Strategic Resources and Family Firm Performance - Windesheim

Strategic Resources
and Family Firm Performance
Ilse Anje Matser

Strategic Resources and Family Firm Performance
Strategische resources en de prestaties van familiebedrijven
(met een samenvatting in het Nederlands)
Proefschrift
ter verkrijging van de graad van doctor aan de Universiteit Utrecht op gezag van de rector
magnificus, prof.dr. G.J. van der Zwaan, ingevolge het besluit van het college voor
promoties in het openbaar te verdedigen op vrijdag 18 januari 2013
des middags te 2.30 uur
door
Ilse Anje Matser
geboren op 28 september 1969
te Veenendaal

Promotoren: Prof.dr. A. Buijs
Prof.dr. R.H. Flören
Ontwerp omslag: Steven Koelemeijer
Realisatie: Kerckebosch Media, Zeist
ISBN: 978-90-807379-0-7
© 2012, Ilse A. Matser
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Voor zover het maken van kopieën uit deze uitgave is toegestaan op grond van artikel 16b
Auteurswet 1912 juncto het Besluit van 20 juni 1974, Stb. 351, zoals gewijzigd bij Besluit van 23
augustus 1985, Stb. 471 en artikel 17 Auteurswet 1912, dient men de daarvoor wettelijk
verschuldigde vergoedingen te voldoen aan de Publicatie- en Reproductierechten Organisatie
(Postbus 3060, 2130 KB Hoofddorp). Voor het overnemen van (een) gedeelte(n) uit deze uitgave
in bloemlezingen, readers en andere compilatiewerken (artikel 16 Auteurswet 1912) dient men
zich tot de uitgever te wenden.

Voor mijn ouders Anje en Piet Matser

Acknowledgments
Welcome to the world of family business! In 2011, the Family Firm Institute (FFI), an
international organization for family business advisors and researchers, celebrated its twentyfifth
anniversary. Its short history illustrates the fact that family business research is a
relatively new field of research. For many years, the general opinion among scholars has been
that family involvement is limited to a temporary phase in the life cycle of a business. In
general, it has been assumed that as firms grow, the need for external capital and professional
management leads to changes in management and ownership, resulting in a more dispersed
group of owners and an external CEO (Flören, 2004).
However, the growing number of centers and programs devoted to the study of family
business at universities worldwide and the wide variety of international academic conferences
on the topic (Astrachan, 2010) attest to the importance of family business as a separate field
of research. Other evidence suggests this as well. In 2011, the Family Business Review
ranked among the top 20 business journals in Thomas Reuters’ Journal Citation Report (FFI,
2011). Furthermore, the number of submissions to Family Business Review grew from 32 in
2004 to 232 in 2010 (FFI, 2011). In 2010, two new academic journals were launched in this
field: the Journal of Family Business Strategy and the Journal of Family Business
Management. In addition, Astrachan (2010) identifies a significant increase in the number of
articles dealing with family businesses in mainstream journals. Public authorities have also
shown an increasing interest in the topic. For instance, the European Commission has
formulated in an official statement that family firms differ from SMEs and that they deserve
more specific attention (European Commission, 2009).
Despite the growing acknowledgement of the importance of family business research, many
business management students do not appear to come into contact with the peculiarities of
family business management during their studies. When I studied business administration at
Vrije Universiteit in the early 1990s, the topic of family businesses was not mentioned at all.
As a result, certain courses, such as “strategic management,” “leadership,” and
“organizational development” hardly connected with my own experience and background in
a second-generation family business active in the designer furniture sector. When I was a
child, my family and I lived in an apartment above our store. We often discussed customers at
the dinner table and the family business has always been an integral part of our lives, in good
and in bad times. I worked for our family company for a short period at the start of my career.
Recently, my brother has taken over the business from my parents. My personal background,
in fact, has inspired me to initiate the research that has resulted in the dissertation presented
here.
My position as a lecturer in business management at Utrecht University combined with my
experience in the family business led me to the conviction that the topic of family businesses
deserves a more prominent place in business curricula. As a visiting professor at Nelson
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Mandela Metropolitan University, South Africa, I became acquainted with Elmarie Venter
and Shelley Farrington, both of whom are family business scholars. That exchange stay
motivated me to take my first steps towards research with regard to family businesses.
When I started reviewing articles and books in this field, I began to notice the plentitude of
research topics to explore. What interested me most is the notion that family firms have
specific characteristics that can make them very successful in what they do, while other
factors can have a negative or even devastating effect on their performance. This is
particularly important if the firms’ owner-managers are ignorant of the existence of these
positive or negative characteristics, or if they neglect to manage them. I am confident that
new insights stemming from an increase in research related to family businesses will prove a
welcome contribution to current theoretical and practical understanding of business
management. There is a need to increase our understanding of the drivers that influence
family firms, which in turn will help owners of family businesses to optimally manage the
influence of the family effect. Ideally, the positive effects could be leveraged and the negative
effects should be minimized in such a way that the positive effects can dominate.
Writing this dissertation has been a challenging journey with many ups and downs. It has
brought me into contact with many interesting people and places, I learned a lot about doing
research and the subject itself proved to be a source of motivation to continue.
The biggest challenge I faced during this journey is the lack of time to perform in my role as
the managing director of the Dutch Centre for Family Firms (CFB) and professor at
Windesheim, while trying to make my deadlines with regard to this dissertation. The support
I received from family, friends and colleagues has been of great help to keep making
progress, however small, and make it to the end.
First, I wish to thank my supervisors Arie Buijs and Roberto Flören. Arie, since that ‘braai’ at
the guest house of the Mountain Zebra National Park in South Africa where we decided that I
should write this dissertation you have been a great support for me. Besides being a great
supervisor for the past years you gave me the confidence I needed, the most valuable thing to
succeed. Roberto, as the expert of family business in the Netherlands, I am very thankful for
your guidance, feedback and support. You have the ability to give ‘small notes of advice’ that
are very true and very helpful.
Second, I am grateful to the members of the reading committee, Tineke Bahlmann, Johan
Lambrecht, Sascha Kraus, Enno Masurel and Elmarie Venter, for reading and commenting on
this thesis.
Third, doing research meant making long hours in my study but also working together with
fellow researchers and colleagues. Working together with Lorraine Uhlaner, Marta Berent,
Judith van Helvert, Shelley Farrington, Elmarie Venter, Sascha Kraus, Stefan Mark and Coen
Rigtering has not only improved the content of this dissertation but we have also had a great
deal of fun. I’m looking forward to continue to work together with you.
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I would also like to thank the support I got from the CFB, its board members and its partners.
As managing director of a centre that has a mission to increase the knowledge on family
firms, the centre has given me a lot of opportunities that were beneficial for this dissertation.
I am indebted to many colleagues who supported me during this journey. I am indebted to my
colleagues at UCEME in Utrecht during the start of my dissertation and later those at
Windesheim in Zwolle. Especially in this final year, my colleagues in Zwolle helped me out
so I had more time to finish my dissertation. Thank you for this.
Judith van Helvert and Evelyn Groot Bruinderink, thank you for being willing to act as my
‘paranimphs’, assisting me in the defense. Judith at work and Evelyn at home helped me were
they could. Evelyn, you contributed also by making sure that there was also time for having
fun. Judith, we were colleagues in Utrecht and now at Zwolle and at the centre. It’s always
great to work with you, I think we are the best team ever.
Finally, I would like to thank my parents, Anje and Piet, my children Louise and Hugo and
my husband Steven. Thank you for all your love.
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Table of contents
Acknowledgments………………………………………………………………………..
List of Tables…………………………………………………………………………….
List of Figures ……………………………………………………………………………
1: Family involvement, strategic resources, and firm performance: An introduction…...
1.1 Introduction.............................................………………………………………….....
1.2 The three-circle model: family firms as a subgroup of privately owned firms……...
1.3 The family factor’s influence on the business: theoretical concepts………………..
1.3.1 Bivalent characteristics …………………………………………………….
1.3.2 Familiness………………………………………………………………….
1.3.3 Management of strategic resources………………………………………..
1.4 Existing research findings……………………………………………………………
1.5 Research question, framework, definitions and Dutch context……………………..
1.5.1 Research question and research framework……………………………….
1.5.2 Defining the family firm…………………………………………………...
1.5.3 Family firms in the Netherlands…………………………………..............
1.6 Dissertation overview.....................................................................................
2: Ownership social capital in privately held firms: the role of family involvement........
2.1 Introduction................................................................................................................
2.2 Background on ownership social capital ...................................................................
2.3 Research framework and hypotheses.........................................................................
2.3.1 Direct relations among components of ownership social capital................
2.3.2 Complex relations among components of ownership social capital............
2.4 Method........................................................................................................................
2.5 Results.........................................................................................................................
2.6 Discussion and conclusion..........................................................................................
3: The relationship between ownership social capital and product innovation: The
moderating role of family involvement..............................................................................
3.1 Introduction..................................................................................................................
3.2 Background on product innovation and the role of (family) owners...........................
3.3 Research framework and hypotheses...........................................................................
3.4 Method.........................................................................................................................
3.5 Results..........................................................................................................................
3.6 Discussion and conclusion..........................................................................................
4: The relationship between spousal social capital in copreneurial firms and firm
performance......................................................................................................................
4.1 Introduction.................................................................................................................
4.2 Spousal social capital: background and hypotheses....................................................
4.2.1 The copreneurial relationship as a strategic resource...................................
4.2.2 Three dimensions of spousal social capital..................................................
4.3 Method........................................................................................................................
4.3.1 Sample and data collection...........................................................................
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4.3.2 Variables.......................................................................................................
4.4 Results.........................................................................................................................
4.4.1 Factor analysis..............................................................................................
4.4.2 Descriptive statistics and correlations..........................................................
4.4.4 Structural model............................................................................................
4.5 Discussion and conclusion...........................................................................................
5: Securing post-succession continuity in family firms through knowledge transfer........
5.1 Introduction..................................................................................................................
5.2 Research framework and hypotheses...........................................................................
5.2.1 Post-succession continuity............................................................................
5.2.2 The knowledge transfer climate....................................................................
5.2.3 Moderator: Is the successor a family member?............................................
5.3 Method.........................................................................................................................
5.4 Results..........................................................................................................................
5.5 Discussion and conclusion...........................................................................................
6: Conclusions and implications........................................................................................
6.1 Research findings.........................................................................................................
6.2 Overall conclusions......................................................................................................
6.3 Theoretical implications..............................................................................................
6.4 Limitations and directions for future research.............................................................
6.5 Practical implications...................................................................................................
Summary.............................................................................................................................
Samenvatting (in Dutch)....................................................................................................
References.........................................................................................................................
Curriculum Vitae.............................................................................................................
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List of Tables
Table 1.1: Social capital research in major management and family business journals….
Table 1.2: Empirical trends in social capital studies of private firms……………………
Table 1.3: Family business in relation to all businesses in the Netherlands……………..
Table 1.4: Representation in business sectors……………………………………………
Table 1.5: Number of owners per business in the Netherlands………………………….
Table 1.6: Dissertation overview…………………………………………………………
Table 2.1: Factor analysis of multi-item variables included in the study………………...
Table 2.2: Correlations between variables used in the study……………………………..
Table 2.3: Prediction of ownership social capital………………………………………...
Table 3.1: Factor analysis of multi-item variables included in the study………………...
Table 3.2: Correlations between variables used in the study…………………………….
Table 3.3: Prediction of product innovation……………………………………………...
Table 4.1: Overview of sample characteristics…………………………………………...
Table 4.2: Average variance extracted and shared variance estimates…………………...
Table 4.3: Means, standard deviations, and zero-order correlations ……………………..
Table 5.1: Possible factors influencing the knowledge-management process…………...
Table 5.2: Descriptive statistics and correlation matrix………………………………….
Table 5.3: Predicting profit growth………………………………………………………
Table 6.1: Summary of research findings……………………………………………….
List of Figures
Figure 1.1:The three-circle model……………………………………………………….
Figure 1.2: Matrix of family and business dimensions………………………………….
Figure 1.3: Möbius strip………………………………………………………………….
Figure 1.4: Research framework…………………………………………………………
Figure 2.1: Research framework including direct effects………………………………..
Figure 2.2: Interaction term shared vision and quality of relationships…………………
Figure 2.3: Interaction term shared vision and family involvement......…………………
Figure 3.1: Model of ownership social capital and product innovation…………………
Figure 3.2 Interaction term family involvement and network mobilization …………….
Figure 4.1 Research framework…………………………………………………………
Figure 4.2 Structural model……………………………………………………………..
Figure 5.1 Interaction term family succession and knowledge transfer climate………..
Figure 6.1 Research framework…………………………………………………………
Figure 6.2 Adjusted research framework………………………………………………..
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1: Family involvement, strategic resources, and firm
performance: An introduction
1.1 Introduction
Past research has raised many interesting questions regarding the effect of family
involvement on businesses. With the resource-based view as the primary theoretical
framework, this dissertation looks at strategic resources in private firms and how those
resources are influenced by family involvement. Furthermore, the research investigates to
what extent the development of these strategic resources have an impact on firm
performance. The focus is on the development of tacit knowledge and social capital, as these
components of strategic resources have been identified in the literature as elements for which
family involvement may have a strong, positive influence.
In this chapter, the outline of this dissertation and underlying themes are presented. Section
1.2 introduces the distinctive characteristics of family firms, making use of the core concept
of family business research: the three-circle model. Section 1.3 explores the distinctive
characteristics of family firms using the concept of bivalent characteristics. Resource-based
theory is introduced as a theoretical framework that may be appropriate for the dynamics of
family businesses. Furthermore, the unique challenge that family businesses face is
introduced – the need to manage the interests of the family and the business in such a way
that their overlap results in synergies. Section 1.4 highlights several gaps in the existing
empirical research. This leads to the main research question and research framework, which
are formulated in section 1.5, where the quest for finding suitable definitions for family
businesses is explored and an overview of the prevalence of family firms in the Dutch
economy is provided. The final section provides an outline of this thesis.
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1.2 The three-circle model: family firms as a subgroup of privately owned
firms
The business landscape in the Netherlands consists of a rich mixture of firms with an
emerging focus on entrepreneurship (EIM, 2011). Most companies are privately held: the
owner or owners are private persons whose shares are not traded on a public stock exchange.
The objectives of privately held firms are to remain viable and healthy, and, if possible,
create growth. From the owners’ perspective, the firm’s main priority is to meet the owners’
values, goals, and needs. Key for an understanding of the dynamics of privately owned firms
is recognition of the fact that the interests of owners and the firm are not always compatible.
When business owners and the managers who run the business are not the same, the two
parties might face a conflict of interest (Tutelman & Hause, 2008). However, even if the
business is managed by a sole owner, a distinction can be made between interests as an owner
and those as a manager. Tutelman and Hause (2008) stress that it is important to balance
these various interests to ensure the long-term continuity of the business.
Family firms are a subgroup of privately owned firms. Within the entrepreneurship literature
there is a growing interest for the unique challenges this subgroup is facing (Kraus, Craig,
Dibrell and Märk, 2012). The family system is as relevant as the business and the ownership
systems. In family firms, these three systems interact with each other, making the balancing
act even more complex. The family firm can be regarded as an open-system model
comprising three overlapping, interacting, and interdependent subsystems of owners, family,
and managers (Moores, 2008). This view builds on the “systems approach” to organization
(Morgan, 1986): The main principle of the system approach is that organizations, like
organisms, are open to their environment and in order to survive must achieve an appropriate
relation with that environment. A focus of the open-systems approach is that organizations
can be defined in terms of interrelated subsystems. The notion of family firms as
organizations consisting of three subsystems, was introduced by Tagiuri and Davis in 1982
(reprinted in 1996) and is known as the three-circle model (see Figure 1.1). This view has
largely been accepted by the community of family business scholars as the key symbolic
generalization of the prevailing family business paradigm (Moores, 2008).
In the three-circle model, the overlap of the three systems indicates that individuals have up
to three roles simultaneously. A family member who stands at the “core” of the system is a
family member, an owner, and a manager of the business. With each role comes different
obligations, interests, and goals. As a family member, the prime concern is the welfare and
the harmony of the family. As an owner, the focus is on ensuring stable returns on
investments and the continuity of the firm. As a manager, the primary interest is the firms
“operational effectiveness” (Tagiuri & Davis, 1996). These varying interests explain the
potential conflicts among roles in family businesses.
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Figure 1.1: The three-circle model
Ownership
Source: Tagiuri & Davis, 1996
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Family
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Business
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Each individual directly involved in the business can be placed
in one of seven sectors:
1- a family member who is neither an owner nor an employee;
2- an employee who is neither a family member nor an owner;
3- an owner who is neither a family member nor an employee;
4- a family member who is also an owner but not an employee;
5- a family member who is also an employee but not an owner;
6- an owner who is also an employee but not a family member;
7- a family member who is also an owner and an employee.
Flören (2004) highlights the difference between family and non-family firms in terms of the
openness of the systems. In non-family firms, conflicts at home or at work typically remain in
their own environments, while the same is not true for family firms. If, for example, two
sisters who co-own and run a family firm argue about the strategic course for the firm, the
dispute will have consequences in the family sphere. Such spillover effects can be found in
various dimensions of family firms, including finances, work-life balance, and risk
perceptions.
Another aspect incorporated into the three-circle model is the dynamic nature of the family
business system. Individuals’ roles and positions may change during the life cycle stages of
the individuals, the family, and the business as a whole (Hoy & Sharma, 2010). One such
change could be the spouse of the founder joining the business when the workload increases
(Steier, 2007). At a later stage, children may join the family firm, first as employees and later
as owners. In the succession phase, parents and their children may work together. Later, when
parents retire as managers, they might stay involved in the firm as owners. If this
evolutionary succession path is followed, family business systems can become increasingly
large and complex in later generations. A family business can evolve, for example, from a
founder-managed company to a sibling partnership in the second generation and to a cousinlinked
consortium in the third generation (e.g., Gersick, Lansberg, Desjardins & Dunn, 1999).
This evolutionary path may prove impossible or undesirable for many family firms, for
instance when the business does not have the growth potential to financially support a
growing number of family members; undesirable when owners’ visions diverge, family
members are uninterested or incompetent, or family members or family branches begin to
compete (Lambrecht & Lievens, 2008). These signals can be interpreted as indications that it
is time to “prune” the family tree, which ensures that the remaining family owners and
managers are the same people, or that the shareholders are concentrated in a single family
branch. Lambrecht and Lievens (2008) discuss the principle of keeping the management or
ownership of a business within a small group of family members. They argue that pruning the
family tree can potentially enhance family business continuity and family harmony. One
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example of where this process has been successful is the Van Bommel shoe factory, where
recently a pruning process has been completed. The ninth generation currently runs the
business as a sibling partnership.
1.3 The family factor’s influence on the business: theoretical concepts
The previous section introduced the family firm as a subgroup of privately owned firms with
the three-circle model as the key symbolic generalization. In this section, the effects arising
from the interrelationships among the family, the business, and its owners are introduced. In
this regard, the notion that the family effect on the business can lead to both positive and
negative outcomes is highly relevant.
1.3.1 Bivalent characteristics
In order to study family businesses as a stand-alone discipline, it is necessary to identify
theoretically founded, empirical evidence of the distinctiveness of family firms. A milestone
in this regard is the research done by Anderson and Reeb (2003). The impact of that study is
reflected in its high ranking on the frequently cited articles list in family business research
(Chrisman, Kellermans, Kam, Chan & Liano, 2010). Anderson and Reeb compare the
performance of large, publicly traded family and non-family firms in the United States. They
find that family firms outperform non-family firms in specific circumstances, such as when
the former have a family member as managing director. This outcome has led to more
research focused on the question of why family firms outperform non-family firms. For
instance, Miller and Le Breton-Miller (2005) undertook a large qualitative research project to
reveal the success factors of 58 large family firms that had been successful for an extended
period of time. They identify four factors that drive successful strategies: command,
continuity, community, and connections. The findings of this research have been successfully
tested using a sample of small, first-generation family firms (Miller, Le Breton-Miller, &
Scholnick, 2008). The results of the study done by Miller et al., (2008) reflect the prediction
done by Dyer (2006). He argues that within family businesses, the subgroup of clan family
firms, ceteris paribus, will have the highest performance. Clan family firms are firms who are
owned and managed by family members highly committed to both the success of the firm and
the family. Small, first-generation family firms are the stereotype of this subgroup (Dyer,
2006). The four success factors (Miller & Le Breton-Miller, 2005) are in line with the
findings presented in other influential articles focusing on the potential positive
characteristics of family firms (e.g., Aldrich & Cliff, 2003; Chrisman, Chua & Sharma, 2005;
Sharma, 2004).
Research into the positive outcomes of family involvement for a business typically adopts a
normative approach to the distinctiveness of family firms. However, too much emphasis on
the positive aspects may lead to an underestimation of the potential harmful effects of family
influence on a business. To fully capture the effect of family involvement on a business, all
factors – both positive and negative – count.
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As early as 1982, Tagiuri and Davis (1996) acknowledged that family firms have several
unique, inherent attributes, and that each of these key attributes can be a source of benefits
and a source of disadvantages. Given their latent positive and negative potential, these
attributes are labeled as bivalent attributes. These bivalent attributes are the immediate
consequences of the overlap of the family, business, and ownership systems. Jaffe (2007)
refers to this notion when he argues that the characteristics of a family business can lead to
conflict or difficulties if they become extreme.
Tagiuri and Davis (1996) identified seven bivalent attributes of the family firm:
• Simultaneous roles,
• A lifelong common history,
• Emotional involvement and ambivalence,
• A private language,
• Mutual awareness and privacy,
• A shared identity, and
• The meaning of the family company.
The bivalent attributes are mutual related and, in some cases, probably do overlap. For
example, the role of the founder reflects attributes two and three – lifelong common history,
and emotional involvement and ambivalence, respectively. The founder often plays a crucial
role in building a successful firm, but if the founder neglects to train or create sufficient
favorable conditions for a new generation to come into play, the whole business may age
(Jaffe, 2007). This negative effect can be even worse when the incumbent leader is reluctant
to let go and when the business culture is not innovative (“this is the way we do things around
here”). The positive effect of a lifelong common history can be a deep tacit knowledge that is
transferred to the next generation.
In family firms, the simultaneous roles as owner and manager can explain the reduced need
for governance mechanisms, as interests are aligned. This absence of significant agency
costs, is seen as a competitive advantage for family firms relative to firms with dispersed
ownership and external managers (Schulze, Labatkin, Dino & Buchholtz, 2001). A negative
effect stemming from role overlap arises when family harmony prevents decision making in
the firm. This occurs, for instance, when there is clearly one capable successor but all siblings
are installed as new directors because family harmony is prioritized. Schulze et al. (2001)
argue in this respect that there are specific agency costs for family firms that should be take
into account. For example children in management positions can acts as free riders because
they know that their parents will not discipline them.
With respect to shared identity and the meaning of the family company, Sharma (2004)
suggests that the alignment of goals that different stakeholders are striving to achieve is an
important predictor of family firm performance. A mismatch can lead to serious conflicts that
can harm the family business. A shared identity helps to align such goals.
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Jaffe (2007) describes the attribute of private language as family members having a special
shorthand language – they share information quickly and therefore get things done
efficiently. However, this does not imply that families know how to communicate about
sensitive issues. Issues that are not discussed can develop into conflicts that can eventually
make it impossible to continue to work together. Furthermore, Flören (2004) suggests that
taboo subjects exist within families and, by implication, within family businesses. Such
topics are left buried in order to avoid disrupting the family harmony.
Another aspect relates to the phenomena of mutual awareness and privacy; family members
have a keen awareness of each other’s circumstances. This gives them insights into how they
can support one another. At the same time, this awareness can stimulate the feeling that one is
“living in a fishbowl” – maintaining a private life outside the family business is not easy,
which can make family members feel oppressed (Tagiuri & Davis, 1996).
This discussion of the bivalent attributes reveals the complexity confronted by stakeholders in
a family firm. In the next section, the resource-based view is introduced as a theoretical
framework that can be used to analyze the distinct attributes in detail.
1.3.2 Familiness
Tagiuri and Davis (1996) suggest that family firms have unique resources that create positive
and negative outcomes for the firm. This notion has more recently been referred to as the
“familiness” of the firm (Sirmon & Hitt, 2003). Habbershon and Williams (1999) describe
familiness as the unique bundle of resources created by the interaction of family and business
that can stimulate competitive advantage. In this thesis, the resource-based view (RBV) is
used as the theoretical foundation for understanding the distinctive attributes of a family firm.
The theoretical assumptions of the RBV can be specified to fit the family firm context
(Habbershon & Williams, 1999).
The RBV is one of the most influential theoretical frameworks in the field of strategic
management (Barney, Wright & Ketchen, 2001; Newbert, 2007). Wernerfelt (1984)
introduced the notion that firms can be analyzed by focusing on their resources rather than
their products. A resource is defined by Wernerfelt (1984, p. 172) as “anything which could
be thought of as a strength or weakness of a firm.” The key objective of RBV is to establish a
causal relationship between resources and a long-term competitive advantage. Barney (1991)
argued that resources should have four characteristics to establish a competitive advantage.
Such resources, which are labeled “strategic resources,” should be: valuable, rare, difficult to
imitate, and non-substitutable. Examples include reputation, patents, and unique knowledge
(Barney, 1991; Crook, Ketchen, Combs, & Todd, 2008). Barney based the RBV on two
assumptions: resources are heterogeneously distributed among firms and they are imperfectly
mobile. These assumptions allow for differences in firm resource endowments to exist and
persist over time. Both assumptions therefore allow for resource-based competitive
advantages.
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The RBV has proven its value as an appropriate theoretical framework in the field of family
business research (Chrisman, Chua & Zahra, 2003). Within this framework, the competitive
advantage of a firm can be discussed by referring to the firm’s underlying resources, specific
strategies and skills, and thereby allows for differentiation among family firms instead of
regarding the family effect as a specific advantage that is common to all family firms.
Habbershon and Williams (1999) stipulate that this focus on underlying resources, specific
strategies and skills is the appropriate level of analysis for assessments of family firm
advantages. This is also acknowledged by Melin and Nordqvist (2007), who state that
overemphasizing the similarities between family firms downplays the differences and can
lead to an overly simplistic view on family firms. The RBV, therefore, is an appropriate
framework for focusing on the distinctive resources of family firms and for analyzing the
firms’ unique traits.
Various scholars, in turn, discuss possible sources of competitive advantage among family
firms (Carney, 2005: Eddleston, Kellermans & Sarathy, 2008; Habbershon & Williams,
1999; Miller & Le Breton-Miller, 2005; Miller et al., 2008; Sirmon & Hitt, 2003). Sirmon
and Hitt (2003) discuss five possible family-firm-specific resources and their corresponding
positive outcomes:
• Human capital is defined as the acquired knowledge, skills, and capabilities of
individuals. The positive attributes related to human capital that stem from family
influence include extraordinary commitment, warm relationships and the potential for
deep, firm-specific tacit knowledge.
• Social capital is the goodwill or other benefits generated by various social relations
(Adler & Kwon, 2002). Social capital in the family firm is based on strong network
ties, shared languages and narratives, trust, norms and obligations. All of these
components are embedded in the family and can lead to the development of human
capital.
• Patient financial capital is capital that is invested for an extended period of time and
thus carries little threat of liquidation on short notice. In this regard, the generational
outlook of family members creates a focus on a long-time horizon instead of shortterm
results.
• Survivability capital represents the pooled personal resources that family members are
willing to loan, contribute, or share for the benefit of the family business. Such capital
can help the firm through poor economic times.
• Governance structure is relevant in that the mutually-shared objectives, trust and
family bonds found in family firms reduce more formal governance costs.
However, familiness is not always a positive characteristic. Habbershon and Williams (1999)
coins the terms “distinctive familiness” and “constrictive familiness” to differentiate between
the positive and negative sides of familiness. “Distinctive familiness” stands for the
enhancement of family and business capital stocks that occurs as a consequence of a balanced
flow of capital between these systems. On the other hand, “constrictive familiness” reflects
the negative outcome caused by an excess flow of capital in one direction. Sharma (2008)
7

emphasizes in this respect the need for a balance in the input and output of resources from the
family to the business and vice versa.
In general, the RBV emphasizes that the availability of appropriate resources is a necessary,
but insufficient, condition for achieving a long-term competitive advantage. Resources must
be managed in a way that leads to capabilities that make it possible to achieve a competitive
advantage (Sirmon & Hitt, 2003). Therefore, the management of these strategic resources is
discussed in the next section.
1.3.3 Management of strategic resources
Tagiuri and Davis (1996) suggest that the success of a business will depend on whether the
bivalent characteristics are effectively managed. The effective management of these attributes
should result in a positive outcome for the business dimension, as well as for the family and
ownership dimensions. The idea that long-term prosperity of the family business system
requires positive outcomes in both the business dimension and the family dimension is
widely acknowledged (e.g., Ward, 1987; Litz, 2008; Sharma, 2004). Sharma (2004) argues
that recognition of the intertwinement of family and business leads to the definition of highperforming
family firms as organizations that take financial and non-financial goals into
account when attempting to meet the expectations of various stakeholders, including the
family, the business, and owners. Figure 1.2 depicts the performance of family firms in a
matrix. The expression “warm hearts and deep pockets” stands for those family business
systems that have achieved high levels of emotional and financial capital, the preferred state a
the family firm. Sharma proposes that family firms can overcome low levels in one of the two
dimensions in the short term. However, in the long term, family firms need to achieve
positive scores in both dimensions.
Figure 1.2: Matrix of family and business dimensions
Business dimension
Positive
Negative
Source: Sharma, 2004
Positive
Family dimension
Negative
I
II
Warm hearts and deep pockets Pained hearts but deep pockets
High financial and high emotional High financial but low emotional
capital
capital
III
IV
Warm hearts but empty pockets Pained hearts and empty pockets
Low financial but high emotional capital Low financial and low emotional
capital
Litz (2008) takes a somewhat broader approach by proposing that a family business system
can be compared to a Möbius strip, which is a mathematical concept. A Möbius strip can be
described as “a band of paper given a 180 degree twist prior to having its two ends
8

connected” (see Figure 1.3, based on Litz, 2008, p. 219). In other words, each system’s
output becomes another system’s input. This phenomenon occurs in family firms when crosssystem
transfers occur. Consider, for example, a next-generation member who becomes an
employee of the family business. The family’s child and the firm’s wages are transferred
across systems to become the other systems’ inputs: workforce for the firm and income for
the family. Litz joins Sharma (2004) in arguing that if long-term success is to be possible,
there must be synergy within the subsystems (net positive effect of the transfers within each
dimension) and symmetry in the overall balance of transfers between the two subsystems.
Figure 1.3: Möbius strip
Source: turbosquid.com
The viewpoints discussed in this section demonstrate that family business scholars widely
acknowledge the idea that family firms have distinctive characteristics that stem from the
interaction of the family, business, and ownership subsystems. These characteristics are
bivalent, as they carry latent positive and negative potential. Furthermore, when these
characteristics have a positive effect (distinctive familiness), they can be regarded as strategic
resources that lead to competitive advantage. Before the research questions for this
dissertation are presented, it is necessary to understand the implications of the results from
previous research on this topic. These research results are discussed in the next section.
1.4 Existing research findings
Relatively little empirical research has focused on the concept of familiness (Astrachan,
2010). Astrachan notes in this respect that “the sources from which these strategic resources
emerge, the ways in which they can change over time, and the means through which they can
be nurtured and preserved, are not well explored” (2010, p.8). Sirmon and Hitt (2003)
identify human, social, survivability, and patient capital, as well as governance structures as
possible family-firm-specific strategic resources (see section 1.3.2). More specifically, social
capital and tacit knowledge, as elements of human capital, are regarded as key strategic
resources for which family involvement plays an important role (e.g., Arregle, Hitt, Sirmon &
Very, 2007; Cabrera-Suárez, De Saá-Pérez & Garcia-Almeida, 2001; Pearson, Carr & Shaw,
2008; Royer, Simons, Boyd & Rafferty, 2008; Sharma, 2008; Sirmon & Hitt, 2003). In
9

additional, social capital theory is viewed as a promising theory for further development of
the “familiness” construct (Arregle et al., 2007; Pearson et al., 2008).
In order to analyze whether these proposition hold, the findings of previous empirical
research on the topics of social capital and tacit knowledge are reviewed in this section. This
review also helps to identify the gaps in the existing knowledge on these topics and highlights
areas in need of additional research. As social capital is the core construct considered in
Chapters 2, 3, and 4, the empirical findings related to social capital are bundled and discussed
in this section. The empirical findings from previous research on tacit knowledge are
discussed in Chapter 5.
Tacit knowledge
Tacit knowledge differs from explicit knowledge in that it is knowledge stored in routines,
values, norms, etc., rather than in handbooks (Grant, 1991). Furthermore, actors need skills to
apply tacit knowledge, which are gained through experience (Chirico, 2008), and tacit
knowledge is difficult to transfer (Cabrera-Suárez et al., 2001). Therefore, Hoy and Sharma
(2010) identified not only the specific knowledge of a firm but also the transferability of that
knowledge as key strategic resources to manage. Research on possible hurdles in the
knowledge management process reveals three main categories of barriers in the knowledge
transfer process: trust; conflicts and rivalry; and social structure and networks (see Chapter
5). These findings reveal a strong link between tacit knowledge, as a component of human
capital, and social capital. The transfer of tacit knowledge appears to be one of the potential
positive outcomes of social capital (Zahra, Hayton, Neubaum, Dibrell & Craig, 2008).
Furthermore, the transfer of tacit knowledge during business transfer is a topic attracting
considerable interest (Zahra, Neubaum & Larranetta, 2007). The theoretical construct of the
tacit knowledge climate (Cabrera-Suárez et al., 2001) therefore seems to be an appropriate
construct to test among family and non-family firms.
Social capital
Social capital is a concept that can be studied at multiple levels. In this dissertation, the focus
is on the group level: owner groups in private firms and copreneurs. Lee’s review (2009) and
Payne, Moore, Griffis, and Autry’s (2010) systematic analysis of social capital in the
management domain are the starting points of this review.
Payne et al. (2010) analyze social capital research in 14 major management journals. These
journals were selected because they had previously been used in similar management
reviews. As the focus of this dissertation is on private firms, especially family firms, Payne et
al.’s (2010) analysis is extended to include key journals within the field of family business
research that are not among the selected management journals. This is done on the basis of
the list of journals used by Debicki, Matherne III, Kellermans, and Chrisman (2009) in their
analysis of the contributions in the family business research field. This leads to the inclusion
of eight additional journals that featured three or more family business articles between 2001
10

and 2007 (the review period used by Debicki et al., 2009). The Journal of Family Business
Strategy, a journal launched in 2010 with a specific focus on family business research, is also
included.
Payne et al. (2011) distinguish between conceptual and empirical papers. They also use a
typology to distinguish between the individual or collective level and an internal or an
external focus. This framework leads to a two by two matrix. Every article is labeled using
these criteria. In this dissertation, the focus is on the empirical findings at the group level.
Therefore, the articles included are those labeled as “collective” and “empirical” in Payne et
al.’s (2011) gross list. These articles are covered in column two of Table 1.1. Payne’s time
frame ranges from 1989 to 2008. Therefore, this review extends the time frame to include
2009, 2010, and 2011. For these years, the selected journals were searched for articles in
which social capital was the core construct. The results were limited to articles in which
“social capital” was used as a key work or in the abstract. The numbers of articles that were
found in this manner in the various journals are given in column four of Table 1.1. The same
procedure was followed for the nine additional journals. For this group, the search covered
the period from 1998 to 2011. These results are shown in column four in the lower part of the
table.
The next step was to filter these findings based on the criteria that reflected the focus of this
dissertation: empirical research with a quantitative approach, a context of private firms in a
for-profit sector, and the group level as the level of analysis. The numbers of articles that met
these criteria are given in columns three and five. Column three covers the articles in Payne
et al.’s (2011) review that met these criteria, while column five covers the articles published
in the additional years by the journals reviewed by Payne et al. and those published in the
additional journals from 1998 to 2011.
11

