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The family as a platform for FSA development: Enriching new internalization theory with insights from family firm research

  • Research Note
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Abstract

This research note links insights from the family firm literature with extant internalization theory-based studies on family firm internationalization to explain how family-owned multinational enterprises (MNEs) can leverage family resources for successful internationalization, and why some family firms are unable to do so. We identify examples of internationally relevant resources contributed by the founding family, namely, social capital, long-term orientation, and reputation. We then differentiate between pre-existing resources that reside at the family level, and firm-specific advantages (FSAs) that reside at the firm level. In order to derive FSAs from family resources, and to profitably exploit those across borders, family MNEs must engage in two types of recombination. First, family and non-family resources are recombined to create actionable FSAs. Second, family-derived FSAs are recombined with location-specific resources in order to respond to differences between home and host country environments. We discuss complementary resources required for each type of recombination and specific mechanisms utilized by family MNEs to integrate those resources. By investigating a potential functional contribution of a family to successful internationalization, we extend prior internalization theory-based work, which focuses predominantly on family firms’ propensity toward bifurcation bias and the constraining effect of this bias on efficient international governance.

Resume

Cette note de recherche relie les connaissances tirées de la littérature sur les entreprises familiales aux études existantes sur l’internationalisation des entreprises familiales fondées sur la théorie de l’internalisation pour expliquer comment les entreprises multinationales (EMN) familiales peuvent tirer parti des ressources familiales pour réussir l’internationalisation, et pourquoi certaines entreprises familiales ne sont pas en mesure de le faire. Nous identifions des exemples de ressources pertinentes au niveau international apportées par la famille fondatrice, à savoir le capital social, l’orientation à long terme et la réputation. Nous différencions ensuite les ressources préexistantes qui résident au niveau familial et les avantages spécifiques de l’entreprise (ASE) qui résident au niveau de l’entreprise. Afin de tirer les ASE des ressources familiales et d’exploiter celles-ci de manière rentable au-delà des frontières, les EMN familiales doivent s’engager dans deux types de recombinaison. Premièrement, les ressources familiales et non familiales sont recombinées pour créer des ASE exploitables. Deuxièmement, les ASE dérivées de la famille sont recombinées avec des ressources spécifiques de la localisation afin de répondre aux différences entre les environnements du pays d’origine et du pays d’accueil. Nous discutons des ressources complémentaires requises pour chaque type de recombinaison et des mécanismes spécifiques utilisés par les EMN familiales pour intégrer ces ressources. En étudiant une contribution fonctionnelle potentielle de la famille à une internationalisation réussie, nous étendons les travaux antérieurs sur la théorie de l’internalisation, qui se concentrent principalement sur la propension des entreprises familiales à un biais de bifurcation et à l’effet contraignant de ce biais sur une gouvernance internationale efficace.

Resumen

Esta nota de investigación conecta las perspectivas de la literatura sobre la empresa familiar con estudios basados en la teoría de internacionalización existentes sobre la internacionalización de la empresa familiar para explicar cómo las empresas multinacionales (EMN) de propiedad familiar pueden apalancar los recursos familiares para una exitosa internacionalización, y por qué algunas empresas familiares no pueden hacerlo. Identificamos ejemplos de recursos relevantes internacionalmente aportados por la empresa fundadora, concretamente, capital social, orientación de largo plazo, y reputación. Luego diferenciamos entre los recursos preexistentes que se radican a nivel familiar, y las ventajas específicas de la empresa (FSAs por sus iniciales en inglés) que se derivan nivel de la empresa. Para obtener ventajas específicas de la empresa de los recursos familiares, y para explorar rentablemente estos internacionalmente, las empresas multinacionales familiares deben participar en dos tipos de recombinaciones. Primero, los recursos de la familia y los no familiares son recombinados para crear ventajas específicas de la empresa procesables. Segundo, las ventajas específicas de la empresa derivadas de la familia son recombinadas con recursos específicos de la ubicación para responder a las diferencias entre los entornos del país de origen y del anfitrión. Discutimos los recursos complementarios necesarios para cada tipo de recombinación y mecanismos específicos utilizados por las empresas familiares multinacionales para integrar estos recursos. Al investigar una posible contribución funcional de la familia en la internacionalización exitosa, ampliamos los trabajos de investigación previos basados en la teoría de internacionalización la cual se centra predominantemente en la propensión de las empresas familiares hacia el sesgo de bifurcación y el efecto restrictivo de este sesgo en la gobernanza internacional eficiente.

