Family Business Characteristics and the Approach to HRM in Overseas Ventures

Abstract

This paper provides new evidence on the relationship between family business (FB) and human resource management (HRM) abroad. Our analysis provides two main results. First, not all organizational attributes of exert the same effect on the approach to abroad. Whereas participation of family members in the board of directors displays no significant impact, ownership and family managerial models favor the exploitation of the human resources supplied by the parent company. In contrast, the involvement of young successors favors an explorative attitude. Second, a multidimensional approach has better explanatory power compared with a dichotomous classification of FBs.

Notes

¹ Despite the growing empirical evidence, a comprehensive theoretical model of HRM in family firms is still missing. In their review of the recent literature of HRM in entrepreneurial and family firms, Dabíc, Ortiz‐De‐Urbina‐Criado, and Romero‐Martínez (2011) suggest that this gap may depend on the intrinsic contrast between the individual nature of entrepreneurship and the collective, process‐based nature of HRM, typically based on coordination among different professionals.

² Reprint classifies FDIs based on the actual location of economic activities. We were consequently able to exclude foreign investments made by financial firms, investment funds, private equity funds, and merchant banks as part of management buyouts and when there is no direct participation in the management of the investee company.

³ χ² tests on the distribution of firms by mode of entry in the foreign market and type of control over the overseas venture show nonsignificant difference between sampled firms and the population of Italian multinational firms (χ²(1) = 0.522, p = .470 and χ²(1) = 0.217, p = .641, respectively).

Additional information

Notes on contributors

Mariasole Bannò

Mariasole Bannò is research fellow at the Department of Economics and Management, University of Trento.

Francesca Sgobbi

Francesca Sgobbi is associate professor of Organisation Planning at the Department of Industrial and Mechanical Engineering, University of Brescia.