A CROSS-CULTURAL PERSPECTIVE OF FAMILY BUSINESS GROUPS

Alessandra Vecchi, University of Bologna

Bice Della Piana, University of Salerno
Claudia Cacia, University of Salerno

ABSTRACT
Around the world, some of the largest firms in many countries are controlled by family business groups
such as Fiat in Italy, Ford in the US, Hutchison Whampoa in Hong Kong, Samsung in South Korea and
many others. Further, many family groups have a long history. Although family business groups are a
significant and long standing phenomenon in most parts of the world, their resilience to globalization in
their use of different organizational structures have received little attention from a cross-cultural
perspective. Drawing on our previous work, the study provides a theoretical framework to classify family
business groups on the basis of their organizational choices from a cross-cultural perspective.

1. INTRODUCTION

The internationalization of family business groups is developing into a significant research area (Kontinen
& Ojala, 2010). Family business groups have traditionally operated in domestic markets, but increasingly
find themselves obliged to internationalize, in order to survive in a market that is becoming more and
more globally competitive. Since the internationalization of family business groups may differ from
internationalization of firms with different ownership structures (Bell, Crick & Young, 2004; Fernandez &
Nieto, 2006; George et al., 2005; Graves & Thomas, 2004, 2006; Johanson & Vahlne, 2009), it is
important to investigate family business groups as a distinct entity, and attempt to identify their specific
internationalization patterns. n particular, there is extensive evidence showing that family ownership in
itself might lead to contradicting results in terms of internationalization different studies conducted in
different countries have provided substantial conflicting evidence by which family ownership can either
boost internationalization or either inhibit it.

Drawing on a cross-cultural perspective by adopting GLOBE (Javidan & House, 2004; Chhokar et al.,
2007) and by relying on meta-data analysis, the study provides a theoretical framework to classify family
business groups on the basis of their internationalization strategy from a cross-cultural perspective. The
rest of the paper is organized as follows. n section 2 we review the literature on family firms that is
relevant to the purpose of our work and we review the literature on family business groups by adopting a
cross-cultural perspective. While section 3 describes the methodology adopted, section 4 illustrates the
main findings. Finally, in section 5 we present a discussion of these findings by addressing conclusions,
their managerial implications, their limitations and directions for future research.

2. LITERATURE REVIEW

2.1 Family Business Groups and their Distinctive Traits
Family business groups have emerged as a distinct theme in the literature and have thus attracted the
interest of a wide range of scholars from different disciplines. n particular, renewed interest in this topic
has recently spurred from the definition developed by Granovetter (1995, 2005) and tends to overcome
this main shortfall by providing a richer insights over the existence of a particular set of ties by which
governance can be exerted by the founding family. Similarly, when discussing family business groups,
Steers et al. (1989) outline the importance of the strong social ties that families use in order to place their
members in the key positions so to strengthen the power of the family. Granovetter (2005) and Pieper (et
al., 2008) also highlight the importance of the persistence between formal and informal ties to ensure both
the longevity and the long-term sustainability of family business groups. Overall, all these accounts
widely refer to the key traits that characterize the inter-organizational relations within family business
groups that are namely the nature, the type, the intensity and the persistence of the ties. These
key-traits are explained in detail elsewhere (Della Piana et al., 2010a; 2010b; 2012) and have been
summarised in Table 1 in the appendix. Although there is a quite established consensus about the


existence of these distinctive traits that characterize family business groups, we tend to lack a fuller
appreciation on how they affect family business groups' internationalization strategies across different
cultural settings.

