Family Business And Competitive Strategy Research

Family firm are those whose policy and direction are subject to significant influence by one or more family units. This influence is exercised through ownership and sometimes through the participations of family members in management (Davis, 1983). The influence of family on business is extended to their governance and management. In our chapter, after we describe the family firms characteristics we focus on the influence of family in the competitive strategy choice. So far, it is impossible to find contributions that analyse this relationship directly; in our opinion this is related to the major difficult to understand what is relevant in this kind of choice for any firms. Still, contributions in the family business field highlighted that the organizational culture in family firms is an important strategic resource that can be used to gain a competitive advantage (Zahra, Hayton, Salvato, 2004). Moreover, family firms have the unique characteristics of five resources and attributes (human capital, social capital, patient capital, survivability capital, governance structure attribute) that provide potential advantage over non family firms are (Sirmon and Hitt, 2003). According to these researchers we also believe that the family as decision maker’s has unique resources that influence highly the competitive strategy choice; thus, in our paper we first review the literature on family business and competitive strategy. Second, we analyse the family as decision maker in the family business and third we link its characteristics to the competitive strategy. The family decision maker’s characteristics relevant for the strategic choice are: level of commitment, long term vision and level of distinctiveness. More specifically, this uniqueness link with the differentiation strategy because the family owners always foster for a niche strategy as demonstrated by our anecdotal results.