The Influence of Siblings
Toward R&D Investment
in Family Firms
MASTER THESIS WITHIN: Engineering management NUMBER OF CREDITS: 15
PROGRAMME OF STUDY: Master thesis in general management AUTHOR: Xiaohan Su, Simran Patel
Master Thesis in General Management
Title: The Influence of Siblings Toward R&D Investment in Family Firms
Authors: Simran patel & Xiaohan Su
Tutor: Tommaso Minola
We would like to give special regards to our supervisor, Tommaso Minola for the guidance he provided to reach our research goals and he assisted us to be on track. Moreover, we would also like to reckon our friends and family who helped us to find sibling owned business via personal contact for our research. We would also like to express our gratitude towards the individuals from family firm who spared time for us even in this crucial time of Covid-19 and provided immense contribution by sharing their experiences. Finally, we are thankful of Jönköping University and the professors for giving us platform to do our research and excess to all the sources we need to continue the thesis.
Xiaohan su & Simran Akanksha Ajaykumar Patel Jönköping, May 2020
Various studies suggested that family ownership plays a significant role in R&D investment considering family-owned businesses. This thesis specifically explores sibling ownership and how it influences R&D Investment in their company. Moreover, various factors have been highlighted and explored extensively to understand what makes the difference between sibling owners and sole owners when it comes to their behaviors whether to pursue and invest in R&D for the betterment of the company.
This paper adopted qualitative research as a method. Data was collected from 5 cases which consisted of sibling owners and sole owners to understand the differences between 2 types. In this multiple case study, two respondent took part in each case. Semi-structured interviews were carried out to have an in-depth understanding of the cases. Furthermore, the analysis of these data was done using the SEWi scale which provided us the three dimensions to scrutinize the impact on R&D investment by sibling owners and compare it with sole owners.
Using the theoretical lenses, the sibling ownership presents a unique attitude as of any other family ownership. To have a more broader approach, the comparison between a sole owner and sibling owner derived many different factors to take up R&D Investments. It shows that sibling owner does not always initiate investment for the company to prosper but they consider other family members involvement for investing. R&D investments are taking part in the sibling ownership by keeping the family wealth in mind. This tends to provide evidence that sibling owner is careful in investment for R&D. Family values and family unity in sibling owned business create an immense impact on the decision making for the investment. Considering the decision making regarding R&D investment, sibling owner believe that they have ease to make a decision when the family is involved whereas sole owner finds difficulty in taking such decisions, especially under uncertainty. The following observations from our research provided the idea that sibling owner initiative to invest in R&D is not only restricted to the company growth perspective but also the involvement of various family dimensions.
Table of contents
Table of contents... v
1 Introduction...11.1 BACKGROUND...1 1.2 PROBLEM STATEMENT... 1
1.3 PURPOSE AND RESEARCH QUESTIONS... 2
1.4 THE PERSPECTIVE AND DELIMITATIONS...3
2 Theoretical framework...4
2.1 LINK BETWEEN RESEARCH QUESTIONS AND THEORY... 4
2.2 FAMILY FIRM UNDERSEW...4
2.2.1 SEWi scale... 5
2.3 EFFECT OF FAMILY MEMBERS OWNERSHIP ONR&DINVESTMENT...7
2.3.1 The positive effect on family ownership on R&D... 7
2.3.2 The negative effect on family ownership on R&D... 8
2.4 SIBLINGS RELATIONSHIP... 9
2.4.1 Siblings behaviors under SEW...10
3 Methodology... 11
3.1 RESEARCH PHILOSOPHY...11
3.2 RESEARCH DESIGN AND METHOD... 12
3.2.1 Case study design...12
3.2.2 Criteria of sampling...13
3.3 DATA COLLECTION... 13
3.4 DATA ANALYSIS AND INTERPRETATION...17
3.5 RESEARCH QUALITY...18
3.5.1 Validity and reliability... 18
3.5.2 Ethical consideration...19
4 Empirical data...21
4.1 DESCRIPTION OF EMPIRICAL MATERIAL...21
4.1.1 Information of company A...22
4.1.2 Information of company B...22
4.1.4 Information of company D...23
4.1.5 Information of company E... 23
5 Analysis... 245.1 CODING...24 5.2 FINDING... 26 5.2.1 Family prominence...27 5.2.2 Family continuity... 32 5.2.3 Family enrichment... 34
6 Discussion and conclusion...40
6.2 CONTRIBUTION... 44
6.4 CONCLUSIONS ANDFUTURERESEARCH...45
The chapter provides a background for the study and the problem area the study is built upon. Further, the purpose and the research questions are presented. The scope and delimitations of the study are also described. Lastly, the disposition of the thesis is outlined.
Innovation, an important strategic instrument for the research field in family owned business, has become cumulative impulse to make sure economic prosperity (Röd, 2016; Poter, 1980). The innovation process is a multi-staged process according to the work of Lumpkin, Steier, and Wright (2011). Innovation process is systematized into input, activities and output. Innovation input is defined as resources that business can use to innovate, for example, research and develop (R&D) expenditure or personnel who contribute to innovation (Lumpkin et al, 2011). Extant literature states R&D is vital in innovation management process, which can contribute to new products, services and such value-adding creation (Sciascia, Nordqvist, Mazzola, & De Massis, 2015; Chiesa, 2001). Moreover, R&D investment enhances the advantages of company innovation and is considered as a prominence to acquire and maintain a competitive advantage (Chen, & Hsu, 2009; Ettlie, 1998). Though family firms invest less toward innovation and can even convert input efficiently into output compared to nonfamily firms (Duran, Kammerlander, van Essen, & Zellweger, 2016), the heterogeneity of family firms regarding involvement of family members remains different between family owned businesses.
1.2 Problem statement
Family controlling members’ behaviors in investment of R&D become complex due to substantial variance when taking family involvement into account. In order to understand family members’ behaviors in R&D investment, it is important to disentangle family involvement. Family firms may involve heterogeneous ownership, management and transgenerational succession (Limpkin et al., 2011). Further, ownership and management is related to a conception that how the family can be beneficial from the firm potentially across generations, which entails the pursuit of non-economic family-centered goals, for instance, maintaining governance power in the control of family members (Berrone, Cruz, & Gomez-Mejia, 2012; Chrisman, Chua, Pearson, & Barnett, 2012; Kotlar & De Massis, 2013; Kotlar, Fang, De Massis,
& Frattini, 2014;). Because of the characteristic of family firms, more specifically, the research will conduct under socioemotional wealth (SEW).