2.2 FamiIy Business Groups from a Cross-CuIturaI Perspective
2.2.1 Internationalization of Family Business Groups
Although in many country the majority of businesses are family-owned such as in Europe (Cromie et al.,
1999) and also in the United States (Gersick et al., 1997, Gallo, 1995), the internationalization of the
family business groups has received very limited attention by the existing research (Harju & Heinonen,
2004; Okoroafo, 1999; Davis & Harveston, 1999; Davis and Harveston, 2000; Zahra, 2003; Gallo &
Garcia-Pont, 1996; Gallo et al., 2004; Harju & Heinonen, 2004). According to Kim et al., (2004)
internationalization becomes crucial for family business groups at their maturity stage. As a business
matures, it seeks growth opportunities outside the domestic market. Some companies are born global
and internationalize early, but many others take the incremental approach described by the Uppsala
model. Depending on the nature of the company and the type of industry in which it is engaged, some will
do business abroad in the introduction stage, and others will wait until the growth or maturity stage.
Figure 1 in the appendix indicates typical internationalization activities at the various stages of family
business groups' growth.

On the one hand, there is evidence showing that if a business or a group belongs to a family the degree
of internationalization appear to be higher than the non-family ones (Miller et al., 2008; Kontinen & Ojala,
2010). A recent study suggests the importance of relational ties in the internationalization strategies of
family firms (Kontinen & Ojalanet, 2010) in the form of social capital. Social capital represents the wealth
associated with the existing relational ties between the family members (Salvato and Melin, 2008). Other
scholars outline the importance of other factors that affect the internationalisation of family firms (Kontinen
& Ojalanet, 2010). These are the cohesive nature of family ties, their unusual devotion to continuity, their
tendency to nurture the community of employees very carefully, and their search for closer connections
with customers and partners in order to sustain the business (Miller et al., 2008). On the other hand,
family involvement often seems to inhibit the internationalization processes of family firms (Claver et al.,
2008; Burt, 1992; Granovetter, 1973; Graves and Thomas, 2006; Graves and Thomas, 2008). Similarly,
Fernandez and Nieto (2005) shows that the proportion of export firms and export sales is much lower in
family-run than in non-family businesses. Okoroafo (1999) suggests that family firms rarely rely on a
clear internationalization strategy, but this is often the result of unsolicited orders from foreign customers
or from existing stable relationship with foreign suppliers. Other studies highlight that generally family-
owned firms are not likely to engage in networking with other businesses, and struggle in their
internationalization process due to their more inward looking perspective and lacking the relationships
required to expand internationally (Grave & Thomas, 2004, Boeker & Karichalil, 2002; Flamholtz, 1986;
Hoy & Verser, 1994; Levinson, 1971; Dyer, 1989; Kontinen and Ojala, 2010).

2.2.2 Family business groups' internationalization from a cross-cultural perspective
Although there is wide consensus that the organizational context is crucial to fully understand family
business groups (Granovetter, 1985; Rao et al., 2000; Steier, 2003; Uzzi, 1996; Aldrich and Cliff, 2003;
Steier, 2001; Steier et al., 2009) very few studies devote attention to their cultural context. Veliyath' study
(et al., 2000) for instance investigates the CEO's social embeddedness and overt and covert power as
determinants of CEO pay in a sample of ndian family-controlled firms. Similarly, a very recent study
conducted by Masulis et. al., (2011) investigate the motivations for family-controlled business groups.
They argue that particular group structures emerge not only to perpetuate control, but also to alleviate
financing constraints at the country and firm levels. Bertand et al., (2008) analyze how the structure of
the Thai families behind these business groups affects the groups' organization, governance and
performance. nterestingly, groups that are run by larger families (more male siblings of the group head)
tend to have lower performance. Overall this evidence leads us to assume that the internationalisation
strategy of family business groups are likely to vary according to different national clusters. We endorse
the idea that national culture provides a fruitful area for research in family business groups and extending
this line of enquiry to family business groups holds great potential to gain a fuller insight on whether their
internationalisation strategy tends to differ across national cultures. The theoretical framework
underpinning our research relies on GLOBE (Javidan & House, 2004; Chhokar et al., 2007). House et al.,
95

(2004) examine national cultures in terms of nine dimensions: uncertainty avoidance
1
, power distance
2
,
institutional collectivism
3
, in-group collectivism
4
, gender egalitarianism
5
, assertiveness
6
, future
orientation
7
, performance orientation
8
and human orientation
9
. On the basis of these nine cultural, the
GLOBE study identifies ten societal clusters
10
.

