Strategic decision-making in family firms: an explorative study

Abstract

Strategic decision-making (SDM) processes in family firms represent a complex task involving family managers, family members and, in most cases, non-family managers. Drawing on the concept of socio-emotional wealth (SEW), this study aims to explore the characteristics of SDM processes in family firms, which groups of stakeholders they involve, and how the family itself influences the process. We present a multiple case study based on qualitative data collected through 30 interviews, representing 15 family firms in the service industry. Upon discussing the findings, we are able to identify family membership, adherence of decision-makers to SEW goals, as well as the expertise and work experience of employees as crucial factors in joining and forming SDM in family firms. Moreover, strategic decisions in family firms depend on long-term firm goals and are affected by the need to cooperate/compete with other firms to overcome barriers of size and hostile environmental dynamics.