Table 1.1: Social capital research in major management and family business journals, 1998-2011
Journals reviewed by Payne et al. (2011)
Review period 1998-2008 Met criteria 2009-2011 Met criteria
Academy of Management Journal 11 3 0 0
Academy of Management Review 0 0 0 0
Administrative Science Quarterly 3 1 0 0
Entrepreneurship Theory & Practice 0 0 11 2
Journal of Business Venturing 1 0 7 1
Journal of Management 0 0 2 0
Journal of Management Studies 4 1 1 0
Journal of Organizational Behavior 2 0 1 0
Management Science 2 0 2 0
Organization Science 4 0 3 0
Strategic Management Journal 8 2 3 1
Journal of Applied Psychology 0 0 3 0
Personnel Psychology 0 0 0 0
Organizational Behavior & Human Decision Processes 0 0 0 0
Total number of articles from Payne’s et al. review 35 7 33 4
Additional journals based on review by Debicki et al. (2009)
Review period 1998-2011 Met criteria
Corporate Governance 9 0
Family Business Review 4 2
International Small Business Journal 10 3
Journal of Business Research 10 1
Journal of Small Business Management 9 3
Organization Studies 7 1
Small Business Economics 18 3
New family business journal launched in 2010
Journal of Family Business Strategy 4 1
Total number of articles from additional journals 71 22
The analysis of Payne et al.’s (2011) review highlights the Academy of Management Journal
and Strategic Management Journal as key contributors with roughly half of the total
empirical articles on social capital. In 2009-2011, Entrepreneurship Theory & Practice paid a
lot of attention to social capital (11 articles). From 2009 to 2011, 33 articles were published
on this topic in comparison to a total of 35 articles in the previous ten years. These figures
indicate that the construct of social capital and, more specifically, empirical studies of this
construct at a collective level are viewed as increasingly relevant. The relatively large number
of articles from the additional journal list can be viewed as a signal that the social capital
theory is seen as relevant within the fields of family businesses, and small and medium sized
enterprises. A comparison of the figures from column three and five to the total for all
selected articles shows that only one-fifth of all articles met the specific criteria of
quantitative research within private firms at the group level. Overall, while the figures in
Table 1.1 reflect the growing interest in social capital theory, they also emphasize that
relatively little attention has been paid to quantitative research at the group level. The key
findings from the individual papers are discussed in Table 1.2.
12

Table 1.2: Empirical trends in social capital studies of private firms
Study
Journal 1
Sample Key constructs of social capital Key findings on social capital
Aartsad et
al. (2010)
ETP
Acquaah
(2007)
SMJ
Audretsch
et al.
(2011)
ISBJ
Berent-
Braun &
Uhlaner
(2012)
SBE
Bamford
et al.
(2006)
JSBM
Brewton
et al.
(2010)
JFBS
Carr et al.
(2011)
ETP
Chua et
al. (2011)
JBV
Hydroelectric
micro-power
start-ups
(Norway)
CEOs of
medium and
large firms
(Ghana)
Participants
in a new
venture
workshop,
(US)
Non-random
group of FB
(18
countries)
New
ventures in
bank sector
(US)
Small and
mediumsized
family
firms (US)
Small family
businesses
(US)
New
ventures with
varying
levels family
involvement
(US)
Dyadic social capital measured with
network structure
Three types of networking: firms,
government, and community; firms:
buyers, suppliers, and competitors
Mobilization of contacts (structural
dimension)
Results indicate that firms lacking social
capital can enhance performance through
cohesion with firms rich in social capital.
Entrepreneurs can benefit by mimicking the
networking patterns of successful colleagues.
Social capital developed from managerial
networking and social relationships with top
managers at other firms, government officials
(political leaders and bureaucratic officials),
and community leaders enhances
organizational performance.
Positive relationships are found for groups
with pre-existing professional interactions for
founding a firm after the workshop (=
accelerator).
Owner focus on shared wealth Owner focus on shared wealth acts as a
mediating variable for the relationship
between family governance practices and the
financial performance of the family business.
Size of top management team (TMT),
exit of founder/ CEO
Adjustment strategies, family-tobusiness
intermingling, way of life
Collective/internal social capital
stemming from family members; split
into structural, cognitive, and
relational dimensions
Family involvement: ownership,
governance, and management
The exit of the founder/CEO has negative
impact on performance. The size of the top
management team has a moderating effect.
The set of social capital variables contributes
significantly to the explanation of firm
resilience for rural, but not urban, firms. Of
note is the negative relationship between firm
resilience and the crossover of family and firm
tasks for rural firms. The lone significant
social capital variable for urban businesses
was the meaning of the firm for the business
owner.
Scales are developed and tested to measure
internal social capital in family firms. A
positive association is found with knowledge
sharing, cohesion, work satisfaction, and
family satisfaction, while a weak link is found
with firm performance.
Family involvement increases the ability to
borrow family social capital. Family
involvement has a positive influence on new
venture debt financing.
1 AMJ = Academy of Management Journal, ETP = Entrepreneurship Theory & Practice, FBR = Family
Business Review, ISBJ = International Small Business Journal, JFBS = Journal of Family Business Strategy,
JBV = Journal of Business Venturing, JMS = Journal of Management Sciences, JSBM = Journal of Small
Business Management, SMJ = Strategic Management Journal, SBE = Small Business Economics.
13

Study
Journal 2
Danes et al.
(2009) FBR
Fang et al.
(2010) ISBJ
Fitzgerald et
al. (2010)
JSBM
Maurer et al.
(2011)
OS
Miller et al.
(2007) ISBJ
Molina-
Morales &
Martinez -
Fernández
(2009) SMJ
Pennings et
al. (1998)
AMJ
Pérez-Luno
et al. (2011)
JBR
Sample Key constructs of social capital Key findings on social capital
Small and
medium-sized
family firms (US)
CEOs or Top
management team
tenants of
incubator
program (Taiwan)
Family social capital (FSC):
djustment strategies, family
functioning, family-to-business
intermingling, way of life,
generation, and family/firm
congruity
Tenant-incubator social capital:
relationship, shared cognition, and
incubator’s referral position
Copreneurs (US) FSC: receptivity of the family to
the community, family functional
integrity, and community support
Project leaders in
firms in machine
engineering
industry
(Germany)
Small business
owners (family
and non-family)
(US)
Key-informant
SMEs (Spain)
Accounting firms
1880-1990
(Netherlands)
R&D managers in
medium-firms
(Spain)
Intra-organizational social capital
structural: the number of intraorganizational
ties; relational:
strength of ties and trust
Membership in network: years,
personal friendship, activities,
shared vision, continuance,
resource sharing
FSC has no short-term effect, but it has a
long-term significant effect on gross
revenue variance and owners’ success
perceptions. Adjustment strategies have a
positive effect.
Tenants of incubation programs uniquely
leverage their social capital with their
incubator and, in turn, enhance their own
interorganizational learning and
performance.
Business owners’ engagement in at least
one socially responsible activity is
positively associated with a positive
attitude about the community and a wellfunctioning
family.
No association is found between the
structural dimension of social capital and
intra-organizational knowledge transfer.
There is a positive association for tie
strength, while the relation between intraorganizational
trust and intraorganizational
knowledge transfer is
insignificant.
A shared vision and high risk resource
sharing among network members
significantly benefit members’ businesses.
Strategic networking (cooperation) has a
positive impact.
Social interaction and trust The impact of social capital decreases
beyond a certain point of development. In
fact, the effect of social interactions and
trust on firm value creation follows an
inverted U-shaped curve.
Social capital proxy of
professionals' ties to potential
clients
Relational side of external social
capital
Human and social capital strongly predict
firm dissolution (source of competitive
advantage). Effects depend on specificity
(uniqueness) and non-appropriability (the
ownership status of the capital).
Social capital per se exerts a weak
influence on radical innovations. Social
capital and the tacitness of knowledge
have a positive join effect on radical
innovations (SC as moderator) but no
moderation with knowledge complexity.
2 AMJ = Academy of Management Journal, ETP = Entrepreneurship Theory & Practice, FBR = Family
Business Review, ISBJ = International Small Business Journal, JFBS = Journal of Family Business Strategy,
JBV = Journal of Business Venturing, JMS = Journal of Management Sciences, JSBM = Journal of Small
Business Management, SMJ = Strategic Management Journal, SBE = Small Business Economics.
14

Study
Journal 3
Reagans et
al. (2003)
ASQ
Samuelsson
& Davidson
(2009)
SBE
Sorenson et
al. (2009)
FBR
Stam &
Elfring
(2008) AMJ
Oh et al.
(2004) AMJ
Uhlaner et
al. (2007)
SBE
Werbel &
Danes
(2010)
JSBM
Wu (2008)
JMS
Yli-Renko et
al. (2001)
SMJ
Sample Key constructs of
social capital
Project teams of
medium-sized
firms
New venture
longitudinal
(Sweden)
Small family
firms (US)
Founding teams,
ICT sector
(Netherlands)
Members of work
groups in SMEs
(Korea)
Private family and
non-family firms
(Netherlands)
New small family
businesses (US)
Hong Kong-based
Chinese familyowned
SMEs,
manufacturing
sector
Young firms in
five hightechnology
sectors
(UK)
Network status:
internal density and
external range
Instrumental social
capital of all team
members and social
reinforcement
Collaborative
dialogue and ethical
norms
Network centrality
and bridging ties
Group closure,
intergroup
horizontal bridging,
and intergroup
vertical bridging
Ownership
commitment,
collective norms,
and shared goals
Spousal workfamily
conflict
(WFC) and spousal
commitment
Network ties,
repeated
transactions, and
trust, with
information sharing
as mediating
variable
Relation with major
client: social
interaction,
customer network
ties, and
relationship quality
Key findings on social capital
Social network variables have positive effects on team
performance. The use of these network criteria to build teams
would improve their performance.
SC is relatively successful in explaining progress in the
creation process for a minority of innovative ventures, but
has limited success for the imitative majority. The building
up of instrumental social capital is important for making
progress in both types of ventures.
Collaborative dialogue and ethical norms cultivates family
social capital (FSC). FSC is positively related to firm
performance.
High network centrality and extensive bridging ties
strengthen the link between entrepreneurial orientation and
performance. Support is found for interactive effects between
internal and external social capital.
U-shaped curvilinear relationship is found between group
closure and group effectiveness. Positive relations are found
with intergroup vertical bridging but not with horizontal
bridging.
The results indicate a positive association between family
ownership and collective norms and goals, a positive
relationship between collective norms and goals and owner
commitment, and a positive relationship between owner
commitment and firm performance.
When the spouse experiences WFC, then the spouse is likely
to be a resource constraint. Spousal commitment to a new
venture exacerbates this relationship.
Strong indications that the information benefit is one of the
key benefits of social capital, that information sharing
contributes to firm performance, and that different
dimensions of social capital have different levels of influence
on firm performance. Some dimensions of social capital may
be necessary but insufficient for competitiveness
improvement.
Social interaction and network ties are positively related to
knowledge acquisition, but the quality of that relationship is
negatively related to knowledge acquisition.
The papers included in the table reflect the variety of ways in which social capital can be
measured. On the basis of the internal-external focus of social capital (Adler & Kwon, 2002),
3 AMJ = Academy of Management Journal, ETP = Entrepreneurship Theory & Practice, FBR = Family
Business Review, ISBJ = International Small Business Journal, JFBS = Journal of Family Business Strategy,
JBV = Journal of Business Venturing, JMS = Journal of Management Sciences, JSBM = Journal of Small
Business Management, SMJ = Strategic Management Journal, SBE = Small Business Economics.
15

the papers can be divided into four categories: focus solely on the internal dimension of
social capital (e.g., Bamford, Bruton & Hinson, 2006; Molina-Morales & Martinez-Perez,
2009); focus on the external dimension (e.g., Audretsch, Aldridge & Sanders, 2011, Yli-
Renko, Autio & Sapienza, 2001); combination of internal and external focuses (e.g., Oh,
Chung & Labianca, 2004; Wu, 2008); and focus solely on the family dimension (e.g., Danes,
Stafford, Haynes & Amaraputkar, 2009; Sorenson, Goodpaster, Hedberg & Yu, 2009). The
last category is ambiguous, as the family dimension is partly external and partly internal
depending on the role of family members within the firm. The consequence of these different
viewpoints is that the variety of key constructs to measure social capital is even greater. The
empirical research that has been carried out to date has been based on constructs ranging
from ethical norms, adjustment strategies, social reinforcement, and network memberships to
network positions and bridging ties. Most of these constructs can be labeled as external or
internal elements of social capital. Although this variety makes it difficult to draw general
conclusions, some tentative propositions can be made.
The majority of the papers show that social capital has a positive influence on the dependent
variable, such as firm performance. However, the link between social capital and firm
performance is mixed, with different papers indicating positive (Sorenson et al., 2009;
Uhlaner, Flören, Geerlings, 2007), weak (Carr, Cole, Ring & Blettner, 2011), or insignificant
results (Danes et al., 2009). There is also evidence that the relation with the performance
variable is U-shaped curvilinear (Molina-Morales & Martinez-Perez, 2009; Oh et al., 2004).
Furthermore, social capital can act as a moderator (e.g., Peréz-Luno et al., 2011) or a
mediator (e.g., Berent-Braun & Uhlaner, 2012), and there is evidence that social capital is
only effective in combination with other variables, such as knowledge sharing (Yli-Renko et
al., 2001) or human capital (Pennings, Lee & Van Witteloostuijn, 1998).
Overall, there is evidence of the potential positive effects of social capital. However, more
rigorous research is needed to develop a clear picture on the impact of social capital in the
context of private firms for several reasons. First, the focus on the group of owners has
largely been neglected. Such a focus seems relevant, especially when the relational and
cognitive aspects of social capital are investigated. Uhlaner et al.’s (2007) finding that the
commitment of owners has a positive impact on firm performance can be taken as a starting
point in this respect. To achieve this focus, it would be helpful to make the roles of the
respondents more transparent. In some studies covered here, it is unclear whether the CEO is
also a shareholder of the firm (e.g., Acquaah, 2007).
Second, the influence of the family on the development of social capital needs more attention.
For instance, in what specific roles do family members influence the development of social
capital? Is this process different from those involving non-family owners?
A third aspect that has largely been ignored is the potential value of exploring the diverse
links among attributes of various dimension of social capital. Stam and Elfring (2008) find an
interaction effect between internal and external social capital, which seems to offer an
interesting path for exploration. Lee (2009) makes a similar statement, recommending that
16

esearch include the structural, relational, and cognitive dimensions of social capital, and
focus on how these various dimensions interact and influence each other.
The review presented in this section demonstrates the need for more empirical research in the
field of social capital and tacit knowledge within the context of private firms. Furthermore, it
reveals specific topics of interest. With these findings in mind, the research questions for this
dissertation are formulated in the next section.
1.5 Research question, framework, definitions and the Dutch context
The gaps in the extant research identified in the previous section lead to the research question
for this dissertation, which is formulated in section 1.5.1. As part of this introduction to the
family business research field, family businesses definition issues are discussed in section
1.5.2. The research done in this dissertation takes place in the context of Dutch private firms,
with a specific focus on family firms. Therefore, some key figures on family firms in the
Netherlands are presented in section 1.5.3.
1.5.1 Research question and research framework
Problem statement
In the previous section, social capital and tacit knowledge were identified as key strategic
resources for family firms. The review of available research results reveals many interesting
questions regarding the development of these strategic resources. Against the background of
the dominance of family firms in the economic landscape it seems important to gain a better
understanding of how these strategic resources influence family firms. For example, do these
resources stem from family involvement or are they merely influenced by family
involvement? How and when do these strategic resources translate into competitive
advantages?
Research objectives
The primary aim of this dissertation is to contribute to the understanding of how and when
family involvement stimulates the development of strategic resources in privately held firms.
The research focuses on social capital and on tacit knowledge as element of human capital.
As stated earlier, the literature suggests that these components are potential key strategic
resources for family firms. The secondary objective of this research is to understand the
extent to which these strategic resources affect the added value realized by the business.
Research question
How does family involvement influence the development of components of social capital and
tacit knowledge in privately held firms, and to what extent does the development of these
strategic resources have an impact on firm performance?
17

In order to answer the research question, the following issues must be addressed:
1. What specific components of social capital and tacit knowledge are positively or
negatively influenced by family involvement?
2. Which contingency factors other than family involvement influence the development of
components of social capital and tacit knowledge in privately held firms?
3. Do components of social capital and tacit knowledge have a positive impact on firm
performance?
Figure 1.4 illustrates the research framework for the study of strategic resources in privately
held firms on which this dissertation is based. This framework is based on the theoretical
outline of a resource-based framework for assessing the strategic advantage of family firms
(Habbershon & Williams, 1999). Habbershon and Williams’ framework identifies the
organizational resources of family businesses and determines under which conditions they
meet the criteria for creating a sustainable competitive advantage. Following this logic,
resources have to result in capabilities, which in turn have to lead to competitive advantage
and should result in higher performance.
Figure 1.4: Research framework
CONTINGENCY FACTORS RELATED TO BUSINESS CONTEXT
Firm characteristics,ownershipcharacteristics,
businesscycle
STRATEGIC RESOURCES
SOCIAL CAPITAL
Bondingownershipsocial capital
Bridgingownership social capital
Spousalsocial capital
HUMAN CAPITAL
Tacit knowledge transfer climate
CONTINGENCY FACTORS RELATED TO FAMILY CONTEXT
Family involvement,family successor
FIRM PERFORMANCE
Product innovation
Financial performance
Post succession
continuity
18

1.5.2 Defining the family firm
The three-circle model discussed in section 1.2 has become the key symbolic generalization
of a family business (Moores, 2008). However, rigorous family business research also
requires a clear definition. Unfortunately, this definition is still subject to an on-going debate.
A consequence of this debate is that there is not one definition that is accepted by all family
business scholars. It seems that it is not the distinction between a family firm and a firm that
is clearly not a family firm that is difficult, the problem is more in defining the ‘grey area’ in
between (Kraus, Harms & Fink, 2011). Family business scholars take different approaches in
their efforts to overcome this definition dilemma. As several approaches are used to define
family firms in this dissertation, it is necessary to understand the positive and negative
aspects of each approach. Major definition streams among researchers include:
The components-of-involvement approach: Chrisman et al. (2005) argue that family
involvement in ownership, governance, and management is what makes a firm a family firm.
This is consistent with the three-circle model and implies that a sound definition has to reflect
these components. An example of such a definition is that formulated by Flören (2002),
which has been used in various studies in the Netherlands. Firms are defined as family firms
when two out of three criteria (ownership, board membership, and strategic decision making)
are met. Recently, the GEEF (European Group of Owner Managed and Family Enterprises)
definition has been recommended by the European Commission (2009). In order to be
categorized as a “family business” according to this definition, a firm must meet the
following criteria: 1) the majority of ownership (directly or indirectly) rests in the hands of a
natural person and/or family; and 2) at least one representative of the family or kin is
involved in the management or administration of the firm.
The essence approach: Rather than capturing the components of family involvement, the core
argument of this approach is that family involvement per se is not enough. Family
involvement must lead to behavior that produces certain distinctiveness (Chrisman et al.,
2005). Litz’s (1995) definition of family businesses is formulated in this manner. To the
criterion of family influence in ownership and management, Litz (1995) adds the intentions
of the family with regards to intra-organizational family-based relatedness (the intention of
achieving intra-generational succession). This leads to subcategories of potential family
businesses and potential non-family businesses, which reflect the dynamic element of this
definition.
Early attempts in this approach focused mainly on defining family firms in such a way that
they could be distinguished from non-family firms. More recent attempts acknowledge that
this dichotomous categorization does not reflect the variation in the degrees of family
involvement (Sharma, 2004). The significant variation among family firms in the “real
world”– ranging from small “mom-and-pop” shops in retail business to very large
multinationals – makes it difficult to cover all of them with one definition. Chrisman et al.
(2007) state that an acknowledgement of the differences within families and how these
19

differences influence firm behavior can contribute to the ability to explain variations within
the subgroup of family firms.
Categorization in family firm typologies: Family firms can be divided into subgroups based
on different characteristics. For example, Sharma’s (2002) typology identifies 72 distinct
categories based on the extent of family involvement in terms of ownership and management.
A less complex categorization can be based on family relationships among the owners: one
owner-manager, husband and wife teams (copreneurs), sibling partnerships, and cousin
consortiums. To acquire more in-depth knowledge about the family effect on the business, it
seems fruitful to focus research on specific types of family firms, as such a focus makes it
possible to analyze specific dynamics within each subgroup.
Scales of family involvement: Shanker and Astrachan (1996) use a three-tier categorization
ranging from broad (little family involvement) to middle (some family involvement) to
narrow (a lot of family involvement). Another way of dealing with the varying degrees of
family involvement is to work with a continuous scale, rather than a binary attribute, to assess
the involvement of the family in the businesses. Such a scale makes it possible to include
questions that relate to the components of the family involvement and to the essence of that
involvement. They may cover family relationships between owners of the firm, whether the
family has considerable influence on the business strategy, and whether the business could be
described as a family business.
In this dissertation, family firms are defined in various ways given the different research
methods that are used in the various studies. For each study, the most appropriate definitions
are chosen. In Chapter 2 and 3, family involvement is measured on a continuous scale. The
scale is based on the Guttman family influence scale, which was developed by Uhlaner
(2005). The use of a continuous scale instead of a binary attribute allows for a more in-depth
understanding of how family involvement impacts the business. Chapter 4 is dedicated to
copreneurs, an example of a specific type of family firm. In Chapter 5, the approach is to
distinguish between succession of family or non-family members in family and non-family
firms. The definition developed by Flören (2002) is used to distinguish between family and
non-family firms, as this definition is widely used and accepted in the Netherlands. The
decisions to use the various definitions and consequences for each approach are discussed in
the research methods section of each study. Clearly, a consequence of the use of more than
one definition is that the various outcomes are more difficult to compare. This is one of the
limitations of this dissertation, as discussed in Chapter 6. However, it also leads to
opportunities to compare the results with current research findings of other family business
research projects.
20

1.5.3 Family firms in the Netherlands
The empirical data used in this dissertation cover Dutch privately held firms. This section,
therefore, provides a demographic overview of family businesses in the Netherlands. The
focus on the Netherlands is welcome when the limited extant data on family business is
considered (Expertgroep Familiebedrijven, 2007). 4 The need for more research on family
firms was one recommendation given in a report that emphasized the vital role of family
businesses in the Dutch economy (Expertgroep Familiebedrijven, 2007). As a follow up to
that report, the Dutch Minister of Economic Affairs initiated a research project in 2008. This
study, which was undertaken by Nyenrode Business Universiteit (Flören, Uhlaner & Berent-
Braun, 2010), highlights the prevalence of family firms in the Netherlands. The collected data
indicate that approximately 260,000 businesses in the Netherlands can be labeled as family
firms (according to the GEEF definition), which is about 69% of all businesses (excluding the
self-employed). Table 1.3 provides the distribution of family businesses by company size.
Table 1.3: Family businesses in relation to all incorporated businesses in the Netherlands (excluding self-
employed)
Employees
(including director)
Companies Family businesses, % Family businesses
(estimated)
2-9 304,418 72.9 221,921
10-49 58,046 56.0 32,506
50-99 6,939 49.7 3,449
100-199 3,047 44.8 1,526
200 or more 2,348 27.6 648
Total 375,158 69.3 260,050
Source: Flören et al. (2010)
Notably, the idea that family businesses are only small “mom and pop shops” does not hold.
Among firms with more than 50 employees, there is still a significant proportion of family
businesses.
Flören et al.’s (2010) study reveals some key characteristics of Dutch family firms. Some of
these were discussed in Flören et al. (2010), while others could be retrieved from additional
analyses of the data.
Business sectors
The data reveal the dominance of family firms in most business sectors with one exception:
the financial services sector. The notion that almost all agricultural businesses are family
business holds: 87% can be described as family firms.
4 This report was written by the Expert Group on Family Business, a group established by the Dutch
National Chamber of Commerce.
21

Table 1.4: Representation in business sectors
Business sector Family businesses, %
Agriculture/fishing 87%
Manufacturing 65%
Construction 69%
Wholesale/retail 79%
Hospitality 76%
Transport and communication 77%
Financial services 43%
Business services 55%
Other services 5 86%
Source: Flören et al. (2010)
Firm age and generation
There is no difference between the average age of the family businesses and non-family
businesses. On average, the businesses included in the study have been in existence for 41
years. The data reveal that 73.4% of the family firms are in the hands of the first generation,
16.4% are run by the second generation, and 10.2% are held by the third generation or later.
Number of owners and their family relations
Owners play a crucial role in privately owned firms. The majority of firms can be labeled as
multiple-owner private firms. The data reveal that the number of owners of family businesses
is significant lower than that of non-family businesses. Almost 90% of family firms have one
or two owners, while the corresponding figure for non-family firms is only 62%.
Furthermore, the percentage of firms with more than 100 owners is significantly higher in
non-family firms.
Table 1.5: Number of owners per business in the Netherlands (excluding self-employed)
Number of owners Family businesses, % Non-family businesses, %
1 47.2 20.6
2 41.9 41.4
3-10 9.2 24.4
11-50 0.6 2.3
51-100 0.5 0.1
More than 100 1.6 11.1
Source: Flören et al. (2010)
Respondents were asked to describe their family business as a reflection of the family
relations among owners. The typologies used stem from the evolutionary path family firms
can follow (e.g., Gersick et al., 1999) and reflect the family relations between the owners.
The majority (56%) describe their businesses as single-owner-managed firms. Within the
5 Other services sectors include: temporary work agencies, advertising agencies, architectural services,
engineering services, law offices, economic services, detective and investigative services, and research and
computer-service agencies.
22

group of business-owning families, three subgroups are roughly equally present: copreneurial
firms (15.7%), parents and their children (10.9%), and sibling partnerships (11.8%). Cousin
consortiums are a relatively small subgroup with a proportion of only 3.4%.
1.6 Dissertation overview
The research questions are addressed in Chapters 2 to 5. In Chapter 2, family involvement is
tested as an antecedent of ownership social capital to analyze whether it matters if owners
also have blood ties. In Chapter 3, the relation between social capital and product innovation
is theoretically and empirically explored. Chapters 2 and 3 contribute to the literature by
exploring the antecedents and effects of ownership social capital.
Chapters 4 and 5 take two specific situations into account. In Chapter 4, the specific context
of copreneurs as an important subgroup of family firms is considered. In this group, the three
circles have a relatively large overlap. The chapter investigates the meaning of this overlap
for the creation of social capital and the effects of spousal social capital on the performance
of copreneurs. In Chapter 5, the dynamics of the three-circle model during the succession
phase are explored, as is the question of whether it matters if the family stays involved in the
business after succession. The transfer of tacit knowledge between successor and incumbent,
and its effect on post-succession continuity are tested.
Chapter 6 presents the overall conclusions. The limitations of the research are also discussed
and suggestions for future research directions are presented. Finally, implications for
governments, business owners, and advisors are provided. Table 1.6 presents an overview of
this dissertation.
23

Table 1.6: Dissertation overview
Ch Topic Research
issues
1 Introduction
2 Antecedents of bonding and bridging
ownership social capital and the
influence of family involvement
3 Bonding and bridging ownership
social capital and relation with
product innovation
4 Copreneurial bonding and bridging
social capital and relation with firm
performance
5 Influence of knowledge transfer
climate during succession and
relation with post-succession
continuity
6 Conclusions, implications,
limitations, and recommendations for
future research
Key construct Sampling method Methods of
analysis
1 and 3 Ownership
social capital
2 and 3 Ownership
social capital
1,2, and 3 Spousal
social capital
1,2, and 3 Tacit
knowledge
transfer
Random stratified
sample of private
firms
Random stratified
sample of private
firms
Snowball sample
of copreneurs
Non-random
sample of private
firms
Multiple
regression
analysis
Multiple
regression
analysis
Structural
equation
modeling
Multiple
regression
analysis
This table concludes the introduction of this dissertation. In the next chapter the first research
that was undertaken to find answers for the research questions formulated in this introduction
will be discussed.
24

2: Ownership social capital in privately held firms: the role of
family involvement 6
2.1 Introduction
This study focuses on ownership social capital and how it may be influenced by the degree of
family involvement in a business. Family involvement is a central topic in family business
research (Chrisman et al., 2005), while social capital is included in discussions of a wide
range of topics at several levels of analysis: national and regional (e.g., Putnam, 1993;
Fukuyama, 1995), organizational (Leana & Van Buren, 1999), individual (Burt, 1992), and
group (Oh et al., 2004). The latter includes the special case of the owning group (Berent-
Braun, 2010). Regardless of the level of analysis, social capital definitions suggest that social
relationships generate benefits (Adler & Kwon, 2002) and that such relationships can act as
levers for other types of capital, including human, financial, emotional, and physical capital
(Arregle et al., 2007a; Montemerlo & Sharma, 2010; Steier, 2007). In addition, social capital
is identified as a type of asset that is firm specific but generic in its application (Gedajlovic &
Carney, 2010). This implies that social capital is broadly applicable and that its effectiveness
is similar for a variety of purposes. For instance, ties within a business group can provide
information on business opportunities, and they can also serve as a source of financial capital
and as a way of lowering transaction costs.
Researchers have identified various positive consequences of social capital. For example, a
direct benefit of social capital is that it offers access to information for the individual or group
(Adler & Kwon, 2002). A recent meta-analysis by Westlund and Adam (2010) concludes that
social capital is positively linked to the economic performance of the firm, a finding that is
consistent with past research (Lee, 2009; Sorenson et al., 2009). However, empirical research
that explores the possible antecedents of social capital (such as family involvement) remains
limited (Sharma, 2008). The aim of this paper, therefore, is to explore such relationships,
especially in the context of the owning group. The primary research question is the following:
“Do differences in family involvement across private firms explain differences in the levels
of ownership social capital associated with such firms?”
This approach makes it possible to distinguish between family and ownership social capital.
Recently, family social capital has received attention from family business scholars (Arregle
et al., 2007a; Carr et al., 2011; Pearson et al., 2008; Sorenson et al., 2009). These studies
identify the family social network and the interrelationships among family members as
antecedents of the creation of organizational social capital that have positive outcomes for
firm performance. As this research focuses on family as a source of social capital and tests
these propositions only in family businesses, scholars do not allow for the possibility that it is
not family per se but rather the owning group that serves as the source of social capital. This
6 This chapter is based on the paper by Matser, Uhlaner, Berent-Braun, and Flören (2011), which was presented
at the 7 th Workshop on Family Business Management, May 2011, Witten, Germany. Winner of the best paper
award.
25

study fills this gap by separating the role of owners from the role of family in creating social
capital within the context of private firms.
Scholars identify two types of social capital (Adler & Kwon, 2002; Lin, 1999). Bonding
social capital focuses on internal ties within a collective, while bridging social capital refers
to direct and indirect external links with actors beyond the immediate collective (Sharma,
2008). The present research examines the relationship between family involvement and both
the bonding and bridging forms of social capital. The hypotheses are tested using data from a
large-scale quantitative research study of Dutch private firms carried out in 2009. The sample
used for the current study encompasses 708 privately held small and medium-sized firms
with multiple owners.
This chapter makes three key contributions to the literature. First, it enhances the general
understanding of the concept of ownership social capital and its possible antecedents,
especially family involvement, as well as other characteristics of company and ownership
structures. Second, the focus on owners makes it possible to distinguish between ownership
and family as the source of social capital. This helps improve the understanding of the
concept of social capital not only within the family business context but also for the wider
field of private firms held by a group of owners. Third, it provides insights into the
interrelationships between bonding and bridging social capital in the context of the owning
group, as well as some information on whether these interrelationships serve as potential
sources of synergy or have a negative overall effect. Therefore, this paper contributes not
only to the field of family business research but also to the wider field of research on social
capital.
The next section provides a short overview of the relevant literature on social capital and a
more detailed explanation of the concept of ownership social capital. It is followed by a
presentation of the framework and the rationale for the hypotheses. The method section
describes the sample, data collection, variables, and data analysis, while the final sections
present the results, discussion, and conclusions.
26