3. METHODOLOGY

Given the lack of comparable data across countries and the importance of theoretical knowledge in a
scholarly inquiry and development of a feld of study (Whetten, 1989, 2002) we started by performing
meta-analysis (Glass, 1976; Hedged & Olkin, 1985; Hunter & Schmidt, 1990) that aggregates empirical
findings from the literature on family business groups. The evidence was obtained by aggregating the
findings across several studies in order to more comprehensively assess similarities and differences in
terms of internationalization strategies of family business group across the GLOBE societal clusters. To
this end we searched Science Direct, JSTOR and Emerald-plus for paper and abstracts (articles, book
chapters, dissertations, and unpublished reports) using the keywords internationalization, family
business, "business group", "SME", and family business group. Based on a review of several refereed
articles we systematically organized the literature according to each GLOBE cluster in order to build ten
short case-studies. n particular, our aim was to identify the prevalent pattern of nature, type, intensity and
persistence of the ties in the intenationalisation strategy of family business groups. Studies are
abstracted, coded and assembled in line with the theoretical framework previously developed from the
literature. A case-study approach was selected as case studies are considered most appropriate as tools
in the critical, early phases of a new management theory, when key variables and their relationships are
being explored (Yin, 1994; Eisenhardt, 1989). n particular multiple case studies provide a more solid
basis for generalization and can provide substantial opportunities for theory-building (Steier & Miller,
2010). For the purpose of the research 10 explorative case-studies belonging to the 10 GLOBE clusters
were selected drawing from a variety of different sectors.

4. MAIN FINDINGS

4.1 The AngIo CIuster
As for WKH QDWXUH of the ties, in the Anglo cluster in most countries, large firms are organized into business
groups controlled by a few wealthy old families (La Porta et al., 1999). Among these, Canada and
Australia, for example have both large widely held firms bur also business groups controlled by wealthy
old families, which have a significant economic importance. Although an examination of internationalised
firms found that the extent of internationalisation of family firms is less than that of non-family firms, this

1
8QFHUWDLQW\ $YRLGDQFH is deIined as the extent to which members oI a society strive to avoid uncertainty by
reliance on social norms, rituals and bureaucratic practices to mitigate the unpredictability oI Iuture events.
2
3RZHU 'LVWDQFH is deIined as the degree to which members oI society expect and agree that power should be
equally shared.
3
,QVWLWXWLRQDO &ROOHFWLYLVP reIlects the degree to which societal practices encourage and reward collective
distribution oI resources and collective action.
4
,Q*URXS &ROOHFWLYLVP reIlects the degree to which individuals express pride, loyalty and cohesiveness in their
organisations.
5
*HQGHU (JDOLWDULDQLVP is the extent to which a society minimises gender role diIIerences and gender
discrimination.
6
$VVHUWLYHQHVV is the degree to which individuals in societies are assertive, conIrontational and aggressive in their
social relationships.
7
)XWXUH 2ULHQWDWLRQ is the degree to which individuals in societies engage in Iuture-oriented behaviours such as
planning, investing in the Iuture, and delaying gratiIication.
8
3HUIRUPDQFH 2ULHQWDWLRQ reIers to the extent to which a society encourages and rewards group members Ior
perIormance improvement and excellence.
9
+XPDQH 2ULHQWDWLRQ is the degree to which individuals in organisations or societies encourage and reward
individuals Ior being Iair, altruistic, Iriendly, generous, caring and kind to others.
10
South Asia, Anglo, Arab, Germanic Europe, Latin Europe, Eastern Europe, ConIucian Asia, Latin America, Sub-
Sahara AIrica and Nordic Europe.


