IDEAS home Printed from https://ideas.repec.org/a/eee/fambus/v12y2021i4s1877858521000061.html
   My bibliography  Save this article

When so much is at stake: Understanding organizational brinkmanship in family business

Author

Listed:
  • Smith, Celina
  • Nordqvist, Mattias
  • De Massis, Alfredo
  • Miller, Danny

Abstract

The role of brinkmanship in politics and international affairs has captured headlines and popular attention around the globe. It is a behavioral phenomenon whereby to gain concessions actors like states and governments take actions that may not only harm their adversaries, but also themselves. However, hidden from view, and far less understood is its role in business and management. This is an important oversight not only because stakes can be high in business, but also because how members of a firm's dominant coalition respond to existential threats can be critical for organizational outcomes. We introduce the notion of organizational brinkmanship and outline how the process unfolds in a context where family engagement in the business can also serve to heighten potential stakes. With our focus on family business we unravel circumstances where the propensity to maintain historical and current family control over the business can increase susceptibility to engaging in organizational brinkmanship. The cornerstone of our contribution is to develop a conceptual model that explains how the process of brinkmanship can unfold in a family business. We also offer a future research agenda to guide scholarly attention on this important yet under-explored area of research and suggest propositions. This work is particularly timely in light of increasing environmental instability around the globe.

