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A historical investigation of the strategic process within family firms

Patrick M. Kreiser, Jari Ojala, Juha-Antti Lamberg, Anders Melander



Emerald FullText Article :


A historical investigation of the strategic process within family firms



A historical investigation of the strategic process within family firms


Patrick M. Kreiser, Jari Ojala, Juha-Antti Lamberg, Anders Melander


The Authors


Patrick M. Kreiser, College of Business, Ohio University, Athens, Ohio,

USA

Jari Ojala, Department of History and Ethnology, University of Jyvaskyla,

Jyvaskyla, Finland

Juha-Antti Lamberg, Institute of Strategy and International Business,

Helsinki University of Technology, Helsinki, Finland

Anders Melander, Jonkoping International Business School, Jonkoping,

Sweden


Abstract


Purpose – The primary purpose of this paper was to perform an in-depth

analysis of the strategic process that occurs within family firms.



Design/methodology/approach – This study analyzed the historical

development of the growth strategies of four family firms in the US,

Finland, and Sweden.



Findings – The results of this study suggest that family firms typically

adopt conservative strategies in the early part of their life cycle.

During their formative years, family firms often implement financially

conservative strategies and place an emphasis on maintaining tight control

of the strategic decision-making process within the family unit. However,

the competitive pressures experienced by family firms over time often

force these companies to embrace a more entrepreneurial posture during the

latter stages of their life cycle.



Research limitations/implications – The stage in the company life cycle

plays an important role in determining the strategic behavior of family

firms. Future research aimed at replicating the results of this study may

help shed further light on the strategic process that occurs within family

firms.



Practical implications – Although the firms examined in this study were

from various cultures, their strategic development over time was very

similar. This tentatively suggests that the evolution of the strategic

process that occurs within family firms may be generalizable across

cultures.



Originality/value – Our findings indicate that there may be an important

distinction between family firms and entrepreneurial organizations. That

is, all family firms are not necessarily entrepreneurial, especially early

on in their company life cycle.


Article Type: Research paper

Keyword(s): Family firms; Paper industry; Entrepreneurs; Sweden; Finland;

United States of America.


Journal of Management History

Volume 12 Number 1 2006 pp. 100-114

Copyright © Emerald Group Publishing Limited ISSN 1355-252X



Introduction

Entrepreneurial researchers have long realized that the strategic planning

process that occurs within family firms may differ from that which occurs

in other types of organizations (Jones, 1982; Ward, 1988; Zahra et al.,

2004). However, recent research suggests that our knowledge of the

strategic process in family firms is still quite limited (Steier et al.,

2004; Upton et al., 2001). Specifically, scholars have suggested that more

research needs to be conducted assessing the manner in which family firms

develop their strategies for growth (Sharma et al., 1997; Teal et al.,

2003). Accordingly, the primary purpose of this paper was to analyze the

manner in which family firms in a variety of cultures developed their

growth strategies over time.

In order to achieve this objective, we traced the historical and strategic

development of four family firms in the paper and pulp industry. These

companies represented three different countries: the US (Gulf States Paper

Corporation), Finland (Ahlstrom and Schauman), and Sweden (MoDo). An

analysis of the companies' enacted strategies provided insights into the

growth strategies that these firms have employed over time. Thus, a major

portion of the paper examined the evolution of strategies that occurred in

family firms in a variety of cultural settings. The cultural diversity of

the sample was particularly important, given research suggesting that

cultural attributes play an important role in determining the growth

strategies employed by family firms (Yeung, 2000).

Specifically, the major strategic actions that these four companies have

enacted since their founding were classified along two dimensions. The

first dimension examined the strategic actions employed by these companies

in relation to their competition. The primary focus was on whether or not

the actions occurred in the internal or external arena. The second

dimension categorized the type of action that was enacted, and whether it

was an opening or closing action. Particular emphasis was placed on the

emergent strategies that developed within these companies in response to

the many environmental pressures that exist in the paper and pulp industry

(Mintzberg and Waters, 1982, 1985).