difference is not persistently significant across countries and over time. This suggests that there is no
marked difference in the extent of internationalization. n the US, results from the analyses of 409 U.S.
manufacturing firms show that family ownership and involvement in the firm as well as the interaction of
this ownership with family involvement are significantly and positively associated with internationalization
(Zahra, 2003). n United Kingdom 76% of firms are family-owned (Welsch, 1991). The findings indicate
that small family-owned businesses can be just as competitive in overseas markets as their non family-
owned counterparts, assuming that an effective strategy is employed (Crick, et al., 2006). As for the type
of the ties, in the Anglo-cluster where the US and the UK have a predominant role, businesses are
generally controlled by professional managers as fiduciaries for multitudes of public investors (Mork&
Yeung, 2003). Ownership structure in Canada differs from its Anglo-Saxon counterparts and exhibits a
high level of concentration. Like in many parts of the world, this concentrated ownership is obtained by
dual class shares and/or pyramidal structures (Ben-Amar & Andre, 2006). As for persistence, surprisingly
many large Canadian companies (e.g., Power Corp., Magna Corp., Bombardier inc., Quebecor inc.) are
still controlled by the founders or their families. n New Zealand, significant factors associated with the
internationalization of family firms included product type and proxy experience, and an immigrant effect
which impacted on the choice of FD mode (Chung, 2001). Other evidence proves that if a family
business does not get involved in foreign markets in the first and second generations, it is unlikely to do
so in later generations (Okoroafo 1999). n this context, this lack of persistence seems to be in line with
the low score in in-group collectivism that that characterizes the Anglo cluster.

4.2 Latin Europe
Overall, the results from the Latin European clusters show how the family involvement plays a mediating
role when considering the internationalisation of family firms. n relation to the nature of the ties, in Spain
71% of firms are family-owned (Gallo & Garca Pont, 1989). The results show that internationalisation is
negatively related to family ownership and positively related to corporate ownership. The presence of a
corporate blockholder in family firms encourages internationalisation. These results support the idea that
ownership type influences the decision to internationalise (Fernndez and Nieto, 2006). n this context,
the nature of the ties seem to be in line with the high score in institutional collectivism that characterises
the Latin European cluster. As for the type and the intensity of the ties, in France, Kontinen & Ojalanet
(2010) find that family owned companies undertake internationalization strategy through exports with the
aim of looking for suitable partners to increase their international sales. n general, they suggest that
companies demonstrate that family entrepreneurs rely on a large number of trusted people in foreign
markets, especially when launching international operations, but also after several years of running
international operations. The generally emerging pattern was that instead of seeking to span structural
holes internationally, the family SMEs concentrated on the development of network closure with a very
small number of partners in their international operations. n this context, the type and the intensity of the
ties seem to be in line with the high score in human orientation that characterises the Latin European
cluster. n relation to persistence, in taly, Zucchella et al., (2006) find that among the drivers of early
internationalization the role of the previous experience of the entrepreneur, and especially of their
international experience, frequently nurtured in internationally oriented family firms on one side or in
multinational/foreign firms on the other one, was found significant. The positive association between
precocity in internationalisation and niche positioning of the business enforces the relevance of
entrepreneurship because focalization is a reflection of entrepreneurial orientation and strategic
decisions. These results indicate that there is no inherent superiority of the family-firm ownership and
emphasize the importance of conducting an analysis of internationalization strategies in a variety of
institutional and cultural settings.