Suggested Citation

  • Smith, Celina & Nordqvist, Mattias & De Massis, Alfredo & Miller, Danny, 2021. "When so much is at stake: Understanding organizational brinkmanship in family business," Journal of Family Business Strategy, Elsevier, vol. 12(4).
  • Handle: RePEc:eee:fambus:v:12:y:2021:i:4:s1877858521000061
    DOI: 10.1016/j.jfbs.2021.100425
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1877858521000061
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jfbs.2021.100425?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Powell, Robert, 1987. "Crisis Bargaining, Escalation, and MAD," American Political Science Review, Cambridge University Press, vol. 81(3), pages 717-735, September.
    2. Michael Carney, 2005. "Corporate Governance and Competitive Advantage in Family–Controlled Firms," Entrepreneurship Theory and Practice, , vol. 29(3), pages 249-265, May.
    3. Elena Rivo-López & Mónica Villanueva-Villar & Miguel Michinel-Álvarez & Francisco Reyes-Santías, 2021. "Corporate Social Responsibility and Family Business in the Time of COVID-19: Changing Strategy?," Sustainability, MDPI, vol. 13(4), pages 1-13, February.
    4. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    5. Jess H. Chua & James J. Chrisman & Alfredo De Massis, 2015. "A Closer Look at Socioemotional Wealth: Its Flows, Stocks, and Prospects for Moving Forward," Entrepreneurship Theory and Practice, , vol. 39(2), pages 173-182, March.
    6. Alexander Dyck & Luigi Zingales, 2004. "Private Benefits of Control: An International Comparison," Journal of Finance, American Finance Association, vol. 59(2), pages 537-600, April.
    7. Powell, Robert, 1988. "Nuclear Brinkmanship with Two-Sided Incomplete Information," American Political Science Review, Cambridge University Press, vol. 82(1), pages 155-178, March.
    8. Chua, Jess H. & Chrisman, James J. & De Massis, Alfredo & Wang, Hao, 2018. "Reflections on family firm goals and the assessment of performance," Journal of Family Business Strategy, Elsevier, vol. 9(2), pages 107-113.
    9. Kroenig, Matthew, 2013. "Nuclear Superiority and the Balance of Resolve: Explaining Nuclear Crisis Outcomes," International Organization, Cambridge University Press, vol. 67(1), pages 141-171, January.
    10. Sarah Fitz-Koch & Mattias Nordqvist & Sara Carter & Erik Hunter, 2018. "Entrepreneurship in the Agricultural Sector: A Literature Review and Future Research Opportunities," Entrepreneurship Theory and Practice, , vol. 42(1), pages 129-166, January.
    11. Luis R. Gomez–Mejia & Joanna Tochman Campbell & Geoffrey Martin & Robert E. Hoskisson & Marianna Makri & David G. Sirmon, 2014. "Socioemotional Wealth as a Mixed Gamble: Revisiting Family Firm R&D Investments with the Behavioral Agency Model," Entrepreneurship Theory and Practice, , vol. 38(6), pages 1351-1374, November.
    12. Brian L. Connelly & Robert E. Hoskisson & Laszlo Tihanyi & S. Trevis Certo, 2010. "Ownership as a Form of Corporate Governance," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1561-1589, December.
    13. Franz W. Kellermanns & Kimberly A. Eddleston, 2004. "Feuding Families: When Conflict Does a Family Firm Good," Entrepreneurship Theory and Practice, , vol. 28(3), pages 209-228, May.
    14. Pramodita Sharma & S. Manikutty, 2005. "Strategic Divestments in Family Firms: Role of Family Structure and Community Culture," Entrepreneurship Theory and Practice, , vol. 29(3), pages 293-311, May.
    15. Liliana Pérez-Nordtvedt & Susanna Khavul & David A. Harrison & Jeffrey E. McGee, 2014. "Adaptation to Temporal Shocks: Influences of Strategic Interpretation and Spatial Distance," Journal of Management Studies, Wiley Blackwell, vol. 51(6), pages 869-897, September.
    16. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 1999. "Corporate Ownership Around the World," Journal of Finance, American Finance Association, vol. 54(2), pages 471-517, April.
    17. Miller, Danny & Steier, Lloyd & Le Breton-Miller, Isabelle, 2003. "Lost in time: intergenerational succession, change, and failure in family business," Journal of Business Venturing, Elsevier, vol. 18(4), pages 513-531, July.
    18. Dye, Alan & Sicotte, Richard, 2006. "How brinkmanship saved Chadbourne: Credibility and the International Sugar Agreement of 1931," Explorations in Economic History, Elsevier, vol. 43(2), pages 223-256, April.
    19. James J. Chrisman & Esra Memili & Kaustav Misra, 2014. "Nonfamily Managers, Family Firms, and the Winner's Curse: The Influence of Noneconomic Goals and Bounded Rationality," Entrepreneurship Theory and Practice, , vol. 38(5), pages 1-25, September.
    20. Belén Villalonga & Raphael Amit, 2010. "Family Control of Firms and Industries," Financial Management, Financial Management Association International, vol. 39(3), pages 863-904, September.
    21. Habbershon, Timothy G. & Williams, Mary & MacMillan, Ian C., 2003. "A unified systems perspective of family firm performance," Journal of Business Venturing, Elsevier, vol. 18(4), pages 451-465, July.
    22. Sine, Wesley D. & David, Robert J., 2003. "Environmental jolts, institutional change, and the creation of entrepreneurial opportunity in the US electric power industry," Research Policy, Elsevier, vol. 32(2), pages 185-207, February.
