Family Business

Topics: International trade, Target market, Business Pages: 31 (8954 words) Published: October 18, 2011
Bachelor Thesis Organization & Strategy
Entrepreneurship The Internationalization of Family Businesses By

Bart van Overbeek 910523

University of Tilburg
BSc International Business Adminstration (former Business Studies) April 2010

Bart van Overbeek


This thesis presents the results from research conducted during February to June 2010. In February 2010, I, Bart van Overbeek, started conducting research on the topic of expanding to international markets by family-owned businesses. This study was conducted for the Department Organization and Strategy of the University of Tilburg. During the research period, some interesting and some unfavorable outputs came to the light, that will be presented throughout this thesis. At first, I would like to express my sincere gratitude towards my supervisor Stijn van den Hoogen. Without his advise and feedback, this thesis would not have come to clarity and completion. Furthermore, I would like to thank my fellow thesis writers for their efforts in giving feedback and for their quality of feedback. Also, I would like to thank my father, Roel van Overbeek, for giving me the idea to write this thesis about. Thanks to him, I was able to formulate my propositions into a clear topic and concept. Tilburg, June 2010

Bart van Overbeek


Bart van Overbeek

Management summary
This bachelor thesis focused on internationally expanding by family firms. Family-owned businesses are unique of nature and in this thesis these kinds of businesses have been defined as firms that are managed and controlled by at least two members of the family, seeking sustainability of the firm and where family members seek increasing involvement within the firm. Family firms, in their business operations, cope with the family segment, which, due to emotionality and complexity of firm and family issues, negatively affects the operations. However, family businesses outperform their counterparts in terms of sales and profits. This can be explained by their unique “family language” and their overall high levels of trust. When family firms want to expand to international markets, they have to take into account that there are numerous factors affecting this process. Family firms tend to be more conservative towards international expansion and they can even be viewed as risk-adverse in such cases. They focus too strong on their domestic markets which limits the internationalization. Surely the government aids in the internationalization, but family firms strengthen this process themselves by listening to the market demand. Successful successions in family-owned businesses mostly aid in the process of internationalization by providing ambitious ideas and strategies. Internationalization is one of the most difficult strategies a company can undertake. In order for a company to consider international expansion, the costs, such as exchange-rate fluctuations, should be outweighed by the benefits, such as knowledge increase. Family firms should follow a certain pattern before internationalizing. They have to draw up a plan that involves all aspects of the operations, the target markets, the time pattern and the sales objects. Family firms and its managers ought to know that the greater the distance between their domestic markets and a foreign target market is, the smaller the level of knowledge is. When entering foreign markets, three main entry strategies can be used, namely export entry, contractual entry and investment entry. Export entry can be either with the use of intermediary agents (indirect) or the company goes directly to the customer (direct). While export entry is the most used entry strategy, for every company another “ideal” strategy is needed, because this strategy will affect the business operations for a future period of time.


Bart van Overbeek

Table of Contents
1 Introduction...