Theoretical development



In this paper, we defined a family firm as a “business governed and/or

managed with the intention to shape and pursue the vision of the business

held by a dominant coalition controlled by members of the same family or a

small number of families in a manner that is potentially sustainable

across generations of the family or families” (Chua et al., 1999, p. 25).

As such, a family firm can be characterized by two main attributes:

it is controlled by a family or group of families; and

this family/families wishes to maintain control of the firm for an

extended period of time.

Thus, it was expected that family firms would be more long-term in their

strategic orientation than other types of organizations.

Family businesses have been and still are a central element in most

economies. For example, most companies in Western Europe and in the US can

be viewed as family firms. Family firms are usually defined as business

units, owned and governed mainly by one family or kin. However, this does

not necessarily mean that the operative leadership is also in the hands of

the family. Furthermore, the close interaction between family and firm, as

well as the continuity and succession of the firm from one generation to

another, are usually understood as determinants of the success of family

firms (Casson, 1982; Colli, 2003; Koiranen, 1998; Schulze et al., 2003).

Casson (1999) stresses that some of the features typically associated with

family firms are a small to medium size, organic growth through reinvested

profits (rather than takeovers and mergers), avoidance of stock market

finance, reliance on banks merely for short-term credit, and internal

management succession. As Ward (1988) noted, family and family business

cannot be understood separately. What is good for the family is good for

the business – and vice versa. The continuity of the family firm is an

essential question at the time of succession (Pollard, 1965; Rose, 1993).

Family firms often display certain benefits and drawbacks when viewed over

an extended period of time. Family firms can be seen as dynamic entities

due to the personal commitment of the owner (Casson, 1982; Rose, 1993).

Another advantage is often the long-term orientation, personal style of

management, independence from the resources outside of the family, family

identity and culture, and lower levels of bureaucracy. Some of the primary

disadvantages are problems related to financing (especially within the

larger companies), and related to that, constrained growth possibilities,

as well as autocratic management (as a result from lesser bureaucracy),

conservatism, nepotism, family/kin feuds, and problems within the

successions process (Casson, 1999; Koiranen, 1998).

This study examined the development of growth strategies within family

firms in a variety of cultures. Specifically, this study explored whether

the development of growth strategies in family firms more closely mirrors

the strategic process that occurs in entrepreneurial organizations or

living companies. While there tends to be an implicit assumption that

family firms are entrepreneurial in the formation and implementation of

organizational strategies, this may in fact be an inaccurate assumption.

The extant literature posits that entrepreneurial organizations exist

primarily with short-term profit goals in mind, while family firms are

most concerned with the long-term survival of the organization. Drawing

primarily upon the entrepreneurship and small business literature, this

paper performed an in-depth analysis of the organizational strategies

enacted by four family firms throughout their existence in an effort to

answer this intriguing question.



The strategic characteristics of entrepreneurial firms



Organizational researchers have often conceptualized entrepreneurial

organizations as possessing three main characteristics: risk-taking,

innovation, and proactiveness (Covin and Slevin, 1989; Miller, 1983;

Miller and Friesen, 1982). Such an entrepreneurial orientation is

demonstrated by the “extent to which top managers are inclined to take

business-related risks (the risk-taking dimension), to favor change and

innovation in order to obtain a competitive advantage for their firm (the

innovation dimension), and to compete aggressively with other firms (the

proactiveness dimension)” (Covin and Slevin, 1988, p. 218).

The concept of risk-taking has long been associated with entrepreneurship.

Early definitions of entrepreneurship centered on the willingness of

entrepreneurs to engage in calculated business-related risks (Brockhaus,

1982). In the 1800s, John Stuart Mill argued that risk-taking was the

paramount attribute of entrepreneurs (Brockhaus, 1982). This view of

entrepreneur as risk-taker continued to gain support throughout the

twentieth century, as McClelland (1960, p. 210) posited that “practically

all theorists agree that entrepreneurship involves, by definition, taking

risks of some kind”. Research also suggests that entrepreneurs tend to

categorize business situations as possessing less risk than

non-entrepreneurs (Busenitz, 1999; Palich and Bagby, 1995).

