Academic journal article Journal of Small Business Management

Leveraging Family-Based Brand Identity to Enhance Firm Competitiveness and Performance in Family Businesses *

Academic journal article Journal of Small Business Management

Leveraging Family-Based Brand Identity to Enhance Firm Competitiveness and Performance in Family Businesses *

Article excerpt

Drawing on the family-embeddedness perspective on entrepreneurship and the resource-based-view of the firm, we investigate how the promotion of family-based brand identity influences competitive orientation (customer versus product) and firm performance in family businesses. Applying structural equation modeling to survey data collected from leaders of 218 family businesses, we demonstrate that developing a family-based brand identity positively contributes to firm performance (growth and profitability) indirectly, via a customer-centric orientation. In contrast, attempts to leverage family-based brand identity via a product-centric orientation do not impact firm performance. Our results suggest that family-based brand identity enhances the family business' ability to persuade customers to make purchasing decisions based on the perceived attributes of the seller. As a result, we contribute to the discussions centered on how to optimize the intricate synergy between family and business.

S. C. Johnson, a multibillion-dollar global organization, is a family business. This fifth-generation dynasty chose to promote their identity as "A Family Company" after extensive research revealed that consumers have a positive view of family businesses. Many large (e.g., Ford Motor Company, Gallo Wines, Anheuser-Busch Breweries) and small family businesses promote their family brand identity as a means of differentiating themselves in a crowded marketplace. Yet despite its intuitive appeal there is a noticeable lack of empirical evidence to support the premise that promoting or marketing a business as a family business enhances financial performance. It is this gap that gave rise to the research question investigated here: How does the promotion of family-based brand identity influence competitive orientation (customer versus product) and firm performance in family businesses?

To address this question, we draw inspiration from Aldrich and Cliff's (2003) family-embeddedness perspective on entrepreneurship. Reinforcing Rogoff and Heck's (2003) notion that family and business are as closely connected as oxygen and fire, the family-embeddedness perspective is a conceptual framework that highlights the role of the family in new venture creation. The current research extends this discussion to the potential benefits of promoting family involvement in the poststart-up stages of the venture. We further inform our discussion theoretically by drawing on the resource-based view (RBV) of the firm (Barney 1991; Wernerfelt 1984; Penrose 1959). RBV presents organizations as collections of idiosyncratic resources and capabilities that provide bases of competitive advantage and influence performance (Barney 1991). Recently, scholars have proposed that RBV has particular relevance to family business research (Chrisman, Chua, and Sharma 2005). Notably, Sirmon, and Hitt (2003) used the RBV framework to argue that family businesses are unique in the way they evaluate, acquire, shed, bundle, and leverage their resources. Of particular significance to the current study are arguments by Cooper, Upton, and Seaman (2005) that family business' identification with the family name motivates a greater emphasis on serving customers and consumers effectively, such as through providing quality products and customer services.

We investigate the role of familybased brand identity in relation to competitive orientation (i.e., product or customer service orientation) and firm performance using a sample of closelyheld small and medium-sized family businesses, defined as having fewer than 500 employees. Such firms are relevant for this study. Lacking the substantive economies of scale and scope available to their larger brethren, small and medium-sized family businesses may be especially inclined to leverage their distinctive family name to create a form of reputational capital or family brand equity that helps enhance performance. In the current study, we present the alignment or fit present in family-based brand identity-competitive advantage-performance relationships in terms of mediation (Venkatraman 1989). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.