    23. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    24. Jean–Luc Arregle & Lucia Naldi & Mattias Nordqvist & Michael A. Hitt, 2012. "Internationalization of Family–Controlled Firms: A Study of the Effects of External Involvement in Governance," Entrepreneurship Theory and Practice, , vol. 36(6), pages 1115-1143, November.
    25. G.T. Lumpkin & Keith H. Brigham & Todd W. Moss, 2010. "Long-term orientation: Implications for the entrepreneurial orientation and performance of family businesses," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 22(3-4), pages 241-264, May.
    26. Jean-Luc Arregle & Mattias Nordqvist & Lucia Naldi & M.A. Hitt, 2012. "Internationalization of Family-Controlled Firms : A Study of the Effects of External Involvement in Governance," Post-Print hal-02312678, HAL.
    27. Josip Kotlar & Alfredo De Massis, 2013. "Goal Setting in Family Firms: Goal Diversity, Social Interactions, and Collective Commitment to Family–Centered Goals," Entrepreneurship Theory and Practice, , vol. 37(6), pages 1263-1288, November.
    28. Jess H. Chua & James J. Chrisman & Pramodita Sharma, 1999. "Defining the Family Business by Behavior," Entrepreneurship Theory and Practice, , vol. 23(4), pages 19-39, July.
    29. Elitsa R. Banalieva & Kimberly A. Eddleston & Thomas M. Zellweger, 2015. "When do family firms have an advantage in transitioning economies? Toward a dynamic institution-based view," Strategic Management Journal, Wiley Blackwell, vol. 36(9), pages 1358-1377, September.
    30. Michael Lubatkin & Eric Gedajlovic & William S. Schulze, 2004. "Crossing the threshold from founder management to professional management : A governance perspective," Post-Print hal-02311640, HAL.
    31. Brian L. Connelly & Robert E. Hoskisson & Laszlo Tihanyi & S. Trevis Certo, 2010. "Ownership as a Form of Corporate Governance," Journal of Management Studies, Wiley Blackwell, vol. 47(8), pages 1561-1589, December.
    32. Demsetz, Harold, 1983. "The Structure of Ownership and the Theory of the Firm," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 375-390, June.
    33. James J. Chrisman & Jess H. Chua & Pramodita Sharma, 2005. "Trends and Directions in the Development of a Strategic Management Theory of the Family Firm," Entrepreneurship Theory and Practice, , vol. 29(5), pages 555-575, September.
    34. Danny Miller & Jangwoo Lee & Sooduck Chang & Isabelle Le Breton-Miller, 2009. "Filling the institutional void: The social behavior and performance of family vs non-family technology firms in emerging markets," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(5), pages 802-817, June.
    35. Alfredo De Massis & Emanuela Rondi, 2020. "Covid‐19 and the Future of Family Business Research," Journal of Management Studies, Wiley Blackwell, vol. 57(8), pages 1727-1731, December.
    36. Thomas M. Zellweger & Robert S. Nason & Mattias Nordqvist & Candida G. Brush, 2013. "Why Do Family Firms Strive for Nonfinancial Goals? An Organizational Identity Perspective," Entrepreneurship Theory and Practice, , vol. 37(2), pages 229-248, March.
    37. Belén Villalonga & Raphael Amit, 2009. "How Are U.S. Family Firms Controlled?," Review of Financial Studies, Society for Financial Studies, vol. 22(8), pages 3047-3091, August.
    38. Luis R. Gomez‐Mejia & Marianna Makri & Martin Larraza Kintana, 2010. "Diversification Decisions in Family‐Controlled Firms," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 223-252, March.
    39. Shepherd, Dean A. & Wiklund, Johan & Haynie, J. Michael, 2009. "Moving forward: Balancing the financial and emotional costs of business failure," Journal of Business Venturing, Elsevier, vol. 24(2), pages 134-148, March.
    40. W. Gibb Dyer Jr. & David A. Whetten, 2006. "Family Firms and Social Responsibility: Preliminary Evidence from the S&P 500," Entrepreneurship Theory and Practice, , vol. 30(6), pages 785-802, November.
    41. Irmak Erdogan & Emanuela Rondi & Alfredo De Massis, 2020. "Managing the Tradition and Innovation Paradox in Family Firms: A Family Imprinting Perspective," Entrepreneurship Theory and Practice, , vol. 44(1), pages 20-54, January.
    42. James J. Chrisman & Jess H. Chua & Allison W. Pearson & Tim Barnett, 2012. "Family Involvement, Family Influence, and Family–Centered Non–Economic Goals in Small Firms," Entrepreneurship Theory and Practice, , vol. 36(2), pages 267-293, March.
    43. Eric Gedajlovic & Michael H. Lubatkin & William S. Schulze, 2004. "Crossing the Threshold from Founder Management to Professional Management: A Governance Perspective," Journal of Management Studies, Wiley Blackwell, vol. 41(5), pages 899-912, July.
    44. Celina Smith, 2016. "Environmental Jolts : Understanding How Family Firms Respond and Why," Post-Print hal-02311914, HAL.
    45. Karl E. Weick, 1988. "Enacted Sensemaking In Crisis Situations[1]," Journal of Management Studies, Wiley Blackwell, vol. 25(4), pages 305-317, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stephen J. Smulowitz & Didier Cossin & Alfredo De Massis & Hongze (Abraham) Lu, 2023. "Wrongdoing in Publicly Listed Family- and Nonfamily-Owned Firms: A Behavioral Perspective," Entrepreneurship Theory and Practice, , vol. 47(4), pages 1233-1264, July.
    2. Le Breton-Miller, Isabelle & Miller, Danny, 2023. "Contradiction and disaggregation for family firm research," Journal of Family Business Strategy, Elsevier, vol. 14(1).
    3. Deferne, Marie & Bertschi-Michel, Alexandra & de Groote, Julia, 2023. "The role of trust in family business stakeholder relationships: A systematic literature review," Journal of Family Business Strategy, Elsevier, vol. 14(1).
