Family involvement and organizational ambidexterity in later-generation family businesses

Abstract

Purpose – How family businesses (FBs) manage to survive in the long term is still not well understood in FB research. A promising concept to explain survivability, that is currently heavily discussed in the management literature is organizational ambidexterity (OA) – the ability to balance exploring and exploiting activities at the same time. However, FB research has not yet taken sufficient advantage of the potential of OA to contribute to explaining the ability of later-generation FBs to survive. The paper aims to discuss this issue. Design/methodology/approach – Using central tenets of agency theory, this conceptual paper draws together findings from the FB literature and the OA literature to create a framework for the relationship between family involvement and the ability to reach high levels of OA. Findings – Seven propositions are developed which suggest that the level of family involvement in ownership and management affect the ability of later-generation FBs to reach high levels of OA. They further suggest that the number of family shareholders, the existence of majority family shareholders, and generational involvement of the controlling family in management moderate these relationships. Originality/value – This is the first paper to theoretically analyze OA in later-generation FBs. The seven propositions and avenues for further research presented in this paper are intended to motivate FB research to take a closer look at OA. This may be crucial to better explaining and predicting one of business-owning families’ most important goals: the long-term survival of the FB.