4.3 Nordic Europe
Scattered studies providing conflicting evidence in terms of the nature of the ties were found in relation to
the Nordic European cluster. n Denmark, Boter & Holmquist (1996) find that the internationalization
process must be understood in the context of the industry, company, and people involved as the
conditions for industries and single companies are different. Family owned companies tend to have a
natural local concentration that ultimately implies different strategies from the innovative companies who
have more of a global focus. The findings suggest that family ownership tends to be negatively
associated with internationalization. By contrast, a study across Finish SMEs demonstrated that family
businesses were even more internationalized than other businesses when assessing both export


activities and main market areas (Harju & Heinonen, 2004). As for the type and the intensity of the ties, in
Finland, Niemel (2003) focused on inter-firm cooperation and networking in family firms and investigated
five Finnish furniture producers as case studies. The empirical results of the study suggest that inter-firm
co-operation is a simultaneous learning process for the owner-managers, as well as for the networking
family firms. Furthermore, the values, attitudes, and beliefs of the owner-managers reflect their family
business culture, and the culture of each family firm influences the development and quality of inter-firm
co-operation capability. As for persistence, in Sweden, the business group of the Wallenberg family,
which is run by the fifth generation, has been investigated from a succession point of view (Lindgren,
2002). n particular, the long term viability of one of the most important Swedish family business groups,
is analyzed by focusing on one aspect of great importance in family strategic business behavior: the
succession of leadership from one generation to another. The case clearly shows the importance of
consolidated group norms and attitudes a corporate culture in explaining the outcomes of succession
planning, and, given these norms and attitudes, how the recruitment of reliable outsiders exceptionally
has been used to provide a bridge from one generation to the next.

4.4 Germanic Europe
n relation to the nature of the ties Austria (83.2%) and Germany (82%) of firms are family-owned
(Donckels & Frolich, 1991). Family business is prevalent type of company in Germany (Klein, 2000). The
author finds that 67% of all German companies with more than 2 million Euro turnover are family
business, or firm substantially influenced by family. Klein (2000) shows the relevance of family
businesses to the German economy and their structure with respect to ownership, governance, and
management. The data show that ownership, rather than governance or management, is the key to
differentiating family from nonfamily businesses. As for the type and the intensity of the ties, from the
findings it emerges that governance and management are more complementary to each other, families in
German family businesses seek influence either through family members on the supervisory board or on
the management board. n this context type and intensity of the ties seem to be in line with the high score
in assertiveness and performance orientation that characterize the Germanic European cluster.

4.5 Eastern Europe
As for the type and the intensity of the ties, Smallbone & Welter (2001) are concerned with the
distinctiveness of entrepreneurship and small business development in transition countries that are at
different stages of transformation to market based economies. From the findings it emerges that in an
unstable and weakly structured environment, informal networks often play a key role in helping family
firms to mobilise resources, win orders and cope with the constraints imposed by highly bureaucratic
structures and often unfriendly officials. Moreover, the social context inherited from the former socialist
period appears to affect both the attitudes and behaviour of family firms and the attitudes of society at
large towards entrepreneurship. The type and the intensity of the ties seem to be in line with the high
score in in-group collectivism that characterizes the Eastern European cluster. n relation to persistence,
according to Kim et al., (2004) n the growth and maturity stages, family business groups may become
direct investors and increase their international holdings. Activities in foreign markets deepen, and major
modes of entry are wholly owned subsidiaries, turnkey projects, and joint ventures. n the late growth
stage, the switch from exporting to direct investment in overseas operations is a crucial decision. Major
obstacles to internationalization are lack of knowledge and resources. As family business groups learn
about foreign markets, the perceived risk of investment decreases, and overseas expansion grows
rapidly. Late in the maturity stage, family business groups may increase the level of resources committed
abroad and change the mode of market servicing.

4.6 Sub-Saharan Africa
No article was found to deal with family business groups in Africa. This reflects the general lack of
academic research over the experience of African countries.