According to Lumpkin et al. (2011), “The configuration of the ownership may also be influential in determining entrepreneurial activities, for example whether relationships between family members are husband-wife, siblings, cousins, extended families, etc.” (p. 198). However, when researchers seek for the reasons led to the distinction between family firms, implicit assumption will be taken for granted regarding relationship between family members (Röd, 2016). Therefore, operationalizing different aspects of the family and its effect on R&D investment needs to be digged.
1.3 Purpose and research questions
Drawing on the problem statement, regarding family dynamics, little knowledge of siblings and spouses restrains the path to their distribution to R&D investment. More specifically, the complex relationship between their roles will be a great effect on company activities, which could be a driving force or barrier when taking measures to innovate (Röd, 2016). According to Singapurwoko (2016), sibling partnership is only found in a family-owned business and family firms can differ in terms of their ownership, which triggers the incentive to get a better understanding of their influence of ownership when they do the investment decision together. Recent research from Chen, C. Wang, Q. Wang and Luo (2019) state ownership of sibling rivalry causes increasing risk-taking of the family firm in a short period, but for a family business in which the siblings are united together, risk-taking is lower than that of family firms with only one offspring, this situation aims at the second generation of a family firm, while it is still unknown when siblings as co-owners already take over family firms, how they interact their roles concerning innovation input, especially R&D investment. Consequently, the purpose of this special objective and aim of this paper is to develop the research on the common role, siblings, in investing R&D as well as on the significance of their ownership in mediating R&D intensity and owner behaviors under SEW. To be able to fulfill the purpose, below are the research questions:
How does sibling ownership influence R&D investment in family firms compared to the sole owner?
To answer the following research question and thereby fulfilling the purpose, qualitative research will be conducted.
1.4 The perspective and delimitations
The paper contributes to the family firm literature in some perspective. For society, it provides a narrative and sharp angle to understand internal managerial structure within a family firm. By investigating the common family member sibling’s influence toward R&D investment, this research gives new evidence for a distinction between different family firms. Besides, the finding can benefit both scholars and practitioners from adjusting their R&D investment in the initial stage with their peculiarity.
The research is organized as follows: the following section provides a theoretical framework of reference including the structure of SEW, R&D investment and ownership, and sibling relations. Section 3 introduces the research methodology containing research design and data collection. Section 4 presents empirical findings and discuss the influence of siblings’ different variables toward R&D investment. In the last section, research will state the premise and implications of its conceptual framework along with the conclusion drove in the end.
The chapter presents the theoretical foundation for the study.
2.1 Link between research questions and theory
In the following chapter, the theory provides the theoretical foundation for answering the research questions. The following areas are described in the theoretical framework: family firms under SEW, the effect of family members ownership on R&D investment, and sibling's behaviors under SEW. The review form SEW introduces the concept consisting of distinctive economic goals. Since family-centered non-economic goals could influence family involvement (Chrisman, Chua, Pearson, & Barnett, 2012), it is essential to develop current theory when taking SEW as the setting. Furthermore, the paper adopts SEWi as the tool to measure the importance of SEW for family firm owners. The effect of family member's ownership on R&D investment is covered as the second part because it provides quality research outcomes as the theoretical foundation. The last part states siblings' behaviors under SEW to uncover the common but special role along with their behavior related to ownership in family firms. Based on the three categories, the research takes siblings’ ownership as a mediator to see how R&D investment changes.
2.2 Family firm under SEW
The heterogeneity of family firms has long been committed (Chua, Chrisman, Steier, & Rau, 2012; Melin & Nordqvist, 2007; Sharma, Chrisman, & Chua, 1997). As Charisman and Patel (2012) state, different families will be extremely varied in their preferences and aspirations regarding either short term consideration like providing jobs for family members, or long-term issue, for example, preparing for multi-generation. Berrone, Cruz, and Gomez-Mejia (2012) point out, SEW is a paramount differentiator for family firms as special entities, so it contributes to the explanation of why family firms behave differently. Moreover, they describe SEW as “affective endowment” for family owners. It also means that family owners can accrue non-financial value under SEW. In this formulation, gains or losses in SEW states the importance that family-owned businesses use to make major strategic choices or decisions.
Berrone et al. (2012) label SEW as FIBER based on prior research, that is: “ Family control and influence, Identification of family members within the firm, Binding social ties, Emotional attachment of family members, and Renewal of family bonds to the firm through dynastic succession” (p. 259). This model derives from the nature of family firms that show the presence of different salient goals driven by the family value and that shift over time (Berrone et al., 2012; Chua, Chriaman & Sharma, 1999; Sorenson, Goodpaster, Hedberg, & Yu, 2009; Zellweger, Nason, Nordqvist, & Brush, 2011). However, SEW to the family is more intangible due to the deep psychological level where the family owners operate to inseparably tie to the business (Berrone, Cruz, Gomez-Mejia, & Larraza-Kintana, 2010). For example, sentiments, emotions, and relationships may be distinctive from one family firm to another, even within the firm, from one time period to another (Berrone et al., 2012; Hoy & Sharma, 2010). To know how the family members, perceive SEW, the tool below develops the SEW model and makes it possible to measure the importance of SEW that affects the decision-making process.
2.2.1 SEWi scale
Further research conducted by Debicki, Kellermanns, Chriaman, Pearson, and Spencer (2016) proposes the socioemotional wealth importance (SEWi) scale consisting of three dimensions rather than five of SEW from Berrone et al (2012). The research adopted SEWi because it provides an instrument for family owners to directly measure the importance of SEW. By doing so, SEWi is tested at the individual level and focus on the family group referent. To be precise, the SEWi scale makes it possible to preserve the variations to different behaviors of owners in family firms.
According to Debicki et al (2016), the SEWi scale is divided into family prominence, family continuity, and family enrichment. The family prominence indicates the importance of how the community can perceive the owners of a family firm. Besides, it reveals the commitment from the community through fulfillment and generous behaviors towards others, including the network contribution. As for family continuity, it shows the significance for family owners to maintain involvement within a family-owned business. By involving family members in pursuance of common business goals and preserving family values in the business procedure, owners can maintain the
harmony of the family (Debicki et al., 2016; Handler, 1990). The last dimension -family enrichment presents the importance of the willingness to carry out obligations for family members to boost the unity of the family and demonstrates altruism to family members as many rather than only the members involved with the family business. The short description also shows in Table 1.
