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Family Firm Governance, Strategic Conformity, and Performance: Institutional vs. Strategic Perspectives

Author

Listed:
  • Danny Miller

    (HEC Montréal, Montréal, Quebec H3T 2A7; and University of Alberta, Edmonton, Alberta T6G 2R6, Canada)

  • Isabelle Le Breton-Miller

    (HEC Montréal, Montréal, Quebec H3T 2A7; and University of Alberta, Edmonton, Alberta T6G 2R6, Canada)

  • Richard H. Lester

    (Texas A&M University, College Station, Texas 77842)

Abstract

A fundamental schism divides the family firm and strategy literatures, on the one hand, and the institutional literature, on the other, regarding both the situational prevalence and the utility of conforming behavior. The first two schools, respectively, view strategic differentiation as especially common among family firms and an important source of competitive advantage. By contrast, the reasoning of institutionalists would suggest that family firms will be subject to unusually powerful motivations to conform, in part because of their pursuit of socioemotional wealth objectives. Unfortunately, the relationships between conformity and family firm governance—and, in fact, governance in general—have not been amply studied. This analysis of Fortune 1000 firms finds considerable support for the institutional perspective: family involvement is related to greater, not lesser, conformity in many aspects of strategy. Although strategic conformity related to superior returns on assets, it did not enhance firm market valuations.

Suggested Citation

  • Danny Miller & Isabelle Le Breton-Miller & Richard H. Lester, 2013. "Family Firm Governance, Strategic Conformity, and Performance: Institutional vs. Strategic Perspectives," Organization Science, INFORMS, vol. 24(1), pages 189-209, February.
    • Handle: RePEc:inm:ororsc:v:24:y:2013:i:1:p:189-209
    DOI: 10.1287/orsc.1110.0728
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    References listed on IDEAS

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