4.7 Latin America
n relation to the nature of the ties, according to Magnani-Tavares (2012), family owned-businesses are
the leading form of business organizations in Brazil, even when considering large groups and listed
companies. The study reports that 51,5% of the 200 largest listed companies are family owned. Similarly,
Shimizu (2004) highlights how in many developing countries including Peru, family businesses, in which


families control both ownership and management, still play an important role in the national economy. n
this context the nature of the ties seem to be in line with the high score in in-group collectivism that
characterizes the Latin American cluster. As for the type and the intensity of the ties, Magnani-Tavares
(2012) outline the importance of the family in the internationalization process of two family businesses in
Brazil. Similarly, Shimizu (2004) finds that in Peru joint stock companies would be transformed from
family firms to managerial firms with their development in size and scope. Such managerial firms would
have many small shareholders; hence the ownership and management of the firm would be separated.
To secure competitiveness, it is indispensable for family businesses to obtain management resources
such as financial, human and technological resources from outside of the families. n order to do so
without losing the control over ownership and management, Peruvian family businesses have
incorporated companies with distinct characteristics to the extent that they can secure the control over
ownership and management inside of their group. The management of companies with different degrees
of control allows them to survive in today's rapidly changing global business environment. The type and
the intensity of the ties seem to be in line with the medium score in both power distance, assertiveness
and human orientation that characterize the Latin American cluster.

4.8 MiddIe East
Very a few studies were found to be concerned with family business groups in the Middle East cluster. As
for the types of ties and their intensity, Wasta is an Arabic relational term that involves a social network of
interpersonal connections rooted in ties to family and kinship (Hutchings and Weir, 2006). Wasta is a
central characteristic in the social and business operations in all the Middle Eastern countries (Hutchings
and Weir, 2006). Ozhen (2008) analyses the family business groups in Turkey and distinguishes them
between the dominant and the emerging ones. The former ones tend to be larger by size, more
diversified in their scope and their internationalization mostly occurs with alliances with MNCs. The latter
ones tend to be smaller, less diversified in their scope and in their geographical reach which is mostly
local or regional. The type and the intensity of the ties seem to be in line with the high score in in-group
collectivism that characterize the Middle East cluster.

4.9 Southern Asia
As for the nature of the ties, most Southern Asian countries are characterized by greater ownership
concentration in the hands of individuals, families, governments or industrial groups. n South Asia,
business groups are community based and rely on the extended family. n the ndian subcontinent (e.g.
ndia and Pakistan), the business community is considered socially complete because the merchant
communities are divided along social, religion, ethnicity and regional lines that have interesting effects on
the nature of inter-firm transactions. For instance, the prominent business communities of Gujratis,
Khojas, Chinotis, Sethis and Parsis of the ndian Sub-continent make use of ready-made networks of
credit and capital based on religious and caste origin (Lyer, 1999). After the partition of ndian
Subcontinent in 1947, some of the business families in ndia migrated to the newly established state of
Pakistan. This is one of the many reasons that the ndian and Pakistan business environments are
governed by similar types of informal institutions. Within this context, Khanna and Palepu (2000) find that
family-controlled business groups have a survival advantage over freestanding widely held firms in ndia
and other developing countries because family-controlled firms can deal with each other, avoiding
transactions in corrupt or otherwise flawed open markets. The nature of the ties seems to be in line with
high score in in-group collectivism that characterizes Southern Asian clusters. n relation to the type and
the intensity of the ties, Suehiro and Wailerdsak (2004) examine family businesses in post-crisis Thailand.
The analysis focuses on their corporate management and governance restructuring. The findings indicate
that family business still strongly persists and can be categorized into four groups, namely, closed family
businesses, specialized family businesses, authoritarian family conglomerates, and modern family
conglomerates. From the findings it emerges that while the last three types of family firms perform well in
terms of internationalization, the closed family firms face major challenges in capital market and the
pressure of T development. The type and the intensity of the ties seem to be in line with high score in
human orientation that characterizes Southern Asian clusters. As for persistence, for instance Bertrand et
al., (2008) in Thailand find a strong positive association between family size and family involvement in the
ownership and control of the family business. The sons of the founders play a central role in both
ownership and board membership, especially when the founder of the group is gone. The availability of
more sons is also associated with lower firm-level performance, especially when the founder is no longer


present. Excess control by sons, but not other family members, is associated with lower firm performance.
n addition, excess control by sons increases with the number of sons and with the death of the founder.
One conclusion that emerges from the analysis is that part of the decay of family-run groups over time
may be due to a dilution of ownership and control across a set of equally powerful descendants of the
founder, which creates a race to the bottom in tunneling resources out of the group firms.