Table 1 Description of SEWi
Family prominence The importance of how the community can perceive the owners of a family firm. It reveals the commitment from community through fulfillment and generous behaviors towards others, including the network contribution
Family continuity The significance for family owners to maintain involvement within family owned business. By involving family members in pursuance of common business goals and preserving family values in business procedure
Family enrichment The importance of the willingness to carry out obligations for family members to boost the unity of family and demonstrates altruism to family members as many
Debicki et al (2016) point out, the relationships between SEWi dimensions and family involvement were various. When it turns to family ownership, it is relevant to differences in the different dimensions. The finding shows ownership has a negative effect on family prominence, but it was positively relevant to family continuity and was not notably related to family enrichment. While keeping count on a number of generations who are active in ownership, all three dimensions are positively related to it (Table 2 is derived from it). The result suggests that whoever is involved with the family firm may affect SEWi. In most studies, family ownership is used as a proxy for the existence of SEW (Berrone et al., 2010; Berrone et al, 2012; Gomez-Mejia, Haynes, Núñez-Nickel, Jacobson & Moyano Fuentes, 2007). This tool reflects family owners’ reference regarding emotional tie, and it is also the determining factor to tell if SEW affects firm behavior including R&D investment.
Table 2 The relationship between SEWi and ownership family prominence family continuity family enrichment family ownership - + \
number of generations active in ownership
+ + +
2.3 Effect of family members ownership on R&D investment
Family ownership has a significant effect on R&D investment which is also related to firm performance (Luo, Li, Wang, & Liu, 2019). According to some studies, a negative relationship between family ownership and R&D investment suggests that family firms discourage risky long-term R&D investments (Chen & Hsu, 2009; Muñoz-Bullón & Sanchez-Bueno, 2011; Munari, Oriani, & Sobrero, 2010; Sun, Lee & Phan, 2019). However, in some cases, it represents that there is also a positive relationship between family ownership and R&D investment (Craig & Dibrell, 2006; Gudmundson, Tower, & Hartman, 2003; Llach & Nordqvist, 2010).
2.3.1 The positive effect on family ownership on R&D
The presence of institutional investors in the ownership structure of a family firm increases the willingness to invest in R&D activities. The positive relationship witnesses between the ownership and R&D investments when the institutional investors are present because they have expertise in innovation activities and favors R&D expenditure (Cirillo, Ossorio, & Pennacchio, 2019). Besides, they can put pressure on boards of directors, exercise their exit options and make public announcements (Brossard, Lavigne, & Sakine, 2013).
Chen & Wang (2019) concluded that family owners/firms prefer higher firm risk, devote more capital to total investments, and commit greater resources to R&D investments than non-family firms. To take such risky decision one possible reason tend to be the reputation of their product/service, firm name, and family name and thus aim to accumulate SEW (Gomez-Mejia, 2007; Berrone, 2012; Kubota, & Takehara, 2019). However, the outcome of R&D investment is uncertain, because
family owners are risk-averse (Block, 2012; Block et al., 2013) and instead try to accumulate the private wealth of the family (Anderson, Mansi, & Reeb, 2009).
2.3.2 The negative effect on family ownership on R&D
SEW plays a major role in a family firm to decide whether the owner will lead to higher or lower investments in R&D (Gomez-Mejia et al., 2011; Cirillo, Ossorio, & Pennacchio, 2019). The family’s identity is often connected with the organization (Sciascia, Nordqvist, Mazzola, & De Massis, 2015), especially if it carries the family’s name (Berrone et al., 2012), so failed R&D investments also damage the family’s reputation, diminishing members’ SEW (Chrisman & Patel, 2012). Families are more exposed to the idiosyncratic risk of the firm, and they may try to decrease risk at the firm level that makes the family owners voluntarily avoid investment in R&D because such spending poses a risk to the family’s financial wealth(Sciascia et al., 2015). This exemplifies the effect of socio-emotional wealth preserve the financial wealth of the family firm.
Apart from SEW, financial constraints can restrict R&D investment to a greater extend (Brown, Fazzari, & Petersen, 2009). Ownership structure can lead to outcomes very different from those for other firms when it comes to financing (Hamelin, 2011; Psillaki&Daskalakis,2009; Xiang, Chen, Tripe, & Zhang, 2019). The family-owned business is more creditworthy because of their lower likelihood of investing in risky projects (Naldi, Nordqvist, Sjöberg, & Wiklund, 2007) and may thus suffer less from the financial constraints due to innovation. Besides, because R&D investment has high failure risks and unpredictable returns such as no payoffs or payoffs only occurring after many years (Schmid, Achleitner, Ampenberger, & Kaserer, 2014 ; Luo et al., 2019), it may increase the risk-aversion for family owners.
Considering family business and innovation, past research has suggested that family ownership and its level of active involvement in management are major factors impacting firm innovativeness (Daspit, Chrisman, Sharma, Pearson, & Mahto, 2018; Luo, Li, Wang,& Liu, 2019; Muñoz-Bullón & Sanchez-Bueno, 2011; Sciascia, Nordqvist, Mazzola, & Massis, 2015). Hence, the R&D investment is also in the
hands of the owner. Researchers have gradually reached a consensus that family firms are not homogenous (Fang, Siau, Memili, & Dou, 2019) and differ from one another in several ways such as in top management organization, ownership structure and governance (Cannella, Jones, & Withers, 2015; Miller, Le Breton-Miller, & Lester, 2010; Miller, Le Breton-Miller, & Lester, 2011), which may be a major reason for the mixed findings. Therefore research is needed to follow the effect of a particular family member such as siblings to understand and conclude what could be the possible aspects of less and more investments in R&D considering various factors of their behavior and the resources they get.
2.4 Siblings relationship
Singapurwoko (2017) describes Sibling partnership that partially or inherits the family business from the previous generation. Though previous family generations may involve business, siblings from the same generations still hold ownership with equal proportions (Zona, 2015). With the ownership dispersion, the characteristic of sibling partnership is described by Lim, Lubatkin, & Wiseman (2010), “Lacking a clear controlling owner, each controlling sibling must solicit the cooperation of the other controlling siblings before pursuing risk-laden actions. We posit that despite the need for cooperation in managing the firm’s affairs, some sibling partnerships may become confrontational” (p. 201). Therefore, typically there are two types of sibling relations. For a family with more than one offspring, engaging as many as offspring in the company as executives can enhance significantly in family’s control over the firm, and this so-called “brothers in arms” will tend to take risk-averse measures (Chen et al., 2019; Lim et al., 2010). On the contrary, sibling rivalry will harm the harmony of the family firm, which results in a rise in risk-taking at least in the short-term (Chen et al., 2019). The outcome also implies SEW including family closeness, commitment, which can contribute to the decline in risk-taking. Their research investigates the influence of sibling relationships toward risk-taking, which is one dominant fact toward R&D investment. However, this situation aims at the second generation of the family firm, while it is still limited when siblings as co-owners already take over family firms, how they interact their roles concerning innovation input, especially R&D investment.