2.2 Background on ownership social capital
Business owners are a social group distinguished from other social entities in the firm by
their possession of ownership rights in the company (Berent-Braun & Uhlaner, 2010). As an
ownership group is a set of two or more business owners, ownership social capital (e.g.,
Berent-Braun, 2010) can be seen as a type of group social capital. Given the general
definition of social capital proposed by Nahapiet and Ghoshal (1998), ownership social
capital can be defined as the sum of the actual and potential resources embedded within,
available through, and derived from the network of relationships possessed by the business
owners. Although some aspects of ownership social capital are rooted in earlier research on
organizational social capital (Leana & Van Buren, 1999), group social capital (Oh et al.,
2004), family social capital (Arregle et al., 2007; Danes et al., 2009), and relational
governance (Mustakallio, Autio & Zahra, 2002), the notion of ownership social capital was
first introduced by Uhlaner (2008) and further elaborated upon by Berent-Braun (2010).
Social capital scholars have repeatedly noted that when social capital is being considered,
both bonding and bridging aspects are important (e.g., Adler & Kwon, 2002; Lin, 1999;
Payne et al., 2011; Sharma, 2008). Yet, the vast majority of the extant empirical research
examines either the role of bridging social capital or the role of bonding social capital in
isolation. The bridging aspects of social capital include networking with external partners to
access information and resources (e.g., Elfring & Hulsink, 2007; Uzzi, 1997). In contrast,
bonding social capital maintains and preserves the group, and is defined and/or measured as
trust, collective goal orientation, or stewardship (Davis, Schoorman, & Donaldson, 1997) in
the organizational (Leana & Van Buren, 1999) and family social capital literature (e.g.,
Arregle et al., 2007a). Nahapiet and Ghoshal (1998) highlighted three distinct dimensions
within social capital that are now widely accepted (e.g., Carr et al., 2011; Maurer, Bartsch &
Ebers, 2011; Pearson et al., 2008): the structural, relational, and cognitive dimensions.
The structural dimension of social capital reflects the configuration of networks that link a
social unit’s members to each other (internal network) or to outside individuals and units
(external network) (Nahapiet & Ghoshal,1998). The structural dimension includes such facets
as network ties, configuration, and appropriable organization (Nahapiet & Ghoshal, 1998).
An important feature of the network is “appropriable social organization” (Coleman, 1988;
Hazleton & Kennan, 2000), which is the ability of networks or organizations that are formed
for one purpose to be utilized for other purposes (Hazleton & Kennan, 2000). This aspect is
emphasized in the family business literature. Sorenson et al. (2009) indicate “collaborative
dialogue” and “ethical norms” as inputs from the family sphere that lead to the development
of family social capital. Arregle et al. (2007a) discuss the building of organizational social
capital through family social capital. In this study, family involvement is the focal element of
the structural dimension of social capital because family involvement influences the nature
and type of relationships among members of the business owning group.
27

Most studies on social capital in the family business literature focus on bonding aspects of
social capital (e.g., Mustakallio et al., 2002; Montemerlo & Sharma, 2011; Uhlaner et al.,
2007). In particular, the relational and cognitive dimensions of bonding social capital are the
elements on which family factors are expected to have a potential positive effect. The
relational dimension refers to those assets created and leveraged through relationships. Key
aspects are trust and trustworthiness, norms and sanctions, obligations and expectations, and
identity and identification (Nahapiet & Ghoshal, 1998). The cognitive dimension refers to
those resources providing shared representations, interpretations, and systems of meaning
among a collective (Nahapiet & Ghoshal, 1998). In line with studies of organizational social
capital (Leana & Van Buren, 1999) and family social capital (Mustakallio et al., 2002), as
well as more recent research on ownership social capital (Berent-Braun, 2010), the cognitive
and relational dimensions of bonding ownership social capital are included in this study as
the shared vision (or collective goal orientation of the owners), and the quality of
relationships among the members of the owning group (reflected in such elements as trust,
cooperation, cohesiveness, and team spirit).
Gedajlovic and Carney (2010) argue that family firms have a relatively good starting position
from which to develop, sustain, and appropriate value from bridging social capital. Therefore,
elements of bridging ownership social capital are also included in the research framework.
Bridging ownership social capital refers to the relationships owning group members have
with external networks and other resources that can benefit the owning group as well as the
company. To investigate how bonding ownership social capital and bridging ownership social
capital interact, Lin’s (1999) model of social capital is useful. Lin’s model highlights the
causal sequence from investments in social capital towards returns on social capital. A crucial
step in the process of realizing a positive return is the mobilization of the accessible
components of social capital. In this study, the focus in relation to bridging ownership social
capital is on precisely this aspect namely, network mobilization. In line with Lin’s model
(1999) the various elements of ownership social capital are depicted in Figure 2.1. The
hypothesized relationships are discussed in the next section.
28

Figure 2.1: Research framework including direct effects
H1
Bonding ownership social capital Bridging ownership social capital
Quality of relationships
among owning group
Shared vision
among owning group
Family involvement
H6
Network
mobilization
of owning group
H2 H7
H3
H8
Control variables
Company size, sector , age of business, expansion, number of owners, ownership-management overlap,
board of directors
2.3 Research framework and hypotheses
2.3.1 Direct relations among components of ownership social capital
Family involvement as an antecedent of elements of ownership social capital
H4
H5
The first two hypotheses suggest that family involvement and cognitive and relational
elements of bonding ownership social capital are positively associated with each other. In this
regard, scholars have described the potential positive influence of the family on the
development of organizational social capital (Arregle et al., 2007a; Gedaljovic & Carney,
2010; Montemerlo & Sharma, 2011; Pearson et al., 2008; Salvato & Melin, 2008; Sharma,
2008; Sorenson et al., 2009). For example, the overlap between the family system and the
business system creates an opportunity to build a strong organizational identity. A shared
organizational identity, in turn, will have a positive influence on the development of
organizational social capital (Arregle et al., 2007a). In addition, the related concept of
ownership commitment has frequently been cited as a strength of the family-owned firm
(Uhlaner et al., 2007). Uhlaner et al. (2007) use social identity theory to argue that owner
commitment and shared collective norms may be stronger in a family owning group. This
commitment is not necessarily attributable to altruistic motives, as implied by stewardship
29

theory, but results from a stronger need to be affiliated with the “in” group associated with
the owning group, on the one hand, and the family on the other. Membership within the “in”
group leads to greater sense of self-worth and social esteem (Ellemers, 2001; Uhlaner et al.,
2007). In a mixed sample of family and non-family firms, Uhlaner et al. (2007) find that
family ownership strongly predicts the presence of collective goals relative to individual
goals. The current study examines a specific aspect of collective goals that focuses inward
toward the firm—a shared vision of the firm’s objectives. All else equal, the mechanisms of
social identity and the drive to be accepted by the “in” group may be expected to lead to a
higher level of shared vision among members of a family owning group.
A key aspect of the relational dimension of bonding ownership social capital refers to
developing a high level of trust within the owning group. Pearson et al. (2008) argue that the
family context helps in the development of high-quality relationships. Their argument is
based on the fact that owners have obligations to both the family and the business, and that
this creates an environment that stimulates collective action. Similarly, Carr et al. (2011, p.
1211) state that “the relational dimension of internal social capital represents the norms of
obligations, trust and a level of family and firm identity that can exist within family firms and
that are not easily developed in non-family firm situations.” Therefore, greater cooperation
and cohesiveness is expected in owning groups when there is a family linkage among the
business owning group. In sum, the proposition is that family involvement has a positive
effect on the development of elements of bonding ownership social capital. More
specifically:
Hypothesis 1: Family involvement is positively associated with the quality of relationships
among members of the owning group.
Hypothesis 2: Family involvement is positively associated with a shared vision among
members of the owning group.
The rationale for the relationship between family involvement in the business and bridging
ownership social capital contrasts with the rationale for the relationship between family
involvement and bonding elements of ownership social capital. Bridging requires the
development and mobilization of resources outside the owning group.
In this regard, past research proposes that family firms are typically introverted rather than
extroverted (De Lema & Durendez, 2007). This suggests that family members often look
inward, rather than outward, when searching for social contacts beneficial to the firm. Arregle
et al. (2007a) argue that the self-sufficiency that often characterizes family firms increases
their dependency on (internal) family members and simultaneously reduces their dependency
on external resources. For instance, the decision to keep the business in the family can lead
owners to favor family members and, as a consequence, fail to retain competent employees or
to attract competent people from outside the firm. Therefore, the closeness of a family, which
stimulates the development of bonding social capital, may have the opposite effect on
bridging capital, leading to an inward-looking attitude among the business owners. Along
30

these lines, McFayden and Cannella Jr. (2004) suggest that given the maintenance costs of
social capital, bridging and bonding social capital are mutually exclusive to some extent.
Thus, if family business owners rely heavily on “their own people,” they might begin to
believe that they do not need help, information, or advice from “outsiders.” As a result, they
may miss valuable resources that reside in those outside contacts. Strong solidarity within the
family, which increases bonding social capital, may lead to over-embeddedness within the
ownership group, resulting in group think and passivity (Adler & Kwon, 2002; Zahra, 2010).
These observations lead us to suggest:
Hypothesis 3: Family involvement is negatively associated with the owning group’s network
mobilization.
Relationships between elements of bonding ownership social capital and bridging ownership
social capital
As mentioned in the introduction, most empirical studies on social capital focus specifically
on either bridging social capital or bonding social capital. By combining external and internal
aspects of social capital, this study offers some insights into how these distinct aspects
interact. These insights, in turn, shed light on the complexity of the social capital concept.
Hypotheses 4 and 5 suggest that elements of bonding ownership social capital influence the
mobilization of bridging ownership social capital. Lin’s (1999) model of social capital and
Adler and Kwon‘s (2002) opportunity-motivation-ability framework are useful for exploring
this possible relationship.
Lin’s (1999) model of social capital contains building blocks highlighting the causal
sequence from investments to returns on social capital. A crucial step in the realization of
social capital is the process of social capital mobilization – the way an individual is enabled
or disabled to mobilize such capital. Lin’s (1999) model emphasizes that individuals take
action to enhance the mobilization of resources. Shared vision and good relations among the
members of a business-owning group can act as a catalyst for the mobilization of potential
social capital. This relates to the opportunity-motivation-ability framework developed by
Adler and Kwon (2002), which states that aspects of both bonding and bridging social capital
must be present for social capital to be activated. In terms of the business-owning group, this
implies that although weak ties (Granovetter, 1992) can be a valuable resource, owners must
be motivated to use their networks to help the firm. Adler and Kwon (2002) argue that such
motivation stems from bonding social capital, as it reflects deeply internalized norms and a
feeling of a shared destiny.
In line with Lin (1999) and Adler and Kwon (2002), components of bonding social capital are
argued to be a condition for the mobilization of bridging social capital. When there is a
shared vision and trust within a group, the individuals within that group will be inclined to
mobilize and use their resources for the benefit of the company. Furthermore, because
bonding social capital maintains the closeness of the group, it ensures that any resources
31

owners bring in from the outside will be utilized within the context of the firm. To
summarize:
Hypothesis 4: The quality of relationships is positively associated with the mobilization of the
owners’ network.
Hypothesis 5: A shared vision is positively associated with the mobilization of the owners’
network.
2.3.2 Complex relations among components of ownership social capital
Whereas McFayden and Cannella Jr. (2004) argue that bridging and bonding social capital
are mutually exclusive to some extent, other scholars suggest the opposite (e.g., Miller,
Besser & Malshe, 2007; Reagans & McEvily, 2003; Stam & Elfring, 2008). Even within
bonding and bridging dimensions of social capital, various components could potentially
interact with each other. For instance, how does a shared vision among owners affect the
quality of the relationships among those owners? Thus far, little empirical research has
centered on the interactions among the structural, cognitive, and relational dimensions of
social capital (Lee, 2009).
Long’s (2011) theoretical framework on family social capital development can serve as a
starting point for a more in-depth investigation of the potential interactions. Long (2011)
applies social exchange theory to the development of social capital, which leads to a
multilevel, iterative model. The starting point is the “relations which are ontologically prior
to structure and shared cognition and necessary for the development of the latter” (Long,
2011, p. 1231). Repeated exchanges among group members contribute to the development of
a shared vision and group cohesion. These developments also serve as a reference for future
exchanges among group members, making the development of social capital a multi-loop
event. In line with this argumentation, good relationships among owners, in combination with
a shared vision, can be expected to provide an extra stimulus for the mobilization of bridging
ownership social capital. Therefore:
Hypothesis 6: The positive relationship between the shared vision among owners and the
mobilization of the owners’ network will be stronger in firms with a higher quality of
relationship among owners.
In this study, the potential moderating effects of family involvement on the relationship
between bonding elements and bridging social capital is investigated further. The level of
family involvement is viewed as a key element of the structural dimension of social capital.
The direct effects of family involvement on bonding and bridging elements of ownership
social capital are hypothesized as mixed, with a positive effect on bonding and a negative
effect on bridging. Arregle et al. (2007a) propose that the development conditions in families
(such as closure and interdependency), in combination with the overlap of the family and
business systems, lead to a potential to develop social capital in the firm that stems from
32

social capital within the family. This proposition, which is supported by empirical findings
presented by Carr et al. (2011), Danes et al., (2009) and Sorenson et al. (2009), relates to the
aspect of “appropriable social organization” (the ability to utilize a network for another
purpose than its original intention; Hazleton & Kennan, 2000) discussed earlier in this
chapter. Here the proposition is that the network that is formed within the family will be used
for the benefit of the firm. Therefore, family involvement in a business should have a positive
effect on the relation between bonding and bridging elements of ownership social capital.
These observations lead to the following:
Hypothesis 7: The relationship between the quality of relationships among owners and the
mobilization of the owners’ network is stronger for firms with high family involvement than
for firms with low family involvement.
Hypothesis 8: The relationship between a shared vision among owners and the mobilization
of the owners’ network is stronger for firms with high family involvement than for firms with
low family involvement.
2.4 Method
Sample and data collection
The empirical analysis was conducted using a random sample of Dutch private businesses
(excluding self-employed) registered with the Dutch Chamber of Commerce. The sample was
stratified according to sector and size. The sample represents all sectors of the Dutch
economy in correct proportions to the entire population of Dutch businesses. The size classes
were based on the number of employees (including the director) as follows: 2-9, 10-49, 50-
99, 100-199, and 200 or more. In order to ensure an appropriate number of companies in each
size class, the larger companies were overrepresented relative to the distribution within the
general population. In addition, 31 firms that were members of the Family Business Network
Netherlands were approached in order to collect data from family firms with larger groups of
family owners.
The data was collected in May and June 2009 by means of telephone interviews with the
primary directors of the companies in question. In each case, a key informant approach was
adopted, which is an accepted approach for such studies (Kumar, Stern & Anderson, 1993;
Uhlaner et al., 2007). Of the 3,563 firms originally contacted, 1,500 agreed to participate,
resulting in a response rate of 42.1%. Of these 1,500 firms, 937 reported having two or more
individual owners and were thus administered the more detailed survey 7 , which included
questions on ownership social capital. As the study focuses on social capital within a group of
owners, the sample was restricted to firms with between 2 and 20 owners. Firms with more
than 20 owners might be viewed as firms with a more dispersed ownership and thus the
respondent may have less knowledge of how the owners function as a group. Another
7 The Dutch questionnaire is available from the author upon request (i.a.matser@uu.nl).
33

estriction was made with regard to the size of the firm. In the present analysis, only firms
with less than 500 employees were included. This was done to make the sample more
homogeneous by leaving out the large firms. The 500 employee cut-off is chosen because it is
a measurement used to define small and medium-sized enterprises 8 . 781 of the 937 firms met
the parameters of 2 to 20 owners, and up to 500 employees. Due to missing data for some of
these questions, a final data set of 708 cases was used for the analyses.
Variables
Unless otherwise stated, all variables were measured as the mean score of the responses to the
statements. The individual items were measured on a five-point Likert scale where 1 =
strongly disagree and 5 = strongly agree (unless otherwise indicated).
Components of bonding ownership social capital were measured using three variables: family
involvement (reflecting the relevant structural dimension of ownership social capital, as the
focus is on potential family influence), shared vision of the owners (representing the
cognitive dimension of ownership social capital), and quality of relationships among the
owners (representing the relational dimension of ownership social capital).
Unfortunately, there is no consensus among scholars regarding how best to operationalize
family involvement (e.g., Chrisman et al., 2005; O’Boyle Jr., Pollack & Rutherford, 2012). In
this study, family involvement was measured on a continuous scale instead of dichotomizing
the sample into family and non-family groups. The development of this variable is in line
with the approach used in recent studies (Klein, Astrachan, & Smyrnios, 2005; Uhlaner,
2005) and stems from the idea that family firms are not homogenous. Shanker and Astrachan
(1996) argue that family firms can be categorized from broad to narrow, with narrow subsets
fitting within broader subsets. Such a cumulative scale can be produced using the Guttman
scaling technique tested by Uhlaner (2005). The items used by Uhlaner (2005) are utilized, to
some extent, in this study, although some adjustments had to be made because the items in
the current survey did not perfectly match the items used by Uhlaner (2005). Family
involvement (Cronbach’s alpha = .70) was measured by asking the respondents to indicate
whether there was a family relation among the owners of the company, whether one family
had considerable influence on the business strategy, and whether the business had been
owned by the same family for two or more generations. All of these questions were measured
as binary variables, where 1 = yes and 0 = no. The final question related to the number of
directors that were related to the owners. All answers indicating two or more directors were
coded 1, while all other answers were coded 0. The variable was measured as the sum of the
answers to all four questions. The score reflects family involvement and can vary from 0 (no
family involvement) to 4 (highest family involvement).
8 The US Small Business Administration defines small and medium sized firms (SME) as firms with fewer than
500 employees. This is a broader definition than de European SME definition which defines firms with fewer
than 250 employees as a SME. Since it is expected that especially in larger medium sized firms there will be
firms with more than one owner, the decision has been made to use the US SME definition.
34

Shared vision (Cronbach’s alpha = .70) was measured by asking respondents about the extent
to which they agreed or disagreed with the following statements: “The owners share the same
vision about the business,” “The owners try to pull this company in opposite directions”
(reverse scored), “The owners agree about the key objectives of the business,” and “The
owners are committed to managing wealth as a group rather than as individuals.” The first
three items are based on Mustakallio et al.’s (2002) shared vision scale. The last item was
added to test the extent of a shared ownership strategy among the group of owners and was
created for this study.
Quality of relationships (Cronbach’s alpha = .93) was measured by asking respondents about
the extent to which they agreed or disagreed with the following statements: “The owners of
this business tend to trust one another,” “The owners are open and honest with one another,”
“The owners have good cooperative relationships,” and “The owners work together as a
team.” The items are taken from Morris and Williams’ (1996) study and adapted to the
context of the ownership group as a whole rather than just family members.
Network mobilization (Cronbach’s alpha = .80) was measured by asking respondents to
indicate the extent to which they agreed or disagreed with the following statements: “The
owners of this business speak enthusiastically about the business with people outside the
business” (adjusted from Allen and Meyer, 1990), “The owners help to expand the business’s
network by making outside contacts,” and “The owners help to seek out or create new
opportunities for the firm” (adjusted from Vilaseca, 2002).
The control variables used in this study include a range of variables characterizing both the
business and the ownership structure. Company size was measured as the number of
employees in the firm. Company age was measured as the number of years between the
establishment of the business and 2009. As the distributions of company age and company
size were skewed, the variables were calculated as the natural logarithms of the original
values. Expansion, which reflects the stage of the business lifecycle, was measured as a
dummy variable where 1 = expansion and 0 = other stages of the lifecycle, including start-up,
maturity, or decline. Sector was the final variable used to characterize the business. All
companies included in the sample were classified in one of five sectors depending on their
industrial classification code: manufacturing, construction, retail, agriculture, or services
(including hospitality, transport, financial services, business services, and other services),
with a dummy variable created for each category (1 = yes, 0 = no).
Ownership structure characteristics were measured using three variables. In order to measure
the number of owners, respondents were asked to state the number of individual owners. To
offset the skewed distribution, each value was converted into the natural logarithm. Board of
directors 9 was a dummy variable coded 1 given the presence of a board and 0 otherwise.
9 The Netherlands has a two-tiered governance structure, which means that many firms have a board of directors
in addition to the top management team. The board plays a supervisory role. However, as a board of directors is
35

Finally, ownership-management overlap was measured as the percentage of managers that
were also owners.
Data Analysis
When creating the scales, several standard statistical analyses were used, including factor
analysis, inter-item correlations, and reliability tests. To ensure that common method bias
was not a problem, a Harman’s single-factor test was applied (Podsakoff & Organ, 1986) and
the factor loadings for multi-item scales within the same factor analysis were reviewed.
Variance inflation factors (VIF) were controlled to check for multicollinearity among the
predictor variables. The hypotheses were tested using hierarchical multiple regression
analyses. The direct effects of the independent variables were tested by assessing the twotailed
significance of their contributions to explaining the dependent variable.
A bootstrap test was used to estimate the mediation effect (Preacher & Hayes, 2008). This
procedure, which involves repeatedly sampling from the dataset to estimate the indirect
effects and building an empirical approximation of the sampling distribution, is more exact
and has more statistical power than those based on a normal distribution (e.g., Sobel test)
(Holiday Wayne & Casper, 2012). The analyses were performed using SPSS with Preacher
and Hayes’s INDIRECT.SPS Macro (www.quantpsy.com).
2.5 Results
Development of Scales
Table 2.1 presents the results of the principal component factor analysis with orthogonal
rotation for the ownership social capital and family involvement variables. All items clearly
load on one of four distinct factors with the relevant factor loading surpassing .62 in each
instance. The unintended factor loadings, which are not shown in the table, are not higher
than .41. The largest factor in the unrotated factor analysis explains 35.73% of the variance,
which allows us to conclude that the variables are independent and that common method bias
is not a concern in the present study. The Cronbach alphas are also satisfactory, ranging from
.70 to .93 (see Table 2.1).
Descriptive Statistics and Bivariate Statistics
Table 2.2 reports the bivariate Pearson product-moment correlation coefficients as well as
descriptive statistics, including means and standard deviations. As shown in the table, the
firms included in the study had an average of 77 employees. The mean of the business age
was 40 years and the businesses had, on average, 3 owners.
not compulsory for most firms (depending on size and some additional criteria), firms can voluntarily
implement a board or choose not to do so.
36

Results of Hypothesis Testing
Table 2.3 presents the results of the multiple regression analysis. The VIF scores for Models
1-4 are not higher than 1.73. On the basis of currently accepted standards, these results
indicate that the variables are free from multicollinearity. Models 5 and 6 test for moderating
effects, mathematically leading to high VIF scores.
37

Table 2.1: Factor analysis of multi-item variables included in the study a
Ownership social capital
Bonding Bridging
Quality of
Family Network
relationships Shared vision involvement mobilization
Owners tend to trust one another. .87 .20 .05 .19
Owners are open and honest with one another. .87 .23 .04 .16
Owners have good cooperative relationships. .88 .22 .03 .19
Owners work together as a team. .82 .26 .11 .21
Owners try to pull the company in opposite directions (scale reversed). .12 .62 .00 -.02
Owners are committed to managing wealth as a group rather than as individuals. .17 .69 .03 .18
Owners share the same vision about the business. .36 .69 -.03 .22
Owners agree about the key objectives of the business. .41 .64 -.03 .33
Owners speak enthusiastically about the business with people outside the business. .22 .08 -.05 .70
Owners help to expand the business’s network by making outside contacts. .15 .19 -.04 .87
Owners help to seek out or create new opportunities for the firm. .20 .20 .04 .85
Family relations exist between the owners. .08 .01 .87 -.08
The family has considerable influence on the business strategy. .05 .03 .73 -.01
Two or more directors are related to the owners. .12 -.19 .67 .06
The business has been owned by the same family for two or more generations. -.08 .16 .63 -.02
Cronbach alpha .93 .70 .70 .80
Percentage variance explained 35.73 7.11 9.04 14.67
a Principal component analysis with varimax rotation; four components extracted.
38

Table 2.2: Correlations between variables used in the study
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
.58 b
1. Network mobilization
2. Quality of relationships .45 b
3. Shared vision .45 b
-.28 b
4. Family involvement -.01 .12 b
.02
5. Company size (ln) .00 -.09 a
-.01 -.06
6. Expansion .02 -.02 -.01 -.18 b
.01
7. Company age (ln) -.08 a
-.02 -.01 .33 b
.35 b
-.26 b
8. Service .06 -.03 -.06 -.17 b
-.07 .08 a -.30 b
9. Agriculture -.06 .04 .05 .10 a
-.11 a
.03 .04 -.14 b
10. Manufacturing -.06 -.04 .04 .02 .17 b
-.05 .22 b
-.40 b
-.08 a
11. Construction .02 .01 .02 .13 -.05 -.11 b
.14 b
-.33 b
-.07 -.19 b
12. Retail and trade .00 .05 .00 .13 b -.07 .03 .01 -.47 b -.10 a -.27 b -.22 b
13. Number owners (ln) -.09 a
-.22 b
-.09 a -.16 b
.30 b
.02 .08 a
.10 b
.03 -.02 -.06 -.08 a
14. Board of directors -.12 b
-.15 b
-.07 -.06 .26 b
-.02 .16 b
-.13 b
-.03 .15 b
-.02 .01 .12 b
15. Ownership-management .19
overlap
b
.21 b
.13 b
.23 b
-.30 b
-.04 -.11 b
.06 .02 -.14 b
.02 .03 -.37 b
4.41 4.44 4.25 1.71 77 .28 40 .41 .03 .19 .13 .24 3 1.16 63.64
SD c .61 .58 .51 1.40 89 .45 36.80 .49 .17 .39 .34 .43 1.99 .37 38.99
Mean c
Pearson correlation coefficient, two-tailed: a : p < 0.05; b : p < 0.01; N = 708.
c
For the variables company size, company age, and number of owners, the means and standard deviations are reported for the original values.
39

The results related to Hypothesis 1, which predicts a positive relationship between family
involvement and shared vision, are presented in Model 1, Table 2.3. As no significant results
are found for family involvement (β = -.06, ns), they offer no support for Hypothesis 1.
Model 2 in Table 2.3 shows the results for Hypothesis 2, which suggests family involvement
as a predictor of the quality of relationships among owners. The results are not significant (β
= -.02, ns) in this case as well, indicating no support for Hypothesis 2. Hypothesis 3 predicts
a negative relationship between family involvement and network mobilization. The results
are presented in Model 3 but are not significant (β = -.06, ns) and thus offer no support for
Hypothesis 3.
The results concerning the prediction of network mobilization are presented in Models 3-6,
Table 2.3. Models 3 and 4 show strong support for Hypotheses 4 and 5, respectively.
Hypothesis 4 predicts a positive association between the quality of the relationship and
network mobilization. The results show a positive relationship between the dependent
variable and network mobilization (β = .44, p < .001) and thus offer support for Hypothesis 4.
In Model 4, shared vision is added to the regression model and the relationship with network
mobilization is significant (β = .28, p < .001), lending support to Hypotheses 5. A stepwise
regression analysis shows shared vision as the stronger variable in terms of predicting
network mobilization. A bootstrap test is used to estimate the mediation effect (Preacher &
Hayes, 2008). 5,000 bootstrapping resamples were run with listwise deletion of missing data.
The analyses examine the direct relationship of the quality of relationships to the dependent
variable (network mobilization), as well as the indirect relationship through the mediator
(shared vision) while controlling for the control variables. The total effect of the quality of
relationships on network mobilization (.46) is significant (t = 12.81, SE = .04, p < .001) and
the direct effect (.29) is still significant (t = 6.84, SE = .04, p < .001). After including shared
vision as mediator, the path coefficient is substantially reduced, suggesting partial mediation.
Furthermore, the bootstrapping technique shows a bias-corrected 99% confidence interval of
0.0998 to 0.2447 for this indirect effect, with the lower and upper limits above zero. Taken
together, the bootstrap test reveals a significant partial mediation effect of shared vision on
the relation between quality of relationships and network mobilization.
40

Table 2.3: Prediction of ownership social capital
Dependent variable Bonding
ownership social
capital
Bridging ownership social capital
Quality Shared Network mobilization
relation
-ships
vision
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7
Explanatory β value
variables
d β value d β
value d
β
value d
β value d β value d β value d
Company size (ln) .03 .05 .10 a
.09 a
.09 a
.09 a
.07
Expansion .00 -.01 .00 .00 .00 .00 .02
Age (ln) -.02 -.03 -.05 -.05 -.05 -.05 -.04
Service -.04 -.05 .04 .04 .04 .05 .04
Agriculture .02 .05 -.06 -.07 -.07 a
-.07 -.06 a
Manufacturing -.03 .05 -.01 -.03 -.03 -.03 -.03
Construction -.02 .01 .02 .02 .02 .02 .02
Number of owners
(ln)
-.16 c -.05 .02 .01 .01 .01 .01
Board of directors -.10 b -.05 -.03 -.03 -.03 -.03 -.03
Ownershipmanagement
overlap
.12 b
.12 b .13 c
.12 b
.11 b
.12 b .12 b
Family involvement -.06 -.02 -.06
Quality
relationships
.44 c
Shared vision
Moderator QR x SV
Moderator FI x QR
Moderator FI x SV
-.04
.28 c
.28 c
-.03
-.10
-.10
.69 b
.06 -1.18 c
.29 c .26 c
.28 c .17 c
-.10
1.17 c
∆R square .18 c .05 c .03 c .00 .01 b
R square .08 c
.03 a .24 c
.29 c
.29 c
.29 c .34 c
Adj. R square .07 .02 .23 .27 .28 .28 .29
F statistic 5.77 1.97 18.08 22.74 20.83 20.17 22.65
DF (df1, df2) (11, 696) (11, 696) (12, 695) (13, 694) (14, 693) (14, 693) (14, 693)
N = 708.
a : p < 0.05; b : p < 0.01; c : p < 0.001.
d : β values represent standardized regression coefficients in the multiple regression analysis.
41

Hypotheses 6, 7, and 8 propose complex relations among components of ownership social
capital. Hypothesis 6 proposes that the quality of the relationships among the owners will
have a positive moderating effect on the association of shared vision with network
mobilization. The results are presented in Model 5. The results show a positive interaction
term for quality of relationships and shared vision in the model predicting network
mobilization (β = .69, p < .01). These results support Hypothesis 6. The nature of the
interaction effect is depicted in Figure 2.2.
Figure 2.2: Interaction term shared vision and quality of relationships
Network mobilization
5
4,5
4
3,5
3
2,5
2
1,5
1
Low Shared vision High Shared vision
Low Quality of
relationship
High Quality of
relationship
Both lines in Figure 2.2 are positive, reflecting the positive relation between the shared vision
among owners and the mobilization of the owners’ network. The dashed line lays above the
dense line, which highlights the proposition that good relationships among owners together
with a shared vision of the business will lend extra stimulus to the mobilization of bridging
ownership social capital.
Hypotheses 7 and 8 propose that family involvement moderates the relationship between the
two elements of bonding ownership social capital and network mobilization. The results of
the moderating effect of family involvement on the association between the quality of
relationships and network mobilization are not significant (β = -.10, ns). This leads to a
rejection of Hypothesis 7 (Model 6). Model 7 shows the results for Hypothesis 8. The results
indicate a significant positive moderating effect of family involvement on the relationship
between shared vision and network mobilization (β = 1.17, p < .001). This lends support to
Hypothesis 8. The nature of this interaction effect is depicted in Figure 2.3.
42

Figure 2.3: Interaction term shared vision and family involvement
Network mobilization
5
4,5
4
3,5
3
2,5
2
1,5
1
The dashed line in Figure 2.3 is steeper than the solid line. This indicates that an increase in
the level of shared vision among owning group members in combination with high family
involvement will lead to a faster improvement in the mobilization of the owners’ network. In
firms with low family involvement, the positive effect from a shared vision on network
mobilization almost completely disappears. The slopes in Figure 2.3 confirm the proposition
that the family firm context is a fruitful environment in which to mobilize and use the
potential network resources, especially when owners agree on the vision for the firm. While
family involvement has no direct positive effect on the development of bridging or bonding
ownership social capital, this proposed moderating effect is confirmed by the data.
Other Results
Low Shared vision High Shared vision
Low Family
involvement
High Family
involvement
Company size is positively related to network mobilization (β = .09, p < .05). The overlap
between ownership and management is positively related to all three dependent variables:
shared vision (β = .12, p < .01), quality of relationships (β = .12, p < .05), and network
mobilization (β = .12, p < .01). Furthermore, the quality of relationships is predicted by the
number of owners (β = -.16, p < .001) and the presence of a board of directors (β = -.10, p <
.01). Finally, network mobilization is negatively related to the agricultural sector (β = -.07, p
< .05).
In terms of the prediction of all components of ownership social capital tested in this study,
owner-management overlap is found to have a positive effect. This suggests that ownermanagement
groups with greater overlap are more likely to have a stronger shared vision,
higher quality of relationships, and greater mobilization of network resources. This finding is
43

in line with the expectation that owners will report a higher level of agreement and
commitment on business-related issues when the roles of owners and managers overlap.
The results for the quality of relationships among owners indicate a negative association with
the number of owners, suggesting that the larger the group, the less cohesive it will be, which
is consistent with social psychology research on groups (Baron & Kerr, 2004; Shani & Lau,
2000). The negative effect of the presence of a board of directors on the quality of
relationships when controlling for company size may suggest that a board of directors
somehow reduces the need for the owning group to learn to work together.
2.6 Discussion and conclusion
Theoretical and practical implications
One aim of this study was to improve the understanding of the effect of family involvement
on the development of ownership social capital in privately held firms. The hypotheses that
family involvement has a direct positive effect on bonding social capital and a negative effect
on bridging social capital were not confirmed by the data.
Overall, the findings suggest that family involvement per se may not have an effect on
ownership social capital. Rather, the results indicate that the interaction of family
involvement with a shared vision among owners predicts the outcome. This is in line with
scholars who propose that the “family system” itself is not a source of advantage but that its
interactions with other organizational systems create value (e.g., Gersick et al., 1997; Zahra
et al., 2008). The findings of the present study highlight the importance of gaining more
insight into how family involvement affects private firms. This study shows that although a
shared vision and the quality of relations among owners are important factors, these factors
are not limited to family owners. This is in line with O’Boyle et al. (2012), whose metaanalysis
of the relation between family involvement and a firm’s financial performance
showed no significant results. Furthermore, the results indicate that the development of
bridging social capital is positively influenced by owner groups with a shared vision and
good relationships. Family ties among these owners and family involvement in the business
only partially influence this outcome. Therefore, scholars should be careful when measuring
family social capital in the context of family firms. In cases where only family firms are in
focus, social capital can be misinterpreted as a resource stemming from the family sphere
whereas it may, in fact, arise from the owning group even when there are no family ties.
The findings of this study also enhance the understanding of the concept of ownership social
capital. The analyses show that a shared vision and good relations among owners (i.e., high
levels of trust, cooperation, and cohesiveness) are important for the development of bridging
social capital. Furthermore, in contrast to the view set forth by McFayden and Cannella Jr.
(2004), bonding and bridging social capital do not appear to be mutually exclusive resources.
The findings suggest that the bonding aspects of ownership social capital are associated with
44

mobilization of bridging ownership social capital. These findings are in line with the
qualitative study undertaken by Salvato and Melin (2008), who emphasized that family
businesses need to invest in both external and internal social capital. This finding also lends
support to the argument made by some scholars that it is necessary to consider both bonding
and bridging social capital at the same level of analysis in order to build a more
complementary view of social capital (Lin, 1999; Payne et al., 2011; Zheng, 2010).
From a managerial perspective, this study emphasizes the importance of good relations and a
shared vision among owners. The owning group should be aware of these elements. Time and
effort spent on building an effective team will probably have a positive effect on the
development of ownership social capital. For example, a yearly review of how the owners
function as a group might be a beneficial activity. Another issue to be aware of is the positive
association between the overlap between management and ownership, and the bonding and
bridging components of ownership social capital. If, during the life cycle of the firm, the
overlap between owners and managers diminishes, the change might have a negative effect
on the shared vision, the quality of relationships, and the mobilization of network resources.
Research limitations and implications for future research
This research suffers from several limitations. First, this study tries to cover the construct of
social capital using two scales for bonding social capital and one scale for bridging social
capital. The scales were tested and found reliable for the data set. However, as there is no
clear consensus with regard to the precise definition of the concept of social capital (Adler &
Kwon, 2002), scholars use a range of scales to measure it. For instance, bridging social
capital is often measured as the number of ties and the level of centrality in the network (e.g.,
Kim & Canella, 2008). In this study, the focal element is the mobilization of the embedded
resources (Lin, 1999). More empirical testing of the diverse scales would help in the
development of a clearer theory and measurements of social capital.
Second, the effects of social capital on firm outcomes, such as financial performance or
innovation, are not investigated in this study. In particular, the link between bridging social
capital and product innovation seems to offer a promising avenue for future research. Several
scholars have shown, for instance, that bridging social capital (measured as the number of
network contacts) is an important organizational resource for the development of innovative
capabilities (e.g., Subramaniam & Youndt, 2005). Another research avenue could be to
include other types of capital in order to develop a complete picture and to better understand
how interactions among these different resources affect the firm (Sharma, 2008). For
example, human capital seems to interact with social capital (e.g., Florin, Lubatkin, &
Schulze, 2003) and financial capital could be taken into account.
45