Resumo

Esta nota de pesquisa vincula ideias da literatura sobre empresas familiares a estudos existentes baseados na teoria da internalização sobre internacionalização de empresas familiares para explicar como empresas multinacionais de propriedade familiar (MNEs) podem alavancar recursos familiares para uma internacionalização bem-sucedida e por que algumas empresas familiares são incapazes de fazê-lo. Identificamos exemplos de recursos internacionalmente relevantes contribuídos pela família fundadora, a saber, capital social, orientação a longo prazo e reputação. Em seguida, diferenciamos recursos preexistentes que residem no nível da família de vantagens específicas da empresa (FSAs) que residem no nível da empresa. Para obter FSAs a partir de recursos da família e explorá-los de maneira lucrativa internacionalmente, MNEs familiares devem se envolver em dois tipos de recombinação. Primeiro, recursos familiares e não familiares são recombinados para criar FSAs acionáveis. Segundo, FSAs derivadas da família são recombinadas com recursos específicos do local para responder a diferenças entre os ambientes do país de origem e do país anfitrião. Discutimos recursos complementares necessários para cada tipo de recombinação e mecanismos específicos utilizados pelas MNEs familiares para integrar esses recursos. Ao investigar uma possível contribuição funcional da família para internacionalização bem-sucedida, estendemos trabalho prévio baseado na teoria da internalização, que foca predominantemente na propensão das empresas familiares ao viés de bifurcação e no efeito restritivo desse viés na governança internacional eficiente.

摘要

本研究笔记将家族企业文献的洞见与现有的基于内化理论的家族企业国际化研究联系起来, 以解释家族跨国企业(MNE)如何利用家族资源成功实现国际化, 以及为什么某些家族企业无法做到这一点。我们列举了创始家族提供的国际相关的资源, 例如社会资本, 长期导向和声誉。我们然后将家庭层面的现有资源与公司层面的公司特定优势(FSA)进行了区分。为了从家庭资源中获取FSA, 并跨界获利, 家族MNE必须进行两种类型的重组。首先, 将家族和非家族资源重新组合以创建可行的FSA。第二, 将源于家族的FSA与特定位置资源进行重组, 以应对本国和所在国环境之间的差异。我们讨论了每种类型重组所需的补充资源, 以及家族跨国企业用来整合这些资源的特定机制。通过研究家族对成功国际化的潜在功能性的贡献, 我们扩展了基于内化理论的先前工作, 该工作主要侧重于家族企业的分叉偏见倾向, 以及这种偏见对有效的国际治理的约束作用。

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Acknowledgements

We thank owners and managers of family firms featured in this study for generously sharing information with us. We would like to express our sincere gratitude to Prof. Tailan Chi and two anonymous reviewers for their valuable guidance and support. We thank Prof. Birgitte Grøgaard, Prof. Antonio Majocchi, and Prof. Rajneesh Narula for their insightful feedback on the earlier version of the manuscript, and Mattia Bertazzini and Magali Canovi for high-quality research assistance. We gratefully acknowledge financial support of the Social Sciences and Humanities Research Council of Canada (SSHRC), and the Transformative Research Grant provided by the Haskayne School of Business.

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Authors and Affiliations

  1. Haskayne School of Business, University of Calgary, 2500 University Drive N.W, Calgary, AB, T2N 1N4, Canada

    Liena Kano

  2. Department of International Development, King’s College, London, WC2 R2LS, UK

    Luciano Ciravegna

  3. INCAE Business School, Alajuela, Costa Rica

    Luciano Ciravegna

  4. ESCP Business School, C.so Unione Sovietica 218bis, 10134, Turin, Italy

    Francesco Rattalino

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  1. Liena Kano
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Accepted by Tailan Chi, Area Editor, 24 January 2020. This article has been with the authors for six revisions.

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Kano, L., Ciravegna, L. & Rattalino, F. The family as a platform for FSA development: Enriching new internalization theory with insights from family firm research. J Int Bus Stud 52, 148–160 (2021). https://doi.org/10.1057/s41267-020-00308-y

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