2.4.1 Siblings behaviors under SEW
The level of embeddedness of family members in both the family and the business can contribute to different circumstance, even in the same family business context (Berrone et al., 2012; Le Breton-Miller, Miller, & Lester, 2011). Precisely, the complex relationship between siblings will be a great effect on company activities. The prevailing proxy in prior research to capture intensity of SEW is stock ownership in limited family actors and it shows the positive correlation between ownership and SEW (Berrone et al., 2012). In addition, the secondary proxy, percentage of family ownership, may be another alternative to observe by the archival database. As for the deep dimension, such as, siblings’ emotional bond, relationship and family commitment still need to be plowed due to variety from one person to another, even with the same level of ownership. Berrone et al., states “family firms are not a monolithic or homogeneous group of people with congruent interests, nor are all family businesses identical with respect to organizational characteristics and behaviors” (p. 261). Therefore, though most sibling's partnership is defined as a relatively equal for ownership among members on board, the potential divergence from individuals still exists (Zona, 2015). About making investment decisions, some research show co-owners will manoeuvres different plan, for instance voting or compromises (Zona, 2015; Schulze, Lubatkin, & Dino, 2001). However, there is still scarce evidence to prove how different sibling partnership affect R&D investment decisions in both direct and indirect way under SEW and this will be conducted in the paper by using SEWi scale.
The chapter provides an overview of the work process of the study. Further, the approach and design of the study are described as well as the data collection and data analysis. The chapter ends with a discussion about the validity and reliability of the study.
To acquire deeper understanding and further explanation of the influences of sibling ownership towards R&D investment in family firms, this article utilizes qualitative research as the main tool.
3.1 Research philosophy
When delivering the methodology of this research, we drew both ontological and epistemological assumptions from their views. These philosophical issues are essential when conducting research design. To give good answers to questions being in the research and to describe the motivation of authors, below will firstly explain the nature of the article followed by epistemology. Considering the evidence and how it is to be gathered and interpreted, we will introduce the research method.
We held critical altitude for the influence of sibling ownership and discuss it under the SEWi scale. Precisely, the truths are more than one, and facts rely on our perspectives. This is supported by sociologists who point out that different viewers hold different standpoints for relativists. Furthermore, looking through the structure of the paper, proposed theories - the framework for the research, are relevant to the process where we acquire them. The process is no static. This can be consistent with Collins’s (1983: 88, as cited in Easterby-Smith et al., 2015, 5th p. 49) concept, “what counts for the truth can vary from place to place and from time to time”.
Apart from relativism, we also reveal our nominalism tendency while directing research. Nominalist indicates there is no truth and social reality is merely the discourse people create. To some extent, we gained our knowledge and developed mechanisms through interaction within an organization.
According to Easterby-Smith, Thorpe, and Jackson (2015), “constructionist research designs are linked to the relativist and nominalist ontologies. They start from the assumption that verifiable observations are potentially subject to very different
interpretations” (5th p. 84). It is consistent with the aim of the research which is to figure out how sibling ownership influences R&D investment in family firms. Also, the reasons underneath the influence will be different because the family firm is a heterogeneous entity. Our job is to interpret a wide range of truths and to construct different claims for truth and reality in a realistic way.
As mentioned above, in this research, we used a constructionist design compatible with purpose. Compared with positivism, constructionism lays emphasis on people’s thoughts and feelings, and the way we interact with each other in any formats. Unlike taking the measurable data, we tried to understand various experiences from our interviewees, which was only based on a small number of samplings.
From the constructionist perspective, we gathered opinions from people who held different standpoints. Interpretation from these views is grounded in the inductive research method, which means “knowledge is constructed through the creation of concepts, model, and schemes to make sense of human experience and are continually interpreted and modified by researchers” (De Massis & Kotlar, 2014 p. 17). To meet the requirement of getting an in-depth investigation of the family firm phenomenon, a case study was conducted as a strategy for qualitative research.
3.2 Research design and method
3.2.1 Case study design
A case study turns out to be a well-suited methodology for this qualitative research since it can not only deal with the situation where there are distinctive priorities of SEW within the certain settings but dependent on various sources of truths, with statistics to consist of a triangulation convention (De Massis & Kotlar, 2014; Yin, 2003). Regarding the purpose of the research which is to examine how sibling ownership influences R&D investment in family firms, an exploratory case study is used to understand how the situation takes place. This will refine the extant research in the area of R&D investment in heterogeneity family firm.
R&D investment is related to individuals and companies; however, extant evidence shows the firm level from statistics and scarce research is available towards the
individual level. Therefore, the research will focus on individuals. The paper begins with an analysis of respondents’ relationships, which helps to understand the function of ownership under SEW and explain the influence of ownership towards R&D investment decisions.
3.2.2 Criteria of sampling
As stated above, the unit of the interview is individuals who own the family firm. To answer the research question, we decided to get two groups of cases, the first group would be family firms owned by siblings including founder siblings and 2nd-generation sibling owners since we assume different siblings' relationships will also affect the R&D investment decision. The comparable group would be family firm owned by sole owners. By comparing two types of owners, we can get variables that influence R&D investment.
The initial design was to get both sibling owners for the 1st group. Besides, to enrich the data, for each case we also asked owners to recommend the R&D manager in this company to assess relevant investment and acquire managers’ points of view towards owners. For a company in which other sibling owners or R&D managers were unavailable, we got the 3rd party who is the participated family member or got more supported data by the second interview.
3.3 Data collection
Our starting point was to identify family-owned business particularly with sibling ownership or involvement of the sibling in a company. As there is no database to find sibling owned businesses, we used snowball sampling to find companies that meet the research criteria. Besides, by using the network of ourselves, we can know better about informants from the third person we contact. After discussing with friends, family members, and University professors we discovered 20 companies owned by Family which was beneficial and effective. To be more specific, we scrutinize the company’s websites, and some databases to check the finance history of their companies.
We aim to have an interesting context of family relation impacting the R&D investment and how engaging is, the family owner towards the innovative project. The results of R&D investments cannot be obtained during a short period of ownership time, so we also consider that the companies we opt to do the study on, have at least 10 or more years of sibling ownership. In addition to that, relationship between siblings, board type, ownership duration, type of firm, country-specific, the percentage of R&D in total turnover, and ownership type were used as the screening process for the family-owned business, to have concise sample for the research. We narrowed down to 5 companies considering the above factors. The samples also consist of 2 comparable to understand the difference of influence of owner on R&D investments.
Communication with family-owned businesses was done via E-mail, personal contacts, and phone calls. Mails regarding the invitation for the interviews consisted of a short description of where we are from, what the aim is for the research, what the expectations are from the company and how long the interview will be. The Covid-19 situation was also considered in scheduling the interview. To begin with every interview, we also inform the GDPR and state again basic information above to gain consent from informants.