4.10 Confucian Asia
We found extensive research concerned with family business groups in Confucian Asia. n relation to the
nature of ties, Chang & Shin (2007) review the ownership structure of 15 Korean chaebols
(conglomerates) using data from published combined financial statements to determine whether
controlling family ownership in private firms is higher compared with public firms within the same chaebol.
From the findings it emerges that the simple average of family ownership is lower for the private firms
than the public firms within the same chaebol. The nature of the ties seem to be in line with the high score
in high group collectivism that characterizes Confucian Asia. As for the type and the intensity of the ties,
Kienzle and Shadur (1997) show that the organizational structures of Japanese business groups,
keiretsu, are pyramidal and tightly controlled by the lead firm which is often family-owned. n order to keep
and maintain bilateral trading within business groups, Japanese business groups place a high value on
preferential relationships. These informal networks are present in institutional form at many levels of
Japanese society and ensure group stability and individual commitment to the group. Similarly Yu (2001)
highlights how the Korean cheabol is owned and controlled by a family and its members with low levels of
formal coordination. Likewise, Chinese business groups or networks are based on familial and ethnic ties
and characterized by simple organizational structures with centralized decision-making by the owner-
cum-manager (Kienzle and Shadur, 1997). Chinese family business networks do not rely on formal
contracts, and personal trust is used for financial and other network transactions. Overseas Chinese
entrepreneurial success is frequently attributed to Confucian cultural values of diligence, order, filial piety
and familial responsibility, which promotes prudent use of resources and capital accumulation. Thus the
type and the intensity of the ties seem to be in line with the high score in high institutional collectivism and
high performance orientation that characterize Confucian Asia. n relation to the persistence of the ties, by
using the case of Chinese family business groups in East Asia, Carney & Gedajlovic (2003) examines the
relationship between the strategic behaviour exhibited by family business groups and their administrative
heritage. n particular, Carney & Gedajlovic (2001) argue that family business groups emerged as a
regional force during the early 1980s and the first wave of international investments by family business
groups was labour seeking assembly transplant activities (Yeung, 1997), which were funded through
internally generated funds. Second wave investments were made possible by a flood of foreign portfolio
investments and commercial bank lending (Henderson, 1998) which enabled family business groups to
accelerate the pace of their offshore investments and acquisitions. However, much of these investments
were in fields where the family business groups had no technological expertise (Panamond and Zethaml,
1998). Another view suggests that family business groups international investments are guanxi driven
project-specific investments aimed at generating fast returns (Lasserre and Probert, 1998). However,
guanxi is location specific since there is a limit on the number and depth of personal contacts that can be
cultivated by an entrepreneur and his family. Consequently, the advantages conferred by guanxi might be
expected to decline in more distant markets.

5. CONCLUSIONS AND DIRECTIONS FOR FURTHER RESEARCH

This study shows that only 9 out of the 10 GLOBE cultural clusters have partially been studied. Following
an in-depth analysis of the literature the paper demonstrates that while the impact of ownership (and
therefore the nature of the ties) on family business groups' internationalisation strategies still varies
greatly across clusters, the other key dimensions that characterise family business groups tend to vary
accordingly. These key dimensions in turn appear to be culturally embedded and clusters dependant. n
the Anglo cluster for example, both the nature (i.e. coexistence of widely held business groups and family
firms and the more general competitiveness of family firms) and the type of ties (i.e. concentrated
ownership through a dual class shares and/or pyramidal structures to enhance control) seem to reflect
the high GLOBE score in performance orientation that characterizes the Anglo cluster. Overall our
findings highlight that although family business groups are owned and controlled by a family, there are
other factors apart from ownership that shape their internationalization strategies. As found by the


