The impact of sociocultural context on strategic renewal

Kevin Yuk-fai Au · Stone Han · Hsi‐Mei Chung

29 citations0/0 files storedCross Cultural & Strategic Management

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Family Business Performance and Succession Innovation and Knowledge Management Organizational Management and Leadership

Abstract

Purpose The purpose of this paper is to contribute a multilevel, cross-national analysis of the role that sociocultural context may play to enrich the understanding of strategic renewal in family firms. The authors conceptualize sociocultural context as consisting of firm-level social contexts and national culture, and propose that: heterogeneous social contexts in family firm management, i.e. family CEO and multigenerational involvement, give rise to mindsets that have differential effects on renewal efforts and that the proposed effects are subject to variation due to the moderation of national cultural dimensions of uncertainty avoidance and power distance. Design/methodology/approach The authors use unique date set consisting of 959 family firms from 26 countries drawn from a cross-national, quantitative study of family firms. Findings The authors found that family CEO is negatively related to renewal across cultures, and this relationship is attenuated by uncertainty avoidance and power distance. In addition, multigenerational involvement is positively related to renewal, and this relationship is enhanced by the two cultural dimensions. Practical implications The authors suggest that decision makers examine how different contexts, practices and cognition contribute to overall dominant logics that exist in firm. In doing so, they can evaluate how logics as a whole affect renewal, and also how different parts of the logics play a role. This overall evaluation will afford managers a holistic picture of renewal forces that operate in family firm and allow managers to make precise changes to enhance strategic renewal. Originality/value The findings support the contention that there is cultural-dependent countervailing effects on strategic renewal within family firms.

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References

2003Common method biases in behavioral research: A critical review of the literature and recommended remedies.2011Dimensionalizing Cultures: The Hofstede Model in Context 1983The Correlates of Entrepreneurship in Three Types of Firms 2010The Worldwide Governance Indicators: Methodology and Analytical Issues 2007Socioemotional Wealth and Business Risks in Family-controlled Firms: Evidence from Spanish Olive Oil Mills 2007Answers to 20 Questions About Interrater Reliability and Interrater Agreement 2010From the Editors: Common method variance in international business research 1990Measuring Organizational Cultures: A Qualitative and Quantitative Study Across Twenty Cases

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