Conclusions
The aim of this paper was to explore whether family involvement shapes the level of
ownership social capital. The results of the empirical study conducted on a large, random
sample of privately held Dutch firms, all with two or more individual owners, confirm the
assumption that family involvement affects the development of ownership social capital.
However, this is not a direct effect. Family involvement works as a moderator, strengthening
the relation between the shared vision among the owners and the mobilization of bridging
ownership social capital. Furthermore, the data show that both a shared vision and the quality
of relations among owners have positive effects on the mobilization of the owning group’s
network resources. In this regard, the study supports the model proposed by Lin (1999),
which highlights the sequence of events in the development of social capital. In future
research, these factors should be examined in greater detail.
46

3: The relationship between ownership social capital and product
innovation: The moderating role of family involvement 10
3.1 Introduction
A recent global survey undertaken by McKinsey & Company highlights the importance of
innovation to business. In the survey, 84 percent of 2,240 executives indicated that
innovation was extremely or very important to their companies’ growth strategies
(McKinsey, 2010). These practical findings are in line with Schumpeter’s (1934) seminal
work on economic development. In the economic and business literature, scholars are
convinced that innovation is important for value creation (e.g., Hitt, Hoskisson, Johnson &
Moesel, 1996). Product innovation is often seen as pivotal for the long-term competitive
advantage of the firm (Sharma & Salvato, 2011). To innovate, firms need to reallocate
resources, combine new resources, or combine existing resources in new ways (Tsai &
Ghoshal, 1998). Social capital – the goodwill or other benefits generated by various social
relations (Adler & Kwon, 2002) – is a recent, yet significant, addition to the list of
innovation-inducing factors (Zheng, 2010). Subramaniam and Youndt (2005) specifically
identify social capital as an important organizational resource for fostering innovation:
“Social capital appears to be the bedrock of innovative capabilities” (Subramaniam &
Youndt, 2005, p. 459).
Privately-held firms play a significant role in the economy, and can be divided into family
and non-family firms. Recently, the focus of family business research has shifted from family
businesses as a whole towards role of the business-owning family (Nordqvist & Melin,
2010). The entrepreneurial mindset of the owning family has been identified as a key element
in the creation of new streams of value within and across generations (Uhlaner, Kellermanns,
Eddleston & Hoy, 2012; Berent-Braun & Uhlaner, 2012; Habbershon, Nordqvist &
Zellweger, 2010). In general, however, the role of ownership in private firms is a topic that
has received little attention until recently (Uhlaner, 2008; Berent-Braun, 2010; Hall, Helin,
Brundin & Melin, 2012). Past research on ownership has focused on “having” shares rather
than adopting a more dynamic approach that looks at owners “acting” and “doing” ownership
(Hall et al., 2012). The latter, more dynamic approach is specifically interesting when
examining private firms where the shares are in the hands of an owning group. Data provided
by The Global Entrepreneurship Monitor 2002 estimates that almost half of all established
firms are owned by groups (Uhlaner, 2008, p. 8).
The purpose of the present study is to apply this dynamic approach in an investigation of the
relationship between ownership social capital and product innovation. The group of owners is
the focal level of analysis and the research question concerns whether the social capital of the
10 This chapter is based on a paper by Matser, Uhlaner, Berent-Braun, and Flören (2012) that was presented at
the IFERA conference in June 2012 in Bordeaux, France. An earlier version of this chapter was presented at the
XXV RENT Conference in November 2011 in Bodo, Norway.
47

owning group adds value to the product innovation process in privately held Dutch firms.
More specifically, this paper examines the following research question: Does ownership
social capital predict product innovation in privately held firms? The focus is primarily on the
direct effects of bonding (shared vision, trust, and cohesiveness of the ownership group) and
bridging (networking of owners with outsiders) social capital. Furthermore, the moderating
role of family involvement on the relationship between the different dimensions of social
capital and product innovation is investigated. An attempt is made to distinguish between a
“family” effect and an “ownership” effect through this approach.
This chapter makes three main contributions to the literature. First, it empirically tests the
relationship between social capital and innovation. This is important because there is not
enough empirical evidence to allow for a systematic analysis of the relationship between the
two constructs (Zheng, 2010). Second, this research is unique in its focus on ownership social
capital in relation to product innovation. The business-owning group as a level of analysis
seems promising for studies of social capital. Uhlaner (2008) argues that an effective owning
group can be an important source of competitive advantage, while an ineffective group can
undermine or even destroy a firm. This study combines the internal and external dimensions
of ownership social capital, which helps to create a complete picture of the concept. Third,
this chapter investigates the moderating role of family involvement. In line with the concept
of bivalent attributes of family firms, a dual effect is expected (Tagiuri & Davis, 1996).
Family firms have several unique attributes that can be sources of both benefits and
disadvantages (Tagiuri & Davis, 1996).
The chapter is structured as follows. The next section provides a short overview of the
relevant literature on product innovation and social capital, as well as an explanation of the
concept of ownership social capital. It is followed by a presentation of the framework and the
hypotheses. The method section describes the sample, data collection, variables, and data
analysis, while the final sections present the results, discussion, and conclusions.
3.2 Background on product innovation and the role of (family) owners
Innovation studies span a broad range of topics and adopt various levels of analysis. Scholars
distinguish between innovation diffusion, innovation adoption, innovativeness, and
innovating (Damanpour, 1991). The domains studied vary from technology, products,
services, and processes, to administrative systems (Zheng, 2010). For the current research,
the distinction between types of innovations – incremental, progressive, and radical – is
relevant (Bergfeld & Weber, 2011). “Incremental” innovations use existing established
technologies and/or markets. “Progressive” innovations use adjacent technologies and/or
markets. “Radical” innovations, in contrast, use entirely new technologies and/or markets.
Incremental and progressive innovations focus on the full exploitation of existing
opportunities, while radical innovations strive for exploration of new opportunities. Sharma
and Salvato (2011) argue that dependence on exploitation alone is unlikely to lead to
competitive performance advantages in the long term, as better services and products will
48

always appear in the market at some point. Therefore, stages of radical innovation are
necessary to ensure long-term competitive advantage. Such stages can be followed by periods
of exploitation. Sharma and Salvato (2011) refer specifically to family firms but it seems
logical that this premise should hold for all private firms. Therefore, this study not only
focuses on the realization of new products and services but it also combines this with the
distinction between “new to the world” and/or “new for the firm.” Through this approach, a
scale is created that measures progressively more radical innovation.
The McKinsey study (2010) reveals that the core barriers to successful innovation remain a
challenge for the modern firm. This is reflected in the corporate entrepreneurship literature,
where a dominant theme is the identification of the characteristics and circumstances that
make firms entrepreneurial (Nordqvist and Melin, 2010). Miller (1983, p.771) defines an
entrepreneurial firm as “a firm that engages in product innovation, undertakes somewhat
risky ventures, and is first to come up with ‘proactive’ innovations, beating competitors to the
punch.” A sub-stream within the corporate entrepreneurship literature investigates
entrepreneurship in the context of the family business. An important initiative in this area is
the Global STEP Project (Nordqvist & Zellweger, 2010), which focuses on transgenerational
entrepreneurship—the maintenance of the entrepreneurial spirit through succeeding
generations. One preliminary outcome of the project is the introduction of the family as the
unit of analysis. The proposition is that the family should be regarded as the actor that
undertakes entrepreneurial activities, including innovation (Nordqvist & Melin, 2010).
Habbershon et al. (2010, p. 10) state that there is “increasing evidence that the families who
are in control of these firms need to be considered as drivers and enablers of new
entrepreneurial activity in their regional and national context.”
Bergfeld and Weber (2011) also focus on the role of the family within the innovation process
in their investigation of “dynasties of innovation.” In this qualitative study of old, successful
German family firms, the authors identify a crucial role of owning families as stimulators of
radical innovation and corporate renewal. Their research reveals that a successful strategy for
the owning family is to focus on maintaining long-term innovativeness rather than becoming
overly involved in incremental innovation challenges. The ultimate goal is to ensure the
continuity of the firm. Therefore, owning families should set the strategic imperatives, and
support radical and progressive moves. They can mainly do so via their positions on the
firm’s supervisory board.
In Bergfeld and Weber’s (2011) study, family owners are viewed as strategic resources for
the firm. In line with Berent-Braun (2010), the current study identifies business owners as a
distinct, important group within the privately held firm. Bergfeld and Weber (2011) see
family owners as guardians of a radical innovative climate. Although their findings are
promising (Sharma & Salvato, 2011), they are limited to “old” successful firms and
qualitative results. To overcome the shortcomings of Bergfeld and Weber’s study (2011), this
chapter adopts a quantitative approach and uses a sample that includes firms of all ages.
Furthermore, non-family firms are included (Miller et al., 2007) in order to distinguish
49

etween “owner” effects and “family” effects, and to capture the potential influence of family
owners.
Nordqvist and Melin (2010) stress the need to investigate the role of social capital with
regard to entrepreneurship and innovation within family firms. Social capital is the goodwill
and other benefits generated by various social relations (Adler & Kwon, 2002). Recently,
social capital has become the subject of an increasing amount of attention in the business
literature in general (Lee, 2009) and in family business literature in particular (e.g., Arregle et
al., 2007a; Pearson at al., 2008). Nordqvist and Melin’s (2010) argument stems from the fact
that social capital has been identified as a likely source of competitive advantage for family
businesses (Carney, 2005; Arregle et al., 2007a; Pearson at al., 2008). Furthermore, social
capital is seen as a key resource in innovation (Subramaniam & Youndt, 2005), due to the
fact that innovation is often a collaborative effort. In fact, social capital is often believed to
play a central role in both incremental and radical innovation (Hargadon & Sutton, 1997).
Therefore, the focus in this study is on the role of owners in creating social capital and on
how this social capital influences product innovation. “Ownership social capital” is defined
as the sum of the actual and potential resources embedded within, available through, and
derived from the network of relationships possessed by the business owners. This definition
follows the general definition of social capital proposed by Nahapiet and Ghoshal (1998). In
line with Adler and Kwon (2002), a distinction is made between bonding aspects of
ownership social capital (internal) and bridging aspects of ownership social capital (external).
Furthermore, in line with Kellermans, Eddleston, Sararthy, and Murphy (2012), this study
investigates the influence of family involvement on the relationship between the role of the
owners and the level of new product development in private firms. The dimensions of
ownership social capital, and their expected direct and indirect relationships with product
innovation are more fully discussed in the next section.
3.3 Research framework and hypotheses
Bridging ownership social capital and product innovation
Bridging social capital relates to linking and/or brokering processes that occur between
unrelated groups and people (Gedaljovic & Carney, 2010). Scholars focus on the potential
benefits of bridging social capital, especially in the entrepreneurship literature on new
venture creation (De Carolis & Saparito; 2006; Liao & Welsch, 2005; Pirolo & Presutti,
2010; Steier, 2007). Consistent with a network view, these research perspectives regard
innovation as the outcome of the interactions and exchanges of knowledge across a diverse
range of actors in various situations rather than as product of isolated inventors (Zheng,
2010). Zheng’s literature review (2010) concludes that bridging social capital has a
significant positive impact on innovation. The argument that bridging social capital adds
value is closely related to network theory (e.g., Ramos-Rodríguez, Medina-Garrido, Lorenzo-
Gómez & Ruiz-Navarro, 2010). A key concept in network theory is that of structural
50

embeddedness. “Structural embeddedness” reflects the configuration of an
individual/group/organization’s network (Granovetter, 1992), while “network configuration”
describes the pattern of linkages by measuring the density, connectivity, and hierarchy
(Nahapiet & Ghoshal, 1998) of an individual or organizational network. Structural
embeddedness creates economic opportunities that are difficult to replicate via contracts,
markets, or vertical integration (Uzzi, 1997).
One assumption made in network theory is that the more ties an actor maintains, the more
opportunities that actor has to be exposed to external information, ideas, and knowledge
(Maurer et al., 2011; Zheng, 2010). Bridging ties act as a “scanning device” that allows firms
to detect new trends and asymmetries in the market faster than firms lacking such
connections (Stam & Elfring, 2008). In addition to knowledge acquisition, such contacts also
enable greater knowledge sharing (Zheng, 2010). In this respect, Zahra (2010) emphasizes
the importance of established family firms connecting with new ventures in order to
incorporate new developments and radical change. Subramaniam and Youndt (2005) stress
the brokering aspect of bridging social capital, where “brokering” is defined as the
combination of previously unconnected ideas. This aspect of social capital refers to the
connection of diverse ideas and thoughts that leads to unforeseen and unusual combinations
with the potential to create radical breakthroughs. In this study, the group of owners of a
private firm is in focus. Based on the arguments mentioned above, the network of the
individual owners can be expected to hold valuable resources for the firm in its efforts to
realize product innovation. Taken together, these arguments lead to the following hypothesis:
Hypothesis 1: The mobilization of the owning group’s network is positively associated with
product innovation.
Bonding ownership social capital and product innovation
Bonding social capital focuses on the internal structure of the group—“the linkages among
individuals or groups within the collective and, specifically, in those features that give the
collective cohesiveness and thereby facilitate the pursuit of collective goals” (Adler & Kwon,
2002, p. 21). The distinction between the relational dimension and the cognitive dimension is
relevant with regard to the discussion on ownership social capital.
The relational dimension of social capital draws from Granovetter’s (1973) relational
embeddedness argument, which refers to the quality of the relationships within a network.
The relational dimension of social capital encompasses assets that are created and leveraged
through these relationships, such as trust and trustworthiness, norms, obligations, identity,
and identification (Tsai & Ghoshal, 1998).
Social ties serve as channels for information and resource flows (Tsai & Ghoshal, 1998).
When these social ties can be characterized as high on the relational dimension, information
and resources can be expected to flow more smoothly. Communication, the fluid diffusion of
information, and the sharing and assimilation of information are vital elements of innovative
51

capabilities (Subramaniam & Youndt, 2005). Tsai and Ghosal (1998) confirm that informal
social relations and tacit social arrangements within a firm encourage business units to
combine and exchange resources across formal organizational lines and levels. This exchange
and combination of resources is positively associated with product innovation.
One benefit of trust among members of a group or collective is that it works as a governing
mechanism (Uzzi, 1997): “actors that trust and are trusted by others give and receive
information and knowledge resources freely without fear of being cheated or misled”
(Molina-Morales & Martinez-Fernandez, 2010, p. 264). Molina-Morales and Martinez-
Fernandez (2010) find a positive association between trust in an external social network and
innovation. Taken together, these observations lead to the following hypothesis:
Hypothesis 2a: The quality of relationships among members of the owning group is positively
associated with product innovation.
The cognitive dimension of social capital refers to those resources providing shared
representations, interpretations, and systems of meaning among parties (Nahapiet & Ghoshal,
1998). This dimension of social capital “comprises the groups’ shared vision and purpose, as
well as unique language, stories and culture of a collective that are commonly known and
understood, yet deeply embedded” (Pearson et al., 2008, p. 957). Shared vision and purpose
are constructs that seem particularly relevant to link with innovation: A shared vision among
the owners about the future of the firm and a common purpose in terms of organizational
goals are expected to positively influence the development of new products and services.
Zheng’s review of research on social capital and innovation (2010) shows that research in the
area of shared vision and innovation is fragmented and scarce. However, the available
findings confirm that shared vision is positively linked to innovation. Therefore, the
following hypothesis is presented:
Hypothesis 2b: A shared vision among the owning group is positively associated with product
innovation.
Bridging ownership social capital as a mediating variable
The relationship between bonding ownership social capital and product innovation may be
mediated by bridging ownership social capital. Zheng’s (2010) literature review reveals that
most empirical studies on social capital take either bridging or bonding social capital into
account, but not both. A combination of the bonding and bridging aspects of social capital
provides insights into how these distinct aspects interact with each other. Zheng (2010)
emphasizes the importance of taking an integrative view on social capital based on the fact
that the structural part of a network cannot exist independent of the relational part, while the
relational part cannot exist without the structural part. This relates to another aspect of the
complexity of the social capital construct – the difference between potential and realized
social capital (Montemerlo & Sharma, 2010).
52

To realize the positive effect of bridging ownership social capital on product innovation,
owners must actively mobilize their network for the benefit of the firm. A possible mediation
effect is explored on the basis of Lin’s model of social capital development (1999). Lin
(1999) argues that a crucial step in the development of social capital is the process of social
capital mobilization, in which individuals act to enhance the mobilization of resources. In this
study, bonding social capital is expected to primarily act as a condition for the realization of
bridging social capital. It is assumed that when there is a shared vision among owners and
high-quality relationships, the owning group will be inclined to mobilize and use its potential
external resources for the benefit of the company. Furthermore, as bonding social capital
maintains the closeness of the network, it ensures that if owners do bring in outside resources
and network contacts, those resources and contacts will benefit the firm. Therefore, the third
set of hypotheses is the following:
Hypothesis 3a: The quality of relationships among members of the owning group is indirectly
positively associated with product innovation through the network mobilization of the owning
group.
Hypothesis 3b: A shared vision among the owning group is indirectly positively associated
with product innovation through the network mobilization of the owning group.
Family involvement as a moderating variable
Given the complex nature of the relation between ownership social capital and product
innovation, it seems reasonable to expect complementary effects between certain ownership
characteristics and product innovation outcomes. Recent studies in the field of
entrepreneurship and innovation incorporate the structure of the firm’s ownership and
management as a moderator (e.g., Casillas & Moreno, 2010; Classen, Van Gils, Bammens &
Carree, 2012; Zhara, 2010). In the present study, family involvement is expected to moderate
the relation between ownership social capital and product innovation.
Miller and Friesen (1982) find that product innovation differs considerably between
“entrepreneurial” and “conservative” firms. In their research, conservative firms differ from
entrepreneurial firms in that the former have relatively low organizational differentiation,
market homogeneity, low market hostility, and unconscious strategies. Such conservatism
can plague family firms. Reliance on family members, the exclusion of outsiders, loyalty to
traditions, and insular strategic thinking are factors that lead to conservatism in family firms
(Zahra, 2010). However, family firms are not homogeneous (Westhead & Howorth, 2007)
and they tend to become conservative over time (Zahra, 2012). Many of the concerns about a
lack of innovativeness in family firms have to do with life-cycle effects, a suggestion that is
empirically supported by Miller et al. (2007), who found that first-generation family firms
outperform family firms led by later generations as well as non-family firms. Other factors
mentioned in the literature in relation to the lack of innovation in family firms include less
53

isk taking, an inability to react to change, slowness in decision making, and a reluctance to
grow (Kraus, Pohjola & Koponen, 2012).
Despite these arguments, the empirical evidence concerning the statement that family firms
are less innovative is equivocal (Llach & Nordqvist, 2010). On the one hand, Morck,
Stangeland, and Yeung (2000) show that Canadian family firms are less active in research
and development activities than non-family firms comparable in age, size, and sector. On the
other hand, Llach and Nordqvist (2010) show that Spanish family firms are more innovative
than their non-family counterparts. In line with Subramaniam and Youndt (2005) and Zheng
(2010), Llach and Nordqvist’s (2010) findings highlight social capital as an important
strategic resource that supports innovation.
Zahra (2012) explores the influence of family ownership on organizational learning.
Organizational learning is a capability that stimulates innovation, as it enables the firm to
recognize changing market conditions and opportunities to be exploited (Zahra, 2012). Zahra
(2012) identifies opposing effects of family ownership on organizational learning: a positive
effect on the breadth and speed of learning, and a negative effect on the depth of learning. In
this paper, these opposing effects are also expected, with the role of family involvement
acting as a mediator between ownership social capital and product innovation.
Critical voices, viewpoints from outsiders, and fresh opinions are necessary for deep learning.
However, these qualities are often lacking in the family firm context (Zahra, 2012).
Especially when there is an orientation towards traditional fundamental values, family
businesses can cling to obsolete products on basis of a belief that former success proves the
appropriateness of the current strategy (Roessl, Fink & Kraus, 2010). The inward orientation
of many family firms can be explained by the closure of the social network, which is
particularly common among family firms (Arregle et al., 2007a). Closure is a necessary
condition for the creation of bonding social capital (Pearson et al., 2008) but it can be
harmful to the development of an external network. This relates to network theory, which
distinguishes between strong and weak ties. The importance of weak ties is suggested by
Granovetter (1973) and follows the notion that weak ties, in particular, can act as a “bridge”
to valuable, new information. Actors with an extensive network of weak ties – that is,
contacts who are not connected to each other – will have a high level of bridging social
capital (Moran, 2005). Pirolo and Presutti (2010) confirm the added value of weak ties,
showing that weak ties act as “local bridges” to distant contacts possessing unique
information. Furthermore, a lack of a tight link to a business partner seems to be a condition
for the achieving level of autonomy necessary to spot new, profitable opportunities (Uzzi &
Gillespie, 2002). Taken together, these observations lead to the following hypothesis:
Hypothesis 4a: The relationship between the mobilization of the owning group’s network and
product innovation is weaker for firms with high family involvement than for firms with low
family involvement.
54

The closeness of the family is an important ingredient in Zahra’s (2012) explanation of the
positive effect of family ownership and family cohesion on the breadth and speed of
organizational learning. A combination of high family ownership and high family cohesion
will lead to a motivation to learn broadly, and a willingness to exchange and share
information, which will help to speed up organizational learning (Zahra, 2012). The same
mechanism is expected to work within the context of bonding ownership social capital and
product innovation. A reliance on family members and an inward orientation are beneficial
for the development of bonding ownership social capital, and these elements will enhance the
positive effect of bonding ownership social capital on product innovation. Therefore:
Hypothesis 4b: The relationship between the quality of relationships among members of the
owning group and product innovation is stronger for firms with high family involvement than
for firms with low family involvement.
Hypothesis 4c: The relationship between the shared vision among the owning group and
product innovation is stronger for firms with high family involvement than for firms with low
family involvement.
The hypothesized relationships are depicted in Figure 3.1.
55

Figure 3.1: Model of ownership social capital and product innovation
3.4 Method
Sample and data collection
The research is conducted using a random sample of Dutch private businesses. This is the
same sample as is used in Chapter 2. Therefore, the discussion of the data set can be found in
section 2.4.
Variables
The discussion of the variables family involvement (reflecting the relevant structural
dimension of ownership social capital, as the focus is on potential family influence), shared
vision of the owners (representing the cognitive dimension of ownership social capital),
quality of relationships among the owners and the owners group network mobilization, can
also be found in section 2.4. The same holds for the control variables, company size, company
age, sector, expansion, number of owners, board of directors and ownership-management
overlap.
56

Product innovation (Cronbach’s alpha = .67) (not included in Chapter 2) was measured using
three items. First, respondents were asked to indicate the percentage of total sales that could
be attributed to new products or services in the previous fiscal year. Second, respondents
were asked to describe whether the new products or services were new to the world, or only
new for the company or the industry (coded: 1 = no innovations, 2 = new to firm or industry,
3 = new to the world). Finally, respondents were asked to indicate on a five-point Likert scale
whether the business objective was to be the first on the market with new products or
services. Items were converted to standardized scores and then a mean score of the nonmissing
values was calculated to produce the product innovation index.
Data analysis
The first step in the data analysis was to verify the proposed scales for shared vision, quality
of relationships, bridging social capital, product innovation, and family involvement. A
confirmatory factor analysis with varimax rotation was used for this step. To check whether
common method bias was a problem, a Harman’s single-factor test was applied (Podsakoff &
Organ, 1986) and factor loadings for multi-item scales within the same factor analysis were
reviewed. To ensure that multicollinearity among the independent variables was not a
problem, variance inflation factors (VIF) were calculated. To test the reliability of the scales,
Cronbach’s alpha scores were calculated for each scale.
The hypotheses were tested using hierarchical multiple regression analyses. The direct effects
of the independent variables were tested by entering the variables alone after the controls and
in the full model that included all of the variables. The effect of each variable was assessed in
terms of the two-tailed significance of its contribution to explaining the dependent variable.
The potential mediation effects were tested applying bootstrap tests following the method
suggested by Preacher and Hayes (2008). The analyses were performed using SPSS with
Preacher and Hayes’s INDIRECT.SPS Macro (www.quantpsy.com). This procedure, which
involves repeatedly sampling from the dataset to estimate the indirect effects and building an
empirical approximation of the sampling distribution, is more exact and has more statistical
power than those based on the normal distributions (e.g., the Sobel test) (Holiday Wayne &
Casper, 2012).
3.5 Results
Development of scales, bivariate relationships, and descriptive statistics
A principal component factor analysis with varimax rotation is used to develop the scales.
Table 3.1 presents the results of the factor analyses for network mobilization, shared vision,
quality of relationships, product innovation, and family involvement. All items clearly load
on one of five distinct factors, with the relevant factor loading surpassing .64 in each
instance. The unintended factor loadings are no higher than .41. The largest factor in the
unrotated factor analysis, quality of relationships, explains 29.80% of the variance, which
57

allows us to conclude that the variables are independent and that common method bias is not
a concern. The Cronbach’s alphas are also satisfactory, ranging from .67 to .93 (see Table
3.1).
Descriptive and bivariate statistics
Table 3.2 shows the bivariate Pearson product-moment correlation coefficients as well as the
means and standard deviations of all variables. On average, the firms included in the sample
are 40 years old, and have 77 employees and 3 owners.
Results of hypothesis testing
The results of the multiple regression analysis are presented in Table 3.3. The VIF scores for
Models 1-3 range from 1.09 to 1.719. On the basis of currently accepted standards, these
results do not indicate a problem of multicollinearity between the independent variables.
Model 5 shows higher VIF scores but these are the result of the inclusion of interaction
effects in the model. The full model (Model 4) explains 14.6% of the variance in the
dependent variable (p < 0.001).
The results related to Hypothesis 1, which predicts a positive relationship between network
mobilization and product innovation, are presented in Model 3, Table 3.3. As the results
show a significant relation (β= .14, p < 0.001), they support Hypothesis 1.
Model 1, Table 3.3, shows the results for Hypothesis 2a, which suggests that the quality of
relationships is a predictor of the level of product innovation in a particular firm. The results
indicate that the quality of relationships is positively related to product innovation (β = .09, p
< .05), which lends support for Hypothesis 2a. Model 2 shows the results for Hypothesis 2b,
which predicts a positive relationship between shared vision and the level of product
innovation in a firm. As the relationship between shared vision and product innovation is not
statistically significant (β = .04, ns), Hypothesis 2b is not supported.
The results concerning network mobilization as a mediating variable are presented in Model
4. When shared vision and the quality of relationships are added after the control variables,
the quality of relationships significantly relates to product innovation (Models 1 and 2, Table
3.3). However, when entered together with network mobilization in a single model, the
explanatory power of quality of relationships decreases and becomes non-significant (β = .09,
p < .05 to β = .05, ns) (Model 4, Table 3.3). The explanatory power of network mobilization
remains significant (β = .14, p < .01, ∆R 2 = 0.013).
58

Table 3.1: Factor analysis of multi-item variables included in the study a
Family
involvement
Shared vision Product
innovation
Quality of
relationships
Network
mobilization
Owners speak enthusiastically about the business with people outside the
.69 .21 .10 .10 -.04
business.
Owners help to expand the business’s network by making outside contacts. .87 .18 .14 .03 -.04
Owners help to seek out or create new opportunities for the firm. .85 .21 .19 .03 .04
Owners tend to trust one another. .19 .87 .20 .01 .04
Owners are open and honest with one another. .16 .86 .25 -.02 .03
Owners have good cooperative relationships. .19 .88 .22 .01 .02
Owners work together as a team. .21 .81 .26 .00 .10
Owners are committed to managing wealth as a group rather than as
.17 .15 .69 -.00 .03
individuals.
Owners share the same vision about the business. .23 .35 .69 .03 .03
Owners try to pull this company in opposite directions. (scale reversed) -.02 .16 .70 -.01 .01
Owners agree about the key objectives of the business. .33 .41 .64 .02 -.03
Products are new to the company and industry, or new to the world. .03 .01 .03 .83 -.11
Percentage of sales in previous year stemming from new products. .02 .02 .01 .75 -.06
First on the market with new products. .08 -.03 -.03 .71 .03
Two or more directors are related to the owners. .09 .09 -.21 -.08 .66
Business owned by the same family for two or more generations. -.04 -.04 21 -.02 .64
Family relations exist between the owners. -.06 -.06 .01 -.09 .87
The family has a considerable influence on the business strategy. -.02 .17 .01 .04 .73
Cronbach’s alpha .80 .93 .70 .67 .70
Percentage variance explained 13.00 29.80 7.35 5.96 9.35
a
Principal component analysis with varimax rotation; four components extracted.
59

Table 3.2: Correlations between variables used in the study
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
.58 b
.03 b
1. Network mobilization
2. Quality of relationships .45 b
3. Shared vision .45 b
4. Product innovation .12 b
.04
5. Family involvement .01 .12 b
.04 -.10 b
6. Company size (ln) -.00 -.09 a -.01 .22 a -.06
7. Expansion .02 -.02 -.01 .16 b .18 b .02
8. Company age (ln) -.08 a
-.02 -.01 -.06 .33 b .35 b -.26 b
9. Service .06 -.03 -.06 -.05 -.17 b -.07 .08 a -.30 b
10. Agriculture -.06 .04 -.05 -.03 .10 a -.11 b .03 .04 -.14 b
b b b b a
11. Manufacturing -.06 -.06 .04 .15 .01 .17 - .05 .22 - .40 - .08
12. Construction .02 .00 -.02 -.08 a .02 .05 -.11 b .14 b -.33 b -.07 -.18 b
13. Retail and trade .00 .05 .00 .00 .13 b -.07 .03 -.08 -.47 b -.10 a -.27 b -.22 b
14. Number owners (ln) -.09 a
-.22 b
-.09 a .13 b -.16 b .30 b .02 .08 a -.10 b -.03 -.02 -.06 -.08 a
15. Board of directors -.12 b
-.15 b
-.10 b .10 b -.06 .26 b -.02 .16 b -.13 b -.03 .15 b .02 .01 .13 b
16. Ownership-
.19
management overlap
b .21 b -.06 -.13 b .23 b -.29 b -.04 -.11 b .06 .03 -.14 b .02 .03 -.37 b -.28 b
Mean c
4.41 4.44 4.25 1.01 1.71 77.46 .28 40.25 .41 .03 .19 .13 .41 3.03 1.16 63.65
SD c .61 .58 .51 .81 1.40 88.98 .45 36.81 .49 .17 .39 .34 .49 1.99 .37 39.00
Pearson correlation coefficient, two-tailed: a : p < 0.05; b : p < 0.01; N = 708.
c
For company size, company age, and the number of owners, the means and standard deviations are reported for the original values.
60

Table 3.3: Prediction of product innovation
Dependent variable Product
innovation
Product
innovation
Product
innovation
Product
innovation
Product
innovation
Model 1 Model 2 Model 3 Model 4 Model 5
Explanatory variables β value d β value d β value d β value d β value d
Controls
Company size (ln) .22 c
.22 c
.20 c
.20 c
.20 c
Expansion .12 c .12 c .12 c .12 c .12 c
Age (ln) -.14 c -.14 c -.13 c -.13 c -.14 c
Construction .01 -.02 -.01 -.01 .00
Retail .06 .06 .06 .06 .06
Manufacturing .15 c .15 c
.16 c .16 c
.16 c
Agriculture .02 -.02 -.03 -.01 .03
Number of owners (ln) .07 .06 a .06 .03 a .07
Board of directors .04 .03 .03 .05 .04
Ownership-management overlap -.04
-.03 -.05
-.05 -.06
Family involvement -.02 -.02 -.01 -.02 .49
Ownership social capital
Quality of relationships .09 a .05 .07
Shared vision .04 -.04 -.09
Network mobilization .14 c .14 b .25 c
Moderator family involvement
Interaction effect
Family involvement x network mobilization
Family involvement x quality of relationships
Family involvement x shared vision
∆R square .007 a .002 .018 c .013 c .011 b
R square .121 c .116 c .133 c .135 c .146 c
Adj. R square .106 .101 .118 .117 .125
F statistic 7.99 7.63 8.87 7.70 7.332
DF (df1, df2) 12,695 12,695 12,695 14,693 16,691
a : p < 0.05; b : p < 0.01; c : p < 0.001; N = 708
d : β values represent standardized regression coefficients in the multiple regression analysis.
61
-.81 b
-.28
.56

A bootstrap test is then used to estimate the mediation effect, following the recommendations
of Preacher and Hays (2008). 10,000 bootstrapping resamples were run with a list wise
deletion of missing data and 95 percent confidence intervals, and. The analyses examine the
direct relationship between the quality of relationships and the dependent variable (product
innovation) as well as the indirect relationship through the mediator (network mobilization)
while controlling for the control variables. The total effect of the quality of relationships on
product innovation (.12) is significant (t = 1.96, SE = .063, p = .05). However, after network
mobilization is added as a mediator, the path coefficient becomes non-significant, suggesting
mediation. Furthermore, the bootstrapping technique shows a bias-corrected 95% confidence
interval of 0.0233 to 0.0977 for this indirect effect, with the lower and upper limits above
zero. Taken together, the results reveal that network mobilization has a significant mediation
effect on the relation between the quality of relationships and product innovation, which
lends support for Hypothesis 3a.
In Model 5, the results of the hypotheses predicting family involvement as a moderator are
shown. Hypothesis 4a predicts that family involvement among the owners will have a
negative moderating effect on the relationship between network mobilization and product
innovation. The results show a negative interaction term for family involvement and network
mobilization in the model predicting product innovation (β = -.81, p < .01). These results
therefore support Hypothesis 4a. The nature of the interaction effect is depicted in Figure 3.2.
Figure 3.2: Interaction term family involvement and network mobilization
Product innovation
5
4,5
4
3,5
3
2,5
2
1,5
1
Low Network mobilization High Network mobilization
Low Family
involvement
High Family
involvement
62

