3^rd Global Entrepreneurship Congress

Biography

Biography: Dr Goswami

Abstract

Family businesses focus on resilience more than performance. They forgo the excess returns available during good times in order to increase their odds of survival during bad times. Family firms may  survive even in future  in large numbers because family involvement provides temporary advantages in early stages of venture development (Chang, Chrisman, Chua, & Kellermanns, 2008). Even if family firms are not resilient  and  become indistinguishable from nonfamily firms as predicted by institutional isomorphism, there can be more of them at a  time. To add further, evidence continues to prove  that the characteristics and behaviours of family firms are different from those of nonfamily firms and that considerable variation can be witnessed  among family firms across economic systems (Steier, 2009). For example, family firms are often constrained by both the quality and the quantity of their human capital (Verbeke & Kano, 2010). A common solution is professionalization, but this may lead to other problems that are equally difficult to handle  unless the fundamental governance systems and behaviors of the family firm are also changed (Chua, Chrisman, & Bergiel, 2009). Likewise, family firms have been characterized as loss averse with respect to their socioemotional wealth (Gómez-Mejía, Haynes, Núñez-Nickel, & Monyano-Fuentes, 2007), an indicator of the importance of the achievement of family-centered noneconomic goals. This loss aversion can, in some instances, lead to risk aversion (Gómez-Mejía, Makri, & Larraza-Kintana, 2010) .How fundamental characteristics associated with  family firms (noneconomic goals, intentions for intrafamily succession, altruism, and social capital) lead to governance systems that make searching, identifying , and exploiting  of opportunities a reality can be examined. To put  differently, loss prevention may  jettison  the size of the investments made in innovative activities by family firms but may not gauge  the efficiency and effectiveness of the investments they do make over time. They  can utilize social capital (Gedajlovic & Carney, 2010) unabashedly. But there is a paucity of measures of how social capital is formed ( Arregle, Hitt, Sirmon, & Very, 2007). The resilience of family firms appears to be a function of how they respond to the need to infuse managerial talent in the firm without losing control, to the need to balance economic and noneconomic goals over changing  time periods,  to the percolating need to refurbish  unique governance systems to innovate and  extract maximum value from the social capital they possess.