    4. Elisa Conz & Giovanna Magnani & Antonella Zucchella & Alfredo Massis, 2023. "Responding to unexpected crises: The roles of slack resources and entrepreneurial attitude to build resilience," Small Business Economics, Springer, vol. 61(3), pages 957-981, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Debellis, Francesco & De Massis, Alfredo & Messeni Petruzzelli, Antonio & Frattini, Federico & Del Giudice, Manlio, 2021. "Strategic agility and international joint ventures: The willingness-ability paradox of family firms," Journal of International Management, Elsevier, vol. 27(1).
    2. Junsheng Dou & Emma Su & Song Wang, 2019. "When Does Family Ownership Promote Proactive Environmental Strategy? The Role of the Firm’s Long-Term Orientation," Journal of Business Ethics, Springer, vol. 158(1), pages 81-95, August.
    3. Wright, Mike & Kellermanns, Franz W., 2011. "Family firms: A research agenda and publication guide," Journal of Family Business Strategy, Elsevier, vol. 2(4), pages 187-198.
    4. Alfredo De Massis & Josip Kotlar & Pietro Mazzola & Tommaso Minola & Salvatore Sciascia, 2018. "Conflicting Selves: Family Owners' Multiple Goals and Self-Control Agency Problems in Private Firms," Entrepreneurship Theory and Practice, , vol. 42(3), pages 362-389, May.
    5. Michael Carney & Marc Van Essen & Eric R. Gedajlovic & Pursey P.M.A.R. Heugens, 2015. "What do we know about Private Family Firms? A Meta–Analytical Review," Entrepreneurship Theory and Practice, , vol. 39(3), pages 513-544, May.
    6. Hansen, Christopher & Block, Joern, 2020. "Exploring the relation between family involvement and firms’ financial performance: A replication and extension meta-analysis," Journal of Business Venturing Insights, Elsevier, vol. 13(C).
    7. Carney, Michael & Duran, Patricio & van Essen, Marc & Shapiro, Daniel, 2017. "Family firms, internationalization, and national competitiveness: Does family firm prevalence matter?," Journal of Family Business Strategy, Elsevier, vol. 8(3), pages 123-136.
    8. Ivan Miroshnychenko & Alfredo De Massis & Danny Miller & Roberto Barontini, 2021. "Family Business Growth Around the World," Entrepreneurship Theory and Practice, , vol. 45(4), pages 682-708, July.
    9. Schickinger, Antonia & Bierl, Philipp A. & Leitterstorf, Max P. & Kammerlander, Nadine, 2023. "Family-related goals, entrepreneurial investment behavior, and governance mechanisms of single family offices: An exploratory study," Journal of Family Business Strategy, Elsevier, vol. 14(2).
    10. Patricio Duran & Nadine Kammerlander & Marc van Essen & Thomas Zellweger, 2016. "Doing More with Less : Innovation Input and Output in Family Firms," Post-Print hal-02276703, HAL.
    11. James J. Chrisman & Esra Memili & Kaustav Misra, 2014. "Nonfamily Managers, Family Firms, and the Winner's Curse: The Influence of Noneconomic Goals and Bounded Rationality," Entrepreneurship Theory and Practice, , vol. 38(5), pages 1-25, September.
    12. Weiping Liu & Haibin Yang & Guangxi Zhang, 2012. "Does family business excel in firm performance? An institution-based view," Asia Pacific Journal of Management, Springer, vol. 29(4), pages 965-987, December.
    13. Debellis, Francesco & Rondi, Emanuela & Plakoyiannaki, Emmanuella & De Massis, Alfredo, 2021. "Riding the waves of family firm internationalization: A systematic literature review, integrative framework, and research agenda," Journal of World Business, Elsevier, vol. 56(1).
    14. Cao, Feng & Li, Sifei & Dai, Ming & Li, Jing, 2023. "Your heart is where your treasure is: Family chairman and tax avoidance in family-controlled firms," Journal of Business Research, Elsevier, vol. 154(C).
    15. Thomas M. Zellweger & Franz W. Kellermanns & James J. Chrisman & Jess H. Chua, 2012. "Family Control and Family Firm Valuation by Family CEOs: The Importance of Intentions for Transgenerational Control," Organization Science, INFORMS, vol. 23(3), pages 851-868, June.
    16. D’Angelo, Alfredo & Majocchi, Antonio & Buck, Trevor, 2016. "External managers, family ownership and the scope of SME internationalization," Journal of World Business, Elsevier, vol. 51(4), pages 534-547.
    17. Cambrea, Domenico Rocco & Ponomareva, Yuliya & Pittino, Daniel & Minichilli, Alessandro, 2022. "Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms," Journal of Family Business Strategy, Elsevier, vol. 13(3).
    18. Rosalia Santulli & Mariateresa Torchia & Andrea Calabrò & Carmen Gallucci, 2019. "Family ownership concentration and firm internationalization: integrating principal-principal and socioemotional wealth perspectives," Journal of International Entrepreneurship, Springer, vol. 17(2), pages 220-248, June.
    19. James J. Chrisman & Jess H. Chua & Pramodita Sharma, 2005. "Trends and Directions in the Development of a Strategic Management Theory of the Family Firm," Entrepreneurship Theory and Practice, , vol. 29(5), pages 555-575, September.
    20. Lu, Feifei & Zhu, Zhu & He, Xiaogang, 2021. "Aspirations of Chinese families-in-business: Development of a reliable measurement instrument," Journal of Family Business Strategy, Elsevier, vol. 12(4).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:fambus:v:12:y:2021:i:4:s1877858521000061. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/719791/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.