Other researchers considered innovation to be at the very heart of

entrepreneurship (Covin and Miles, 1999; Jennings and Young, 1990;

Schollhammer, 1982; Schumpeter, 1934). Entrepreneurial innovation can be

defined as the “willingness to support creativity and experimentation in

introducing new products/services, and novelty, technological leadership

and R&D in developing new processes” (Lumpkin and Dess, 2001, p. 431).

Schumpeter (1934) was one of the first scholars to argue that innovation,

as evidenced by the creation and development of new products and

processes, was the fundamental undertaking of the entrepreneurial

organization. Jennings and Young (1990) defined corporate entrepreneurship

as the strategic process of developing new products and/or markets. Covin

and Miles (1999) theorized that innovation was the single most critical

factor in defining corporate entrepreneurship.

A third strategic characteristic frequently associated with

entrepreneurial firms is proactiveness. The preponderance of research that

has been done on the topic posited two main attributes of proactiveness:

aggressive competitive behavior directed at rival firms; and

the organizational pursuit of favorable business opportunities (Knight,

1997; Lumpkin and Dess, 2001; Stevenson and Jarillo, 1990).

Knight (1997, p. 214) argued that the emphasis of proactiveness is on

“aggressive execution and follow through, driving toward achievement of

the firm's objectives by whatever reasonable means are necessary”.

Stevenson and Jarillo (1990) conceptualized proactiveness as the

organizational pursuit of business opportunities that were deemed by the

firm to be positive or favorable. This view is consistent with a recent

definition offered by Lumpkin and Dess (2001, p. 431), in which

proactiveness is viewed as an “opportunity-seeking, forward-looking

perspective involving introducing new products or services ahead of the

competition and acting in anticipation of future demand to create change

and shape the environment”.



The strategic characteristics of living companies



A competing view of the firm is based on the premise that long-term

survival, not financial performance, should be utilized to ultimately

judge the success of an organization (Brenneman et al., 1998; de Geus,

1997). de Geus (1997) described companies that were successful over the

long-term as “living companies”, firms that were able to adapt and evolve

throughout their history. de Geus (1997) drew a “distinction between

‘economic companies,’ which are run as profit machines, and ‘living

companies,’ whose primary purpose is to survive and perpetuate themselves

as ongoing communities” (Stamps, 1997, p. 76). de Geus (1997, p. 52) noted

that:

… mounting evidence suggests that corporations fail because their policies

and practices are based too heavily on the thinking and the language of

economics … companies die because their managers focus exclusively on

producing goods and services and forget that the organization is a

community of human beings that is in business – any business – to stay

alive.

de Geus (1997) claimed that the majority of organizations that were able

to survive and prosper over long periods of time often shared many of the

same characteristics. According to de Geus, these successful organizations

shared four specific attributes in common with one another:

financial conservatism;

sensitivity to the world around them;

awareness of their identity; and

tolerance of new ideas.

These characteristics did not just describe the strategies employed by

these companies, but they described the entire mindset of the corporation.

Organizations that embraced these values were more likely than other firms

to enjoy long-term success, as “these four traits form the essential

character of companies that have functioned successfully for hundreds of

years” (de Geus, 1997, p. 54).

The first characteristic of these organizations, financial conservatism,

allowed these companies to save spare money that might be useful in the

pursuit of future business opportunities. Instead of spending their money

all at one time and in a haphazard manner, financially conservative

organizations invested their money carefully and only after putting a

great deal of thought into the investment. Such companies “understood the

meaning of money in an old-fashioned way; they knew the usefulness of

spare cash … money in hand allowed them to snap up options when their

competitors could not” (de Geus, 1997, p. 53).

