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Performance implications of institutionalization process in family-owned businesses: Evidence from an emerging economy

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  • Alpay, Güven
  • Bodur, Muzaffer
  • YIlmaz, Cengiz
  • Çetinkaya, Saadet
  • ArIkan, Laçin

Abstract

This paper attempts to understand the role of two highly relevant founder family characteristics, harmony among family members and the degree of democratization in decision-making, in the institutionalization and adaptive capability development processes of family firms in Turkey as an exemplar of an emerging market. The paper examines how institutionalization and adaptability jointly drive firm-level differences in quantitative (i.e., sales growth, market share, and return on investment) and qualitative performance (i.e., quality of goods/services, new product development, employee satisfaction) components. Data were collected from 436 respondents in 132 family firms through structured questionnaires administered to at least three respondents from each firm. Findings indicated that among the institutionalization dimensions, transparency had the strongest effect on both quantitative and qualitative firm performance, whereas adaptability influenced qualitative performance only. Harmony in family relations increased efforts for institutionalization, whereas democracy in decision-making enhanced adaptability. Implications of these findings are discussed and several future research directions are suggested.

Suggested Citation

  • Alpay, Güven & Bodur, Muzaffer & YIlmaz, Cengiz & Çetinkaya, Saadet & ArIkan, Laçin, 2008. "Performance implications of institutionalization process in family-owned businesses: Evidence from an emerging economy," Journal of World Business, Elsevier, vol. 43(4), pages 435-448, October.
  • Handle: RePEc:eee:worbus:v:43:y:2008:i:4:p:435-448
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    References listed on IDEAS

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    1. Aldrich, Howard E. & Cliff, Jennifer E., 2003. "The pervasive effects of family on entrepreneurship: toward a family embeddedness perspective," Journal of Business Venturing, Elsevier, vol. 18(5), pages 573-596, September.
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    Cited by:

    1. Roland Kidwell & Franz Kellermanns & Kimberly Eddleston, 2012. "Harmony, Justice, Confusion, and Conflict in Family Firms: Implications for Ethical Climate and the “Fredo Effect”," Journal of Business Ethics, Springer, vol. 106(4), pages 503-517, April.
    2. Harun Taşkin & Ünal Atakan Kahraman & Cemalettin Kubat, 0. "Evaluation of the hospital service in Turkey using fuzzy decision making approach," Journal of Intelligent Manufacturing, Springer, vol. 0, pages 1-12.

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