literature, these must include national culture (Kim et al., 2001). The evolution of a family business is
closely related to the local economic environment. The cultural context is an important determinant of the
nature of the ties, their types, their intensity and their persistence of ownership and the
internationalization vision of the family owners. Thus, our research suggests that a greater understanding
of the internationalization phenomenon of family business group is still required. More precisely, drawing
on the key dimensions of family business groups in relation to nature, type, intensity and persistence and
the GLOBE cultural dimensions further hypotheses should be developed.

5()(5(1&(6

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APPENDIX
TabIe 1 - Key-traits
Key-traits Definition References
Nature Specifically we refer to the shareholding as
a set of legally-separate firms with stable
relationships operating in multiple
strategically unrelated activities and under
common ownership and control (Cuervo-
Cazurra, 2006: 420). n this sense the
business groups is identified as a type of
firm network, characterized by a multiple
set of stable relationships on the basis of a
common ownership.
Granovetter, 1995; Aronoff et
al., 1995;Chung, 2001; Della
Piana & Cacia, 2009; Harvey
et al., 1994; Della Piana et al.
2010b; Ensley, 2005; Hsieh,
2009; Khanna & Yafeh, 2005;
Cestone et al., 2005; Cuervo-
Cazurra, 2006; Gopalan et al.,
2007; Minichilli et al., 2010
Type n line with Khanna and Rivhin (2006), we
argue that as products of social
construction, family business groups most
likely cannot be reduced to the distinctive
presence of specific types of ties between
firms such as equity holdings, family bonds,
or interlocking directorships. For instance,
family businesses can rely on networks and
long-term relationships that might foster
trust and altruism and frequently have a
long-term perspective.
Astrachan, 2010; Granovetter,
2005;Le Breton-Miller & Miller,
2009; Pieper, 2007.

Intensity ndeed, other researchers refer to these
ties as implicit ties that are often an
effective substitute for the relatively more
formalized, explicit, contractual
relationships. This is particularly visible in
the family system, where the key features
that influence the firms' operations are the
pre-existing, implicit and social ties among
family members and often the family
system, thanks to the presence of trust, no
longer needs hierarchical control. n this
context, family relationships can provide
competitive advantage in addition to firms'
specific resources.
Aronoff & Ward, 1995; Harvey,
1999; Astrakhan, 2010; Ben-
Porath, 1980; Gulati, 2005; Le
Breton-Miller and Miller, 2009;
Lorenzoni & Lipparini, 1999;
Ferrin & Dirks, 2003; Lubatkin,
2005; Pollak, 1985; Powell,
1990; Ring & Ven de Ven,
1992; Ernst & Bleeke, 1993;
Barney & Hansen, 1994;
Blankenburg Holm et al., 1999;
Schulze, 2003.

Persistence Maximizing the interests of the founding
members across generations and the long-
term profitability of the group as a whole
requires the persistence of the specific set
of inter-organizational relationships. Apart
from business vitality, research shows that
persistent family values are crucial for
maintaining family ownership in the long
run. Evidence highlights that in family
businesses the entrepreneurial behaviour is
related to growth and the number of
generations the family has been in
business. Others find that a long-term
orientation and non-family management are
positively related to international growth.
Astrachan, 2010; Claver et al.,
2009; Memili et al., 2011;
Pieper, 2007; Zahra, 2005.



Figure 1: FamiIy Business Groups' internationaIisation according to the degree of maturity
(Source: Kim et al., 2004)


AUTHOR PROFILE:
Dr. AIessandra Vecchi, alessandra.vecchi@unibo.it University of Bologna
Dr. Bice DeIIa Piana, bdellapiana@unisa.it University of Salerno
Mrs. CIaudia Cacia, ccacia@unisa.it University of Salerno