In this research, interviews are the primary source of data which will reflect the effect of involvement of sibling on R&D investment. The interview protocol for the semi-structured interview was followed and executed. To have a guideline and to have an in-depth understanding of the research topic via interview. Due to the Covid-19, we are not able to have a direct observation which helps in understanding the culture of the company. However, attempts were made to get the essence of the culture via asking questions based on that (De Massis & Kotlar, 2014). Table 3 collects the basic information of chosen companies.
Table 3 Company information
age Industry Turnover(million kr) 2018 Country
A 22 Food processing
plant 14 China
B 31 Car repairing
industry / China
C 11 Book distributor 4.47 Germany
D 37 Kitchen
manufacture 73.166 Sweden
E 23 Construction / Taiwan
*Information of turnover and company age is from database in every country. These websites are www.tianyancha.com/www.unternehmensregister.de/www.allabolag.se respectively.
*Currency transformation is according to the date 2020/4/27 by Alipay. *Company B and Company E chose to remain it confidential.
*The calculation formula for turnover of German company: turnover=operating income+ prepaid expenses
3.3.1 Semi-structure interview
The choice of data collection method influences the analysis; this supports the idea of choosing semi-structured so that in-depth interviews were conducted to ensure the quality of the data. Our research-based on different themes such as family relation and R&D investment intensity. Semi-structured interview provides opportunities to deepen the discussion with the informants. The purpose is to organize and draw out the necessary meaning and conclusions from the data collected.
Semi-structure interviews guided us to be organized and provide the advantage of preparing questions beforehand, so the respondents stay on the topic. Moreover, unlike any other interview, the semi-structure interview allows respondents to be open regarding sensitive issues, the open-ended response delivers the in-depth information needed for the research. Focus on owners provides more efficient sampling rather than interviewing other irrelevant individuals.
For designing and conducting semi-structured we followed handbook of practical program evaluation by Kathryn, Harry, and Joseph (2015) who stated some techniques such as selecting respondents and arranging interviews, drafting questions
and interview guides, and starting the interview. First, selecting respondents and arranging interviews we used phone, e-mail, and took the individual appointment of the owner for our research and schedule them. In advance, we sent them a short introduction stating our research purpose and give reference to Jönköping University. This provided legitimacy and saved time to arrange the meeting. Moreover, the agenda and the timing were well conveyed because proposing too long a period can prompt an outright refusal.
Second, drafting questions and the interview guide. The focus group consists of owners, the questions were tailored reflecting the R&D investments and the influence. The outline of planned topics and questions to be addressed regarding the research questions were prepared beforehand so that further analysis could be done at its ease. Third, starting the interview by introducing ourselves and themes that were covered in the interview. The disadvantage of a semi-structured interview is that the data can be interpreted wrong so to avoid that we recorded the audio to ensure we can reflect material back and forth. We emphasized on keeping the confidentiality at the initial invitation and at the start of the interview. Also, the close-end questions were thoroughly prepared so that the respondent will not be abrupted in the middle of important discussions.
Further, we triangulate the research topic, research questions, themes, and categories of the data collected to be more specific towards the findings. Our major topic is R&D investment, owner role over the years, and each topic will represent the role of a sibling as an owner influence the R&D investment in a family-owned business. Table 4 presents details about interview and triangulated material.
Table 4 Covers the details about the interviews
y informant Interview Date 1stIntervie w duration (minute s) 2nd intervie w duratio n Contact
channel Connectionintermediar y* Numb er of archiv al file A Sibling-owner 2020/4/2 2020/5/ 1 34:25 16:15 WeChat voice call 2nd connection 3 B
Sibling-owner 2020/4/3 38:30 / WeChatvoice
call 2nd connection 2 Family member (N) 2020/5/ 1 18:12 / WeChatvoice call 1st connection / C
Sibling-owner 2020/4/9 39:09 15:20 WhatsApp voice call 2nd connection 8 Family member (P) 2020/5/ 4 21:17 / Inperson 1stconnection / D
Sole-owner 2020/4/1 18:48 34:17 Zoomvideo call
Sole-owner 2020/5/5 34:08 / WeChatvoice
call 2nd connection 3 Family member (P) 2020/5/ 5 28:24 / WeChatvoice call 1st connection / *1st connection is from authors’ own connection, 2nd connection is through authors’ family, friends.
*N means non-participated business family members, P means participated business family members.
3.4 Data analysis and interpretation
In this part, we firstly put transcripts into the data analysis software. We did the first coding data regarding common themes from sentences. According to theoretical reference, second coding turns out to be within the SEWi scale. The owner response was critically analyzed by the theory of socio-emotional wealth and what activities is affecting the R&D investment. The contribution of the investment was thoroughly
explained to relate it with our research question. The response is an empirical example of SEWi.
The owner’s decision-making ability and risk on the investments can be defined more precisely. As the sibling ownership will consist the involvement of two people various dimensions will affect the investment intensity such as working as a partner create how much value to the company or which partner emphasis more on the investment part of the company and why.
The themes were divided based on family prominence, family continuity, and family enrichment. The definite reason to support the intensity and factors to initiate investment is deliberately mentioned in these parts. In some circumstances, there was a situation where a company avoids investments in R&D due to saving their family wealth. This area is well discussed and argued after getting the responses from the following interviews. In addition to that, some companies invest more to keep up with the reputation of the family business and in rarest of the case, the decision making without any planning could be a treat for the company. In this vein, the SEWi is well-argued to understand the pattern of the investment with typical cases.
3.5 Research quality
Since we focused on the best fit rather than the most right assumption of the business management phenomenon under study, we put ourselves into the shoes of the naturalistic paradigm. Concerning the naturalistic term, three parts will be covered: credibility, transferability, and confirmability (Guba, 1981).
3.5.1 Validity and reliability
To acquire a holistic view, we used some methods to ensure credibility during the interview. Firstly, the research focuses on family firms that have run for over a certain number of years. That means the sample needs to have its impact in its area. The persistent observation was another way that the paper uses to tell characteristics from a common theme, for example, each interview costs a certain time length to ensure sufficient time to get a better understanding of interviewees. Besides, triangulation was a pivotal tool for its combination of interviews, observations, websites, and
archival information. Guba (1981) showed that various ways have complemented one another to cross-check statistics and interpretations. We also shared information with interviews to guarantee overall understanding among different interactions.
In order to describe and interpreted a given context and achieve transferability, researchers selected theoretical sampling. As discussed in data collection, the process of theoretical sampling is to cover all relevant information. Therefore, every case was chosen after we made sure we met the criteria of sampling. From the sample selection of the research, previous interviews were also designed deliberately according to the company’s different situations. More importantly, the paper focus on both its authority and unique towards the proposed research topic. In this way, we met the criteria of transferability by covering a range of information.