The solid line in Figure 3.2 is steeper than the dotted line, which indicates that firms with low
levels of family involvement will benefit more from the mobilization of the owners’ network,
resulting in higher scores for product innovation. Overall, the levels of the different slopes
indicate that, when compared with firms with low levels of family involvement, firms with
high family involvement have lower product innovation scores. The horizontal dotted line in
Figure 3.2 confirms that the family firm context is not a fruitful environment for mobilizing
and using potential network resources to realize product innovation. In other words, while the
analysis of the data does not reveal a direct effect of family involvement on the development
of new products and services, the proposed negative moderating effect of family involvement
on the relation between network mobilization and product innovation is confirmed by the
data set.
Hypothesis 4b predicts that family involvement in the owning group will have a positive
moderating effect on the relationship between the quality of relationships and product
innovation. Following the same arguments, Hypothesis 4c predicts that family involvement in
the owning group will have a positive moderating effect on the relationship between shared
vision and product innovation. The results are presented in Model 5. The results of the
moderating effect of family involvement on these components of bonding ownership social
capital are not significant (interaction with quality of relationships: β = .28, ns; interaction
with shared vision: β = -.56, ns), lending no support for Hypotheses 4b and 4c.
Other results
The number of owners is the only ownership characteristic that significantly influences the
dependent variable (β = .06 in Model 2 and β = .03 in Model 4; p < .05), albeit not in all
models. The control variables for business characteristics show significant associations for
company size, expansion, age, and sector. Younger firms have a higher score on product
innovation (Model 5: β = -.14, p < .001) as do larger firms (Model 5: β = .20, p < .001). The
same holds true for firms in the expansion stage versus those in other life-cycle stages (Model
5: β = .12, p < .001). Of the various business sectors that were included in the analysis, only
manufacturing has a significant positive effect on product innovation (Model 5: β = .16, p <
.001). Those results are consistent through all models.
63

3.6 Discussion and conclusion
Theoretical and managerial implications
The main aim of this study was to improve the understanding of the relationship between
ownership social capital and product innovation. The analysis provides empirical support for
several of the suggested hypotheses. With regard to bridging ownership social capital, the
results reveal a significant direct relation between the mobilization of the owning group’s
network and the realization of new products and services. Bonding ownership social capital is
measured in terms of the shared vision among the owning group and the quality of the
relationships among members of the owning group. Of these two components, only the
quality of relationships has a significant effect on product innovation. The analysis shows
that the quality of the relationships among members of the owning group has an indirect
effect on product innovation via the mobilization of the network resources of the owning
group. Based upon the theoretical discussion, family involvement is expected to act as a
moderator. Given the bivalent attributes of family involvement, a positive effect on the
relation between bonding ownership social capital and innovation, and a negative effect on
the relation between bridging ownership social capital and product innovation are expected.
However, only the negative moderating effect on the relation between bridging ownership
social capital and product innovation is found to be significant.
These results have several theoretical and practical implications. First, the findings of this
study enhance the understanding of the concept of ownership social capital. A starting point
of this study is the recognition of business owners as a distinct and important group within
the privately held firm. The empirical results highlight the positive effect of components of
ownership social capital on product innovation. From a theoretical perspective, the analyses
support the view that both bonding and bridging ownership social capital play roles in
innovation: good relations among owners as well as the resources in the owners’ external
networks are valuable for the development of new products and services. These findings are
consistent with other research showing that social capital in general is important for
stimulating innovation (e.g., Subramaniam & Youndt, 2005).
Furthermore, bonding and bridging ownership social capital do not appear to be mutually
exclusive resources. These findings are in line with the qualitative study of family-controlled
businesses by Salvato and Melin (2008) and a quantitative study of sales managers by Moran
(2005). The results of the present study also support the argument that it is important to
consider both bonding and bridging aspects when attempting to build an integrative view of
social capital (Lin, 1999; Payne et al., 2011; Zheng, 2010). In addition, the results are in line
with the argument made by “small world” researchers that high levels of closure and tie
strength in the local cluster, together with a large number of weak bridging ties with other
clusters, have a positive effect on innovation (Zheng, 2010). A study by Fleming and Marx
(2006) on ties between inventors in Boston and Silicon Valley shows the benefits of such a
“small world.” They emphasize that it is neither the cohesive clustering nor the bridging ties
64

in themselves that improve seminal creativity. Rather, the interaction of these two effects
leads to positive outcomes.
From a managerial perspective, this study emphasizes the positive effect of both dimensions
of ownership social capital on product innovation performance. The group of owners in
privately held firms should view both aspects as important. Not only will good relations
between owners have a positive effect on innovation but external network activities will also
add value to the innovation process.
The results reveal no significant direct effect of family involvement on the dependent
variable. However, family involvement is also considered as a moderator. In the latter case, a
significant negative effect is found for the relationship between mobilization of the owning
group’s network resources and product innovation. This study shows that the influence of
family ties among the owning group and family involvement in the firm have a limited
influence on product innovation. In fact, the effect is less prominent than might be expected
from previous theoretical and empirical research (e.g., Arregle et al., 2007a; Pearson et al.,
2008; Sorenson et al., 2009). Therefore, it is suggested that research in this area should not be
limited to the family firm context. When only family firms are taken into account, social
capital can be misinterpreted as a resource stemming from the family sphere when, in fact, it
is a positive outcome regardless of whether there are family ties.
In summary, the results suggest that it is useful to focus on behavioral and attitudinal factors
influencing the functioning of a group of owners instead of looking exclusively for a family
effect. Nevertheless, it may be needed to delve deeper into the types of families studied. For
instance, Ensley and Pearson (2005) find differences among non-family, parental, and
familial top management teams with regard to the level of cohesion, conflict, potency, and
consensus. Their study reveals, for example, that group cohesion is highest in parental teams
followed by non-family top management teams, with familial teams scoring the lowest.
Research limitations and implications for future research
This research suffers from several limitations. First, although four of the hypotheses are
supported by significant results, a rather small percentage of variance in the dependent
variable is explained by the proposed full model. Future research might explore additional
sources of capital that can help to explain a greater proportion of variation in product
innovation. For example, Tsai and Ghoshal (1998) emphasize the exchange and combination
of resources with other business units as important in explaining the level of product
innovation. Research that takes other forms of capital into account, such as human capital,
patient capital, or financial capital, would be helpful in developing a complete picture of how
these different resources affect firm innovation (Sharma, 2008). For example, Subramaniam
and Youndt (2005) reveal that social capital works as leverage for investments in human
capital. Furthermore, to improve our understanding of ownership social capital, it would be
helpful to elaborate on the characteristics of the group of owners. In line with Ensley and
Pearson (2005), researchers could differentiate among non-family, familial, and parental
65

teams. A future study that includes such variables as education, age, and work experience of
members of the owning group may also more clearly reveal the antecedents of ownership
social capital.
Another limitation of this study is that it only includes one dimension of innovation – the
development of new product and services. It would be valuable to include other aspects of
innovation, such as managerial and organizational innovation. Kraus et al. (2012) find, for
example, that organizational innovation is a type of innovation that has a significant positive
effect on the corporate success of family firms. Furthermore, this study entails cross-sectional
data from only one country (the Netherlands). Further research in other countries will reveal
whether the results are country specific. Especially with regard to aspects of bonding
ownership, social capital scholars are aware of the potential influences of cultural differences.
For instance, trust among organizational members is probably highly correlated with the
more general variable of trust in other persons (Westlund & Adam, 2010). The general score
on trust within society can vary widely from country to country, an aspect that may be worthy
of consideration in future research.
66

Conclusions
The purpose of this study was to investigate whether ownership social capital contributes to
the development of new products and services by private firms, and whether family
involvement moderates this relationship. A first contribution of this study is an enhanced
understanding of the concept of ownership social capital in relation to product innovation.
Based on a random sample of Dutch private firms, this study reveals that the mobilization of
the network resources of the business-owning group has a direct positive relationship with
product innovation. An indirect effect is found between quality of relationships among the
members of the business-owning group and product innovation via network mobilization.
These findings confirm earlier research that highlights the role of owners in relation to
product innovation (Bergfeld & Weber, 2011). Also the positive impact of social capital on
product innovation is confirmed in this study (Zheng, 2010).
A second contribution relates to the impact of family involvement on product innovation.
Interestingly, the study finds only one moderating effect, namely a negative effect of family
involvement on the relationship between network mobilization and product innovation. When
combined with the positive effects of ownership, this negative family effect highlights the
need for a better understanding of these different contributions to product innovation. This
research is a first step towards a better understanding of this topic, and highlights the
importance of distinguishing between ownership and family as two systems that interact with
each other and with the business system.
Finally, the indication that interaction effects are present between the bonding and bridging
elements of social capital is interesting. It may be promising to analyze whether the “small
world” conditions (Fleming & Marx, 2006) hold for the owner groups of privately held firms.
Also, longitudinal research could more accurately investigate the sequential path between
bonding and bridging, and thereby improve our understanding of the important concept of
social capital in relation to product innovation.
67

4: The relationship between spousal social capital in copreneurial
firms and firm performance 11
4.1 Introduction
Case 1: Just as Marc decided to hire the first employees in his construction business, his wife
Alice lost her job as a management assistant at a regional technical school. Alice decided to
take care of the many administrative tasks in her husband’s small business and started
working for the firm on a part-time basis. Alice and Marc have four children and own equal
shares in the business. As the business is located near their home, Alice can easily combine
her work with taking care of the children. The business is growing and Alice’s contacts with
her old employer help the company recruit young, qualified personnel. The spouses make all
important decisions together, both at home and at work. However, their roles are clear:
Marc is the manager at work and Alice is the manager at home.
Case 2: The succession plan seemed clear. Robert and his life partner Lianne had taken over
the real estate agency from Robert’s parents, who still worked part-time in the business but
planned to retire within a couple of years. Lianne and Robert had a shared vision of the longterm
orientation of the business. Lianne had been working in Robert’s family business for 10
years, and she and Robert had lived in an apartment above the office. However, things
changed rapidly when Robert ended their relationship six months ago. Lianne found a new
place to live but she still works for the family business. The relationships among the four
adults are tense. Robert’s parents are worried about the completion of the succession plan
and the future of the family business. Lianne is devastated. In a short space of time, she has
lost nearly everything: her partner, her house and, most likely, her job. Robert feels
responsible for the whole mess and is trying hard to keep matters from worsening.
The cases above describe two situations in which couples are responsible for a family
business. Such firms are known as “copreneurial” businesses. According to Ponthieu and
Caudill (1993), copreneurs are married couples or life partners who jointly own and operate
business organizations or who otherwise share risk, ownership, responsibility, and
management by working together in any phase of a business venture. The first case illustrates
the advantages of such a working relationship (quick decision-making processes and the
possibility of combining business with personal life), whereas the second highlights the
vulnerabilities of this type of business. The overlap of business and personal life presents
several unique challenges for the couples involved. The purpose of this study is to investigate
the influence of some of these challenges on the performance of copreneurial firms.
Demographical changes and changes in society at large have not only influenced how
families are composed but also the roles and relationships among family members. These
11 This chapter is based on a manuscript by Matser, Van Helvert-Beugels, Farrington, Venter & Rigtering.
(2012), which was presented at EFMD Conference Maastricht, March 5-6, 2012.
69

changes have implications for new business opportunities, opportunity recognition, business
start-up decisions, and the resource mobilization process (Aldrich & Cliff, 2003). The
copreneurial business serves as a good example of how these changes can impact an
organization. In a representative study undertaken in the Netherlands (Flören et al., 2010),
16% of all family firms described themselves as copreneurial businesses (see also Chapter 1,
section 1.5.3). Similarly, figures for the UK indicate that 26% of all business owners have a
partner or spouse working with them (Fletcher, 2010).
However, relatively little research has been done on this important subgroup of family firms
(Rutherford, Muse, & Oswald, 2006). One exception is a research project conducted by
Fitzgerald and Muske (2002) in the United States. Results from their study show that, when
compared to other types of entrepreneurs, copreneurs work longer hours, have lower financial
performance, and view their businesses more as a way of life than a source of income.
Furthermore, copreneurs experience a need to renegotiate roles and expectations for both
their firms and their spousal relationships.
The importance of the spousal relationship is emphasized in the literature on new venture
creation. The commitment of spouses seems critical to overcoming difficulties during the
initial phases of operation (Bosma, Van Praag, Thurik & De Wit, 2004; Danes, Lee, Stafford
& Heck, 2008; Davidsson & Honig, 2003). A spouse with low levels of commitment is said
to add to the stress associated with starting a business, as a lack of commitment often creates
work and family conflicts (Van Auken & Werbel, 2006). Bosma et al. (2004) find the
emotional support of a spouse to be important—those entrepreneurs who enjoy it earn
approximately 40% more than their counterparts who have no such support.
This chapter expands the extant research on new venture creation to established copreneurial
firms. Within this context, the impact of the spousal relationship on the financial performance
of the business is analyzed and differences in performance within copreneurial businesses are
explained in terms of dimensions of spousal social capital. In line with Danes et al.’s (2009)
definition of family social capital, spousal social capital is defined as the goodwill among and
between spouses and their external network that can serve as input for the couple and their
business to facilitate action. Social capital is used as the theoretical framework because social
capital is based on relational aspects and has been identified as a key strategic resource for
achieving a long-term competitive advantage (Adler & Kwon, 2002).
Given the large number of businesses characterized as copreneurial, as well as the role that
spousal social capital can play in their success, the primary objective of this chapter is to
investigate the influence of dimensions of spousal social capital on the performance of
copreneurial businesses. This research also adds to the understanding of how social capital
develops through the life cycle of copreneurial firms. The focus of this investigation is on
established copreneurial firms. Until recently, most research on copreneurial firms has related
to those in the start-up phase (Danes et al., 2008; Matzek, Gudmunson & Danes, 2010).
Lastly, following Lee’s (2009) suggestion that the linkages and interplay among the various
70

dimensions of social capital warrant further investigation, this study aims to investigate the
interactions of various dimensions of spousal social capital.
The article proceeds as follows. First, the literature overview discusses the concept of social
capital theory and how it can be applied to copreneurial companies. The concept of spousal
social capital is discussed in detail and the different dimensions of spousal social capital – the
structural, relational, and cognitive dimensions – are discussed. The hypotheses and the
methodology are then presented, as is the data analysis. Lastly, the implications of the
research results are discussed, as are recommendations for future research.
4.2 Spousal social capital: background and hypotheses
4.2.1 The copreneurial relationship as a strategic resource
“Familiness” refers to the unique bundle of resources created by the interaction that occurs
between the family and business (Sirmon & Hitt, 2003). The concept was introduced by
Habbershon and Williams (1999), who use the resource-based view (RBV) to link the
uniqueness of family firms to an advantage in the market. The overlap that occurs between
the business and the family creates a strategic resource that can result in a long-term
competitive advantage for the family business. Pearson et al. (2008) and Arregle et al.
(2007a) use social capital theory to further develop the familiness construct. The focus on
social capital arises because it is seen as a key strategic resource and as a way of leveraging
other sources of capital (human, financial, emotional, and physical) (Arregle et al., 2007a;
Montemerlo & Sharma, 2010; Steier, 2007). Similarly, the focus is on spousal social capital
in the form of strategic resources derived from the couple’s relationship that span the home
and work environments. Research has shown that spousal social capital is an important
resource for couples starting a business (e.g., Bosma et al., 2004; Davidsson & Honig, 2003).
The commitment of spouses to the business and the emotional support of spouses appear to
be valuable resources during the initial phases of operation.
However, familiness does not always lead to a competitive advantage. Habbershon and
Williams (1999) distinguish between “constrictive” familiness and “distinctive” familiness.
Constrictive familiness occurs when the overlap between the family and the business
negatively affects the functioning of the family firm, whereas distinctive familiness occurs
when the impact is positive. Therefore, this study suggests that spousal attributes can lead to
a competitive advantage in some situations but not in all cases.
In this study, “social capital” is defined as the sum of the actual and potential resources
embedded within, available through, and derived from the network of relationships possessed
by an individual or social unit (Nahapiet & Ghoshal, 1998). In organization studies, social
capital theory is used to analyze the effect that the structure and content of social relations
can have on firm performance (Nahapiet & Ghoshal, 1998). Westlund and Adam’s (2010)
meta-analysis of the relation between social capital and performance shows strong evidence
71

of this relationship. Of the 21 studies in their survey, 18 found a positive impact of social
capital on performance when the latter was measured in terms of economic growth.
Nahapiet and Ghoshal (1998) argue that it is useful to define social capital in terms of three
dimensions: the structural, the cognitive, and the relational. This division has been adopted
by numerous scholars, including Pearson et al. (2008). Pearson et al. (2008) designed a model
of social capital stemming from familiness by incorporating the studies of Arregle et al.
(2007a), Leana and van Buren (1999), Nahapiet and Ghoshal (1998), Oh, Labianca, and
Chung (2006), and Tsai and Ghoshal (1998). To analyze the functioning of social capital in
family firms, Pearson et al. distinguish between family firm resources and family firm
capabilities: “The presence and strength of the resources lead to organizational capabilities
that are advantageous for superior firm performance” (Pearson et al., 2008, p. 960). Pearson
et al.’s (2008) model forms the basis of the research discussed in this chapter, which
investigates the concept of spousal social capital in copreneurial firms.
4.2.2 Three dimensions of spousal social capital
Structural dimension
In general, the structural dimension of social capital refers to the configuration of the
networks that link a social unit’s members to one another (internal networks) or to external
individuals and units (external networks) (Nahapiet & Ghoshal, 1998). In other words, this
dimension is about social interactions and network ties in terms of who can be reached and
how (Burt, 1992).
This definition highlights a central component of the structural dimension: the existence or
absence of external ties. For family firms, external ties are an important source of the
knowledge necessary to stimulate entrepreneurship and safeguard against conservatism and
nepotism, which can plague family firms (Zahra, 2010). An external network can help ownermanagers
of small firms expand their limited supply of tangible and intangible assets. For
instance, product innovation becomes a viable strategy when undertaken in cooperation with
a supplier and/or client. For such purposes, external ties are valuable for gaining access to
knowledge and sharing costs. In copreneurial firms, it seems important that couples approach
non-family members for advice and expertise on business matters when needed. Chua et al.
(2003) highlight the importance of non-family involvement by showing empirically that nonfamily
executives play a critical role in strategic decision making. According to Sharma
(2004), there is a clear need to devote more attention to understanding the role and influence
of non-family employees. In this study, therefore, spousal social capital is linked to the usage
of an external network for advice and for help in making strategic decisions.
Not only is the existence of an external network relevant, but the willingness to use external
ties also seems pivotal. Sorenson (2000, p. 197) indicates that consultation with outside
professionals is correlated with both business and family outcomes: “Perhaps the best
analogy of a family business leader that does not consult with professionals is the
72

stereotypical man who refuses to stop to get directions when he is lost.” This analogy
suggests that one characteristic of an effective family businesses is a willingness to utilize the
expertise of competent external professionals.
In a test of survey data covering firms in Finland, Mustakallio et al. (2002) show that outsider
expertise positively influences strategy formation, decision making, and business survival.
Furthermore, Farrington, Venter, Eybers, and Boshoff (2011) find evidence of a positive
relation between non-family involvement and the performance of the copreneurial firm.
Classen et al. (2012) find a positive relation between a higher percentage of non-family
managers and a higher performance on product innovation. Arregle, Nordqvist, Mari, Melin,
and Very (2007b) emphasize the role of the board in mitigating conflicts among family
owners. Woods, Dalziel, and Barton (2012) stress the importance of outside board members
in avoiding escalation of commitment. Long-term dependence on a single owner or small
group of owner-managers can result in owner-managers becoming entangled in their own
rhetoric and beliefs, and prevent them from facing reality and objectivity. Taken together,
these arguments lead to the first hypothesis:
Hypothesis 1: There is a positive relationship between non-family involvement and the
financial performance of the copreneurial business.
Cognitive dimension
The cognitive dimension refers to those resources providing shared representations,
interpretations, and systems of meaning among members of a collective (Nahapiet &
Ghoshal, 1998). When actors within a collective participate in meaningful communication,
synergy is created (Tymon & Stumpf, 2003). For instance, shared meanings and language
facilitate the exchange of information that allows actors to share thinking processes (De
Carolis & Saparito, 2006), which can lead to knowledge creation.
Within family firms, a shared vision and a shared language are often deeply embedded in the
family’s history. This creates fertile ground for the creation of a shared focus on the longterm
continuity of the firm (Pearson et al., 2008). For example, a well-known, thirdgeneration
Dutch family firm uses mottos introduced by the first generation as a point of
departure for its current strategic focus, highlighting that values from the past are still useful
for shaping the present situation. In copreneurial firms, a key component of the cognitive
dimension is the spouses’ shared vision for the firm. According to Van Auken and Werbel
(2006), committed spouses/partners work cooperatively towards common goals, which in
turn has a positive effect on business performance and perceived success. In their research on
private firms, Uhlaner, et al. (2007) find a positive relation between collective norms and
goals, and commitment, and that more commitment leads to higher financial performance.
Similarly, Berent-Braun (2010) proposes that a firm that is unified by a shared vision among
the owners will achieve better performance. In line with these findings, copreneurs who have
a shared vision should perform better than their counterparts. These leads to the second
hypotheses:
73

Hypothesis 2: There is a positive relationship between a shared vision between the spouses
and the financial performance of the copreneurial business.
Relational dimension
The relational dimension refers to those assets created and leveraged through relationships.
The key aspects of this dimension are trust and trustworthiness, norms and sanctions,
obligations and expectations, and identity and identification (Nahapiet & Ghoshal, 1998). A
core element is trust, especially a trustor’s belief that a trustee will act beneficially because
the trustee cares about the trustor’s welfare (De Carolis & Saparito, 2006). Lee’s review of
empirical findings on social capital (2009) uncovers several benefits of high trust within a
business environment: trust seems to enhance firm confidence, trust stimulates firm
performance during times of market uncertainty, and trust facilitates the formation of
alliances and resource exchange.
The characteristics of family firms create conditions that are favourable for the development
of the relational dimension. Especially in first-generation family firms, trust is regarded as an
important strategic asset that can lead to a competitive advantage (Steier, 2007), particularly
because the family firm stays within the context of a single nuclear family. This is also the
case in copreneurial firms. Obligations to both the family and the business create an
environment that stimulates collective actions (Pearson et al., 2008). However, a high-quality
relationship between the spouses cannot be assumed. When couples are unable to effectively
manage their professional and personal relationship, performance might be negatively
affected. In this regard, Flechter (2010) identifies issues related to power, competition, and
control. For example, the diversification of the business might be justified by the importance
of creating “own space” for spouses. In contrast, when couples work and live together in
harmony, Farrington et al. (2011) find a positive effect on firm performance and perceived
success. Against this background, the proposition is that firms in which couples have a highquality
relationship that is characterized by trust and respect will outperform their
counterparts, which leads to the third hypothesis:
Hypothesis 3: There is a positive relationship between the quality of the copreneurial
relationship and the financial performance of the copreneurial business.
Shared vision as a mediating variable
Little existing empirical research analyzes the interactions among the three dimensions of
social capital (Lee, 2009). The association between the relational and cognitive dimensions of
social capital can be viewed in opposing directions. Pearson et al. (2008) argue that the
cognitive dimension is an antecedent of the relational dimension. For instance, a partner who
is deeply committed to the firm’s goals is expected to invest more in keeping the relationship
healthy. Empirical evidence for this proposition is provided by Liao and Welsch (2005), who
74

find that nascent entrepreneurs distinguish themselves from a control group in their ability to
utilize their cognitive capital to build relational capital. However, other scholars argue that
the link between the cognitive dimension and the relational dimension functions in the
opposition direction. Lee (2009) and Long (2011) posit the relational dimension of social
capital as a critical starting point. In their view, meaningful communication is necessary for
the development of intellectual capability. Sorenson et al. (2009) focus on two different but
related building blocks of family social capital, they argue that collaborative dialogue relates
positively to the presence of ethical norms of families in business. Collaborative dialogue can
be viewed as a method for sustaining good relationships, and a moral infrastructure within a
family might be extended to the business and positively influencing a shared vision on the
business. The way in which the two dimensions influence each other may also be explained
in terms of the stage in the firm’s life cycle. For a new business venture, a shared vision can
help the copreneurial couple achieve a satisfactory relationship that can be sustained during
the hectic initial years of the business (e.g., Van Auken & Werbel, 2006). If the couple can
sustain a healthy relationship after working together for an extended period, their shared
vision on the future of the firm will be positively affected. If instead a couple encounters
problems in their private life, the strategic planning for the business will be negatively
affected. Based on this discussion and the conflicting viewpoints, the following relation is
hypothesized:
Hypothesis 4: The relationship between the quality of the copreneurial relationship and the
financial performance of the copreneurial business is mediated by the shared vision of the
copreneurs.
75

4.2.3 Developmental conditions for spousal social capital
Arregle et al. (2007a) focus on the development of familiness and highlight the importance of
the conditions for developing social capital. In general, favorable conditions include high
levels of mutual interdependence, interaction, time and stability in social relationships, and a
closed social network (Nahapiet & Ghoshal, 1998). Pearson et al. (2008) argue that a family
firm context leads to more favorable conditions for the development of social capital than a
non-family firm context. These favorable conditions should also be evident among
copreneurial firms for several reasons. First, mutual interdependence and interaction typically
characterize the relationship of spouses working together in a small firm. Second, evidence
indicates that a closed network is a feature of social relationships that is conducive to the
development of social capital (Nahapiet & Ghoshal, 1998), and that such closure is
particularly strong in family firms (Arregle et al., 2007a), including copreneurial firms.
However, while it is important to emphasize that closure is necessary to create social capital,
too much closure can have a negative effect on the continuity of copreneurial firms. In this
respect, Sirmon, Hitt, Arregle & Webb (2008) mention several negative effects of family
influence: group think, alienation, strategic simplicity, nepotism, reliance on tradition, and
succession biases. Non-family involvement can help prevent these negative effects, a
suggestion reflected in the first hypothesis of this chapter.
In line with the positive and negatives outcomes of a closed network, Adler and Kwon (2002)
stipulate the importance of a balanced view on social capital, suggesting that social capital
should not be seen as a resource with only positive effects. Montemerlo and Sharma (2010)
posit that it is necessary to unbundle the family business into two separate units: the business
and the family. This makes it possible to understand how stocks of bonding social capital are
built and can flow from one system to the other. To ensure the long-term continuity of the
two systems, it is necessary to find a balance, as an imbalance will eventually lead to reduced
capital stock for one or both systems (Sharma, 2008). In the long run, the flow of stock
between the business system and the family system will have to lead to a positive outcome
(Litz, 2008; Sharma, 2004). Therefore, it is proposed that a balance between work and family
life is an important developmental condition for social capital in copreneurial firms. Role
clarity between the spouses can help to achieve this balance.
Role clarity
Boundary theory can help clarify the overlap and interaction between the family system and
the business system. According to Sundaramurthy and Kreiner (2008), boundary theory is
helpful in predicting the nature of interactions between social actors, and the potential
benefits and liabilities of varying degrees of interaction. Most copreneurs will spend a
significant amount of time together at home and at work. Consequently, they are expected to
bring personal issues to work and vice versa. Boundary theory makes it possible to identify
the roles of the copreneurs (partners for life versus partners in business), their role flexibility
(the degree to which an individual changes roles, e.g., discussing work-related issues at
76

home), and the role permeability (the degree to which a role allows for elements of another
role to be integrated and assimilated, e.g., taking care of a child at work) (Sundaramurthy &
Kreiner, 2008). For copreneurs in particular, dealing with these boundaries is challenging.
Sundaramurthy and Kreiner (2008) identify a range of situations from full segmentation to
full integration of private life and work. They highlight that all options have possible
advantages and disadvantages. For instance, full integration, a common situation in
copreneurial firms, can not only lead to a shared identity but also to role ambiguity or role
conflict. Therefore, there is a need for actors in the firm to engage in “boundary work” to
manage the integration of the family and the business to reach an optimal situation within a
specific context.
The relatively high interdependence between the business system and the family system in
copreneurial firms can be seen as a risk for the continuity of the business. The copreneurial
couples studied by Fletcher (2010) identify several key challenges stemming from this high
interdependence with potential negative outcomes: balancing roles between family and work
life; making the business more professional; and problems related to leadership ambiguity.
Most firms in Fletcher’s (2010) study show signs of emotional intensity. In addition,
Farrington et al. (2011) find evidence of a positive relation between balance of work and
home and the quality of the relationship between spouses. It is therefore hypothesized that
role clarity between spouses has a positive effect on the cognitive and relational dimensions
of spousal social capital:
Hypothesis 5a: The greater the role clarity between spouses, the higher the shared vision
among the copreneurs.
Hypothesis 5b: The greater the role clarity between spouses, the higher the quality of the
copreneurial relationship.
Role clarity has been hypothesized to have a direct positive impact on the relational and
cognitive dimensions of social capital (hypotheses H5a and H5b). The relational and
cognitive dimensions of social capital have also been hypothesized to have direct positive
effects on financial performance (hypotheses H2 and H3). When these four hypotheses are
combined, mediation effects are expected. Therefore, the following two hypotheses are
proposed:
Hypothesis 5c: The relationship between the role clarity between spouses and the financial
performance of the business is mediated by the shared vision between the copreneurs.
Hypothesis 5d: The relationship between the role clarity between spouses and the financial
performance of the business is mediated by the quality of the copreneurial relationship.
The hypothesized relationships are depicted in Figure 4.1.
77

Figure 4.1: Research framework
Role clarity
between spouses
H5b H5d
H5a H5c
Spousal social capital
Quality of relationships
between spouses
Shared vision
between spouses
Non-family involvement
Control variables
Sector, age of business, gender and education level of respondent
4.3 Method
4.3.1 Sample and data collection
H4
H3
H2 H4 H5c
H1
H5d
Financial
performance
The target group for this research is small and medium sized enterprises 12 (SMEs), as most
copreneurial businesses are likely to fall within this category. 13 In order to identify potential
respondents, the database of The Dutch Centre for Family Firms (Centrum van het
Familiebedrijf) was used. This database contains the contact details of 628 family businesses
throughout the Netherlands. Once identified, potential respondents were contacted by
telephone and invited to participate in the study. As in other research where access to a
national database has been limited (Sonfield & Lussier, 2004; Van der Merwe & Ellis, 2007;
Farrington, 2009), a convenience snowball sampling technique was used to increase the
number of respondents. Once the copreneurs confirmed their willingness to participate in the
study, they were asked to identify other copreneurial businesses that could be approached.
These potential respondents were then also contacted by telephone and the process was
repeated.
12
SMEs are categorized using the European Commission’s definition (Eurostat, 2011): micro less than 9
employees; small 10-49 employees; medium 50-249 employees.
13
For example, an additional analysis of the sample of Dutch private firms (Flören et al., 2010) shows that no
more than 2.5% of the copreneurial firms have more than 200 employees.
78

An instrument developed by Farrington et al. (2011) was used to measure the success of
copreneurial firms and to gather data for each factor under investigation. Farrington et al.
(2011) utilize items sourced from validated measuring instruments used in previous studies as
well as several self-generated items based on secondary sources. In addition, questions were
included in this study to solicit demographic and ownership information. Given our
conceptual definition of copreneurs, responses were only included in the statistical analysis
when the married or co-habiting couples shared ownership and/or when they worked together
in the firm.
An online survey instrument 14 was made available via a web link sent by email to the
copreneurs that agreed to participate. The email explained the purpose of the study and gave
assurances of confidentiality. In total, 171 questionnaires were completed. Three cases were
removed from the sample because data relating to company size was missing, making it
impossible to check whether the company in question belonged to the target group. One case
was deleted because the company did not meet the criteria for classification as an SME. All
other responding firms met the criteria for copreneurial businesses and for SMEs, resulting in
a final sample of 167 valid cases.
The majority of the copreneurial businesses were retail businesses and the firms had, on
average, 9 employees. Most respondents (56%) were male, the average respondent age was
47 years, and 33.13% of the respondents held a bachelor or master degree. A detailed
overview of all sample statistics can be found in Table 4.1.
14 The Dutch questionnaire is available from the author upon request (i.a.matser@uu.nl).
79

