à la Harvard Business School, la "business history", l'histoire des entreprises ou histoire des affaires a acquis également ses lettres de noblesses dans le champ académique en particulier en France autour de la revue Entreprises et Histoire.

On a vu fleurir de nombreuses initiatives d'entreprises qui se sont préoccupées de mettre en scène leur histoire au service du renforcement de la culture "maison". 

Parmi les entreprises ayant investi sérieusement dans la recherche sur leur histoire certaines ont persisté comme Saint-Gobain qui a fêté il y a peu son 350ème anniversaire. D'autres, ayant investi la recherche sur l'histoire de leur secteur, ont parfois disparu en tant qu'entreprise indépendante, comme Pechiney un des fleurons de l'industrie française du XXème siècle. Enfin, si certaines entreprises ont disparu comme marque commerciale comme le Crédit Lyonnais, camouflé sous les initiales LCL puis avalé par le Crédit Agricole, leur patrimoine reste valorisé par des archives ouvertes aux chercheurs.

6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire

 Il y a de nombreux usages de l'histoire et nombreux sont ceux qui sont tentés de la mobiliser dans des buts divers comme le montrent les débats actuels autour du roman national ou de l'excellent ouvrage dirigé par Patrick Boucheron, Histoire mondiale de la France (Seuil, 2017). Pour l'entreprise familiale, deux usages possibles, au sein de la famille, de l'entreprise ou à l'extérieur de celle-ci.

Intégrer et renforcer les liens

Au sein de la communauté familiale, l'histoire peut être utilisée pour intégrer de nouveaux venus, comme les conjoints ou les plus jeunes (les NextGen). Elle peut servir à renforcer les liens entre les générations ou vers les branches plus ou moins éloignées de la famille. Cela peut être étendu aux managers et aux dirigeants non familiaux ou aux employés des Family Office pour s'assurer de leur bonne compréhension des attentes de leurs parties prenantes principales.

Susciter l’engagement

Il existe également un fort potentiel de création de valeur à mobiliser l'histoire pour créer un engagement chez les collaborateurs de manière générale, faciliter le transfert de connaissances en formalisant les pratiques spécifiques à l'entreprise pendant la formation. L'entreprise familiale est un milieu particulier au sein duquel les individus valorisent souvent l'idée de "travailler pour quelqu'un" plutôt que pour des actionnaires anonymes ou des dirigeants "mercenaires" peu attachés à l'organisation. Enfin, l'entreprise familiale, plus que d'autres, est très fréquemment rattachée à un territoire, à un espace physique, la région, le village, l'usine. L'entreprise familiale marque de son histoire un espace concret, par ses bâtiments et ses infrastructures. L'architecture est un levier fort de transmission patrimoniale et symbolique, voire même d'exploitation directe dans le cadre du tourisme industriel.

S’adapter à l’environnement

Pour la famille et pour l'entreprise, l'histoire permet aussi de répondre aux attentes et aux exigences imposées à l'organisation par son environnement afin de s'engager avec les parties prenantes externes. Les clients bien sûr mais aussi les partenaires prestataires de service ou fournisseurs et les communautés locales.

Construire le présent et le futur

L'histoire n'est pas seulement le passé. Afin d'élaborer une stratégie efficace, les membres de la famille et les dirigeants doivent comprendre les contraintes et les opportunités liées aux voies de développement suivies précédemment par la famille et l'entreprise. Ce que les théoriciens appellent "la dépendance de sentier"[1] est un élément central de la réflexion stratégique.

Persuader, Communiquer

La valeur de l'histoire en tant que ressource stratégique repose en grande partie sur sa capacité à évoquer et à persuader. Le plus souvent, l'histoire crée cette persuasion efficace à travers l'effet "pedigree", celui produit par le sentiment d'une lignée obtenue à partir d'une présence de longue date dans les affaires. Cette fameuse enseigne "banque fondée en..." qui souligne la résilience et le sérieux et donne confiance à l'épargnant.

Produire

Les entreprises familiales durables peuvent utiliser efficacement l'histoire pour promouvoir leurs services et leurs produits grâce à des récits historiques d'une part, mais également à la rétro-conception ou au relancement de modèles emblématiques.

Comment les entreprises familiales en font toute une histoire ?