In terms of confirmability, triangulation, as already noted above, is a crucial tool to test our prediction. Another important examination is practicing reflexibility. As Ruby (1980) said "intentionally reveal to his or her audience the underlying epistemological assumptions which cause him or her to formulate a set of questions in a particular way, and finally to present his or her findings in a particular way", we continuously imparted social constructionism covering relativist and nominalist epistemology. The paper induces the context of the sibling's ownership toward R&D investment under the SEWi scale and systematizes mechanisms when conducting a study. Introspections were considered vital as they documented and transcribe simultaneously during interactions.
3.5.2 Ethical consideration
Bell and Bryman (2007) suggested ten principles of ethical practice during qualitative analysis. The key principles in research ethics are as follows no harm, dignity, informed, privacy, confidentiality, anonymity, avoiding, conflicts, transparency, and misleading. The first six mainly reflect the protection of the research subject and others define to protect the integrity of the research community, provides accuracy, and no bias results.
Considering our research these principles were practiced in every aspect possible. The anonymity of the individual/organization while addressing the companies which is
going to be part of our research. The data from the companies ensured to have confidentiality with official permission if some specific data used in the research. Before the interview necessary trust was built, in addition to that dignity of the respondents was considered.
In order to protect the integrity of the research community, the focus of the research was well informed to avoid deception of the topic and to restrain from misleading information. The participants who are involved in the research are deliberately made aware of the research topic that was going to be discussed in order to promote transparency. The abide rules and regulations were followed to avoid conflicts and not to create unnecessary threats for the company in terms of sharing data. Moreover, the schedule for interviews was made based on the availability of the participants. (P. 253).
4 Empirical data
The chapter provides an overview of the empirical domain which forms the basis of this study. Further, a description is given of the empirical data that has been collected to answer the research questions.
Description of empirical material
The research finally selects 5 cases according to the theoretical purpose. Each case is embedded in one family firm and interviews were mainly conducted with owners who usually also manage the family firm. Among these firms, 2 are founded by siblings, 1 is succeeded to siblings, and the left ones， as comparable, are run by sole owners. The 5 family firms includes manufacturing and service industries and they are mainly business to business industries and all the firms consist of an R&D Unit. The number of employees ranges from 6 to 83. Firm age is from 11 to 37, which means they are still young but already have an impact on its market. Except for comparable samples, others are all owned and managed by co-owners. The distribution of interviewees across companies and additional information is showed below in Table 5 and Table 6. Table 5 General Information on primary data
Company Number of siblings
Board type Ownership level
duration Type ofcompany country Numberof employees
A 1 2ndgeneration 50% 18 Seafood
manufactureChina 15-40 B 4 founder 30% 31 Car repairing industry China 83 C 1 founder 50% 11 Book distributor Germany 8-30
Table 6 Comparable group
Company Number of siblings
Board type Ownership
level Ownershipduration Type ofcompany country Numberof employees
D 0 2ndgeneration 100% 10 Kitchen
manufacture Sweden 6
E 0 founder 100% 23 Construction Taiwan
4.1.1 Information of company A
This company was found in 1998 by the first founder who targeted at aquaculture. The product was manually processed by employees and the production rate was 1 ton/day. In 2002, two siblings who were the 2-generation of the founder took over the industry and invested around 1.4 million SEK into R&D, aiming to make it fully automatic. The innovation development of manufacture was also supported by policies from the government according to owners’ statements. Based on the properties of the seafood product procedure, it is seasonal manufacture, so every year, it only runs for 6-7 months. Last year, owners invest 2.8 million SEK in another seafood manufacture in Zhejiang province (Another coastal province in China). By 2020, the total investment has been up to around 11.3 million SEK, and the production rate is 30 t/day. The highest turnover was up to around 1.4 million.
4.1.2 Information of company B
This company is a car repairing industry founded by 5 siblings in 1989. It was initiated by approximately 14 million SEK for all the machines and equipment. There were 20 employees at the very beginning of the business, among which 70% were family members. With the development of business, the market economy pushed the company to transfer from a traditional family business to a joint-stock family firm in 2012. The transformation also switched board structure, which leads to the change of ownership from some siblings. At the same time, it invested another business-automobile trade. The company formally registered in 2014. By 2020, the owner we interviewed hold 30% ownership, and 60% ownership in total still in siblings’ hands. However only one of the siblings decides for R&D investment today. As for the siblings with left ownership, they share the dividends at the end of the financial year.
4.1.3 Information of company C
Company C is a book distributor set up in 2009 by siblings with initial capital 273 thousand SEK. The running mission is to be an efficient dealer between vendors and other parties like schools and bookstores. The most renovated investment was a smart system to manage logistics and finance, which can be seen as the core technology for the business. By this business model, they provide just in time delivery to reduce customers’ inventory costs. With the development of family business, owners now
open positions to the next generation to participate in the operation in the company. The turnover for the financial year 2018 was 4.47 million. And the total asset was 13.866 million.
4.1.4 Information of company D
Company D was established in 1983 by 2 founders who were non-family members. It is a manufacture which aims to design and produce storage solution for the kitchen. In 2010, the current owner bought 50% ownership from his father and another 50% from another part owner. Therefore, the next generation of company D owns a total of 100% ownership until today. During the first 5 years, the financial statement has been rather stable. However, both turnover and EBIT have increased since 2016. From the database, the turnover was up to 73 million in 2018, and according to the owner himself, the turnover increases to 100 million today with just 6 employees working in its headquarter.
4.1.5 Information of company E
Company E has been playing in the construction market since 1997 and was set up by a sole architect. The main business for the company includes wholly-owned construction and joint venture construction. By 2020, the company has 7 permanent staff including owners’ 2nd generation and spouse. It has had 1 thousand sketches and 250 cases done. Current construction projects have been conducted in local Taiwan and Burma.
The chapter answers the research questions by processing the collected empirical data and the theoretical framework.