References: Astrachan B.M., & Astrachan, J.H.(1993). Family Business: the Challenges and Opportunities of Interprofessional Collaboration. In C.E. Aronoff, J.H. Astrachan and J.L. Ward (Eds.) Family Business Sourcebook 2. Marietta: Business Owner Resources, 535-546. Bartlett, C.A., & Ghoshal, S. (1989). Managing Across Borders: The Transnational Solution. Harvard Business School Press, Boston, MA. Callaway, S.K. (2004), Elements of Infrastructure: Factors Driving International Entrepreneurship. New England Journal of Entrepreneurship, 7(1), 27-37. Carter, S. (1997), Global agricultural marketing management. (Marketing and agribusiness texts - 3). Rome, Italy: Food and Agriculture Organization of the United Nations. Cavusgil, S.T., (1980). On the internationalization process of firms. European Research, 8(6), 273–281. Cerrato, D. & Piva, M.,(2007), The internationalization of small- and medium sized enterprises: The effect of family management, human capital and foreign ownership. Working Paper DICE, October, Universita Cattolica del Sacro Cuore Chrisman, J.J., Chua, J.H., Sharma, P. (2003), Current trends and future directions in family business management studies: Toward a theory of the family firm. Coleman White Paper series, Madison, WI: Coleman Foundation and U.S. Association of Small Business and Entrepreneurship. Craig, C.S., & Douglas, S.P., (1996), Developing strategies for global markets: an evolutionary perspective, Columbia Journal of World Business, 31(1), 70–81. doi:10.1016/S00225428(96)90008-3 Doole, I., & Lowe, R., (1999). International marketing strategy. London, Thomson Learning. Dyer, W. G. Jr, (1998) Conflictos en la Empresa Familiar (Conflict in the Family Business) , Iniciativa, January-February, 8 , 15-21. Fayerweather, J., (1978), International Business Strategy and Administration, Cambridge, MA, Ballinger Pub Co. Fernandez, Z. & Nieto, M.J. (2005), Internationalization strategy of small- and medium-sized family businesses: Some influential factors, Family Business Review, 18(1), 77-89. doi: 10.1111/j.1741-6248.2005.00031.x
Bart van Overbeek
Fernandez, Z. & Nieto, M.J. (2006). Impact of ownership on the international involvement of SMEs, Journal of International Business Studies, 37, 340–351. Gallo, M.A. & Cappuyns, K. (2004) Characteristics of successful family businesses, IESE Business School Working Paper, no. 542 Gallo, M.A. & Garcia Pont, C. (1996). Important factors in family business internationalization, Family Business Review, 9(1), 45-59. doi: 10.1111/j.1741-6248.1996.00045.x Gallo, M., & Sveen, J., (1991). Internationalizing the family business: Facilitating and restraining factors. Family Business Review, 4(2), 181–190. doi: 10.1111/j.1741-6248.1991.00181.x Graves, C. & Thomas, J. (2006). Internationalization of Australian family businesses: A managerial capabilities perspective, Family Business Review, 19(3), 207-224. doi: 10.1111/j.1741-6248.2006.00066.x Habbershon, T.G. & Williams, M.L. (1999) A resource-based framework for assessing the strategic advantages of family firms. Family Business Review, 12(1), 1-25. doi: 10.1111/j.1741-6248.1999.00001.x Hitt, M.A., Bierman, L. Uhlenbruck, K. and Shimizu, K. (2006). The importance of resources in the internationalization of professional service firms: the good, the bad, and the ugly. Academy of Management Journal, 49(6), 1137–1157. Hofer, C.W., & Schendel, D., (1978). Strategy Formulation: Analytical Concepts. St. Paul, MN. West Publishing Hollander, B. S., & Elman, N. S. (1988). Family-owned Business: An Emerging Field of Inquiry. Family Business Review, 1(2), 145-164. doi: 10.1111/j.1741-6248.1988.00145.x International Finance Corporation (2010). Family Business Governance Handbook (2nd ed.) Washington, DC: Author Johanson, J. & Vahlne, J.,(1977), The internationalization process of the firm: A model of knowledge development and increasing foreign commitments. Journal of International Business Studies, 8(1). 23–32. Johanson, J. & Vahlne, J.E., (2003),Business relationship commitment and learning in the internationalization process. Journal of International Entrepreneurship, 1. 83-101. Kets de Vries, M. F. (1993). The dynamics of family controlled firms: The good and the bad news. Organizational Dynamics, 21(3), 59–71. doi:10.1016/0090-2616(93)90071-8
Bart van Overbeek