Avant d’être une ressource, l’histoire est le fruit d’une construction. Pour autant, il est difficile de faire une généralisation quand à la manière dont les entreprises familiales élaborent leur histoire. Certaines familles ont une attitude très informelle vis-à-vis de la transmission et elles le font d'individus à individus. Ce processus favorise la transmission de récits quasi mythologiques entre les générations, en mettant l'accent sur des moments héroïques ou des tournants. Il dépend fortement de la mémoire personnelle et n'est pas à l'abri de l'oubli sélectif.

Quand les entreprises et les familles s'étendent, ou deviennent multi-générationnelles, avec de nombreux cousins par exemple, elles ont tendance à être plus professionnelles dans le processus. Elles font appel à un archiviste pour trier les documents d'archives et éventuellement un historien professionnel pour rédiger une histoire problématisée. En effet, il est important d'étudier rigoureusement l'histoire de la famille et de l'entreprise. Un historien professionnel ne sera pas impliqué dans la dimension émotionnelle et aura plus de réflexivité face aux évènements historiques et à l'archive. L'historien est capable, de part sa formation scientifique, de contextualiser, de mettre les différents événements dans une perspective plus large (l’industrie, le territoire, l'évolution technologique ou celle des mœurs ou des habitudes de consommation). Il peut par ailleurs faire le lien entre les développements survenus au sein de la famille et la stratégie de l'entreprise.

Pour autant les entreprises et les familles peuvent être tentées de souligner, de réinventer et même de créer un récit historique pour l'instrumentaliser. Il faut comprendre qu'il existe une forte différence entre le passé (l'ensemble des évènements ayant eu lieu avant aujourd'hui), la mémoire (ce qui reste dans les esprits) et l'histoire.

L'histoire est une «construction sociale et rhétorique qui peut être façonnée et manipulée pour motiver, persuader et encadrer les actions à l'intérieur et à l'extérieur d'une organisation» (R. Suddaby). Dans cette optique, l'écriture de l'histoire est hautement politique et stratégique au sein de la famille et de l'entreprise. Cette écriture change avec le temps et dépend des préoccupations actuelles des personnes qui contrôlent cette histoire et de leur vision pour l'avenir.
 

L'histoire est un matériau très plastique

Les entreprises familiales ont été étudiées dans leur utilisation du passé en tant que ressource stratégique et pour développer leur patrimoine de marque ou d'entreprise. À cet égard, l'histoire peut être considérée comme une source d'avantage compétitif. Plus précisément, une histoire de l'entreprise écrite dans un contexte de succession mettra l'accent sur le changement. Il convient aussi de faire leur place aux mentalités et aux priorités du moment. Ainsi, les familles au milieu du vingtième siècle s'intéressaient beaucoup moins à l'environnement, à la durabilité ou aux opportunités professionnelles pour les femmes au sein de l'organisation. Les échecs sont également rarement mentionnés. C'est dommage car les entreprises peuvent apprendre beaucoup d'une autopsie rigoureuse d'un projet avorté ou d'une aventure coûteuse !

Naturellement, les familles changent beaucoup avec le temps et la définition de ce qui appartient à l'histoire de la famille fait l'objet de débats. Dans une récente exposition consacrée à l'histoire d'une entreprise familiale, certains cousins ont été retirés de l'arbre généalogique parce qu'ils avaient vendu leurs parts dans l'entreprise après une querelle familiale... L'histoire est un matériau très plastique.

 

 

En Savoir plus

Il nous paraît important d'en savoir plus sur les interactions entre l'histoire et la stratégie dans les entreprises familiales. Les historiens sont peu habitués à une recherche conjointe avec des chercheurs en gestion ou en entreprise familiale. C'est pourquoi le Family Business Center de l'Edhec Business School a intégré l'histoire comme l'un de ses objectifs de recherche.
Il existe peu d'études sur l'influence mutuelle entre les émotions et l'histoire et leur impact sur la viabilité des entreprises familiales. Les 11 et 12 mai prochains, le Family Business Centre organise une conférence internationale rassemblant des historiens, des entreprises familiales, des praticiens et des chercheurs pour partager et connaître ce sujet.

Pour avoir plus d’informations sur la Conférence Entreprises Familiales EDHEC 2017, rendez-vous sur la page de l'événement

 

 

 

 

 

 

 

 

 

 


[1] Une théorie expliquant comment un ensemble de décisions passées peut influer sur les décisions futures.

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6 bonnes raisons pour les entreprises familiales d’utiliser leur histoire.

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Ludovic Cailluet
Professeur, Strategic Management & Business History, Family Business Center, EDHEC Business School

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