For analyzing the influence of sibling ownership in R&D investments considering the SEWi scale we thoroughly scan the interviews and discover some interesting observations. The tool used for our data analysis process was NVIVO (OSR International,12 pros) which provided a systematic arrangement of the different themes of the interview. We implemented this software to easily identify themes and create a relationship between them. In order to avoid overlapping of the data we went back and forth to the data and the theoretical framework to make the analysis consistency and in an orderly manner (Kotlar & De Massis, 2013). Our samples were collected not only from the European countries but also from China, which demonstrated versatile data. The Chinese companies were particularly interviewed in their native language and hence we recorded it, used Iflyrec to transcript it in Chinese, and turned it to English by Microsoft Office translation function. Each step was corrected by reviewing the record. By doing so, we did not add any personal views into the transcript, so each word is from informants themselves. As for the other interviews, we used the Otter.ai tool to transcript the English-speaking interview. After getting the transcripts, we corrected the typos to ensure an effective process for coding. We initiated our coding process by getting acquainted with the data we contained from the interviews. Based on our research question, we started with identifying the sentences from the interviews and tried to fill the first-order nodes. First, we roughly categorize these sentences into the owners’ perspective in terms of opinion, choice, other family members. We revised the categories every time and check if it is suitable for that statement from the respondents. However, the provisional categories did not fit well with the data. Instead, we generated contact summary documents according to specific disciplines, trying to seek theoretical categories that are related to research topics. After completing the contact summary sheet, we got a chance to meet the theoretical theme which is owner’s perception toward other family members and siblings, owners’ perception of motivation, risk and choice, owners’ goal for company and owners’ desire for succeeding, and they covered all data.
Further, the second-order themes that are sibling relationship, the need of family members, personal ambitions towards the family firm, recognition of an individual in the community, maintain family value, and preservation of family dynasty, we attempt to integrate it with the first order-nodes. We included second generation and founder siblings at this stage in order to approach towards answering our research question. Also, for comparison, we created themes such as opinion and motivation to reach towards our other research question .we coded the sentences into the above mention dimensions to have a ground observation of how family ties play a critical role in the influence of R&D in sibling owned businesses.
The theoretical background as the base, we created labels for the nodes that are Family prominence, Family continuity, and Family enrichment according to the SEWi scale. These theoretical categories helped us to identify the common and relevant themes to address the influence of ownership in terms of family dynamics which is an area to prove the intensity of R&D investment. To check the coherence of the framework, we repetitively referred to the previous themes and categories. The framework then was finalized after scrutinizing it thoroughly. (Coding book is in Appendix 1) Figure 1 shows the coding process.
Figure 1 The coding processes
When we repeatedly reviewed our data, these three dimensions are consistent with the SEWi scale. For the owners, the importance of how they perceived by the community is presented by Family Prominence(Debicki et al.， 2016）. Informants showed their desire to develop a business that can be committed in the community through their achievements. It is also important for owners to get support from family members in the community. Therefore, family prominence connects the recognition of individual and personal ambitions, which shows how deep as individual involve in business when they do the investment decision. Second, it shows the Family Continuity when decision-makers think about the sustainability of the family business. It reveals the factor that they want to maintain both service, firm reputation, and family dynasty. The final dimension, Family Enrichment turns
out to be highly relevant to meet the need of family members and interact with them, so it contains the way they make a decision with siblings, the way they meet other family members’ requirements.
From the description of the theoretical dimension, we start to discuss the influence on R&D investment. In family firm, sibling owners tend to do the decision under different SEWi scale, and below we will present the effect on R&D investment from each dimension. Under a specific dimension, we will compare the sole owner and sibling owners who are also called co-owners to make paradoxes. Also, through comparison, we can see the differences between owners with different levels of ownership from distinctive. We will bring up the observation after extensively analyze data. To conclude, we will propose a theoretical method regarding finding followed by the up-rising theory.
5.2.1 Family prominence
When it turns to the importance of Family Prominence, which states owners’ desire to develop a business that can be committed in the community through their achievements
(Debicki et al. ， 2016). We perceived their personal ambition and recognition of an individual in the community. First, we compare sole owners and siblings to tell the differences in their R&D investment decision toward a personal perspective. After iteratively comparing information gathered from sibling owners, we found that the motivation from one sibling will influence others in the early stage of the company. This also triggers the development of the company at the beginning. The first idea to make R&D investment was associated with prior knowledge and personal motivation:
“I was a teacher at that time, so I brought the idea of selling the school book... I founded it with my brother” (sibling-owner, book distributor)
“At that moment, we contracted an automobile repairing industry under economy market trend...founders were 5 in total, including 4 siblings of mine.” (sibling-owner, car
“2002 I and my older brother took over and invested for the first founding and made it manufacture...we learn it also by the prior experience before the company...” (sibling
To activate a business or new project for the company, they all chose to Gain the involvement of other siblings. That means sibling owners rely on each other to sketch a blueprint which requires a commitment between them. As for the sole owner, who took over his father’s company, his motivation comes from making ideas into reality. As a person with 100% ownership, of which 50% was bought from non-family members, he runs the company with strong self-driven. when talking about differences after taking over the company alone, he replied “of course I can go for my own visions and ideas without having someone telling me not to do it...I can turn my ideas and dreams into reality” (sole owner, kitchen manufacture). It is consistent with another sole owner regarding motivation, he said: “I had taught architect in university before I founded the company, later on, I had the desire to complete my own work, though I have been through difficult time all by my own.” (sole owner, Construction)
When comparing sibling owns and sole owners, their motivation can be interpreted in two directions. They will have different initial motivations, especially when it turns to company development at the beginning. The sole owner tends to realize his dream without control from others and it interprets that sole owner can gain a sense of fulfillment through the outcome of R&D investment. Unlike sole owners, co-owners usually need support from other siblings to accomplish the set up of the company.
From non-participated observation of their initial management phase, we noticed that the financial statement was stable for FFs of sole owners. The reason can be that they all need to get the loan from bank to get the ownership and fixed asset at the beginning. While for sibling-owners, all of the 3 FFs took family wealth as the initial R&D investment input, so according to interviews for siblings owners, they have to invest to activate their business, as one of them said: “The initial investment of the plant is certain to be quite large” (sibling owner, seafood manufacture). Below is the table to compare the differences between 2 types.
Table 7 Comparison of motivation between 2 types of ownership
Type Ownership Way to
make investment at the early stage If someone step in the business motivation R&D investment change in initial management phase(first 3-5years)
Sole owner 100% Gain the
whole ownership to get control
interference Self-driven Slight change in the
beginning several year* Sibling
owners <=50% Gain-involvement of another siblings
Family-related Great input offamily wealth to activate running
*Observation comes from company's financial statement, both turnover and net income are stable.
Observation 1: The motivation of sole owner comes from their own self-driven, while sibling owners need support from another at the early stage for company R&D investment.
Regarding their risk-aversion and their choice to do the R&D investment, both two themes reveal the owner’s recognition of themselves within the community. While the siblings take part in the decision-making process, the interference will also affect individual choice. Besides, taking risk-aversion from co-owners and their final choice into account, it shows the consensus between them. Below shows their opinions when they make a decision from alternatives.