Sensitivity to the world around them was the second characteristic of

living companies. These companies were able to learn from and adapt to

their external environment. Even though the environment was constantly

changing around them, these firms maintained flexible strategies and an

open-minded posture that allowed them to change with the environment. A

living company recognized that it “can not control its environment. Rather

it must learn to continuously adapt to it” (Kelly, 1997, p. 96). The

open-minded exchange that existed between organizations and their

environment allowed these firms to “adapt themselves to changes in the

world around them … they were good at learning and adapting” (de Geus,

1997, p. 54).

According to de Geus (1997), the third characteristic that helped

organizations to achieve long-term prosperity was an awareness of their

own identity. In other words, everyone involved with the organization felt

like they were part of a larger community, that the actions of individuals

were all part of a larger whole. This sense of community helped bring

together employees and managers, helped decrease divisiveness between

different divisions within corporations, and helped nurture relationships

between corporations and their customers. At the most basic level,

individuals within these firms embodied a “feeling of belonging to an

organization and identifying with its achievements … case studies

repeatedly show that a sense of community is essential for long-term

survival” (de Geus, 1997, p. 54).

The final characteristic of “living companies” is that they tend to be

tolerant of new and innovative ideas. Instead of fearing the unknown,

these companies thrive on uncertainty and realize that opportunity is

often the twin sister of change. While other companies become tied to old

ideals and established practices, living companies are willing to try new

things in an effort to improve their current standing. The emphasis on

trying new ideas and experimenting with new concepts stresses the

important role that learning plays within these organizations (Brenneman

et al., 1998; de Geus, 1997). The willingness of these companies to

experiment and to develop innovative products and processes often allows

them to take a position of technological leadership within their industry.



Sample


Four family firms were included in these analyses. Information was

collected from personal interviews, company documents, and various other

external sources (i.e. newspapers, the internet, books, etc.). A list of

the strategic actions enacted by each firm since it is founding was then

compiled. Utilizing these strategic actions, three time periods were

determined for each firm that corresponded with the firm's:

inception and early strategic period;

primary growth period; and

mature strategic period.

This was done in order to determine each firm's primary strategic focus

during different times in the company's history. It was expected that this

focus (as evidenced by the strategic actions implemented by the firm

during each time period) would evolve in each company over time. A brief

description of each of the four family firms utilized in this study

follows.



Gulf States Paper Corporation (United States)



Gulf States Paper Corporation is a privately held company that currently

employs approximately 3,000 employees in ten states. The company is the

third largest US supplier of SBS paperboard for folding cartons, is among

the nation's top ten folding carton manufacturers, and is a major lumber

producer (www.gulf-states.com). In 1998, the company's annual revenues

were approximately $500 million. Founded in 1884, the company has

experienced slow but steady growth over its nearly 120 years of existence.

The company has also continued to diversify its operations and expand its

strategic vision during this time period. Gulf States Paper, headquartered

in Tuscaloosa, Alabama, has diversified into new product areas in the

twentieth century. The company currently consists of five distinct

operating divisions:

natural resources;

wood products;

pulp and paperboard;

paperboard packaging; and

business solutions.



Ahlstrom (Finland)



Ahlstrom Corporation has annual net sales of approximately $2 billion and

has almost 7,000 employees (www.ahlstrom.com). Founded in 1851, Ahlstrom

has long been one of the largest industrial corporations in Finland.

Ahlstrom's first paper mill was founded in 1907 (Kauttua) and its first

pulp mill in 1917 (Varkaus). Though the company has diversified into

several sectors, it has mainly operated within the wood-processing

cluster. Today, the company is a leader in high performance fiber-based

materials serving niche markets worldwide. One of the most critical

decisions in Finnish industrial history was made in 1987, when Ahlstrom

unexpectedly sold its paper-producing units, and concentrated instead on

producing its niche products. The owners of the company are today the

fourth through sixth generations after the founder Antti Ahlström

(1827-1896). At the moment, the company is going through a profound

structural change: the company was split into three parts in June 2001.

