Strategic Resources and Family Firm Performance

Most companies in the Netherlands can be labeled as family firms (according to the GEEF definition (Mandle, 2008; Flören et al., 2010). The family firm can be regarded as an open system model comprising three overlapping, interacting, and interdependent subsystems: owners, family, and managers (Moores, 2008). This is known as the three-circle model. Tagiuri and Davis (1996) stipulate that family firms have unique resources that create positive and negative outcomes for the firm. This notion has more recently been referred to as the “familiness” of the firm (Sirmon et al., 2003). In this dissertation, the resource-based view (RBV) is adopted as the theoretical foundation for understanding the distinct attributes of a family firm (Habbershon & Williams, 1999). With the RBV as the primary theoretical framework, this dissertation looks at strategic resources in private firms and how those resources are influenced by family involvement. The focus is on the development of tacit knowledge and social capital, as the literature indicates that family involvement may have a strong and positive influence on these components of strategic resources (Arregle et al., 2007a). The need for more empirical research in the field of social capital and tacit knowledge within the context of private firms is made clear by a review of extant empirical research. This review also reveals specific topics of interest: the role of owners, the influence of the family on the development of social capital, the diverse links among the various dimension of social capital, the transfer of tacit knowledge during business successions, and the construct of the tacit knowledge climate. Therefore, the primary research question addressed in this dissertation is: How does family involvement influence the development of components of social capital and tacit knowledge in privately held firms, and to what extent does the development of these strategic resources have an impact on firm performance? The research question is answered on the basis of empirical research presented in this dissertation. All studies rely on a quantitative research method. Chapter 2 examines ownership social capital. The study focuses on a random sample of 708 privately held family and non-family firms with multiple owners. Chapter 3 investigates the relation between ownership social capital and product innovation. Chapter 4 looks at the impact of spousal social capital on the financial performance of copreneurial businesses. Chapter 5 explores the relation between the transfer of tacit knowledge and post-succession continuity