Table 4.1: Overview of sample characteristics
Variable Demographic information
Sex 56% of the respondents are male
Respondent age Average age is 47 years
Partners Partners in life: mean of 22 years; partners in business: mean of 14 years
Education 33% B.Sc. or higher
Number of
employees
The average number of employees is 9; 30% have 0 employees, 45% are micro firms
(1-9 employees), 22% are small firms (10-49 employees), 3% are medium-sized firms
(50-249 employees)
Sales 34% have sales of less than EUR 250,000; 15% have EUR 250,000-500,000; 21% have
EUR 500,000-1 million; 25% have EUR 1-5 million; 5% have more than EUR 5 million
Sector 3% are in manufacturing 9% are in construction; 5% are in wholesale; 34% are in
retail; 16% are in catering; 8% are in financial services; and 25% are in “other”
industries.
Age of the
business
4.3.2 Variables
13% were established prior to 1949, 16% in 1950-1974; 38% in 1975-1999; 31% after
1999
This section briefly describes each of the variables used in the study. A more detailed
description of each composite variable is provided in Appendix A at the end of this chapter.
Non-family involvement is a component of the structural dimension of social capital, and
refers to the extent to which the copreneurial couples involve non-family members in order to
effectively manage their businesses and when making strategic decisions in their business.
Respondents were asked to respond to four statements (see Appendix A) using a seven-point
Likert-type scale, ranging from totally disagree (1) to totally agree (7). In line with Classen et
al. (2012), respondents were asked whether non-family members were part of the
management team. Other statements elaborated on this by investigating when and how these
non-family members were involved.
To measure the shared vision of the copreneurs, respondents were asked to respond to four
statements using a seven-point Likert-type scale. The first three items resembled the items
Mustakallio et al. (2002) developed to measure shared vision.
Quality of the relationship relates to the relational dimension of social capital. Respondents
were asked to respond to three items that measured the quality of their relationship inside and
outside the working environment. These items were based, to some extent, on the research
conducted by Morris and Williams (1996).
Role clarity between spouses relates to the relative balance in the working relationship of the
copreneurial couple. Respondents were asked to respond to three statements that were
80

measured on a seven-point Likert-type scale. The statements were formulated based on
anecdotal evidence on the division of labor (Marshack, 1993; Gale, 2002; Roha & Blum,
1990).
Financial performance is the dependent variable in this study. It was measured by asking
respondents to provide information on their firms’ performance. Van Teeffelen (2010) and
Ghobadian and O’Regan (2006) argue that it is acceptable to use perceived performance
measures because owners of small, private firms are often reluctant to provide detailed data
on performance. Furthermore, other studies show that perceptions of performance are reliable
or highly correlated with objective measures of performance. Financial performance was
measured using several dimensions: growth in turnover, profit, and number of employees;
overall profitability; and financial well-being. All items were measured on a seven-point
Likert-type scale.
Control variables are usually included in statistical analyses to identify partial relationships
and to rule out alternative explanations (Babbie, 2004). Recently, there have been some
concerns regarding the use of control variables in statistical models. Although researchers
generally assume that the inclusion of a number of control variables in the model leads to
more precise results, control variables can contaminate evidence of statistical relationships,
and may lead to underestimated or overestimated relationships (Spector & Brannick, 2011).
However, the blind inclusion of control variables remains the dominant approach even among
top management journals (Atinc, Simmering & Kroll, 2012). In this study, Becker’s (2005)
recommendations are followed in that control variables are only included when there is a
significant relationship between those variables and the dependent variable, and/or when
there is prior evidence and a logical reason for inclusion in the statistical model.
The following variables were viewed as potential control variables in the present study:
gender of the respondent, age of the respondent, education of the respondent, and age of the
business. Gender and age have shown to be related to the quality of the interpersonal
relationship within a marriage (Levenson, Carstensen & Gottman, 1993). As the quality of
the copreneurial relationship is an essential element within the proposed model, these two
control variables were added to filter out respondent-specific characteristics. Gender was
measured as a dummy variable (0 = male; 1 = female), while age was measured as a
continuous variable. Management training and education have been proven to increase the
financial performance of small businesses (Jennings & Beaver, 1997). On the basis of the
assumption that higher formal educational levels can synthesize such management training,
education (measured as no bachelor degree (0), and bachelor degree or higher (1)) was added
as a control variable. Firm age was added as a firm-level control variable, as firm age has
been proven to have a negative effect on performance within large family firms (Anderson &
Reeb, 2003). This relationship is expected to be similar for small and medium-sized family
businesses. The inception year of the business was categorized on the following scale: before
1900, 1900-1924, 1925-1949, 1950-1974, 1975-1999, and after 1999.
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4.4 Results
The empirical analysis starts with tests of the convergent and discriminant validity, as well as
a test of the reliability of the proposed measurement scales. The zero-order correlations
between the different constructs developed to examine the hypothesized relationships, and
the relationships between the control variables and variables under study are analyzed.
Finally, the hypothesized model is tested using structural equation modeling (AMOS 18).
4.4.1 Factor analysis
All independent composite variables are included in a confirmatory factor analysis (CFA). To
assess model fit, the confirmative fit index (CFI), root mean square error approximation
(RMSEA), Tucker-Lewis index (TLI), and normative fit index (NFI) are calculated.
Following Hair et al. (2006), a threshold value of .90 is set for the TLI, NFI, and CFI, while
.08 is set as the threshold value for the RMSEA. The initial CFA yields acceptable levels of
model fit for the CFI (.934), RMSEA (.062), and TLI (.916). Only the NFI (.850) is below
the threshold value of .90. The latter is mainly due to the first item of the scale role clarity
between spouses, which displays significant (p = < .01) cross loadings on the shared vision
scale. This item is removed from the measurement scale because it is significantly related to
another factor than to which was hypothesized. The adjusted model yields good to excellent
model fit (CFI .988; RMSEA .028; TLI .984; NFI .906) and further model respecification
seems unnecessary.
Convergent validity in a measurement model is generally achieved when the squared factor
loadings on the hypothesized latent construct are greater than .50 and/or when there is a
significant relationship between the indicator and its hypothesized latent construct (Bollen,
1989). In the present study, all averaged squared factor loadings are above .50 except for the
family involvement scale (average λ 2 = .40). However, the individual item factor loadings for
this scale are highly significant (p = < .01). Discriminant validity refers to the degree to
which measures of theoretically unrelated constructs do not correlate with one another
(Brown, Churchill Jr., Gilbert & Peter, 1993, p. 130). Farrell’s (2010) procedure for testing
the discriminant validity of a scale, which is based upon the seminal work of Fornell and
Larcker (1981), is applied. It involves the comparison of the average variance extracted
(AVE) on each latent factor with the shared variances between the factors. As shown in Table
4.2, the AVE for each factor far exceeds the shared variances between the relevant factors.
Therefore, it can be concluded that the developed measurement instrument displays good
discriminant and convergent validity.
82

Table 4.2: Average variance extracted and shared variance estimates
Variable Items 1 2 3 4
1 Non-family involvement 4 .16 .00 .02 .00
2 Shared vision 4 .08 .62 .44 .12
3 Quality of relationships 3 .14 .66 .73 .12
4 Role clarity between the spouses 2 .06 .35 .35 .60
Note: Correlations are below the diagonal, shared variance estimates are above
the diagonal, and AVE estimates are on the diagonal.
A Cronbach’s alpha test is used to calculate the reliability of the different measurement
scales. A Cronbach’s alpha of .70 or higher is generally preferred (see Nunnally, 1978). All
measurement scales within the present study can be regarded as reliable (see Table 4.3)
except for the balance scale, which has a Cronbach’s alpha of .59. However, Cortina (1993)
has shown that a Cronbach’s alpha test is sensitive to the number of items within the
measurement scale and that an average inter-item correlation of .50 should generally lead to
acceptable levels of reliability (Cronbach’s alpha > .75). The inter-item correlation within our
two-item balance scale is .46 (p = < .01). Therefore, it can be concluded that the reliability of
this scale is sufficient for use within the statistical analysis. The theoretical constructs were
created by calculating the average score for each respondent.
4.4.2 Descriptive statistics and correlations
The zero-order correlation coefficients as well as the means and standard deviations of the
variables under investigation are presented in Table 4.3. None of the control variables are
significantly related to company performance. Contrary to expectations, age and gender are
also not significantly related to the quality of the copreneurial relationship or the balance
within that relationship. Following Becker's (2005) recommendations, these control variables
are excluded from the statistical model. As a result, the only tested involving the proposed
control variables focuses on whether their inclusion would change the results at a qualitative
level.
All variables under study are significantly related to firm performance and the directions of
the relationships are consistent with our hypotheses (see Table 4.2). The results also offer
support for the potential existence of the proposed mediating relationships, as all relevant
independent variables are significantly related to both the potential mediating variables and
the dependent variable. All mediating variables are significantly related to the dependent
variable. Therefore the proposed mediating relationship is included within the statistical
model.
83

Table 4.3.: Means, standard deviations, and zero-order correlations
Variable 1 2 3 4 5 6 7 8 9
1. Gender (-)
2. Age
-
.23**
(-)
3. Education -.03 -.08 (-)
4. Age of organization
(category)
.11 -.20* .26** (-)
5.Non-family
involvement
-.09 -.06 .05 .05 (.70)
6. Shared vision .11 .01 -.05 .02 .08 (.81)
7. Quality of
relationship
-.04 .05 -.01 .03 .12 .56** (.73)
8. Role clarity -.05 -.04 .11 .06 .17* .26** .24** (.59)
9. Firm performance -.10 -.07 .06 .01 .17* .32** .28** .20** (.77)
Mean .44 47.17 .33 4.79 4.24 6.05 6.53 5.54 5.11
SD .50 9.45 .47 1.24 1.31 .70 .50 1.09 1.13
Notes: The reliabilities (Cronbach’s alphas) are shown on the diagonal axis. Cronbach’s alphas cannot be
calculated for one-item measures—these are labeled (-). N=167 * p = < .05 ; ** p = < .01.
4.4.4 Structural model
The hypothesized structural model (see Figure 4.2) is fitted to the data (N = 167), and the
structural weights and model fit is examined. The model yields excellent model fit (CFI 1.0;
RMSEA .0; TLI 1.008; NFI .974) and supports hypothesis H1, which suggests that nonfamily
involvement increases firm performance (ß = .13, p = < .10). There is also support for
hypothesis H2, which highlights the role of a shared vision in enhancing firm performance (ß
= .25, p = < .01). Hypothesis H3, which states that the quality of the copreneurial relationship
enhances firm performance, is not supported. Furthermore, role clarity between the spouses
results in higher levels of shared vision (ß = .13, p = < .05) and increases the quality of the
copreneurial relationship (ß = .24, p = < .01), providing support for hypotheses H5a and H5b.
Within the structural model, neither role clarity between the spouses or the quality of the
copreneurial relationship have significant direct effects on performance. In both cases, shared
vision acts as a mediating variable, which provides support for hypotheses H4 and H5c.
Given the absence of a direct relationship between the quality of the copreneurial relationship
and firm performance, hypothesis H5d, which highlights the mediating role of the relational
dimension of structural capital, is rejected. The inclusion of the control variables in the
structural model with all hypothesized relationships between the control variables and the
dependent and mediating variables does not change the results at a qualitative level.
84

Figure 4.2: Structural model
Note: Covariances between the constructs and measurement errors have been omitted for the sake of clarity.
† p = < .10; * p = < .05; ** p = < .01
4.5 Discussion and conclusion
The aim of this chapter was to identify those factors that influence the financial performance
of copreneurial firms. The results contribute to the understanding of this type of business,
which has received little attention from family business scholars.
The statistical results show that various factors affect the financial performance of
copreneurial business. Non-family involvement, for example, has a direct positive effect on
financial performance. Role clarity has a positive effect on the relationship between the
spouses and the shared vision of the copreneurial couple. The association between the quality
of the copreneurial relationship and financial performance is mediated by the copreneurs’
shared vision. In addition, shared vision has a direct positive effect on the financial
performance of the business.
85

Theoretical implications
The findings have several implications for family firm scholars. One of the goals of this
research was to enhance the understanding of how social capital develops throughout the life
cycle of copreneurial firms. Where other research has revealed the positive impact of spousal
social capital in the start-up phase (e.g., Davidsson & Honig, 2003), this study shows that
spousal social capital also has a positive impact on the financial performance of established
copreneurial firms. In addition, this study identifies shared vision between spouses, and the
use of non-family involvement at the strategic and management levels as elements of social
capital that have a direct, positive impact on financial performance. Zheng’s (2010) review of
social capital and innovation reveals the cognitive dimension of social capital as an underresearched
dimension. Moreover, the results of the available research show that the cognitive
dimension significantly overlaps the relational dimension. This study shows that shared
vision, as a key element of the cognitive dimension, is a distinctive and significant variable –
at least in this sample of copreneurs.
Another aim of this study was to gain more insight into the linkages and interplay among the
three dimensions of social capital. One of this study’s interesting findings is that the
association between the quality of the copreneurs’ relationship and financial performance is
mediated by the shared vision, and not vice versa. This finding differs from the theoretical
construct proposed by Pearson et al. (2008) but is in line with the viewpoints of Lee (2009)
and Long (2011).
Limitations and recommendations for future research
This research project is not free of limitations. A first limitation stems from the variable used
to measure financial performance – objective financial data would enhance the credibility of
the results. Second, the relatively small sample size implies that the possibilities to generalize
the results are constrained. Third, as the sample consists only of copreneurial firms, the
approach adopted here reveals factors that make some copreneurial firms more successful
than other copreneurial firms. However, this study does not compare copreneurial firms with
other types of firms. Future research with a more diverse sample would make it possible to
identify the specific characteristics that distinguish copreneurial firms from other firms.
Fourth, the dataset is biased for periods of economic growth. It would be interesting to test
the assumptions in periods of economic decline. Therefore, future researchers may wish to
work with a longitudinal research design. Repeated measurements would make it possible to
establish causality and provide insight into the dynamics of the social capital dimensions.
Such an approach would make it possible to test Long’s (2009) iterative model of social
capital development.
86

Practical implications
The analyses of the data presented here can be translated into recommendations for
copreneurs and their advisors. They offer several key messages for copreneurs. For
copreneurs, working together with a spouse can create social capital and have a positive
impact on the performance of the copreneurial business. In fact, the business will benefit
from a good relationship between the spouses. However, the opposite is also true. If the
relationship deteriorates, the shared vision of the business will be negatively affected and
financial performance will suffer. Couples should be aware of these risks and should invest in
keeping the relation healthy. One way of doing so is maintaining clear definitions of the
various roles in play. Above all, the results highlight the importance of paying attention to
spousal social capital. The findings presented here are in line with Sharma’s (2004) matrix on
family and business dimensions: for long-term success, family firms need positive scores on
both the business and the family dimension. Investments of time and effort in these “soft”
issues will be beneficial for the private life of the couple and for the copreneurial business.
Business advisors may discuss with couples the benefits and costs of working together in the
business. They can help copreneurs by explaining the factors that influence the success of the
businesses. By raising awareness of these “soft” issues, they can help these couples to
achieve sustainability of both the business and the relationship.
Conclusion
To conclude, this study makes several contributions to the family business literature. The
results help clarify the social capital components that are relevant for copreneurial firms.
Moreover, these components are linked to the financial performance of copreneurial
businesses.
87

