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Internationalization of family business and its performance: examining the moderating role of digitalization and international networking capability

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Abstract

The purpose of this study is to identify different antecedents related to internationalization intention of family firms. The study also examines the moderating impact of digitalization of family firms and international networking capability of the management of the family firms. With the help of theories and a literature review, a conceptual framework model is developed, which is later validated using the partial least squares structural equation modeling with a sample of 429 respondents in India associated with family firms. The study identifies the antecedents for internationalization intention of family firms and shows the significant moderating impact of digitalization and international networking capability for their successful internationalization and performance.

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Authors and Affiliations

  1. Department of Computer Science & Engineering, Indian Institute of Technology, Kharagpur, West Bengal, India

    Sheshadri Chatterjee

  2. Indian Institute of Management Ranchi, Ranchi, India

    Ranjan Chaudhuri

  3. School of Business, University of Nicosia, Nicosia, Cyprus

    Demetris Vrontis

  4. IPAG Business School, Paris, France

    Adnane Maalaoui

Authors
  1. Sheshadri Chatterjee
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  2. Ranjan Chaudhuri
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  3. Demetris Vrontis
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  4. Adnane Maalaoui
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Corresponding author

Correspondence to Sheshadri Chatterjee.

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Appendices

Appendix 1: A list of Indian family firms

Name of family firms

Founder

Year of establishment

Headquarter

Aditya Birla Group

Seth Shivnarayan Birla

1857

Mumbai

Shapoorji Pallonji

Pallanji Mistry

1865

Mumbai

Tata Group

Jamsetji Tata

1868

Mumbai

Godrej Group

Ardeshir Godrej and Pirojsha Burjorji Godrej

1897

Mumbai

Murugappa Group

A.M. Murugappa Chettiar

1900

Chennai

Khoday Group

Khoday Eshwara

1906

Bengaluru

Kirloskar Group

Laxmanrao Kirloskar

1911

Pune

TVS Group

T.V. Sundaramiyengar

1911

Madurai

  1. Source: www.buddymantra.com.

Appendix 2: Details of research instruments

Items

Source

Statements

Response

[SD][D][N][A][SA]

FP1

Dressler and Tauer 2015

Family influence is an important factor towards expanding the family firms internationally.

[1][2][3][4][5]

FP2

Carr and Bateman 2009; Carney et al. 2015

I believe that it is essential to have a powerful family at the top of the family firms.

[1][2][3][4][5]

FP3

Churchill and Hatten 1987; Eisenhardt 1989

I believe family influence plays a vital tole towards internationalization of family firms.

[1][2][3][4][5]

FP4

Alessendri et al., 2018; Santulli et al. 2019

Family influence plays a vital role towards the digitalization process of the family firms.

[1][2][3][4][5]

RI1

Zhou et al. 2016;

I believe that the international expansion of any firm is associated with high risks.

[1][2][3][4][5]

RI2

Zahra 2005; Luo and Tung 2007

I believe that it is essential to take some risks towards expansion of family firms internationally.

[1][2][3][4][5]

RI3

Agnihotri and Bhattacharya 2021

Without taking any risk, I think that the family firms cannot grow internationally.

[1][2][3][4][5]

RI4

Zhou et al. 2010; Falahat et al. 2021;

There could be a possibility of failure if the family firm wants to expand internationally without a proper strategy.

[1][2][3][4][5]

FE1

Slater and Narver 1995

Experience of the family plays a vital role towards expanding the business in a foreign country.

[1][2][3][4][5]

FE2

Sapienza et al. 2006

I believe that prior international exposure of the family is an important advantage.

[1][2][3][4][5]

FE3

Zhou et al. 2010

Diversified business interests of a family can help them to grow rapidly in the international market.

[1][2][3][4][5]

FE4

Sapienza et al. 2006

Without having any international experience of the family, it is difficult to hire appropriate foreign managers.

[1][2][3][4][5]

FC1

Zhou et al. 2016; Falahat et al. 2021

I believe that family firm culture is considered an internal group-oriented culture.

[1][2][3][4][5]

FC2

Thornton 2004; Zahra et al. 2008

I think that culture of a family is based on personalized and emotional values.

[1][2][3][4][5]

FC3

Dheer et al. 2015

The family firm culture depends on the role that was played by the founder while establishing family firm.

[1][2][3][4][5]

FC4

Schein 1995; Krishnan 2020

I believe that family culture has an influence on how professional managers and employees perform their tasks in family firms.

[1][2][3][4][5]

PA1

Yeoh 2000; Autio et al. 2000

International marketing knowledge is considered an essential element for a family firm’s rapid growth towards internationalization.

[1][2][3][4][5]

PA2

Slater and Narver 1995; Matsuno et al. 2002

Family firms must upgrade their knowledge repository on a regular basis for expanding their business internationally.

[1][2][3][4][5]

PA3

Lunpkin & Dess, 1996

The firm must become knowledgeable on how to effectively deploy the available resources to fetch the best results.

[1][2][3][4][5]

PA4

Oviatt and McDougall 1994; Zahra 2005

Family firms should take appropriate initiatives to develop knowledge about international markets.

[1][2][3][4][5]

IN1

Floris et al. 2021

I believe that innovation capability of the family firms helps them to internationalize their businesses.

[1][2][3][4][5]

IN2

Braga et al. 2017

Family firms must possess appropriate competitiveness to enter the foreign markets.

[1][2][3][4][5]

IN3

Cassiman and Golovko 2011

The family firms need to have appropriate expert managers to enter in the foreign market.

[1][2][3][4][5]

IN4

Baines et al. 2017

The family firms must possess proactiveness to enter the foreign markets.

[1][2][3][4][5]

IN5

Katikeas et al., 2019

To enter the foreign markets, the family firms need to assess its risk-taking appetite.

[1][2][3][4][5]

IN6

Malhotra et al. 2003

I believe that digitalization initiatives can help family firms to rapidly internationalize their businesses.

[1][2][3][4][5]

IP1

Lafuente et al. 2017

Through Internationalization process, family firms can improve their revenue growth.

[1][2][3][4][5]

IP2

Liu et al. 2019

Internationalization process can help family firms getting more expert employees from foreign markets.

[1][2][3][4][5]

IP3

Dubiel et al. 2018

Internationalization process can help to optimize knowledge management process.

[1][2][3][4][5]

IP4

Katikeas et al., 2019

Internationalization of family firms can help more profitability.

[1][2][3][4][5]

IP5

Braga et al. 2017

Entering the foreign markets can help family firms capture more customers.

[1][2][3][4][5]

IP6

Malhotra et al. 2003

Internationalization process can help to optimize supply chain management process.

[1][2][3][4][5]

  1. SD = Strongly Disagree; D = Disagree; N = Neither agree nor disagree; A = Agree; SA = Strongly Agree.

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Chatterjee, S., Chaudhuri, R., Vrontis, D. et al. Internationalization of family business and its performance: examining the moderating role of digitalization and international networking capability. Rev Manag Sci 17, 2443–2470 (2023). https://doi.org/10.1007/s11846-022-00585-x

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