According to the strategic plan of Ahlstrom Corporation, the ownership

share of the family members will be diminished over the next several

years. Though these plans were made in the late 1990s, they were still not

fully carried out as of August 2005. Meanwhile, Ahlstrom has continued its

concentration on fiber-based speciality materials, such as investments in

new production capacity in Germany in 2003.



Schauman (Finland)



The Finnish pulp and paper producing company Schauman ceased to exist in

1987 when it was merged with Kymmene Corporation. Today, the production

plants of Schauman are part of the UPM-Kymmene Corporation, one of the

leading paper producers in the world. During its last operating year

(1987), Schauman's net sales were approximately ∈500 million and the

company had 7,000 employees. Although Schauman was clearly only a minor

player among the major Finnish companies, it still ranked among the top-20

largest Finnish enterprises from the 1920s onward. Schauman, founded in

1883, concentrated during the early twentieth century on saw milling and

plywood production. It entered the pulp industry in the 1930s and paper

producing in the 1960s. The company went through a structural change in

the 1970s, becoming one of the most essential (market) pulp producers in

Finland. For example, the pulp production capacity of Schauman in 1985 was

the third largest in Finland composing approximately 10 percent of the

total. The investments to the new production capacity were, however, too

overwhelming for a family owned company. As an outcome of these bold

investments, the company incurred a large amount of debt, which in turn

led to the merger in 1987.



MoDo (Sweden)



MoDo was founded in 1872 by the Kempe family. The company, although

publicly listed, was controlled by the same family until 1990. As a result

of a takeover attempt, the family was forced to sell their majority share

of the company in 1990. At that time, the company's major operations were

sawn timber, office paper, newspaper, pulp, and folded cardboard. At the

end of 1990, the company's core business was merged with SCA's office

paper and a reborn company, MoDo Paper, went public. MoDo Paper was at

that time focusing on pulp and office paper. In 2001, MoDo Paper was

merged with M-Real, a company controlled by the forest owner's cooperative

in Finland. M-Real currently employs approximately 22,000, of which 16,000

work outside Finland. Today, MoDo Paper is fully integrated in M-Real's

home and office business division.



Methods



As is typical in historical research, we preferred a research strategy

that combined different longitudinal methods. In the literature, this

approach is seen as being especially appropriate when researching issues

that are relatively inadequately understood (Glaser and Strauss, 1967).

The aim of such inquiry is to facilitate theorizing through a careful

examination of relevant data collected from multiple sources, validated

both by extant theories and ongoing re-encounters with the data

(Eisenhardt, 1989). As the purpose of the analysis was to both “track”

realized strategies and to interpret the logic behind these trajectories,

we pursued a multi-method study.

Following earlier studies analyzing patterns of strategy (Miller and Chen,

1994; Mintzberg and Waters, 1982; Murmann, 2003), we engaged in a research

process typical in comparative case analyses (Yin, 1989). The

quantification part of the study followed the logic of a tight research

design in which the coding scheme plays an important role. On the

contrary, we also engaged in more inductive narrative analyses in order to

enhance the validity of our interpretation. This essentially follows the

example of Mintzberg and Waters (1982) when attempting to find the change

patterns in strategies but equally the mechanisms driving them. It is also

important to note that our study is not seeking a full historical account

of the particular companies as much as an understanding of the nature of

family owned companies.



Data



The material for the analysis of strategic patterns is a combination of

archival material including industry statistics and calendars as well as

annual reports and company internal materials. During the research

process, we engaged in intensive utilization of various non-public, as

well as public, archival materials in the cases of the chosen firms. We

started our data collection by examining a variety of public sources such

as company histories and magazine articles describing the historical

development of the companies. Simultaneously, we collected annual reports

and relevant trade statistics. We used this material both for historical

understanding of the companies' development and for identification of the

strategic actions. In defining strategic actions, we followed Miller and

Chen (1994) who refer to:

… [including] major facilities expansions, mergers and acquisitions,

strategic alliances, and important new products or services … strategic

actions involve a larger expenditure of resources, a longer time horizon,

and a greater departure from the status quo than do tactical actions

(Miller and Chen, 1994, p. 2).

