Morehead State University

How Family Controlled Firms Differ from Nonfamily Firms in Competitive Aggressiveness

Institution

Morehead State University

Abstract

In recent years, strategy researchers have paid increasing attention to understanding the competitive actions taken by firms (Chen, 1996; Ferrier, 2001). However, significant gaps in our understanding of competitive behavior persist. One particularly prominent gap is the competitive behavior of family firms and how it differs from the competitive behaviors of their nonfamily counterparts. This research explores the basic, yet unanswered, question of how relatively family firms within a given industry should act and react to prosper in a competitive arena. Specifically, we explore two related questions: How do family firms differ from their nonfamily rivals in their competitive behaviors? Do the competitive behaviors associated with good business performance differ for family and nonfamily firms? There is a growing recognition of family firms’ contribution to the global economy and interest in what they can teach the rest of the business world (Nicholson, 2008). Family businesses dominate the economies in most nations in terms of the number of enterprises (La Porta, et al., 1999; Weber et al., 2003). Although researchers concerned with family businesses have noted that what applies to family firms may not apply to nonfamily ones (Chrisman, Chua, and Sharma , 2005), they have generally stopped short of investigating family and nonfamily firms engaged in intraindustry competition. Consequently, the behavioral differences between family and nonfamily firms competing in an industry and the means by which they build competitive advantage via day-to-day competition have been left unexplored.

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How Family Controlled Firms Differ from Nonfamily Firms in Competitive Aggressiveness

In recent years, strategy researchers have paid increasing attention to understanding the competitive actions taken by firms (Chen, 1996; Ferrier, 2001). However, significant gaps in our understanding of competitive behavior persist. One particularly prominent gap is the competitive behavior of family firms and how it differs from the competitive behaviors of their nonfamily counterparts. This research explores the basic, yet unanswered, question of how relatively family firms within a given industry should act and react to prosper in a competitive arena. Specifically, we explore two related questions: How do family firms differ from their nonfamily rivals in their competitive behaviors? Do the competitive behaviors associated with good business performance differ for family and nonfamily firms? There is a growing recognition of family firms’ contribution to the global economy and interest in what they can teach the rest of the business world (Nicholson, 2008). Family businesses dominate the economies in most nations in terms of the number of enterprises (La Porta, et al., 1999; Weber et al., 2003). Although researchers concerned with family businesses have noted that what applies to family firms may not apply to nonfamily ones (Chrisman, Chua, and Sharma , 2005), they have generally stopped short of investigating family and nonfamily firms engaged in intraindustry competition. Consequently, the behavioral differences between family and nonfamily firms competing in an industry and the means by which they build competitive advantage via day-to-day competition have been left unexplored.