Appendix: Questionnaire items
Financial performance
Our copreneurial business has experienced growth in turnover
over the past two years.
Our copreneurial business has experienced growth in profits
over the past two years.
Our copreneurial business has experienced growth in employee
numbers over the past two years.
Completely
disagree
Neutral
Completely
agree
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
Our copreneurial business is profitable. 1 2 3 4 5 6 7
The financial well-being of our copreneurial business is secure. 1 2 3 4 5 6 7
Structural social capital
In our business, my spouse and I involve non-family members
in assisting us to effectively manage our business.
In our copreneurial business, non-family employees form part
of the management team.
In our copreneurial business, we involve non-family members
when we have to make important strategic decisions about our
business.
If necessary, my spouse and I draw on the expertise of nonfamily
members to assist us with business matters.
Shared vision
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
My spouse and I have agreed on the goals for our copreneurial
business.
1 2 3 4 5 6 7
My spouse and I have agreed on the future direction for our
copreneurial business.
1 2 3 4 5 6 7
My spouse and I have agreed on the vision for our business. 1 2 3 4 5 6 7
My spouse and I freely express our opinions to each other
concerning day-to-day business decisions.
Quality of relationships
1 2 3 4 5 6 7
My spouse and I trust each other. 1 2 3 4 5 6 7
My spouse and I respect each other. 1 2 3 4 5 6 7
My spouse and I are emotionally attached to one another. 1 2 3 4 5 6 7
Role clarity
In our business, a clearly defined division of labor exists
between my spouse and I.*
My spouse and I have agreed on each other’s areas of authority
and responsibility in our business.
In our business, clearly demarcated areas of authority and
responsibility exist between my spouse and I.
* Item dropped after factor analysis
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
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5: Securing post-succession continuity in family firms through
knowledge transfer 15
5.1 Introduction
In the wake of the worldwide recession, family firms might prove to be a solid foundation for
economic recovery. Family firms are viewed as the original form of business activity
(Wakefield, 1995) and they dominate the economic landscapes of most major economies
(Astrachan, 2003; Kraus et al., 2012; Morck and Yeung, 2003; Shanker & Astrachan, 1996).
Furthermore, family firms appear to be less sensitive to rigorous, short-term demands from
external shareholders. However, in periods of slow economic growth and less financing
availability, the transfer of firms from generation to generation may prove challenging. A
crucial moment in the life cycle of any family firm is a succession phase. An unsuccessful
succession can have detrimental effects on performance and continuity. In addition, given the
number of family firms, issues related to succession can have an impact at the
macroeconomic level.
The resource-based view (RBV) is often used as a theoretical basis to argue that “familiness”
is a unique bundle of resources that ensures the competitive advantage of the family firm (e.g.
Habbershon & Williams, 1999). In this article, familiness is linked to the growing interest in
the knowledge-based view (KBV) of the firm. The KBV states that a firm’s ability to gain
new knowledge and absorb it can be a great competitive advantage (Tsai & Ghoshal, 1998).
Family firms have a significant amount of knowledge stored outside their real “knowledge
tanks,” such as protocols and business archives. In these firms, extensive knowledge is also
stored in routines, values, and norms (Grant, 1991). This reservoir can be labeled “tacit
knowledge” (Cabrera-Suárez et al., 2001). This specific firm knowledge, together with the
ability to create and transfer it, is considered a key strategic asset. It is argued that postsuccession
performance is highly dependent on the extent to which tacit knowledge has been
transferred to the successor (Zahra et al., 2007). This chapter therefore suggests that tacit
knowledge transfer plays an important role in post-succession performance.
People are often not aware of tacit knowledge or how it can be of value to others. It is
considered valuable because it provides contexts for people, places, ideas, and experiences.
Given the characteristics of tacit knowledge, transferring it generally requires intense
personal contact and trust. Royer, Simons, Boyd & Rafferty (2008) state that
intergenerational succession has an advantage in this respect, as a positive knowledge transfer
climate appears crucial for the success of the transfer of tacit knowledge. Therefore, the aim
of this paper is to increase the understanding of one particular aspect of the succession
process: the role of knowledge transfer. To assess the knowledge transfer climate, a construct
15 This chapter is based on Matser, Kraus, and Märk (2011), “Securing post-succession continuity in family
firms through knowledge transfer,” which was published in the International Journal of Entrepreneurship and
Small Business, Volume 14, No. 4.
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ased on the theoretical framework proposed by Cabrera-Suárez et al. (2001) is built and
tested.
In May 2008, a survey of Dutch family firms was conducted. All firms had recently
completed a succession process. An ordinary least squares (OLS) regression method was
used to test the hypotheses. The data provide insights into the relations between knowledge
transfer and post-succession performance, and show that trans-generational succession is
preferred relative to transfer to an outside successor. The aim is to understand how
knowledge transfer influences post-succession performance and to assess whether transgenerational
succession should be preferred due to relatively better post-succession
performance when compared to succession to outside parties.
The chapter begins with a discussion of the familiness construct and the family firm’s focus
on continuity as a key strategic asset. If familiness can be transferred from one generation to
another, this legacy may be the core of the family firm concept. An important requirement for
successful succession is the transfer of tacit knowledge from incumbent to successor. In
Section 5.2.2, therefore, knowledge management, types of knowledge, and barriers to
knowledge transfer are discussed. In Section 5.2.3, the moderator effect of a family successor
is discussed. In Section 5.3, the methodology is explained, the data is described, and the
hypotheses are tested. In the final section, the social implications of the findings are
discussed and suggestions are made for further research.
5.2 Research framework and hypotheses
5.2.1 Post-succession continuity
The concept of familiness, which was first introduced by Habbershon and Williams (1999)
and based on the RBV, suggests that the unique resources that family firms may possess may
give them an advantage in the marketplace. The RBV argues that firms can outperform others
if they are able to maintain a competitive advantage. These competitive advantages can be
maintained over the long run if resources are valuable, rare, inimitable, and non-substitutable
(Barney, 1991). Several scholars suggest that the connection between family and business
may lead to unique advantages in the acquisition of resources (Aldrich & Cliff, 2003;
Haynes, Walker, Rowe & Hong, 1999; Stewart, 2003). For example, Barney, Clark &
Alvarez (2002) argue that family ties may provide an advantage in opportunity identification
because family members might be more likely to share information with each other than nonfamily
members. Sirmon and Hitt (2003) distinguish five sources of so-called “family firm
capital”: human capital, social capital, survival capital, patient capital, and governance
structures. These authors argue that family firms acquire, bundle, and leverage their resources
differently than non-family firms.
Miller and Le Breton-Miller (2005) also describe resources that create competitive
advantages for large, family-controlled businesses. They highlight four priorities that drive
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successful strategies, which they refer to as the “four Cs”: take command, ensure continuity,
create a community, and build connections. In this regard, Miller and Le Breton-Miller
(2005) draw attention to continuity as one key aspect of successful family firms. They
distinguish various elements of continuity. Continuity starts with a fundamental mission that
is deeply rooted within the family. This, in turn, motivates patient investment in the
development of core capabilities, which will later enable the achievement of the mission.
This patient capital is combined with a risk-averse financial strategy to secure organizational
health. Another aspect of continuity is the length of top executive apprenticeships and
tenures, which is a unique characteristic of family firms – one generation runs the company
until the next is ready to take over. This approach to succession seems to be one pillar of
family firm success (Miller & Le Breton-Miller, 2005, p. 38) and is in line with the
preferences of most families (Matser & Gerritsen, 2008).
The focus on continuity suggested by Miller and Le Breton-Miller (2005) runs parallel to an
important topic in family firm research based on the RBV: the transfer of unique capabilities
in business successions from one generation to another (Habbershon & Williams, 1999). The
main issue here is understanding which specific resources and capabilities a family firm
should have to ensure that its vision will be passed from one generation to another (Wortman,
1994). If RBV is used as a foundation, the creation of familiness proposed by Habbershon et
al. (2003) might be a driver of post-transfer family firm performance. In short, Habbershon et
al. (2003) argue that the intersection of family and business leads to hard-to-duplicate
capabilities that make family firms particularly suited for survival and growth. If this
familiness can be transferred from one generation to another as a legacy, it might ultimately
comprise the core of the family firm concept (Baker & Wiseman, 1998; Kelly, Athanassiou
& Crittenden, 2000; Poza & Messer, 2001). Therefore, a key question of family business
research is: Can familiness be transferred to the next generation?
Since the inception of academic research on family firms in the early 1980s, one leading
topic has been business succession (Dyer & Sanchez, 1998). This focus probably reflects the
importance of a successful transfer of management within family firms, which is crucial for
firm continuity (Harvey & Evans, 1995). The life span of family firms is often relatively
short, as only a limited number survive the transition to the third generation, and barely onethird
survive the second generation (Beckhard & Dyer, 1983; Neubauer & Lank, 1998;
Paisner, 1999). Therefore, the transfer of a firm from one generation to the next represents a
crucial strategic issue of the firm (Barach & Gantisky, 1995). If succession within the family
is not a feasible option than business owners have to look for other solutions to guarantee the
continuity of the firm. In general, the succession issue is unlikely to lose its appeal in the
foreseeable future since about one-third of all SMEs in the European Union are expected to
be involved in a business transfer at some point in the coming years (Mandle, 2008). Such
business transfers may result in major restructurings in many industries and could lead to the
substantial destruction of (tangible and intangible) capital (Van Teeffelen, Meijaard &
Geerts, 2005). Within this context, the European Commission (2006) tends to see business
succession as a threat to the survival of small and medium-sized firms as well as to overall
employment and economic growth.
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The transfer of a firm is a highly complex process that is influenced by many factors. Le
Breton-Miller, Miller & Steier (2004), for example, show this complexity in a model that
demonstrates that there are different phases in the process; each phase has different aspects;
and there are various stakeholders involved, of which the most important are the
incumbent(s) and the successor(s). Moreover, the entire process is influenced by the family
context and the rational business context. Le Breton-Miller et al. (2004) base this model on a
review of the available research and literature on this topic. According to Sharma, Chrisman
& Pablo (2001), the business owner’s inability to “let go” is the most-cited obstacle to
effective succession. Sharma, Chrisman & Chua (1996) state that three internal factors are
consistently identified as factors influencing transfer planning: the incumbent’s propensity to
step aside, the presence of a competent successor, and the presence of an active advisory
board. Based on a review of the literature to assess the factors that prevent intra-family
succession, De Massis, Chua & Chrisman (2008) present a preliminary model that includes
five factors. Along with context and financial factors, these include individual, relation, and
process factors. The latter are suggested to influence the individual and relation factors.
Examples of these factors include the willingness of the incumbent to resign (individual
factor), the level of trust among family members (relation factor), and the professional testing
of the potential successor (process factor).
De Massis et al.’s (2008) framework stresses the complexity of the business transfer process.
To obtain more insight into the factors influencing the process, it makes sense to focus on
specific elements, as doing so helps limit the confusion arising from the various factors as
they interact with each other. Any one of the numerous factors can be chosen. Cabrera-
Suárez et al. (2001) draw attention to the importance of knowledge transfer between
successor and incumbent, as a key factor in the business transfer process. In fact, their article
is one of the 25 most influential articles in family business research (Chrisman et al., 2010).
5.2.2 The knowledge transfer climate
The development of the knowledge-based view
Knowledge is seen as an important strategic asset for companies due to growing competition
and change (Davenport & Prusak, 1998). The ability of a firm to gain new knowledge and
absorb it can be a great competitive advantage (Tsai & Ghoshal, 1998). To understand the
importance of knowledge, it is useful to utilize the RBV. The core point of this approach is
that the competitive advantage of a firm comes from its unique bundle of resources (Cabrera-
Suárez et al., 2001). Given the wide spectrum of resources, it is no surprise that researchers
have begun considering whether some resources are more important than others.
Undoubtedly, every resource has its importance in different situations, but the existing
knowledge of a firm and the transferability of that knowledge seem to be the most vital
resources to manage (Hoy & Sharma, 2010; Kim & Mauborgne, 1998; Probst, Raub &
Romhardt, 2006).
Family firms hold extensive knowledge beyond their actual “knowledge tanks.” Their
knowledge is also stored in routines, values, norms, etc. (Grant, 1991). These types of
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esources are labeled “tacit knowledge” (Cabrera-Suárez et al., 2001). A firm’s specific
knowledge, as well as the firm’s ability to create and transfer it, are together considered a key
strategic asset. This asset has the potential to help improve performance (Cabrera-Suárez et
al., 2001) because it is valuable, rare, and difficult to trade and imitate (Bierly & Chakrabarti,
1996; Nonaka & Takeuchi, 1995). This phenomenon has been covered by some authors and
given rise to a new theoretical stream of growing importance in the strategic management
field: the KBV of the firm. From the KBV perspective, knowledge can be defined as
“information that is relevant, actionable, and based at least partially on experience” (Leonard
& Sensiper, 1998, p. 113). This approach tries to “analyze how organizations create, acquire,
apply, protect, and transfer knowledge” (Bierly & Chakrabarti, 1996, p. 123).
Explicit and tacit knowledge
Dalkir (2005), Alavi and Leidner (2001), and Jennex (2007) point out that effective
knowledge management is one of the most important challenges of this century. Cabrera-
Suárez et al. (2001) perform extensive theoretical and practical work in this research area.
Although a multitude of frameworks exist for different kinds of knowledge (Grant, 1996;
Probst et al., 2006; Sackmann, 1992), the distinction between explicit and tacit knowledge is
key. The literature clearly distinguishes between “real pure knowledge” (i.e., explicit
knowledge) in the form of information on and an understanding of fundamental principles
acquired through education, and “skill” (i.e., tacit knowledge), which is the ability to apply
the accumulated pure knowledge through experience gained (Chirico, 2008).
Another major difference between explicit and tacit knowledge is how the knowledge can be
stored. Explicit knowledge can be stored in handbooks (how to) or in statistical data (how we
did it and what the outcome looks like). Such knowledge is always combined with the
interpretations of the people who own it. In contrast to explicit knowledge, tacit knowledge is
hard to transfer. Furthermore, such knowledge is an important advantage in family firms
(Probst et al., 2006; Royer et al., 2008; Von Krogh & Köhne, 1998). This type of knowledge
can be seen as the outcome of the interactions between persons (family members, the
entrepreneur, employees, and other important stakeholders), and it is formed through network
ties, a shared vision, and trust and obligations among family members. This social capital can
also result from the overlap between the family and the firm. Therefore, it seems reasonable
to argue that, for family firms, trans-generational transfers offer advantages relative to
transfers to an external actor (“external succession”).
Factors influencing knowledge transfer
As mentioned above, family businesses and knowledge management are complex. Therefore,
it is not surprising that there are a wide variety of factors that can influence the knowledge
transfer. A literature review highlights the factors that have been named in the literature (see
Table 5.1). It is important to note that the factors can have positive and negative effects. The
aim of Table 5.1 is to show the multitude of factors firms face in the knowledge management
process. These factors relate to three main areas:
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• Trust,
• Conflicts and rivalry, and
• Social structure and networks.
Trust is one of the main pillars of family firms (Chirico, 2008; Corbetta, 1995; Steier, 2001).
Chirico (2008) stresses that trust is the foundation of many interactions and that the trust that
people show each other has an enormous impact on their willingness to share knowledge.
Other authors argue along similar lines, including Davenport and Prusak (1998), Gupta
(2008), Inkpen (2008), Newell (2007), Probst et al. (2006), and Von Krogh and Köhne
(1998). Under normal circumstances, this should be a positive phenomenon for family firms
because family members typically show a high degree of interaction and trust (Chirico, 2008;
Steier, 2001).
Table 5.1: Possible factors influencing the knowledge-management process
Factors Authors
• Openness of those involved in the
knowledge-transfer process
Gupta, 2008; Probst et al., 2006; Simonin, 1999; Wathne
et al., 1996
• Kind of interaction Wathne et al., 1996
• Trust Davenport & Prusak, 1998; Gupta, 2008; Inkpen, 2008;
Newell et al., 2007; Probst et al., 2006; Wathne et al., 1996
• Prior experiences Argote & Ingram, 2000; Kogut & Zander, 1993; Wathne et
al., 1996
• Culture Davenport & Prusak, 1998; King, 2007; Kohlbacher &
Krähe, 2007; Probst et al., 2006; Simonin, 1999
• Absorption and learning aptitude Davenport & Prusak, 1998; Gupta, 2008; Lane &
Lutbatkin, 1998; Probst et al., 2006; Szulanski, 2000
• Organizational structure,
organizational context, and
organizational atmosphere
• Interactions among the persons
involved
• The ability to retain the knowledge Szulanski, 1996
• Motivations of the persons
involved
• Reliability of the bearer Szulanski, 1996
Gupta, 2008; Inkpen, 2008; King, 2007; Lyles & Salk,
1996; Probst et al., 2006; Szulanski, 1996
Argote & Ingram, 2000; Szulanski, 2000
Probst et al., 2006; Gupta, 2008; Kalling, 2003; Szulanski,
2000
• Incentive schemes Davenport & Prusak, 1998; Probst et al., 2006
• Conflicts, rivalries, and
misunderstandings
Lyles & Salk, 1996; Probst et al., 2006
• Timing of the knowledge transfer Davenport & Prusak, 1998; Gupta, 2008
• Team atmosphere King, 2007
• The network aspect Tsai & Ghoshal, 1998
• The ambiguity of knowledge Simonin, 1999, Szulanski, 1996
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While trust can serve as an important tool for knowledge transfer, conflicts and rivalry can
ruin it (Lyles & Salk, 1996; Probst et al., 2006). In this regard, the generational aspect
becomes an important factor. Things that happened long ago can suddenly become important
topics and the succession process can create an opportunity to dig up the skeletons of the
past.
Social structure and networks can be equally important. Zahra et al. (2008) show that the way
in which family members and their employees interact with each other has a significant
impact on the willingness to share knowledge. Zahra et al. (2007) emphasize the importance
of both formal and informal knowledge sharing practices to ensure that critical information
is shared. Especially, informal knowledge sharing should benefit from a family firm context
with frequent face-to-face meetings and high levels of shared beliefs and values (Zahra et al.,
2007).
Much scientific effort has focused on finding success factors for business transfers. Cabrera-
Suárez et al. (2001) draw attention to the importance of knowledge transfer. They follow
Grant (1991), who argues that the tacit collective knowledge embedded in the firm’s routines
is necessary to manage those resources successfully. This KBV of the firm also stipulates the
importance of the transfer of tacit knowledge for achieving successful successions and
sustainable competitive advantages (Grant, 1996). A favorable knowledge transference
climate is helpful for achieving a smooth transfer and overcoming the barriers mentioned
above. Similarly, Cabrera-Suárez et al. (2001) suggest a framework for creating an
environment that encourages knowledge transfer. This includes the owner-manager “being
willing to appreciate and be proud of his or her successor’s achievements and possibilities”
while also “having the flexibility to explore and accept new management approaches”
(Cabrera-Suárez et al., 2001, p. 44). The successor “must appreciate the predecessor’s
knowledge and his or her contribution to the firm, not rejecting established work methods and
practices without having considered their value to the firm.” (Cabrera-Suárez et al., 2001, p.
44).
Although Cabrera-Suárez et al. (2001) focus on family firms, their framework may be
applicable to alternative paths of succession. For instance, Scholes et al. (2008) find evidence
of the importance of information sharing and solid relationships in management buyouts
(MBOs) and management buy-ins (MBIs). This leads to the first hypothesis:
Hypothesis 1: A positive knowledge transfer climate during succession will have a positive
effect on post-succession continuity.
To measure “post-succession continuity,” part of the firm performance measurement model
developed by Daily and Dollinger (1992) is adopted. The variables used to estimate actual
firm performance include size, growth, margins, and perceived performance.
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5.2.3 Moderator: Is the successor a family member?
Pearson et al. (2008) use the social capital theory to argue that a shared vision is often deeply
embedded in the family’s history and that the preservation of the family business is an
integral part of this vision. Therefore it can be argued that a trans-generational succession
will have a positive impact on the knowledge transfer climate as a means of achieving postsuccession
continuity. Research done by Royer et al. (2008) provides an indication of the
relative success of intra-generational succession. They argue that a clearer focus among
family firms on the preference for internal successors could enhance the success rate of
business transfers. However, they also identify a crucial precondition: the internal successor
should possess the necessary general and technical competencies to effectively manage the
firm. When there are no suitable family members willing or able to take over the company,
the family firm has to look for alternatives. Management and ownership transfers through an
internal MBO or an external MBI could be attractive alternatives because they provide a
means of realizing the owner’s investment while allowing for continued independent
ownership of the firm (Scholes, Westhead & Burrows, 2008). The fact that the firm’s identity
will remain the same seems to be important for family firm owners (Westhead, 1997).
An interaction effect can be expected between trans-generational succession and a favorable
knowledge transfer climate. It seems plausible that a successor who is a family member
might have deep knowledge about the firm before the actual succession starts (Cabrera-
Suárez et al., 2001). This knowledge may even have been acquired subconsciously, and it
may stem from growing up hearing stories about the family firm, helping out during the
holidays, or working as an employee within the firm. As a consequence, a positive
knowledge transference climate becomes less important during the business transfer.
Furthermore, family ties imply that the social ties between the successor and the incumbent
will remain close long after the succession has taken place. Therefore, knowledge transfer
can continue even after the succession process, making knowledge transfer during the
succession process less crucial. As a result, a positive knowledge transference climate should
have a greater impact on post-transfer performance in transfers of family businesses to an
outside successor or in succession in non-family firms.
Hypothesis 2: The direct positive effect on performance of a positive knowledge transfer
climate during succession is greater for non-family successions.
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5.3 Method
Sample and data collection
The data used in this study were obtained from a research project undertaken by the Dutch
Center for Family Firms (Centrum van het Familiebedrijf) in cooperation with Utrecht
University’s School of Economics. In this study, empirical research focused on the
identification of those factors that determine the success of a leadership transfer. In the spring
of 2008, a web survey tool was used to gather the data. An e-mail request to complete the
survey was sent to the contact list of the Dutch Center for Family Firms. A reminder was sent
two weeks later, resulting in 330 questionnaires being returned (a response rate of 11%). Of
these 330 respondents, 135 had completed a succession process (involving a change in
leadership) in the preceding ten years.
A next step was to use Flören’s (2002) definition of family firms to categorize the firms.
Under this definition, a firm is classified as a family firm when at least two of the following
three criteria are met: 1. a single family owns more than 50% of the shares or certificates; 2. a
single family is able to exercise considerable influence on the business strategy or succession
decisions; and 3. a majority or at least two of the members of the board of directors or board
of advisors are from one family. Based on these criteria 95 firms were coded family firms.
The survey questionnaire 16 consisted of 53 questions that covered various issues, including
the role of the successor, the role of the incumbent, the role of the family, and the succession
process itself. All firms in the sample were at least ten years old. After removing cases with
missing values, the final data set consisted of 81 firms.
16 The Dutch questionnaire is available from the author upon request (i.a.matser@uu.nl).
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Variables
Dependent variable:
The perceived operational profit growth was used (profit) as a proxy for post-transfer
performance. A scale item was used to ask respondents whether they had experienced an
increase in operational profit since succession.
Independent variables:
Two variables were used to test the hypotheses. A dummy variable was used to measure
whether the successor was a family member (family) (1 = family member, 0 = non-family
member).
A scale was created to measure the knowledge transference climate (knowledge). Cabrera-
Suárez et al. (2001, p.44) suggest three items help to create an environment that encourages
knowledge transference: the owner-manager “being willing to appreciate and be proud of his
or her successor’s achievements and possibilities;” “having the flexibility to explore and
accept new management approaches;” and the successor needing to “appreciate the
predecessor’s knowledge and his or her contribution to the firm, not rejecting established
work methods and practices without having considered their value to the firm.” Therefore,
three questions asked whether: during the succession process the incumbent had shown an
appropriate amount of appreciation for the way his/her successor operated; during the
succession process the incumbent was open to new ideas and the successor’s working
methods; and the successor had shown an appropriate amount of appreciation for what the
incumbent had built up in the firm. The answers were categorized into three groups: 1 =
negative, 2 = neutral, 3 = positive. The scale for the knowledge transference climate reflected
the sum of the three questions, so that the lowest possible score was three points and the
highest was nine points. In terms of the internal consistency of the scale, the Cronbach alpha
was 0.66, which is sufficient. The scale was therefore included in the analysis.
Control variables:
Five control variables were included in the final regression model, although more control
variables were tested. The control variables include: moment, firm size, education, capacities,
motivation. The choice of these five variables was based on their importance in the literature
and/or their statistical significance. Given the type of dependent variable (increase in
operational profit), an adjustment was made for the length of time since the transfer had taken
place. An item indicating the year of the transfer was used and the answers were split into
two groups (1996 to 2003, and 2004 to the beginning of 2008; group definitions based on the
mean) (moment). A precondition of the proposed model was the availability of an appropriate
internal successor (Royer et al., 2008). Therefore, three control variables concerning the
successor were included:
- Level of education (1 = primary school, 5 = university) (education),
- Perceived capacities of the successor (three-point scale) (capacities), and
- Perceived motivation to join the business (three-point scale) (motivation).
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The descriptive statistics and the correlation matrix are provided in Table 5.2.
Table 5.2: Descriptive statistics and correlation matrix
mean SD 1 2 3 4 5 6 7 8
Perceived operational profit growth
(Profit)
3.90 1.20
Family successor (Family) .74 .44 .45**
Knowledge
(Knowledge)
transfer climate
7.58 1.69 .26* .10
Company size (Size) 41.51 57.47 .07 .01 -.09
Transfer moment (Moment) .56 .50 -.01 -.02 .10 .08
Education (Education) 2.93 .91 -.10 -.27* .05 .07 .04
Motivation successor (Motivation) 2.90 .34 .04 .08 -.01 .03 -.04 .02
Capacities successor (Capacities)
N= 81
2.72 .58 .25 .20 .18 .01 .03 -.04 .30*
Pearson correlation, ** Correlation is significant at the 0.01 level (2-tailed), * Correlation is significant at the
0.05 level (2-tailed)
5.4 Results
A linear regression model was conducted to test the hypotheses. The data was tested using
statistical program SPSS 16.0. An interaction term of family successor with the knowledge
transfer climate was applied to account for the moderating effect of family succession.
The model with all the variables:
Profit = β0 + β1Family + β2Knowledge + β3Family_Knowledge + β4 Size + β5 Moment + β6
Capacities + β7 Motivation + β8 Education + µ
Table 5.3 presents the results of the multiple regression analysis. The VIF scores for the
models 1 and 2 are not higher than 1.18. On the basis of currently accepted standards, these
results indicate that there is no concern for multicollinearity. Model 3 test for moderating
effect mathematically leading to high VIF scores.
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Table 5.3: Predicting profit growth
Dependent variable Perceived operational profit growth
Model 1 Model 2 Model 3
Explanatory variables β value e β value e β value e
Company size (ln) .07 .09 .09
Transfer moment .-.02 -.04 -.02
Education .02 .00 .03
Motivation successor -.05 -.04 -.06
Capacities successor .18 .15 .16
Family successor .42 d
.40 d
1.39 d
Knowledge transfer climate .20 a
.57 c
Family successor x Knowledge
transfer climate
-1.11 b
∆R square .04 d .05 d
R square .23 d
.27 d
.32 d
Adj. R square .17 .20 .24
F statistic 3.77 3.88 4.23
DF (df1, df2) (6, 75) (7, 74) (8, 73)
a significant at 0.10 level, b significant at 0.05 level, c significant at 0.01 level and d significant at 0.001 level.
e : β values represent standardized regression coefficients in the multiple regression analysis.
As shown in Model 1, Table 5.3, the control variables are not significant except for family
successor. The results show that family transfer has a large positive effect on perceived
operational profit growth (β = -.42, p < 0.001). The results related to Hypothesis 1, which
predicts a positive relationship between a positive knowledge transfer climate during
succession and post-succession continuity, are presented in Model 2, Table 5.3. The results
show a significant positive relation (β = -.20, p < 0.1) and thus offer support for Hypothesis
1.
For Hypothesis 2, the evidence as shown in Model 3, Table 5.3 indicates a significant
interaction effect (β = -1.11, p < 0.05), lending support to Hypothesis 2. The results suggest
that the direct positive effect of a positive knowledge transfer climate on profit during
succession is larger for non-family successions. The nature of the interaction effect is
depicted in Figure 5.1.
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Figure 5.1: Interaction term family succession and knowledge transfer climate
Profit growth
5
4,5
4
3,5
3
2,5
2
1,5
1
Low Knowledge transfer
climate
High Knowledge transfer
climate
Low Family
succession
High Family
succession
The steep solid line in Figure 5.1 indicates that in family firms where an external succession
takes place, a positive transfer climate will lead to an increase in the perceived profit growth.
The dashed line shows that in firms with a family successor, the positive effect from a
positive knowledge transfer climate disappears. This result indicates that the transfer of
knowledge follows a different route in family firms with a trans-generational succession than
with an external successor. Furthermore, the dashed line lays above the solid line, which
highlight the proposition that when an internal successor is available who possesses the
necessary general and technical competencies, a family firm should prefer a transgenerational
transfer given the expected post-transfer performance. Based on the analysis, the
outcomes can be ranked as follows (from high to low):
1 Trans-generational transfer in a positive knowledge transfer climate,
2 Trans-generational transfer in a negative knowledge transfer climate,
3 Transfer to an external successor in a positive knowledge transfer climate, and
4 Transfer to an external successor in a negative knowledge transfer climate.
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5.5 Discussion and conclusion
In recognition of the importance of a smooth succession process for family firms, this study
attempted to highlight the positive effects of trans-generational succession and the
importance of a positive knowledge transfer climate during the succession process. The
hypotheses were formed on the basis of the familiness construct. The support found for the
hypotheses is therefore also an indication of the relevance of this construct. Some tentative
conclusions were made concerning the positive effect of a family member as a successor and
the importance of a smooth transfer of a firm’s tacit knowledge.
This study suffers from several limitations, which could be improved with further research.
The relatively small sample size was a significant weakness. More information about the
ownership structure of companies would also be beneficial. With regard to external
successions, it was not known if a “new” family took over the family firm or if an external
director had been hired by the family. Future research that will include non-family firms in
the sample would strengthen the empirical analysis. This would make it possible to analyze
the influence of family involvement on the knowledge transfer climate. Furthermore, this
study relied heavily on the self-judgment of the respondents.
In addition, the sample was biased because only successful successions were included, with
success being measured as the continuity of the firm after the transfer. Sharma (2008)
indicates that the influence of family social capital can also be negative depending on specific
family characteristics. In the sample used here, there may have been a relatively large portion
of firms that had experienced a positive familiness influence. It would be interesting to use a
longitudinal study to gain more insight into whether and how this influence plays a role
during succession. For example, strong, positive family ties can motivate families to
overcome the difficulties caused by succession by providing instant survival capital, while
negative influences might have a destructive effect on the continuity of the firm.
The research results indicate a positive relationship between a positive knowledge transfer
climate and post-succession performance. Therefore, investments in this climate should be
good for the performance of the firm. The results also indicate that a positive knowledge
transfer climate is even more important for the post-succession performance when the
successor is not a family member. With intra-generational succession, the extent of
knowledge transfer during succession is less important. This might imply that knowledge
transfer in family firms is an ongoing process that spans over a much longer period than in
non-family firms. As such, the transfer of knowledge is perhaps not a conscious process and
not one solely related to knowledge on the way the business should be run. The outcomes
presented here are also in line with Royer et al. (2008), who found a preference for family
members as successors.
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Conclusions
Based on the research outcomes some preliminary recommendations for the various
stakeholders of family firms can be made. Successors and current leaders can learn from this
study that a positive knowledge climate during succession has a positive effect on postsuccession
performance. Investments in good relationships and in information sharing serve
a common interest and seem to pay off in the long run. These recommendations hold for
family successors but are even more important when the successor is not a family member.
The results further indicate that a family firm’s focus on continuity and its preference for
intergenerational succession could be an effective strategy. This suggestion is in line with
other research findings. A precondition for success is that the family successor is capable and
motivated. Alternative routes to family succession can be a management buyout or a
management buyin, in which case a positive knowledge climate becomes even more
important.
A recommendation for policy makers that follows from this study is to invest in initiatives
and programs to improve the preparation of the next generation family members. How to
create a positive knowledge transfer climate should be a key item here. In line with this it is
recommended for business advisors to be aware of the differences in knowledge transfer
among family members and non-family members.
To conclude, this study focused on the process of knowledge transfer. To obtain a more
complete picture, it would be helpful to gain more insight into the type of knowledge that is
transferred. More research is this area would be welcome.
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6: Conclusions and implications
In this chapter, the overall conclusions and implications of this dissertation are presented. The
chapter starts with a short review of the results of the empirical studies, which is followed by
the answers to the research questions posed in Chapter 1 that have been derived from the
empirical research presented in this dissertation (section 6.2). In section 6.3, the theoretical
implications of this study are discussed. Section 6.4 presents an overview of the limitations of
the current study and indicates possible directions for future research. Finally, section 6.5
covers the practical lessons learned from this study.
6.1 Research findings
Past research has raised many interesting questions regarding the effect of family
involvement on businesses. With the resource-based view as the primary theoretical
framework, this dissertation looks at strategic resources in private firms and how those
resources are influenced by family involvement. The focus is on the development of tacit
knowledge and social capital, as these components of strategic resources have been identified
in the literature as elements for which family involvement may have a strong, positive
influence. This approach led to the following research framework, which was presented in
Chapter 1:
Figure 6.1: Research framework
CONTINGENCY FACTORS RELATED TO BUSINESS CONTEXT
Firm characteristics,ownershipcharacteristics,
businesscycle
STRATEGIC RESOURCES
SOCIAL CAPITAL
Bondingownershipsocial capital
Bridgingownership social capital
Spousalsocial capital
HUMAN CAPITAL
Tacit knowledge transfer climate
CONTINGENCY FACTORS RELATED TO FAMILY CONTEXT
Family involvement,family successor
FIRM PERFORMANCE
Product innovation
Financial performance
Post succession
continuity
The framework presented in Figure 6.1 forms the basis of the four empirical studies discussed
in the preceding chapters. It also demonstrates how the research questions developed in
Chapters 2 through 5 are related. A summary of the main research findings is presented in
Table 6.1.
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Table 6.1: Summary of research findings
Chapter Topic/key construct Sample Significant results related to the hypothesized relations
A shared vision among members of the owning group is positively associated with the mobilization
of owning group’s network;
The quality of relationships is positively associated with the mobilization of the owning group’s
network. This relationship is partially mediated by the shared vision of the owning group;
The positive relationship between the shared vision among owners and the mobilization of owners’
network is stronger in firms with higher quality of relationship amongst owners;
The relationship between a shared vision among owners and the mobilization of owners’ network is
stronger for firms with high family involvement than for firms with low family involvement.
Mobilization of the owning group’s network is positively associated with product innovation;
Quality of relationships among the owning group is indirectly positively associated with product
innovation through network mobilization of the owning group;
The relationship between the quality of relationships among the owning group and product
innovation is stronger for firms with high family involvement than for firms with low family
involvement.
The use of non-family involvement is positively associated with the financial performance of
copreneurial businesses;
A shared vision between spouses is positively associated with the financial performance of
copreneurial businesses;
The relationship between the quality of the copreneurial relationship and the financial performance
of the copreneurial business is mediated by the shared vision of the copreneurs;
Role clarity between spouses is positively associated with the shared vision between the copreneurs
and the quality of the copreneurial relationship;
The relationship between role clarity between spouses and the financial performance of the
copreneurial business is mediated by the shared vision between the copreneurs.
A positive knowledge-transfer climate during succession is positively associated with postsuccession
continuity;
The relationship between a positive knowledge transfer climate during succession and postsuccession
continuity is stronger for non-family successions than for trans-generational successions;
Trans-generational successions are positively associated with perceived post-transfer performance.
Random stratified
sample of 708
private Dutch firms
with 2-20 owners
and less than 500
employees
2 Antecedents of bonding
and bridging ownership
social capital; influence
of family involvement.
Key construct:
Ownership social capital
Random stratified
sample of 708
Dutch private firms
with 2-20 owners
and less than 500
employees
Snowball sample of
167 Dutch
copreneurial
businesses
3 Bonding and bridging
ownership social capital
and relation with product
innovation.
Key construct:
Ownership social capital
4 Copreneurial bonding and
bridging social capital
and relation with firm
performance.
Key construct: Spousal
social capital
Non-random
sample of 81
private Dutch
family firms
5 Influence of the
knowledge-transfer
climate during succession
and in relation to postsuccession
continuity.
Key construct: Tacit
knowledge transfer
climate
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6.2 Overall conclusions
This section starts with a review of the answers to the questions formulated in Chapter 1.
Thereafter, the research framework is adjusted based on these answers. With help of the
adjusted framework, the primary research question is then discussed.
1. What specific components of social capital and tacit knowledge are positively or negatively
influenced by family involvement?
The results from the study of business transfers reveal a positive family effect on postsuccession
continuity. In that study, the tacit knowledge transfer climate is found to be less
important during a trans-generational succession than during a non-family succession. These
results together suggest that family involvement has an indirect effect on the development
and transfer of tacit knowledge.
This dissertation also shows that family involvement has an indirect effect on the
development of social capital. Family involvement has a positive impact as a moderator of
the relationship between a shared vision among owners and the mobilization of network
resources – high family involvement stimulates owners who share the same vision to
mobilize their network resources. Interestingly, in the study of copreneurial firms, the
involvement of non-family members is found to have a positive direct effect on the financial
performance of the firm. This outcome confirms that it is important to involve non-family
members instead of relying solely on family members.
However, the results also reveal a negative impact from family involvement, namely as a
moderator of the relationship between mobilizing network resources and product innovation.
This negative effect suggests that owners of firms with high family involvement are relatively
passive in mobilizing their network resources to develop new products and services.
Overall, the results reveal bivalent outcomes of family involvement. Positive indirect effects
arise in relation to tacit knowledge and the bonding aspects of social capital, while negative
effects are evident in relation to mobilization of network resources for the product innovation
process.
2. Which contingency factors other than family involvement influence the development of
components of social capital and tacit knowledge in privately held firms?
The empirical studies highlight ownership, role clarity between spouses, ownershipmanagement
overlap, and company size as valuable factors in the development of the
strategic resources under study. Furthermore, the results show that the bonding and bridging
elements of ownership social capital are positively related – the shared vision among owners
and the quality of relationships among owners both have a positive impact on the
mobilization of the owner group’s network resources. In addition, a combination of a shared
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vision and a high quality of relationships among owners creates an additional stimulating
factor for the mobilization of the resources in the owners’ network. The overlap between
management and ownership roles also has a positive effect on the development of bonding
and bridging elements of ownership social capital. Company size is further identified as a
factor that has a positive impact on the mobilization of the owning group’s network
resources. Finally, the clarity of the roles between the spouses is identified as a supportive
developmental condition for the bonding elements of spousal social capital.
3. Do components of social capital and tacit knowledge have a positive impact on firm
performance?
In stressing the importance of innovation for the long-term continuity of the firm, this
dissertation focuses on the influence of strategic resources on the introduction of new
products and services. The results show that some components of bonding and bridging social
capital have a positive impact on the realization of product innovation. For example, the
mobilization of network resources has a direct positive effect, while the quality of
relationships between owners has an indirect effect via the mobilization of network resources.
When looking at the financial performance of copreneurial firms, a direct positive effect is
found for shared vision among copreneurial couples, and the inclusion of non-family
members in strategic and managerial activities. Furthermore, the quality of the copreneurial
relationship enhances financial performance by stimulating the couple’s shared vision of the
business. Finally, the results reveal a positive effect from a positive knowledge-transfer
climate on post-succession continuity. Overall, the research results identify various strategic
resources that have a positive impact on firm performance.
Based on the findings discussed above, the proposed research framework of this dissertation
can be adjusted (Figure 6.2).
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Figure 6.2: Adjusted Research Framework
CONTINGENCY FACTORS RELATED TO BUSINESS CONTEXT
Companysize, expansion,age, sector, ownership-­‐
management overlap,role clarity between spouses
STRATEGIC RESOURCES
SOCIAL CAPITAL
Bondingownershipsocial capital
Bridgingownership social capital
Spousalsocial capital
HUMAN CAPITAL
Tacit knowledge transfer climate
X
CONTINGENCY FACTORS RELATED TO FAMILY CONTEXT
Family involvement,family successor
FIRM PERFORMANCE
Product innovation
Financial performance
Post succession
continuity
Family involvement
Family successor
As shown in Figure 6.2, the studies in this dissertation confirm that strategic resources, such
as components of social capital and tacit knowledge, are positively related to firm
performance. Based on the literature (e.g., Habbershon & Williams, 1999; Sirmon & Hitt,
2003), a positive direct relation between family involvement and strategic resources relation
was also expected. However, this relationship is not confirmed by the empirical results.
Therefore, the line connecting strategic resource to contingency factors related to the family
context has been removed. Furthermore, the general contingency factors (firm characteristics,
ownership characteristics, and business cycle) related to the business context have been
replaced with the relevant factors (company size, expansion, age, sector, ownershipmanagement
overlap, and role clarity between spouses) identified in the empirical studies.
The next step in drawing conclusions based on this study is to use the adjusted framework to
answer the general research question. The general research question is formulated as follows:
How does family involvement influence the development of components of social capital and
tacit knowledge in privately held firms, and to what extent does the development of these
strategic resources have an impact on firm performance?
The main conclusion concerning the first part of the research question is that the impact of
family involvement on the development of strategic resources is indirect and bivalent.
Notably, the influence of family involvement in the firm is not as high or as positive as was
expected given the discussed literature on familiness and family social capital. With regard to
the second part of the question, the empirical studies reveal a positive impact of strategic
resources on firm performance, and show that the owners of privately held firms play a
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prominent role in this respect. Ownership social capital can apparently serve as a strategic
resource for firms.
Interestingly, the role of ownership in privately held firms and, more specifically, the active
role of owners are topics that have received little attention from researchers (Hall et al., 2012;
Uhlaner, 2008). Given the findings of this dissertation, it may be relevant to focus on the role
of ownership to gain a deeper understanding of the antecedents and development of strategic
resources in family firms. For this purpose, the three-circle model is useful (Tagiuri & Davis,
1996). The three-circle model, which is used by family business scholars as the key symbolic
generalization of the family business (Moores, 2008; see also section 1.2), clearly defines the
family business as a system that consists of three sub-systems. However, the family business
literature places a great deal of emphasis on the influence of the family on the business and
not on ownership. This focus on family in relation to the business makes sense, as family
business researchers are convinced that family firms differ from non-family firms – if they
did not, there would be no need to study them separately (Chrisman et al., 2005). This focus
is reflected in the majority of the literature, where the points of interest relate to the
interactions between the family and the business, while the role of ownership is generally
neglected (e.g., Litz, 2008; Sharma, 2004; Sirmon and Hitt, 2003; Ward, 1987).
Therefore, to develop a better understanding of how strategic resources develop in family
firms, a focus on the role of ownership is recommended for several reasons. First, family
business scholars need to be more aware of the ownership system as part of the family
business system. Second, the distinction between the influences of ownership and the
influences of the family system seems to be a key aspect to investigate. This is particularly
true because there is much to learn about the role of ownership in private firms, an area of
research that has been largely neglected. In the following sections, these recommendations
are applied in discussions of the theoretical and practical implications, and suggestions for
future research.
6.3 Theoretical implications
This dissertation has theoretical implications for three fields: the resource-based view, the
social capital theory, and the theory of the family business.
Resource-based view (RBV)
The main proposition of the resource based view (RBV) is that strategic resources are
valuable because they help in the development of a long-term competitive advantage for
firms. The findings of this study reveal various strategic resources that have a positive impact
on firm performance. The most relevant resources covered in this study are spousal social
capital, ownership social capital, and the knowledge-transfer climate. The results do not
consistently confirm the notion that family involvement itself can serve as a strategic
resource. In fact, a direct positive family effect is found only in relation to post-succession
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continuity. Overall, the findings are in line with the meta-analysis undertaken by Crook et al.
(2008), who estimated a positive effect of strategic resources on performance.
The resource-based view is one of the most widely accepted theories of strategic management
(Newbert, 2007) but it has also been subject to critique (Kraaijenbrink, Spender & Groen,
2010). In response to these criticisms, amendments to the theory have been suggested, some
of which seem particularly relevant within the context of this dissertation. On the basis of a
systematic assessment of the available empirical findings, Newbert (2007, p. 142) argues that
“it may well be the firms’ organizing context and its valuable, rare, inimitable capabilities
and core competencies rather than its static resources that are essential to determining its
competitive position.” Along similar lines, Sirmon, Hitt, Ireland, and Gilbert (2011)
emphasize the need to explicitly address managers’ actions related to firm’s resources. In
other words, it has been recommended that business owners’ and family members’ actions
related to firm resources be incorporated to allow for an accurate assessment of the
competitive advantage of a privately held firm. An example of this action-oriented approach
is found in Chapters 2 and 3, where bridging ownership social capital is measured in terms of
the business-owning group’s efforts to mobilize potential network resources.
Social capital theory
The theoretical implications presented in this section refer firstly to the type of social unit and
the level of analysis to which the social capital theory can be applied. Secondly, they refer to
the interactions among the various dimensions of social capital.
First, as the core concept of social capital concerns the resources derived from social
relations, it is important to specify the specific social context that is being studied. This
dissertation focuses on social capital within the group of owners in private firms and on
social capital stemming from the spousal relationship in copreneurial firms. The results
confirm that social capital is an important resource within these specific social contexts.
Payne et al. (2011) highlight the multilevel challenges and opportunities in social capital
research. The models presented in Chapters 3 and 4 can be seen as examples of cross-level
models, as the dependent and independent constructs are at different levels of analysis. For
instance, the effect of spousal social capital on financial performance is measured; this
represents a combination of a construct at the dyadic spousal level of analysis with a
construct at the firm level. While Payne et al. (2011) emphasize the opportunities of this
multilevel approach, the approach also shows the complexity of social capital theory.
Westlund and Adam (2010) discuss this complexity with regard to the concept of trust in
general and the potential sources of this trust—the cultural context of a nation, business
values, or dyadic relations between actors. The family firm context adds complexity because
of the overlap among the different roles of owners, managers, and family members.
Therefore, the focus in Chapter 2 is on ownership social capital while controlling for
management-ownership overlap and family involvement. To arrive at an in-depth
understanding of the construct of social capital, more insight into this aspect is necessary.
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The second issue relates to the interactions among the various dimensions of social capital.
Overall, the results provide empirical support for the notion that bonding and bridging
elements of social capital interact. Furthermore, the results of the empirical studies are in line
with the theoretical frameworks suggested by Adler and Kwon (2002) and Lin (1999), who
emphasize a sequential process toward a return on social capital.
Another matter discussed in the literature is the difficulty of operationalizing the cognitive
dimension of social capital. Zheng’s (2010) empirical literature review on social capital in
relation to innovation concludes that the cognitive components of social capital have not been
found to make a significant contribution to innovation relative to the other two dimensions of
social capital. This finding is supported by the results presented in Chapter 3, where shared
vision as component of the cognitive dimension was not significantly related to product
innovation. However, shared vision is identified as a key component of spousal social capital
and as an antecedent for the mobilization of available network resources by the businessowning
group. Given these mixed results, it is clear that more research is necessary to gain a
better understanding of the specific role of the cognitive dimension of social capital.
Theory of the family business
The resource-based view and social capital theory have been important contributors to the
development of the theory of the family firm (Chrisman et al., 2010; Moores, 2008). This
dissertation’s theoretical framework is built on these concepts and explores the concept of
familiness (Habbershon & Williams, 1999). Overall, the empirical results indicate that the
effect of familiness can be both “distinctive” and “constrictive,” lending support to the
theoretical discussion found in Sharma (2008). Furthermore, these findings support the
argument made by Tagiuri and Davis (1996) on the bivalent characteristics of family firms.
Another interesting finding is that familiness does not seem to have, on average, a strong
impact on firm performance. As discussed earlier in this chapter, it seems that scholars have
to be very precise in defining the source of potential strategic resources. For example, the
results presented in Chapters 2 and 3 indicate that, to a great extent, committed owners in
non-family firms act in the same way as committed owners in family firms. In other words,
the aspects of social capital identified by Sirmon and Hitt (2003) as family-specific resources
are also evident among private firms with multiple owners and no family involvement. If
these results are related to the three-circle model, the question is whether the family circle or
the ownership circle is the source of social capital.
The quest to understand the effects of family involvement on the firm is made more difficult
by the fact that some research fails to clarify the types of firms to which family firms are
being compared. The heterogeneity of family firms makes this comparison even more
complicated. It could be that in constructing theories of family firms, family firms are
implicitly compared with publicly traded firms with dispersed ownership. However, even in
such cases, this implied comparison is often followed by empirical investigations using
samples consisting of only family firms. The consequence of this approach is that family
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involvement’s linkages with various elements may be questionable, as the results may stem
from the role of the active owners in general rather than from family involvement. An
important implication of the results presented here is that there is a need to reconsider the
concept of family social capital (Carr et al., 2011; Sorenson et al., 2009). The empirical
studies that measure family social capital may have “labeled” the social capital under study as
family social capital but actually measured ownership social capital.
Some factors identified in the literature are undeniably resources that relate to the family
circle, such as the consequences of the fact that family relations are long lasting. Such
consequences can include deep tacit knowledge of and commitment to the firm, which are
built from the moment that young children begin to learn about the business from their
parents. Negative effects can occur when conflicts or incidents from the past reoccur in the
next generation. The overlap of the family and the business is also clearly a unique attribute
of family firms. The cases described in the study of copreneurial couples provide good
examples of the positive and negative consequences of this interdependency.
In the interest of moving towards a better understanding of the strategic resources that are
unique to family firms, the driving forces for business-owning families seem to be an
appropriate starting point. The family business literature emphasizes trans-generational
wealth creation as a driving force that is unique to family firms (Habbershon, Williams &
MacMillen, 2003; Chrisman, Sharma & Taggar, 2007). The (often implicit) assumption is
that the goal of the owning family is to ensure the longevity of the firm (e.g., Nordqvist &
Zellweger, 2010). Chrisman et al. (2005) state that the knowledge about to the fundamental
driving forces in family firms is limited but that this knowledge is necessary to build a theory
of the family firm. More research in this particular field would be very helpful for gaining
more insight into the unique attributes of family firms.
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6.4 Limitations and directions for future research
The research presented in this dissertation addresses questions concerning the impact of
family involvement on the development of private firms’ strategic resources and how these
resources affect firm performance. These studies suffer from several limitations. In this
section, general limitations related to the empirical chapters are discussed and, on this basis,
suggestions for future research are made. Moreover, as not all questions concerning strategic
resources could be covered in this dissertation, this section suggests possible avenues for
future research that could help to more fully develop insights in this area.
Definition issues
In this study, several methods of defining family firms are applied. Chapters 2 and 3 measure
family involvement on a continuous scale in order to capture the variance within the entire
group of private firms. This scale makes it possible to measure the impact of varying levels of
family involvement on the development of the components of social capital. Chapter 4
focuses on a specific type of family firms, namely copreneurs, to gain a better understanding
of spousal social capital as a potential strategic resource. Chapter 5 uses the definition
formulated by Flören (2002) to distinguish between family and non-family firms. This
approach is used to compare family firms with regard to trans-generational and non-family
successions. The application of different definitions limits the possibilities to compare the
research outcomes. In general, family involvement should be measured using a continuous
scale that reflects the variance within the group of family firms (Uhlaner, 2005). Moreover, it
is recommended that future research include both family firms and non-family firms, thereby
making it possible to objectively capture the effect of family involvement on the business
system (Poza, Hanlon & Kishida, 2004).
Research methods
The empirical approach of this dissertation is to analyze quantitative data on strategic
resources and family firm performance. Different independent and dependent variables are
analyzed in each of the chapters 2 through 5. This negatively affects the possibilities to
generalize the four studies. The fact that are no publicly accessible data on private firms in
the Netherlands makes it difficult to collect data for research. This is especially the case,
when the target group of the study consists of a specific subgroup, for instance copreneurs or
firms that recently completed a business transfer. This is reflected in the relatively small
datasets in Chapters 4 and 5 and affects the external validity of these studies. Therefore the
large and random stratified sample of private firms that is used for the studies in Chapter 2
and 3 is an unique dataset that reveals valuable insights into private family and non-family
firms in the Netherlands.
The studies presented here are all based on cross-sectional data gathered at one specific point
in time. As the constructs under study interact with each other, a longitudinal research
approach would be valuable. For instance, a longitudinal study would make it possible to
empirically investigate the process of investing in social capital up until the realization of a
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eturn on this investment (Lin, 1999). Furthermore, empirical research based on social
exchange theory as suggested by Long (2011) would lead to a more in-depth understanding
of how the various dimensions of social capital interact.
All studies in this dissertation rely on data gathered from one source. Future research using
data from multiple sources – such as multiple owners of the same firm – would allow for
confirmation of the reliability of the gathered data. Research that takes multiple perspectives
into account would also generate additional insights. For example, it would be interesting to
combine the viewpoints of owners and managers within the same firm.
Strategic resources
This research focuses on specific components of bonding social capital, bridging social
capital, and tacit knowledge as potential strategic resources. Social capital and tacit
knowledge are the subjects of separate studies. Future research that combines these two
elements would add value to the answer to the general research question presented in this
dissertation. This is particularly true because it is argued in the literature that tacit knowledge
can be regarded as the outcome of social interactions among the various stakeholders in the
firm (Ireland, Hitt, and Sirmon, 2003). Moreover, the combination of these resources serves
as an important potential advantage for family firms (Probst et al., 2006; Royer et al., 2008;
Von Krogh and Köhne, 1998). It seems that family firms have opportunities to develop tacit
knowledge through network ties, a shared vision, trust, and obligations among family
members.
In addition to social capital and tacit knowledge, other sources of strategic resources have
been proposed for which family involvement might have a positive impact. For instance,
Sirmon and Hitt (2003) identify “patient financial capital,” “survivability capital,” and
“governance structure” as additional strategic resources specific to the family firm. As the
research presented here reveals a rather limited effect of family involvement on the
development of the strategic resources under study, it would seem relevant to undertake
additional research into these other strategic resources. The uniqueness of family firms may
be more related to these strategic resources than those studied in this dissertation.
Ownership
One interesting finding in this dissertation relates to the role owners play in creating
ownership social capital. The role of owners is stipulated by Uhlaner (2008) and Berent-
Braun (2010). Their recommendations for more research in this direction are supported by the
results of this study. Thus far, ownership research has been dominated by a focus on “having”
shares, and has failed to adopt a more dynamic approach that looks at “acting” and “doing” in
relation to ownership (Hall et al., 2012). Hall et al. (2012, p. 18) make useful suggestions for
future research on ownership, stipulating the need to take an interest in “owners as human
beings, with the aim of understanding how their emotions, values and relations inform and
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influence ownership practices, and thereby organizations.” In this respect, the research on
ownership social capital is a valuable contribution to this dynamic approach.
For family business researchers, it may be promising to investigate the phenomenon of active
ownership in the context of the succession process, as various actors within the family
business system will change their positions during a period of succession. The role of
ownership becomes more prominent when, for instance, the incumbent leader transfers the
leadership of the business but remains attached as an owner of the firm. The consequences of
these changes and the question of how to effectively deal with these changes are interesting
avenues for future research. Another issue related to this topic is the notion that female
successors, in particular, want to share in the ownership of family businesses (Arijs, 2009;
Remery, Matser, Van Zwol, & Flören, 2012). If this desire is met in the next decade, it will
mean an even higher percentage of multiple-owner firms, providing yet another indication of
the relevance of research on the specific dynamics of multiple ownership.
Ultimately, the knowledge derived from this research can help stakeholders in family
businesses perform their different roles in an optimal way. The practical lessons learned from
this study are therefore discussed in the next session.
6.5 Practical implications
The results of this study have practical implications for business owners in private firms. The
results indicate that bonding elements of social capital, such as a shared vision and the quality
of relationships, positively affect the performance of the firm. Therefore, business owners
should be encouraged to work on these issues. This holds for family business owners, such as
copreneurs or sibling partnerships, as well as for business partners with no family ties.
Business advisors can help business owners in this regard by raising their awareness of these
“soft” issues. This may appear to be an easy suggestion to apply but research (e.g. Matser &
Gerritsen, 2008) has shown that family business owners generally do not score very high on
communication skills. Discussions about the vision of the firm, evaluations of (shared)
leadership, and reflections on relationships are all examples of valuable activities that are
normally not undertaken in most family firms.
The results related to bridging elements of social capital highlight the benefits of mobilizing
network resources. Business owners can support their businesses by actively developing new
contacts, opportunities, and resources. This research investigates the impact of network
mobilization on product innovation but the positive relation found in this respect will
probably hold for other firm-performance indicators as well. Family business owners could
benefit from working on this aspect, especially because the results indicate that businesses
with high family involvement score relatively low on the use of network contacts in the
development of new products and services. The study on copreneurial businesses shows that
the involvement of non-family members has a positive impact on firm performance. This
implies that copreneurs should be encouraged to extend their networks by engaging capable
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and motivated non-family members in their businesses. Of course, copreneurs have to
carefully consider their specific contexts to identify where these “outsiders” could contribute
the most. Nevertheless, the possibility of extending the network with “outsiders” is a
promising opportunity.
Business owners should also be aware of the equal importance of bonding and bridging
elements of social capital. In particular, the combination of working on internal relations and
focusing on extending the external pool of resources seems to be an effective strategy for
business owners.
Finally, the results of the study in Chapter 5 reveal the positive effect of family succession on
post-succession continuity. If a capable family member is available who wishes to take over
the family business, then the firm has a strategic asset at hand. This implies that putting effort
into the development of next-generation leaders can be viewed as a valuable investment.
Although this focus is the responsibility of the business families, it can be supported by the
government. Studies indicate that succession will be a highly relevant topic for many firms in
the coming years, with potentially significant impacts for the economy as a whole (Mandle,
2008). The importance of a positive knowledge-transfer climate is also highlighted with
respect to a successful business transfer. All actors in this process – incumbent leaders, future
leaders, and business advisors – need to pay attention to factors that support such a climate.
These factors are: a willingness to appreciate and be proud of the achievements of the
“counter” party; an openness to exploring and accepting new management approaches; and a
willingness to maintain established work methods and practices until their value for the firm
has been fully examined.
In conclusion, this dissertation takes an important step towards understanding the
phenomenon of strategic resources within private firms, especially family firms. The study
offers valuable insights for businesses owners, private firms’ stakeholders, and family
business scholars. Hopefully, this dissertation will lead to new research in this promising
field.
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Summary
Most companies in the Netherlands can be labeled as family firms (according to the GEEF
definition (Mandle, 2008; Flören et al., 2010). The family firm can be regarded as an opensystem
model comprising three overlapping, interacting, and interdependent subsystems:
owners, family, and managers (Moores, 2008). This is known as the three-circle model.
Tagiuri and Davis (1996) stipulate that family firms have unique resources that create
positive and negative outcomes for the firm. This notion has more recently been referred to as
the “familiness” of the firm (Sirmon et al., 2003). In this dissertation, the resource-based view
(RBV) is adopted as the theoretical foundation for understanding the distinct attributes of a
family firm (Habbershon & Williams, 1999). With the RBV as the primary theoretical
framework, this dissertation looks at strategic resources in private firms and how those
resources are influenced by family involvement. The focus is on the development of tacit
knowledge and social capital, as the literature indicates that family involvement may have a
strong and positive influence on these components of strategic resources (Arregle et al.,
2007a).
The need for more empirical research in the field of social capital and tacit knowledge within
the context of private firms is made clear by a review of extant empirical research. This
review also reveals specific topics of interest: the role of owners, the influence of the family
on the development of social capital, the diverse links among the various dimension of social
capital, the transfer of tacit knowledge during business successions, and the construct of the
tacit knowledge climate. Therefore, the primary research question addressed in this
dissertation is:
How does family involvement influence the development of components of social capital and
tacit knowledge in privately held firms, and to what extent does the development of these
strategic resources have an impact on firm performance?
The research question is answered on the basis of empirical research presented in this
dissertation. All studies rely on a quantitative research method. Chapter 2 examines
ownership social capital. The study focuses on a random sample of 708 privately held family
and non-family firms with multiple owners. The results of this study show that high levels of
bonding elements of social capital (specifically a shared vision and the quality of
relationships among owners) positively affect the mobilization of the owning group’s
network resources. Interestingly, the results do not indicate a significant direct effect of
family involvement on ownership social capital. However, they do reveal a moderating effect
of family involvement: the family firm context is a fruitful environment for the mobilization
and use of the potential of bridging ownership social capital when owners agree on the vision
for the firm.
Chapter 3 investigates the relation between ownership social capital and product innovation.
The study is based on the same sample as in Chapter 2. Literature on innovation in family
firms stipulates the crucial role of owners in realizing radical innovation for the firm. The
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esults show a positive direct effect from bridging ownership social capital: the mobilization
of the owning group’s network resources has a positive effect on product innovation. The
positive effect of the quality of relationships among members of the owning group on product
innovation is mediated by network mobilization. Furthermore, family involvement works as a
moderator in the relation between network mobilization and product innovation: in firms with
high family involvement, the positive effect of mobilizing network resources is weaker than
in firms with low family involvement. This may imply that family business owners view the
potential value of network resources as relatively unimportant to the development of new
products and services.
Chapter 4 looks at the impact of spousal social capital on the financial performance of
copreneurial businesses. The study is based on a snowball sample of 167 copreneurs—
couples who jointly own and operate a family business. The results indicate that the inclusion
of non-family actors has a significant, positive effect on the performance of the firm. A
shared vision among the copreneurial couple is also positively related to performance. The
relation between the quality of the copreneurial relationship and performance is mediated by
the shared vision of the copreneurs. Furthermore, role clarity between spouses is identified as
a significant condition for the development of the relational and cognitive dimensions of
spousal social capital. Overall, the results indicate that both bonding and bridging elements of
spousal social capital positively affect the financial performance of copreneurial businesses.
Chapter 5 explores the relation between the transfer of tacit knowledge and post-succession
continuity. Tacit knowledge is acknowledged in the literature as a key strategic resource for
all firms. The family business literature further argues that the deep tacit knowledge that is
transferred from one generation to another can be a resource that creates a long-term
competitive advantage for family firms. The study is based on a non-random sample of 81
Dutch family firms, all of which recently completed a succession process. The findings reveal
a positive effect of family-based succession on post-succession continuity. Furthermore, they
show that a positive knowledge-transfer climate during succession has a positive effect on
post-succession continuity in general, although the knowledge-transfer climate is more
critical in non-family successions.
Conclusions
The studies in this dissertation confirm that some strategic resources, such as components of
social capital and tacit knowledge, are positively related to firm performance:
• Components of bonding and bridging ownership social capital have a positive impact
on the realization of product innovation. The mobilization of network resources has a
direct positive effect, while the quality of relationships between owners has an
indirect effect via the mobilization of network resources.
• A shared vision and the use of non-family members are directly and positively related
to the financial performance of copreneurial firms.
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• Furthermore, the quality of the copreneurial relationship enhances performance by
stimulating the couple’s shared vision of the business. A positive knowledge-transfer
climate during business succession has a positive effect on post-succession continuity.
The main conclusion concerning the impact of family involvement on the development of
strategic resources is that this impact is indirect and bivalent:
• Family involvement has a positive impact as a moderator of the relationship between
shared vision among owners and the mobilization of network resources. High family
involvement stimulates owners who share the same vision to mobilize their network
resources.
• Family involvement has a negative impact as a moderator of the relationship between
mobilization of network resources and product innovation. Owners of firms with high
family involvement are relatively passive in mobilizing their network resources to
develop new products and services.
• Involvement of non-family members in copreneurial firms has a positive direct effect
on the financial performance of those firms.
• Trans-generational succession has a positive effect on post-succession continuity.
Furthermore, the tacit knowledge-transfer climate is less important during a transgenerational
succession than during a non-family succession.
Other conclusions include the following:
• The role of ownership, role clarity between spouses, ownership-management overlap,
and company size are contingency factors that are positively related to components of
social capital and tacit knowledge.
• Bonding and bridging elements of ownership social capital are positively related to
each other. A shared vision among owners and the quality of relationships among
owners both have positive impacts on the mobilization of the owner group’s network
resources. Furthermore, the combination of these bonding elements creates an
additional stimulus for the mobilization of resources in the owners’ network.
Theoretical and practical implications
This study confirms the main proposition of the resource-based view (RBV), that strategic
resources are valuable because they help firms develop a long-term competitive advantage.
Spousal social capital, ownership social capital, and the knowledge-transfer climate are
identified as strategic resources. The results do not consistently confirm the notion that family
involvement alone acts as a strategic resource. Recently, attention has shifted within the RBV
from a focus on static resources towards capabilities and competencies (Newbert, 2007). In
line with Sirmon et al. (2011), who emphasize the need to explicitly address managers’
actions related to firm’s resources, researchers are advised to incorporate the business
owners’ actions and family members’ actions related to firm resources.
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The results are in line with the propositions of social capital theory. Payne et al. (2011)
highlight the multilevel challenges and opportunities in social capital research. This study
shows that this multilevel aspect is particularly complex in the family firm context because of
the overlaps among the ownership, business, and family systems. To obtain an in-depth
understanding of the construct of social capital, it is necessary to gain more insight into this
issue. This study contributes to the discussion on the interactions among the various
dimensions of social capital (Zheng, 2010) by providing empirical support for the notion that
the bonding and bridging elements of social capital interact. Furthermore, the results are in
line with the theoretical frameworks suggested by Adler and Kwon (2002), Long (2011), and
Lin (1999), which emphasize the sequential process in the development of social capital.
Overall, the empirical results indicate that the effect of familiness can be both “distinctive”
and “constrictive,” lending support to the theoretical discussion presented by Habbershon and
Williams (1999). The findings also confirm Tagiuri and Davis’s (1996) argument on the
bivalent characteristics of family firms. Another interesting research finding is that
familiness does not seem to have a significant impact on firm performance. In this regard, it
seems that scholars need to be very precise in defining the source of potential strategic
resources. An important implication is the need to reconsider the concept of family social
capital (Carr et al., 2011; Sorenson et al., 2009). When the focus is on ownership social
capital, a distinction can be made between the ‘family’ effect and the ‘ownership’ effect.
This dissertation has practical implications for stakeholders of private firms. Stakeholders
should be encouraged to work on bonding elements of social capital, as firms benefit from
investments in the quality of relationships and a shared vision among members of the
business-owning groups and copreneurial couples. Business advisors can help by raising
awareness of these “soft” issues when consulting with their clients.
Business owners can also support their businesses by actively developing new contacts,
opportunities, and resources. Family business owners, in particular, stand to benefit from
focusing on this aspect because they score relatively low in this regard in relation to product
innovation. The results also indicate that copreneurs should be encouraged to expand their
networks by engaging capable and motivated non-family members in their businesses.
Finally, the results reveal a positive effect of family succession on post-succession continuity.
This implies that a focus on the development of next-generation leaders can be viewed as a
valuable investment. The importance of a positive knowledge-transfer climate is also
highlighted with respect to the success of a business transfer. All actors in this process need
to pay attention to factors that support such a climate.
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Recommendations for future research
The research presented in this dissertation does not answer every question regarding the
impact of family involvement on the development of strategic resources in private firms and
how these resources affect firm performance. There are several possible avenues for future
scientific inquiry:
• Qualitative research, such as case studies with a longitudinal timeframe, would be a
valuable addition, as such research would make it possible to empirically investigate the
process of investing in social capital from its initiation until a return on investments is
realized (Lin, 1999). Case studies would also make it possible to take multiple
perspectives into account, which would generate additional insights.
• Future research could combine components of social capital with components of human
capital, thereby adding value to the general research question defined for this dissertation.
This is particularly true because it can be argued that bonding aspects of social capital
may act as building blocks for the development of tacit knowledge.
• Research into additional sources of strategic resources, such as “patient financial capital”
and “survivability capital” (Sirmon & Hitt, 2003), would improve the understanding of
the mechanisms behind the development and impact of strategic resources in private
firms. The role of family involvement in relation to these strategic resources is also
worthy of investigation.
• Family business scholars are encouraged to take both the family system and the
ownership system into account. Such an approach would make it possible to identify the
specific antecedents of the various strategic resources and clarify how these resources
develop in family firms. Furthermore, it would add to the knowledge of how family firms
can be distinguished within the group of private firms.
• In general, more research into the role of ownership is recommended. In particular, a
dynamic approach that looks at “acting” and “doing” forms of ownership (Hall et al.,
2012) would be a valuable contribution to the field of ownership research.
• Finally, it seems promising for family business researchers to investigate the impact of
active ownership in the context of the succession process, especially as actors within the
family business system are likely to change positions during the course of a succession.
This will lead to situations of shared ownership.
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124

