Academic journal article Journal of Management and Organization

The Distinctiveness of Family-Firm Intangibles: A Review and Suggestions for Future Research

Academic journal article Journal of Management and Organization

The Distinctiveness of Family-Firm Intangibles: A Review and Suggestions for Future Research

Article excerpt

ABSTRACT

We review the theoretical and empirical literature on the resource-based view in the context of family businesses using a framework of intangible resources. This approach allows us to structure the present research on value-adding resources in family firms into four clearly distinct groups - organizational culture, reputation, human capital and networks - and provides us with the opportunity to examine the interactions of these intangible resources. We use these relationships to offer a future research agenda that is focused on the creation of competitive advantage through the combination and recombination of these resources.

Keywords: family business research, resource-based view, intangibles, organizational culture, reputation, human capital, networks

INTRODUCTION

Over the last decade, the question as to whether family firms outperform nonfamily firms and the reasons for this postulated outperformance have become one of the most intriguing topics on the family-firm research agenda. Although most studies suggest that family firms perform better than non-family firms (e.g., Anderson & Reeb, 2003; Lee, 2006; McConaughy, Matthews, & Fialko, 2001; Miller & Le Breton-Miller, 2006a; Villalonga & Amit, 2006), more nuanced conclusions are also often drawn (e.g., Barontini & Caprio, 2006; Lubatkin, Durand, & Ling, 2007; Miller, Le Breton-Miller, Lester, & Cannella, 2007; Steier, 2001), and it is argued that several conditions need to be met for a family firm to have superior performance. Barontini and Caprio (2006), for example, find that only family firms where the company's founder is the CEO show superior performance and Miller et al. (2007) even suggest that only public family firms where only the founder and no other family members are present perform better. Other proposed requirements are a high level of trust (Steier, 2001) and a psychosocial form of parental altruism (Lubatkin et al., 2007).

In order to capture the uniqueness of family firms, family-business scholars using primarily a resource-based view have introduced concepts such as 'familiness' (Habbershon & Williams, 1999), 'family capital' (Hoffman, Hoelscher, & Sorenson, 2006), the 'family effect' (Dyer, 2006) and 'family social capital' (Arrègle, Hitt, Sirmon, & Very, 2007). The resource-based view focuses on the way in which competitive advantage is achieved and sustained over time (Penrose, 1959; Prahalad & Hamel, 1990; Wernerfelt, 1984) and examines idiosyncratic firm resources that contribute to sustaining the competitive advantage (Barney, 1986, 1991). The unique resources of family firms originate in the interaction of the family and the business and are considered complex, dynamic and intangible (Habbershon & Williams, 1999). Moreover, it is asserted that the unique bundle of family-firm resources can create both advantages and disadvantages for the family firm (Sirmon & Hitt, 2003).

To date, research on family firms has developed considerably (Craig, Moores, Howorth, & Poutziouris, 2009) and is characterized by a broad diversity in approaches. Thus, a review of the literature can provide an integrative framework. The aims of this paper are to review the body of theoretical and empirical contributions in the field using an integrative framework and to propose new avenues for future research. Among the possible resources, intangible resources are considered the most likely to provide a competitive advantage (Barney, 1991). While most authors acknowledge that the resources that make family firms unique are intangible (e.g., Habbershon & Williams, 1999; Sirmon & Hitt, 2003), they fail to use an intangibles framework to study them. We use the intangibles framework introduced by Hall (1992, 1993) as an integrative tool to take stock of the current literature. Building on Hall's (1992) framework, we discuss the literature on the basis of four groups of family-firm intangibles: organizational culture, reputation, human capital and networks. …

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