Hostname: page-component-78c5997874-lj6df Total loading time: 0 Render date: 2024-11-13T14:51:11.158Z Has data issue: false hasContentIssue false
  • English
  • Français

Attitudes and expectations of shareholders: The case of the multi-generation family business

Published online by Cambridge University Press:  02 February 2015

Jill Thomas
Jill Thomas*
Affiliation:
University of Adelaide Business School, Adelaide SA, Australia
Get access Rights & Permissions [Opens in a new window]

Abstract

As family shareholder support is essential for the ongoing viability of the business as a family business, multi-generation family businesses which allow ‘the ownership tree’ to grow need to monitor the attitudes and expectations of the expanding number of family member shareholders. This paper reports on a case study of a multi-generation family business where the shareholder group had grown to 50 individual shareholders. The study explored the shareholders' views about the business and particularly their attitudes to stewardship and whether and under what circumstances, they would hold their shareholdings, pass them to the next generation of family or possibly consider relinquishing their holdings. Data was obtained from a semi-structured questionnaire and follow-up interviews. While respondents indicated that they had immense pride in being a shareholder of the family business, they admitted that their knowledge of that business was less than optimal. Financial returns were viewed as important, but the intangible rewards relating to the heritage of forebears were more so. While they were keen to pass on their shares to their children, they were uncertain about the level of commitment the next generation members would have. Lessons from this case study are discussed for other multi-generation family businesses focusing on shareholders' responsibilities as owners and the board's need to ensure timely transfer of knowledge to the wider shareholder group.

Keywords

family businessownership responsibilitiesshareholder attitudes
Type
Research Article
Information
Journal of Management & Organization , Volume 15 , Issue 3 , July 2009 , pp. 346 - 362
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aronoff, CE and Ward, JL (1996) Family business governance, Family Business Leadership Series No 8. Marietta GA: Business Owner Resources.Google Scholar
Aronoff, CE and Ward, JL (2001) How to be an effective shareholder, Family Business Leadership Series No 15. Marietta GA: Business Owner Resources.Google Scholar
Astrachan, JH, Keyt, A, Lane, S and McMillan, K (2006) Generic models for family business boards, in Pannikos, PZ, Smyrnios, KX and Klein, SB (Eds) Handbook of Research on Family Business, Cheltenham UK: Edward Elgar, pp 317–342.Google Scholar
Carlock, R and Ward, JL (2001) Strategic planning for the family business, New York: Palgrave.Google Scholar
Craig, J and Moores, K (2002) How Australia's Dennis Family Corp. Professionalised Its Family Business, Family Business Review 15(2): 59–70.Google Scholar
Davis, JH, Schoorman, FD and Donaldson, L (1997) Toward a stewardship theory of management, Academy of Management Review, 22: 20–47.Google Scholar
Dunn, B (1999) The family factor: The impact of family relationships dynamics on business-owning families during transitions, Family Business Review, 12(1): 41–60.Google Scholar
Egan, J (2001) Alignment of directors' accountability and reward, IIR Conference Presentation, Sydney, 03.Google Scholar
Frankenberg, E (2008) Fostering a culture of stewardship, in Spector, B (Ed) Family Business Shareholders Handbook, Philadelphia PA: Family Business Publishing Co, pp 26–27.Google Scholar
Gersick, KE, Davis, JA, McCollom Hampton, M and Lansberg, I (1997) Generation to generation: Life cycles of the family business, Boston MA, Harvard Business School Press.Google Scholar
Hall, A (2005) Beyond the legal: Psychological ownership and responsibility in the family business. Paper presented at Family Business Network (FBN) 16th Summit, Brussels, 27 02 2005.Google Scholar
Holland, PG and Boulton, WG (1984) Balancing the ‘family’ and the ‘business’ in ‘family business’, Business Horizons 03-April pp 16–21.Google Scholar
Johannisson, B and Huse, M (2000) Recruiting outside board members in the small family business: an ideological challenge, Entrepreneurship and Regional Development 12: 353–378.Google Scholar
Klein, SB and Bell, FA (2007) Non-family executives in family business: A literature review. Electronic Journal of Family Business, 1(1): 19–37.Google Scholar
Lansberg, I (2008) Family shareholders must understand their investment, in Spector, B (Ed) Family Business Shareholders Handbook, Philadelphia PA: Family Business Publishing Co, pp 24–25.Google Scholar
Martin, HF (2001) Is family governance an oxymoron? Family Business Review 14(2): 91–96.Google Scholar
Miller, D and Le Breton Miller, I (2006) Family governance and firm performance: agency, stewardship and capabilities, Family Business Review 19(1): 73–87.Google Scholar
Miller, EJ and Rice, AK (1967) Systems of organisations, London, Tavistock.Google Scholar
Pierce, JL, Rubenfeld, SA and Dirks, TK (2001) Towards a theory of psychological ownership in organisations, Academy of Management Review, 26(2): 298–310.Google Scholar
Reichardt, CD and Cook, TD (1979) Beyond qualitative versus quantitative methods. In Cook, TD and Reichardt, CS (Eds), Qualitative and quantitative methods in evaluation research, Beverly Hills CA: Sage.Google Scholar
Romano, CA, Tanewski, GA and Smyrnios, KX (2001) Capital structure decision making: A model for family business, Journal of Business Venturing, 16(3): 285–310.Google Scholar
Stake, RE (1994) Case Studies, in Denzin, NK and Lincoln, YS (Eds), Handbook of Qualitative Research, Thousand Oaks CA: Sage, pp 236–247.Google Scholar
Storey, DJ (2002) Foreword, in Fletcher, D (Ed), Understanding the small family business, London, Routlege, pp xi–xiii.Google Scholar
Tagiuri, R and Davis, JA (1992) On the goals of successful family companies, Family Business Review 5(1): 43–62.Google Scholar
Tagiuri, R and Davis, JA (1996) Bivalent attributes of the family firm. Family Business Review, 9(2) 199–208.Google Scholar
Ward, JL (1991) Creating effective boards for private enterprises: Meeting the challenges of continuity and competition, San Francisco CA: Jossey-Bass.Google Scholar
Ward, JL (2004) Perpetuating the family business: 50 lessons learned from long lasting successful families in business, New York: Palgrave McMillan.Google Scholar
Westhead, P, Howorth, C and Cowling, M (2002) Ownership and management issues in first generation and multi-generation family firms, Entrepreneurship and Regional Development 14: 247–269.Google Scholar
Yin, R (1994) Case study research: Design and methods (2nd edn), Applied Social Studies Research Methods Series, vol 5, Thousand Oaks CA: Sage.Google Scholar