Third, we engaged in an extensive examination of non-public archival

material focusing on strategic issues at the corporate level. This

material includes protocols, correspondence, consulting reports, financial

information, and other data linked to the strategic management of the

companies.



Analysis



Our analysis started with an inductive historical analysis of the company

development paths. During this phase, we wrote four independent case

histories that holistically described the different strategies and

structural solutions undertaken. This effort produced an understanding of

the prime characteristics of the studied companies vis-à-vis their

competitive and institutional environments and, more generally, the

essential logic driving the different actions undertaken through their

history. After the initial analyses, we analyzed the patterns of realized

strategies. In doing so, we followed the tradition in competitive dynamics

literature (Chen and Hambrick, 1995; Hambrick et al., 1996) in plotting

strategic actions and situating them in chronological order. As is typical

in competitive dynamics research, we utilized an industry-specific code

scheme that has been used in similar research settings.

The paper and pulp industry represents a mature line of business with high

entry and exit costs, which significantly affects the strategic

possibilities that firms possess. Each of the four firms' strategic

actions was categorized according to the classification scheme developed

by Näsi et al. (1998). First, each strategic action was categorized as:

internal, peaceful (such as buying a new plant);

internal, tense (such as lowering employee salaries);

external, peaceful (such as forming an alliance); or

external, tense (such as breaking off a cooperative agreement).

Second, each strategic action was also categorized as an:

acquisition;

sale;

merger;

breaking up of a company (merger);

alliance; or

breaking off of cooperation (alliance).

These two dimensions provided insights into the nature of a firm's

strategic vision during a particular period in the company's history, or

more specifically, whether the firm's strategies tended to be focused more

so on the internal operations of the company or on the firm's external

environment[1]. The identification of actions was conducted by the same

researchers that analyzed the historical development of each company. To

avoid differences in deciding which actions should be chosen two members

of the research group assessed the initial lists of actions and made the

final decisions. Similarly, the coding was conducted by the individual

researchers but verified by two researchers. Finally, the action databases

were combined for the initial data analysis and finally for the analysis

of the evolution of the strategic patterns.



Results



An analysis of the arena in which the four family firms' strategic actions

took place provides support for the conclusion that these companies have

become more outward-looking in orientation over time (Table I). While

approximately 70 percent of their total strategic actions during the first

two periods took place in the internal arena, this percentage fell to

approximately 50 percent during the third-time period. The number of

external, peaceful actions employed by the companies approximately doubled

during the third period. The number of external, tense actions also

increased significantly, from around 12 percent of the companies' total

actions during the first-time period to approximately 22 percent of the

actions over the third period. Overall, this suggests that family firms

tend to become more willing to perform external strategic moves over time.

The types of strategic actions practiced by these companies have also

continued to evolve over time (Table II). While acquisitions and sales

constituted the primary strategic actions in all three-time periods, the

emphasis on alliance formation grew significantly as the companies

matured. The percentage of alliances formed by the four companies doubled

from the second- to third-time period, increasing from approximately 9 to

20 percent. Compared to the strategies employed by these companies during

their early existence, they appear to have become much more outward

looking and proactive in their strategy formation over time. This also

suggests that strategic alliances are one important way that family firms

cope with increasing environmental pressures as they reach the maturity

phase of their company life cycle.



Discussion



Taken together, the four characteristics of living companies are extremely

similar to many of the attributes typically associated with family firms.

