How family businesses benefit from familiness: Strategy change

Abstract

This article examines the impact of the attribute of “familiness” on family businesses when they decide to change strategies and its implications for their economic lives. An empirical investigation was conducted using a quantitative approach to analyze 135 family coffee producers in Brazil. While some producers continued to pursue the same low-cost strategic orientation despite a fundamental institutional change, others decided to switch to a differentiation strategy to benefit from new market opportunities. The effect of familiness varies between early and late adopters of the new strategy. Our empirical findings provide clarification on the paradoxical nature of familiness by isolating its positive and negative effects on business strategy choice. The article concludes with recommendations for family businesses and policy makers based on our empirical results.

Keywords

• familiness
• human capital
• social capital
• strategy change