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An image theory of strategic decision-making in family businesses

An image theory of strategic decision-making in family businesses Research suggests family businesses often pursue risky or aggressive strategies despite the desire to preserve socioemotional wealth (SEW), which is thought to lead to conservativism in family firm strategic decision making. The purpose of this paper is to resolve this apparent contradiction by presenting a model that describes the screening criteria used by family business decision-makers when evaluating strategic opportunities.Design/methodology/approachThe conceptual model relies on insights derived from image theory to resolve apparent contradictions inherent in the SEW perspective’s implications for family firms’ risky strategic decisions.FindingsThe proposed model suggests new strategic opportunities in family firms are evaluated through an unconscious, schema-driven decision process and that the preservation of SEW does not preclude risky strategic directions, but instead serves as an unconscious screening criteria for strategic opportunities.Originality/valueThis paper contributes to the literature by expanding the understanding of family-firm strategic decision-making to include considerations of the decision’s fit with the family’s principles, goals and strategic plan rather than solely to overall risk to SEW. Thus, the paper presents a detailed model of family-firm strategic decision-making that relies on insights from image theory. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Family Business Management Emerald Publishing

An image theory of strategic decision-making in family businesses

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2043-6238
DOI
10.1108/jfbm-05-2019-0032
Publisher site
See Article on Publisher Site

Abstract

Research suggests family businesses often pursue risky or aggressive strategies despite the desire to preserve socioemotional wealth (SEW), which is thought to lead to conservativism in family firm strategic decision making. The purpose of this paper is to resolve this apparent contradiction by presenting a model that describes the screening criteria used by family business decision-makers when evaluating strategic opportunities.Design/methodology/approachThe conceptual model relies on insights derived from image theory to resolve apparent contradictions inherent in the SEW perspective’s implications for family firms’ risky strategic decisions.FindingsThe proposed model suggests new strategic opportunities in family firms are evaluated through an unconscious, schema-driven decision process and that the preservation of SEW does not preclude risky strategic directions, but instead serves as an unconscious screening criteria for strategic opportunities.Originality/valueThis paper contributes to the literature by expanding the understanding of family-firm strategic decision-making to include considerations of the decision’s fit with the family’s principles, goals and strategic plan rather than solely to overall risk to SEW. Thus, the paper presents a detailed model of family-firm strategic decision-making that relies on insights from image theory.

Journal

Journal of Family Business ManagementEmerald Publishing

Published: Nov 19, 2019

Keywords: Family business; Strategic planning; Organizational changes

References