Family firms are often financially conservative, since a common rationale

given for the creation of a family firm is to provide for several

generations of family descendents. These firms also tend to have very

strong identities, and maintain a willingness to adapt to the world around

them, all characteristics associated with de Geus's (1997) “living

companies”. As such, it was expected that the four family firms in this

study would embody many of the same characteristics posited for these

types of organizations. The primary focus of this study was to answer the

question of whether family firms typically adopt growth strategies more

closely associated with entrepreneurial organizations or living companies.

Throughout the early part of their history, these four organizations

embodied many of the characteristics often associated with living

companies. The firms in our sample tended to enact financially

conservative strategies, and were willing to spend money when need be, but

also tried to avoid excessive amounts of corporate spending. The

geographic expansion of these firms and the diversification of their

product lines indicate that the companies were willing to adapt to changes

in their external environment. However, these companies did not embody the

prototypical characteristics of entrepreneurial firms during their early

years. They were neither overly willing to take risks nor were they

extremely proactive in their decision-making. During the early part of

their existence, they tended to be tightly managed companies that

maintained a very inward-looking perspective. However, the companies

tended to become more involved in proactive behaviors (alliances, joint

ventures, etc.) as they matured. As such, a strong case can be made that

these companies became more entrepreneurial over time.

Throughout their evolution, the strategies enacted by these four companies

have been formulated with two main issues in mind:

security; and

control.

The financial conservatism that has been so typical of these companies, as

well as the lack of willingness by top management to take extreme risks,

has been an effort to maintain their financial security. The continuous

diversification of their product lines has also helped diminish the

companies' overall risk of poor economic performance (Freeman and Hannan,

1983). The more recent use of mergers and acquisitions in the face of

environmental pressures is also a common strategy employed by

organizations in uncertain environments (Freeman et al., 1983; Hannan and

Freeman, 1977). The second goal of the companies appears to have been

maintaining the ownership of the firm within the family unit.



Implications



The results of this study suggest that family firms typically adopt

conservative strategies associated with “living companies” in the early

period of their strategic growth. During their formative years, family

firms often implement financially conservative strategies in an effort to

conserve their limited resources. Such firms also place an emphasis on

maintaining tight control of the strategic decision-making process within

the family unit. This is not surprising, given previous research

suggesting that the primary focus of family firms is on “maintaining

family control and avoiding debt” and that family firms often maintain a

long-term strategic perspective (Upton et al., 2001, p. 62).

However, this study also suggests that increasing environmental pressures

often force family firms to embrace a more entrepreneurial posture as the

company matures. Over time, these firms tended to make riskier investments

and often undergo a transition from family management to professional

management. It is interesting to note that, while each of the firms in

this study tended to become more entrepreneurial over time, several of the

firms were more successful in doing so. For example, Ahlstrom has

continued to expand and grow and is a significant player in its respective

industry. Also, Ahlstrom is currently in the process of being transformed

to a listed company. Gulf States has experienced modest levels of growth,

but still remains primarily a regional player. On the other hand,

Schaumann and MoDo both merged with other companies. While this study has

primarily examined the historical development of growth strategies within

family firms, future research should examine the various environmental and

competitive factors that impact the success of these chosen strategies.

This study has several important implications. First, it appears that the

stage in the company life cycle plays an important role in determining the

strategic behavior of family firms. These results suggest that family

firms tend to be very conservative and inward looking during their early

years, but become more entrepreneurial over time. This study also suggests

that family firms tend to maintain a long-term orientation when crafting

and executing their organizational strategies. Second, even though the

firms considered in this study were from various cultures, their strategic

development over time was very similar. This tentatively suggests that the

evolution of the strategic process that occurs within family firms may be

generalizable across cultures. Third, our findings indicate that there may

be an important distinction between family firms and entrepreneurial

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Corresponding author



Patrick M. Kreiser can be contacted at: آدرس ایمیل جهت جلوگیری از رباتهای هرزنامه محافظت شده اند، جهت مشاهده آنها شما نیاز به فعال ساختن جاوا اسکریپت دارید


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