Samenvatting (in Dutch)
De meerderheid van de private bedrijven in Nederland kunnen worden bestempeld als
familiebedrijven (volgens de GEEF definitie (Mandle, 2008); Flören et al., 2010). Dit
proefschrift richt zich op deze groep bedrijven en onderzoekt meer specifiek de strategische
resources waarmee familiebedrijven een concurrentievoordeel voor de lange termijn kunnen
ontwikkelen. Bezien als model kan het familiebedrijf beschouwd worden als een open
systeem, bestaande uit drie van elkaar afhankelijke subsystemen die elkaar overlappen en op
elkaar reageren: de eigenaren, de familie, en de directie (Tagiuri & Davis, 1996). Dit model
staat bekend als het drie-cirkelmodel. Zoals ook weergegeven in dit model benadrukken
Tagiuri en Davis (1996) dat familiebedrijven door de overlap van de subsystemen unieke
middelen (strategic resources) bezitten die positieve en negatieve effecten voor de
onderneming genereren. Dit onderscheidende kenmerk wordt aangeduid als de familiness van
de onderneming (Sirmon et al., 2003).
In dit proefschrift wordt de theorie van de resource-based view (RBV) als basis gebruikt om
de rol van familiness in het familiebedrijf verder te onderzoeken (Habbershon & Williams,
1999). Met de RBV als het primaire theoretisch kader, zal in dit proefschrift worden gekeken
naar de strategische resources in private ondernemingen in het algemeen. Meer in het
bijzonder zal worden bestudeerd hoe de ontwikkeling van deze resources beïnvloed wordt
door de betrokkenheid van de familie en wat vervolgens het effect daarvan is op de
economische prestaties van bedrijven. De focus ligt hierbij op een tweetal strategische
resources en hoe die zich ontwikkelen: tacit knowledge en social capital. Onder tacit
knowlegde wordt impliciete kennis verstaan, dit is kennis die ‘in het hoofd’ zit en moeilijk
overdraagbaar is. Bij social capital gaat om de meerwaarde die sociale netwerken tussen
mensen opleveren, niet alleen voor hen zelf maar ook voor de organisaties waarvan ze deel
uit maken. Er is voor deze focus gekozen omdat uit voorgaande onderzoeken is gebleken dat
juist bij deze resources de betrokkenheid van de familie op het bedrijf een sterke en positieve
invloed heeft (onder andere Arregle et al., 2007a).
Een inventarisatie van bestaand empirisch onderzoek laat zien dat er nog weinig onderzoek is
gedaan op het gebied van social capital en tacit knowledge bij private ondernemingen. Het
bestaande onderzoek toont tevens enkele specifieke onderwerpen die nader onderzoek
behoeven: de rol van de eigenaren, de rol van de familie, de interacties tussen de
verschillende dimensies van social capital en de opbouw van tacit knowledge. Voor wat
betreft tacit knowlegde betreft dit met name de overdracht van tacit knowledge in de context
van de bedrijfsopvolging.
De centrale onderzoeksvraag van dit proefschrift luidt:
Hoe beïnvloedt de betrokkenheid van de familie de ontwikkeling van componenten van social
capital en tacit knowlegde in niet-beursgenoteerde bedrijven en in welke mate is de
ontwikkeling van deze strategische resources van invloed op de prestaties van die bedrijven?
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De onderzoeksvraag wordt beantwoord aan de hand van verschillende deelonderzoeken die in
dit proefschrift worden gepresenteerd. Al deze studies maken gebruik van kwantitatieve
onderzoeksmethoden. De bedrijfsprestaties worden op verschillende manieren gemeten:
bedrijfscontinuïteit, innovatie en behaalde financiële resultaten.
Hoofdstuk 2 beschrijft en onderzoekt de rol van ownership social capital. Dit is social capital
toegespitst op de eigenaren van de onderneming. Twee typen van social capital kunnen
worden onderscheiden, bonding en bridging. Vertaald naar ownership social capital betreft
de bonding dimensie het aspect van de interpersoonlijke relaties binnen de groep van
eigenaren die een positieve invloed uitoefenen op het benoemen en behalen van gezamenlijke
doelen (de intern-georiënteerde, verbindende functie). De bridging dimensie omvat de
overbruggende verbanden vanuit het sociale netwerk van de eigenaren waarmee toegang
verkregen wordt tot informatie en voorzieningen (de extern-georiënteerde, overbruggende
functie).
Het onderzoek richt zich op een aselecte steekproef van 708 niet-beursgenoteerde familie en
niet-familiebedrijven, allen met meerdere eigenaren. De resultaten van deze studie tonen aan
dat een positieve score op de bonding dimensie van ownership social capital (in het bijzonder
een gedeelde visie op het bedrijf en goede relaties tussen de eigenaren) een positief effect
heeft op de bridging dimensie. Het gaat dan vooral om het mobiliseren van resources die het
netwerk van de eigenaren te bieden heeft. Opmerkelijk is dat – in tegenstelling tot de
verwachting vanuit de literatuur – de resultaten niet wijzen op een significant direct effect
van de familiebetrokkenheid op de ontwikkeling van ownership social capital. Er is wel een
indirect effect van de familiebetrokkenheid vast te stellen: de context van het familiebedrijf
blijkt een vruchtbare omgeving voor de mobilisatie en het gebruik van de bridging dimensie
van ownership social capital indien de groep van eigenaren het eens is over de visie voor het
bedrijf.
Hoofdstuk 3 onderzoekt de relatie tussen ownership social capital en productinnovatie.
Literatuur over innovatieprocessen in familiebedrijven wordt aan eigenaren een cruciale rol
toegedicht bij het realiseren van radicale innovatie binnen een onderneming. Onder radicale
innovatie wordt verstaan innovatie die leidt tot nieuwe producten en diensten die tevens
nieuw zijn voor de markt. De resultaten tonen een direct positief effect van de bridging
dimensie van ownership social capital: de mate waarin het netwerk van de eigenaren wordt
ingezet ten behoeve van het bedrijf heeft een positief effect op het realiseren van nieuwe
producten en diensten. Daarnaast blijkt een indirect positief effect van de kwaliteit van de
interpersoonlijke relaties binnen de groep van eigenaren op de gerealiseerde productinnovatie
te bestaan. Opvallend is dat de familiebetrokkenheid werkt als een negatieve moderator in de
relatie tussen de mobilisatie van het netwerk en productinnovatie: in bedrijven met een grote
mate van familiebetrokkenheid is het positieve effect van het mobiliseren van het netwerk
van de eigenaren zwakker dan in bedrijven met een lage mate van familiebetrokkenheid. Dit
kan betekenen dat de familiale ondernemers de potentiële waarde van het externe netwerk
onderschatten bij de ontwikkeling van nieuwe producten en diensten.
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Hoofdstuk 4 gaat in op het effect van spousal social capital op de financiële prestaties van
bedrijven van copreneurs. Copreneurs zijn levenspartners die gezamelijk een bedrijf runnen.
Deze ondernemingen, ook wel man-vrouwfirma’s genoemd, vormen een belangrijke
subgroep onder de familiebedrijven. Spousal social capital – echtelijk sociaal kapitaal – staat
voor de meerwaarde die de relatie niet alleen henzelf, maar ook de onderneming oplevert. De
studie is gebaseerd op een steekproef van 167 copreneurs. De resultaten geven aan dat het
betrekken van externen bij de strategische besluitvorming een aanzienlijke, positieve invloed
heeft op de prestaties van het bedrijf. Een gedeelde visie onder de copreneurs zorgt voor een
direct positief effect op de financiële prestaties. De kwaliteit van de relatie van de copreneurs
heeft een indirect positief effect op de financiële prestaties. Bovendien blijkt dat duidelijkheid
over de rolverdeling tussen de echtgenoten een belangrijke voorwaarde is voor de
ontwikkeling van de binding dimensie van spousal social capital.
Hoofdstuk 5 onderzoekt de relatie tussen de overdracht van tacit knowledge en
bedrijfscontinuïteit na een overdracht. Tacit knowledge wordt in de literatuur erkend als een
belangrijke strategische resource voor bedrijven. De literatuur over familiebedrijven voert
verder aan dat tacit knowlegde die wordt overgedragen van de ene generatie naar de andere
een bron kan zijn voor een langdurig concurrentievoordeel bij familiebedrijven. Het
onderzoek is gebaseerd op een steekproef van 81 familiebedrijven waar recentelijk een
bedrijfsoverdracht plaatsvond. De bevindingen tonen aan dat het hebben van een opvolger uit
de familie een positief effect heeft op de continuïteit van het bedrijf. Bovendien laten de
resultaten zien dat een positief klimaat met betrekking tot de kennisoverdracht een positief
effect heeft op de bedrijfscontinuïteit in het algemeen. Overigens blijkt het klimaat waarin
kennisoverdracht plaatsvindt een nog belangrijkere factor bij niet-familiale bedrijfsopvolging.
Conclusies
Het onderzoek dat is uitgevoerd voor dit proefschrift bevestigt dat bepaalde strategische
resources, zoals componenten van social capital en tacit knowledge, een positieve relatie
hebben met de prestaties van bedrijven:
• Bonding en binding elementen van ownership social capital hebben een positief effect
op de realisatie van productinnovatie. De mobilisatie van het netwerk van de
eigenaren heeft een direct positief effect, terwijl de kwaliteit van de relaties tussen de
eigenaren een indirect effect laat zien.
• Een gedeelde visie en het betrekken van niet-familieleden zijn beide direct en positief
gerelateerd aan de financiële prestaties van bedrijven van copreneurs. De kwaliteit
van de copreneurial relatie heeft een indirect positief effect op de financiële
prestaties.
• Een positief kennisoverdrachtklimaat bij de bedrijfsopvolging heeft een positief effect
op de bedrijfscontinuïteit.
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De belangrijkste conclusie met betrekking tot de impact van de familiebetrokkenheid op
de ontwikkeling van strategische resources is dat deze invloed indirect en bivalent is:
• Familiebetrokkenheid heeft een positieve invloed als moderator van de relatie tussen
de gedeelde eigenaarsvisie en de mobilisatie van het netwerk van de eigenaren: hoge
familiebetrokkenheid stimuleert eigenaren die dezelfde visie delen om hun netwerk te
mobiliseren.
• Familiebetrokkenheid heeft een negatieve invloed als moderator van de relatie tussen
enerzijds de mobilisatie van het netwerk van de eigenaren en anderzijds
productinnovatie. Eigenaren van bedrijven met een sterke familiebetrokkenheid zijn
relatief passief in het mobiliseren van hun netwerk als ondersteuning bij het
ontwikkelen van nieuwe producten en diensten.
• Het betrekken van niet-familieleden in bedrijven van copreneurs heeft een direct
positief effect op de financiële prestaties van deze bedrijven.
• Familiale opvolging heeft een positief effect op de bedrijfscontinuïteit. Bovendien is
het kennisoverdrachtklimaat minder belangrijk tijdens een familiale opvolging dan bij
een niet-familiale opvolging.
Aanvullende conclusies zijn:
• Vier belangrijke contextuele factoren die positief gerelateerd zijn aan de ontwikkeling
van social capital en tacit knowledge zijn: de rol van eigenaarschap, een duidelijke
rolverdeling tussen echtgenoten, overlap tussen eigendom en management en de
omvang van de onderneming.
• Interne en externe elementen van ownership social capital zijn positief gerelateerd
aan elkaar. Een gedeelde visie onder eigenaren en de kwaliteit van de relaties tussen
de eigenaren hebben beide een positief effect op de mobilisatie van het netwerk van
de eigenaren. Bovendien blijkt dat een combinatie van de interne elementen zorgt
voor een extra stimulans op de inzet van het netwerk van de eigenaren ten behoeve
van het bedrijf.
Theoretische en praktische implicaties
Deze studie ondersteunt de belangrijkste stelling van de resource-based view (RBV),
namelijk dat strategische resources waardevol zijn omdat bedrijven hiermee een
concurrentievoordeel voor de lange termijn kunnen ontwikkelen. Spousal social capital,
ownership social capital en het kennisoverdrachtklimaat zijn geïdentificeerd als strategische
resources die een positief effect hebben op de gemeten bedrijfsprestaties. Opvallend is dat de
resultaten niet het veel gehoorde idee bevestigen dat familiebetrokkenheid uit zichzelf zou
werken als een strategische resource.
De laatste jaren is de aandacht binnen de RBV verschoven van een focus op de aanwezigheid
van strategische resources naar de capaciteiten en competenties die nodig zijn om vanuit
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strategische resources een concurrentievoordeel te ontwikkelen (Newbert, 2007). In lijn met
Sirmon et al. (2011), die de nadruk leggen op de noodzaak om expliciet aandacht te besteden
aan initiatieven die managers ondernemen met betrekking tot de strategische resources, is het
aan te bevelen om ook de handelingen die eigenaren en familieleden verrichten met
betrekking tot de ontwikkeling van strategische resources, te onderzoeken.
De resultaten van deze studie zijn tevens in overeenstemming met de proposities uit de social
capital theorie. Social capital kan dienen als strategische resource voor ondernemingen. Om
het onderzoek naar social capital verder te brengen, stellen Payne et al. (2010) dat er
uitdagingen en kansen voortvloeien uit het gegeven dat het fenomeen van social capital op
meerdere niveaus kan worden onderzocht (zoals de maatschappij, de organisatie, het team en
de familie). De complexiteit van het familiebedrijf als gevolg van de overlappende
subsystemen, namelijk eigendom, bedrijf en familie, laat duidelijk zien dat social capital zich
op verschillende niveaus kan manifesteren. Voor het verkrijgen van een diepgaand inzicht in
het construct social capital, is het noodzakelijk om meer inzicht te krijgen in deze
complexiteit. Dit onderzoek levert verder een bijdrage aan deze discussie over de interacties
tussen de verschillende elementen van social capital (Zheng, 2010). De empirische resultaten
onderbouwen het theoretische idee dat interne en externe elementen van social capital elkaar
kunnen versterken. Bovendien zijn de resultaten in lijn met de theoretische kaders die
voorgesteld zijn door Lin (1999), Adler en Kwon (2002) en Long (2011), die het sequentiële
karakter benadrukken bij de ontwikkeling van social capital.
In het algemeen kan worden gesteld dat de empirische resultaten de theoretische
beschouwing van Sharma (2008) ondersteunen. Sharma stelt dat het effect van familiness
zowel distinctive als constrictive kan zijn. Met ander woorden, de familiebetrokkenheid kan
zowel een onderscheidend als beperkend effect op de onderneming hebben. De bevindingen
bevestigen daarmee ook het argument van Tagiuri en Davis (1996) betreffende de bivalente
eigenschappen van familiebedrijven. Een ander interessant resultaat van dit proefschrift is de
vaststelling dat familiebetrokkenheid geen direct significant positieve
invloed heeft op de financiële prestaties van bedrijven. In dit verband lijkt het erop dat
onderzoekers zeer precies moeten zijn in het bepalen van de antecedenten van potentiële
strategische resources. Zo lijkt het noodzakelijk om het concept van family social capital
(Carr et al., 2011; Sorenson et al., 2009) te heroverwegen. Deze studie laat namelijk zien dat
als de focus ligt op ownership social capital, er een onderscheid gemaakt kan worden tussen
een 'familie' effect en een 'eigendom' effect. Bij het meten van family social capital zou de rol
van de eigenaren meegenomen moeten worden. Hiermee kan een duidelijker onderscheid
gemaakt worden tussen enerzijds familiebedrijven en anderzijds private bedrijven waar geen
familieband is tussen de eigenaren.
Dit proefschrift heeft praktische relevantie voor de eigenaren van niet-beursgenoteerde
bedrijven. Eigenaren worden aangemoedigd om te werken aan de verbindende elementen van
social capital. De resultaten leveren een indicatie dat investeren in het opbouwen van interpersoonlijke
relaties binnen de groep van eigenaren een positief effect zal hebben op de
bedrijfsresultaten. Dit geldt ook voor levenspartners die samen een bedrijf runnen. Adviseurs
129

kunnen daarbij helpen door het verhogen van het bewustzijn aangaande het belang van deze
"zachte" factoren.
Eigenaren kunnen het bedrijf ondersteunen door het actief ontwikkelen van nieuwe externe
contacten en het identificeren en benutten van mogelijkheden vanuit hun bestaande netwerk
(de brugfunctie van social capital). Familiale ondernemers in het bijzonder, zijn gebaat bij
aandacht voor dit aspect, omdat ze bij het ontwikkelen van nieuwe producten en diensten
relatief laag scoren op deze brugfunctie van social capital. De resultaten suggereren verder
dat het een goede strategie is voor copreneurs om niet-familieleden te betrekken bij hun
bedrijven.
Tot slot blijkt uit de resultaten een positief effect van een opvolging door een familielid op de
bedrijfscontinuïteit na bedrijfsoverdracht. Dit betekent dat tijdige aandacht voor de
ontwikkeling van de volgende generatie als toekomstige leiders van het familiebedrijf kan
worden gezien als een waardevolle investering. Het belang van een positief
kennisoverdrachtklimaat wordt ook benadrukt met betrekking tot het succes van een
bedrijfsoverdracht. Alle actoren in dit proces doen er goed aan om aandacht te besteden aan
de factoren die een dergelijk klimaat ondersteunen.
Aanbevelingen voor toekomstig onderzoek
Uiteraard kan het onderzoek in dit proefschrift niet alle vragen beantwoorden met betrekking
tot strategische resources in familiebedrijven. Mogelijkheden voor toekomstig onderzoek
kunnen als volgt worden samengevat:
• Kwalitatief onderzoek, zoals case studies met een longitudinaal karakter, zou een
waardevolle aanvulling zijn, omdat dergelijk onderzoek het mogelijk kan maken om
empirisch te onderzoeken hoe het proces verloopt van investering in social capital tot
en met het realiseren van een rendement op deze investering (Lin, 1999). Case studies
maken het tevens mogelijk om dit proces vanuit meerdere perspectieven (bijvoorbeeld
eigenaar, familielid en management) te belichten, hetgeen aanvullende inzichten kan
genereren.
• Toekomstig onderzoek zou de onderlinge relaties tussen de verschillende strategische
resources kunnen bestuderen. Dit zal de kennis over strategische resources verder
verdiepen. Dit geldt in het bijzonder omdat vanuit eerder onderzoek is aangeven dat
de verbindende elementen van social capital kunnen fungeren als bouwstenen voor de
ontwikkeling van tacit knowledge.
• Onderzoek zou zich ook kunnen richten op andere potentiële strategische resources,
zoals patient financial capital en survavibility capital (Sirmon & Hitt, 2003). De rol
van de familiebetrokkenheid met betrekking tot deze strategische middelen is ook een
interessante onderzoeksvraag.
• Onderzoekers worden aangemoedigd om zowel met het familiesysteem als met het
eigendomsysteem rekening te houden. Een dergelijke aanpak zou het mogelijk
130

kunnen maken om de specifieke antecedenten van de verschillende strategische
resources te identificeren en te bepalen hoe de ontwikkeling van deze resources in
familiebedrijven verloopt. Bovendien zou dit aanvullende kennis opleveren over de
wijze waarop familiebedrijven kunnen worden onderscheiden binnen de totale groep
van niet-beursgenoteerde bedrijven.
• Vervolgonderzoek naar de invloed van eigenaarschap is aan te bevelen. In het
bijzonder zou een onderzoeksaanpak die zich richt op actieve vormen van eigendom
(Hall et al., 2012) een waardevolle bijdrage kunnen leveren op het gebied van
governance onderzoek.
• Tenslotte, het lijkt veelbelovend voor onderzoekers om de gevolgen van actief
aandeelhouderschap te onderzoeken in relatie tot bedrijfsopvolging. Tijdens de
bedrijfsopvolging zullen stakeholders van positie gaan veranderen en de verwachting
is dat dit in toenemende mate zal leiden tot situaties van gedeeld eigendom.
131

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148

Curriculum Vitae
Ilse A. Matser (1969) works since 1998 as an assistant professor at the Utrecht School of
Economics of Utrecht University. In 2007 Utrecht University became the academic partner of
the Dutch Centre for Family Business and Ilse became the managing director of this expertise
centre for family firms. The centre combines practical experience with the results of scientific
themes that are topical in family business.
Ilse also has the position as Professor of Family Business Management at Windesheim
University of Applied Sciences in Zwolle, the Netherlands. She is head of a new research
group that is started in 2009 and which now consists of ten people. The focus is on research
questions regarding ownership, governance and strategic entrepreneurship in family firms.
The results of the research projects are, amongst others, used in Windesheim’s bachelor and
executive programs.
Ilse is an active member of an international network of family business scholars and
practitioners. The research group is engaged in international research projects and
collaborates with Belgium and South African partners.
Ilse Matser obtained her Master’s degree in Economics & Business at Vrije Universiteit
Amsterdam. Her primary research interests are in the field of strategic management and
governance. She publishes in newspapers, professional and academic journals. She is married
and has two children.
149

Past research has raised many interesting questions regar-
ding the effect of family involvement on businesses. With the
resource-based view as the primary theoretical framework,
this dissertation looks at strategic resources in private firms
and how those resources are influenced by family involvement.
Furthermore, the research investigates to what extent
the development of these strategic resources have an impact
on firm performance. The focus is on the development of
tacit knowledge and social capital, as these components of
strategic resources have been identified in the literature as
elements for which family involvement may have a strong,
positive influence.
Ilse A. Matser (1969) works since
1998 as an assistant professor at the
Utrecht School of Economics of
Utrecht University. In 2007 Utrecht
University became the academic
partner of the Dutch Centre for
Family Business and Ilse became
the managing director of this expertise centre for family
firms. Ilse also has the position as Professor of Family
Business Management at Windesheim University of Applied
Sciences in Zwolle, the Netherlands. Her primary research
interests are in the field of ownership, governance and strategic
entrepreneurship in family firms.
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