Knight, G.A. (2001). Entrepreneurship and strategy in the international SME. Journal of International Management, 7(3), 155–171. doi:10.1016/S1075-4253(01)00042-4 Knight, J. (2007), Internationalization Brings Important Benefits as Well as Risks. International Higher Education, the Quarterly Publication of the Boston College Center for International Higher Education, no. 46, 8-10. Leonidou, L. & Katsikeas, C. (1996). The Export Development Process: An Integrative Review of Empirical Models‟, Journal of International Business Studies, 27(3), 517– 551 Levering, R., & Moskowitz, M. (1993). The ten best companies to work for in America. Business and Society Review, 85(1), 26–38. Litz, R.A. (1997). The family firm‟s exclusion from business school research : explaining the void; addressing the opportunity. Entrepreneurship Theory and Practice, 21, 55-72. Lussier, R.N. & Sonfield, M.C. (2004). Family Business Management Activities, Styles and Characteristics: A Correlational Study. American Journal of Business, 19(1), 47-53. Retrieved from O‟Grady, S. & Lane, H.W. (1996). The psychic distance paradox. Journal of International Business Studies, 27(2), 309-333. doi:10.1057/palgrave.jibs.8490137 Okoroafo, S.C. (1999). Internationalization of family businesses: evidence from northwest Ohio, USA. Family Business Review, 12(2), 147-158. doi: 10.1111/j.1741-6248.1999.00147.x Olson, P., Zuiker, V., Danes, S., Stafford, K., Heck, R., & Duncan, K. (2003). Impact of family and the business on family business sustainability. Journal of Business Venturing, 18(5), 639-666. doi:10.1016/S0883-9026(03)00014-4 Poza, E. J. (2004). Family Business. Mason, Ohio: Thomson-Southwestern. Root, F.R. (1994). Entry strategies for international markets. New York, NY: Lexington Books Ruigrok, W. & Wagner, H., (2003), Internationalization and Performance: An Organizational Learning Perspective. Management International Review, 43(1), 63–83. Ruzzier, M. & Konečnik, M., (2006). the internationalization strategies of SMEs: the case of the Slovenian hotel industry, Management: Journal of Contemporary Management Issues, 11(1), 17-35. Senik, Z.C. (2010). Models, processes and factors influencing internationalization: The case of malaysian SME’s (PhD Thesis, Murdock University, Australia). Retrieved from 28
Bart van Overbeek
Smith, W.L. (2006). Goals and characteristics of family-owned small businesses: An international replication and comparison between Middle America and Western Australia Hospitality Providers. International Journal of Management and Enterprise Development, 3(3), 212 - 226. doi: 10.1504/IJMED.2006.008821 Siddharthan, N. S. & Lall, S. (1982), Recent Growth of the Largest U. S. Multinationals. Oxford Bulletin of Economics and Statistics, 44(1), 1–13. doi: 10.1111/j.14680084.1982.mp44001001.x Su, Z. & Poisson, R., (Eds.). (2000). Proceedings of the Ninth International Conference on Management of Technology, 2000: Utilisation of strategic alliances in the processes of internationalization: an empirical study of small and medium sized high-tech enterprises. Laval University, Quebec, Canada. Retrieved from english/index.html Tagiuri, R. & Davis, J.A., (1996), Bivalent Attributes of the Family Firm. Family Business Review, 9(2) 199-208. doi: 10.1111/j.1741-6248.1996.00199.x Taylor, B., (2006, April). Characteristics of the Family Business. Area Community Development Extension Educator, University of Wyoming, Laramie, WY. Ward, J. L. (1988). The special role of strategic planning for family businesses. Family Business Review, 1(2), 105–117. doi: 10.1111/j.1741-6248.1988.00105.x Webster, F.E., (1992). The changing role of marketing in the corporation. Journal of Marketing, 56(4), 1–17. Zahra, S.A. (2003), International expansion of U.S. manufacturing family businesses: the effect of ownership and involvement, Journal of Business Venturing, 18(4), 495–512. doi:10.1016/S0883-9026(03)00057-0 Zahra, S., & George, G., (2002). International entrepreneurship: research contributions and future directions, Strategic Entrepreneurship: Entrepreneurial Strategies for Wealth Creation. New York, NY, Blackwell, 255–288 Zaltman, G., Duncan, R., Holbek, J., (1973). Innovations and Organizations. New York, NY, Wiley.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Family Business Essay
  • Business Environment Assignment Essay
  • Differences Between "Formal Research" and "Business Proposals" Essay
  • How Technology Advances Influence Business Research and Marketing Strategy Paper Appraisal
  • Effect of Business Acquisition to Get Competitive Advantage Based on the Case Study: Acquisition of Somerfield by Co-Operative Group Essay
  • What Are the Factors Influencing International Channel Choice of Small Business Exported? Essay
  • Engr Essay
  • Marketing essay

Become a StudyMode Member

Sign Up - It's Free