Internationalization of family SMEs: the impact of ownership, governance, and top management team
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Internationalization of family SMEs: the impact of ownership, governance, and top management team Ethiopia Segaro
Published online: 10 June 2010 Ó Springer Science+Business Media, LLC. 2010
Abstract Family small and medium-sized enterprises (SMEs) internationalize their business after consolidating their position in their domestic market. Once family SMEs have built up the necessary resources and capabilities for their growth in the domestic market, they may leverage it later on for further expansion abroad. This paper seeks to examine the determinant factors that may explain the internationalization of family SMEs. More specifically, this study will examine the relationship between ownership, governance, top management team (TMT) and internationalization in family SMEs. Family SMEs may reap the benefit of stewardship orientation. This study seeks to examine the potential moderating role of stewardship orientation and TMT behavioral integration. The main contribution of this study is in examining theoretically and conceptually the relationship between ownership, governance, TMT and internationalization in the family SME context. Keywords Internationalization Family SMEs Governance Top Management Team (TMT) TMT behavioral integration Stewardship orientation
1 Introduction Family firms represent the majority of all businesses worldwide (Shanker and Astrachan 1996, 2003; Gersick et al. 1997; IFERA 2003; Casillas et al. 2007). Likewise, several studies report that family SMEs represent the majority of SMEs worldwide (Shanker and Astrachan 1996, 2003; IFERA 2003; Casillas et al. 2007). Despite the fact that the majority of firms worldwide are family firms, the ‘‘family variable’’ has often been neglected in organizational research (Voordeckers et al. E. Segaro (&) Department of Marketing, University of Vaasa, P. O. Box 700, 65101 Vaasa, Finland e-mail: [email protected]
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2007; Dyer and Dyer 2009). Several researchers suggest that not considering the family as a variable in organizational research can lead to incomplete and misleading findings. For example, previous studies report mixed results regarding the influence of family ownership on the internationalization of family SMEs (Voordeckers et al. 2007; Sciascia et al. 2008, 2010; Dyer and Dyer 2009). Within the organizational research, corporate governance has become one of the most commonly researched topics in the field. However, most studies in corporate governance have focused on board of directors (Brunninge et al. 2007; Voordeckers et al. 2007). Although, in recent years, governance research has begun to expand from purely focusing on large firms to examining corporate governance in SMEs, most studies, however, still consider the different governance mechanisms such as ownership, board, and TMT, independently of each other (Brunninge et al. 2007). Thus, there is a need to look at ownership, governance, TMT issues together and not only independently of each other. In large, publicly held firms, ownership and management are
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