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Human Agents, Contexts, and Institutional Change: The Decline of Family in the Leadership of Business Groups


  • Chi-Nien Chung

    () (Department of Management and Organization, National University of Singapore Business School, Singapore 117592)

  • Xiaowei Luo

    () (Department of Business Administration, University of Illinois, Urbana-Champaign, Champaign, Illinois 61820)


This study examines the interaction between change-minded human agents and environmental and organizational contingencies to understand contested change in highly institutionalized practices. We propose a theory of how individuals, including those who are structurally highly embedded, can become change agents when confronted with amplified institutional contradictions. Using the empirical example of family presence in the leadership of Taiwanese business groups, we argue that despite the structural constraints on second-generation key leaders, these leaders are more likely to actualize their motivation to reduce family presence in the contexts of market-oriented transition and highly diversified business groups, and that key leaders with a management education from the United States are more likely to deviate from this institutionalized practice than are non-U.S.-educated key leaders, because they can transport ideas from different business models. A longitudinal analysis of the top 100 business groups in Taiwan between 1977 and 1998 largely supports our arguments. This study contributes to recent endeavors to understand antecedents to institutional change with an explicit focus on the interplay between agency and context, and to business-group research by examining the change of one foundational feature of the group form.

Suggested Citation

  • Chi-Nien Chung & Xiaowei Luo, 2008. "Human Agents, Contexts, and Institutional Change: The Decline of Family in the Leadership of Business Groups," Organization Science, INFORMS, vol. 19(1), pages 124-142, February.
  • Handle: RePEc:inm:ororsc:v:19:y:2008:i:1:p:124-142
    DOI: 10.1287/orsc.1070.0272

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    References listed on IDEAS

    1. Granovetter, Mark, 1995. "Coase Revisited: Business Groups in the Modern Economy," Industrial and Corporate Change, Oxford University Press, vol. 4(1), pages 93-130.
    2. Claessens, Stijn & Djankov, Simeon & Lang, Larry H. P., 2000. "The separation of ownership and control in East Asian Corporations," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 81-112.
    3. Gibson, Michael S., 2003. "Is Corporate Governance Ineffective in Emerging Markets?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(1), pages 231-250, March.
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    Cited by:

    1. Andrea Dello Sbarba & Alessandro Marelli, 2018. "Family-controlled businesses and management control: the framing of “shareholder-oriented” practices," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(4), pages 417-456, February.
    2. Xuesong Geng & Toru Yoshikawa & Asli M. Colpan, 2016. "Leveraging foreign institutional logic in the adoption of stock option pay among Japanese firms," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1472-1492, July.
    3. Holmes, R. Michael & Hoskisson, Robert E. & Kim, Hicheon & Wan, William P. & Holcomb, Tim R., 2018. "International strategy and business groups: A review and future research agenda," Journal of World Business, Elsevier, vol. 53(2), pages 134-150.
    4. Torres, Juan Pablo & Jara Bertín, Mauricio & López-Iturriaga, Félix J., 2017. "Corporate control and firm value: The bright side of business groups," Journal of Family Business Strategy, Elsevier, vol. 8(2), pages 99-108.
    5. Schmid, Stefan & Altfeld, Frederic & Dauth, Tobias, 2018. "Americanization as a driver of CEO pay in Europe: The moderating role of CEO power," Journal of World Business, Elsevier, vol. 53(4), pages 433-451.
    6. Miller, Danny & Amore, Mario Daniele & Le Breton-Miller, Isabelle & Minichilli, Alessandro & Quarato, Fabio, 2018. "Strategic distinctiveness in family firms: Firm institutional heterogeneity and configurational multidimensionality," Journal of Family Business Strategy, Elsevier, vol. 9(1), pages 16-26.
    7. Danny Miller & Isabelle Le Breton‐Miller & Richard H. Lester, 2011. "Family and Lone Founder Ownership and Strategic Behaviour: Social Context, Identity, and Institutional Logics," Journal of Management Studies, Wiley Blackwell, vol. 48(1), pages 1-25, January.


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