When we ask the risk-aversion for sibling owner who is book distributor, he first told us he was personally opened for development, however, “sometimes the new market and new product will consume lots of money in long-term, it would be very risk-averse, so maybe more than 8” (sibling owner, book distributor). Though he perceived himself low risk-averse, the fact is that when it turns to highly related to long-term investment, he becomes much prudent to assess risk. Another sibling owner was also relatively cautious when he made R&D investment, he explains “the risk should be very low, otherwise the company
will be in danger... though the machine is a long-term investment, we save the running cost for cutting down the number of operators... I prefer the long-term investment” (sibling owner, Car repairing industry). When Sibling owners consider long-term investment, it would increase risk aversion. The sibling owner in the seafood manufacture commented himself 5 out of 10 risk-averse, which was higher than others. He said “Every investment will have the risk... We will think about the market and sales volume, also, we let the technical staff joined the discussion. We will attend the technology show to see the new machine. Finally, innovation support from the government has a great impact.” (sibling owner, seafood manufacture)
On the opposite, the sole owner in SME is quite open to the new thing:
“We try to invest for long-term absolutely...invest at least 10% of earning every year when it comes from the profit side from the margins...It's very important for us to be innovative and unique and we have to develop products...patterns and this kind of thing. So that's a lot of money involved in that of course...I would say that we are making the frontier So, let's say we are two or three” (sole owner, kitchen manufacture)
His openness to new products and markets also makes him handle the risk followed by R&D investment. To be precise, he tackles risk by letting stakeholders on board and wait for the customer's response. Therefore, he dependent more on the market. In accordance with the view, another sole owner thinks he is more risk-apetite:“Basically the premise of
our investment is if we invest out, this money does not affect our life and the operation of company.”
Sole owner in the kitchen manufacture, as a person who bought ownership from father, also tried to make his company family-way when he treats stakeholders including employees, customers, and suppliers who make the feedback of the company.
“We work very much in a family round way, let's say so. The same with my employees and suppliers and customers around what we try to work it in a family-run and where you're working.” (sole owner, kitchen manufacture)
Sole owners manifestation seems to be similar since another said, “you have a few
employees with you for 7,8 years or even 10 years, then you tend to make money for everyone. Simply put, it's a revolutionary emotion with employees.” (sole owner,
To make family round way and to root in a family setting is different, the intention of siblings owners is to gain the commitment from the family setting, while the sole owner cares more about the working environment, which can contribute to work efficiency. Table 8 below shows the variables for their risk-aversion.
Table 8 Facts related with risks and R&D investment
Type Investmen t preference Risk aversion *
Key influence facts for
commitmen t R&D investmen t percentag e (2020) * Sole owner in kitchen manufactur e
Long-term 2-3 Market themselves in>=10%net
income Sole owner in constructio n
Long-term 4-5 Market + regulation themselves 40-50% innet
income Sibling owners in seafood munufactur e
Long-term 5 Familywealth+market+technolog y Family community Average10% in net income Sibling owners in book distributor
Long-term 8-9 Family wealth+market Familycommunity Around10% in turnover (<10% in net income) Sibling owners in Car repairing industry
Long-term 8-9 Family wealth+market Familycommunity <=20% innet income *we divided risk-aversion into 1-10 and asked them to evaluate themselves. 1 means they are positioned for risk appetite, 10 is in the opposite.
Graph 2 Relation between ownership and percentage of R&D investment
Observation 2: Sibling owners are more risk-averse when making R&D investment than sole owner due to the consideration of family wealth.
Observation 3: Sole owner from family firm tends to create family alike way to run their business when doing the R&D decision and this can benefit work efficiency rather than gaining commitment from community
5.2.2 Family continuity
The family continuity mainly covers the part of the preservation of the family dynasty and the values. This has an immense effect on the R&D investments because sibling owned businesses rely on family legacy to decide whether to invest or abort it. It can also be said that the family continuity also has an indirect impact on the goal of the company, desire to succeed in the business, or follow the rigid systems as per family tradition. Based on the theory of family continuity this section contributes to how the siblings maintain family unity, the values of the family, responsibility on next-generation, and having two owners under family continuity, have an impact on their R&D investments. All these aspects are discussed below by comparing the companies belong to sole and sibling owner.
The evidence states how the sibling in unity with the family operates the business and make the necessary decision for the progress of the company. The ownership of all the family
members and siblings derives the investing strategy specifically for R&D. Moreover, emphasis on family ties is claiming that family bonds play an important role in the investments to happen in the company. To continue the family legacy the owners took up the company from their father and started improvising the progress of the company by indulging in various investment activities.
“The daughter of my brother is also in our company for 4 years now, her husband also in our company. So the daughter and her husband are working.” (sibling owner, book
“Yeah, That brings the company forward, because they were brought in the same family, they still have the same family values. So it's kind of a mixture of values that they're raised by the same woman and also kind of different values they got because of different higher education.”(family member, book distributor)
“Broaden the market, develop new product and procure equipment, we will invest equipment every year. Because every year there will be new technology, and it help company, we need to catch the market trend...” (sibling owner, seafood manufacture)
The sole owner is alike in the family value because the statement provided the proof that when the owner has the family firm, they also maintain the family value and legacy to processed into the firm’s process. Moreover, they look forward to their investment decision to maintain their family wealth and prosperity. Whereas, the founder and the second-generation owners presented the importance of family ties and how they maintain it throughout the generations. Also, one of the owners provided a shred of evidence that when one of the family members is given any role in the company, it gives an extra edge to the process they have so far which is continued and followed by this family member.
“If your own child is also engaged in related industries, it is also a very good inheritance of an opportunity and process” (sole owner, Construction)
“Maybe in the long run when we have generations coming to the next ones, maybe there will be some takeovers or so on, but we don't know it's too early to say.” ( sole owner,
In order to have a deeper understanding of the phenomenon of family continuity of sole owner towards R&D, we interviewed the R&D manager of the company in order to see the flow, how the continuity of generation plays an important role in the investment of R&D in their company. The manager suggested that in their company they believed to pass on the responsibilities to next-generation. However, he believed when the owner will be given to two members in next generation, it can create a situation of having two different opinions which can bring conflicts in their investment strategies, particularly in R&D. It can show that these scenarios contradict the fact that sibling owners can also strongly face this kind of situation but when the family continuity is concerned, they will try to sort these conflicts and focus to keep the progress of the company through investment in R&D.
“.... The first of the family culture is to pass on and give it to the next generation. If this is a good effect, then the bad effect is that two people have different opinions, it will also affect...”(R&D Manager, construction )
1. Both sibling owner and sole owner in family firm will consider family long-term run for next generation.
2. Both sibling owner and sole owner will invest in the R&D regarding brand, service and product to maintain company longevity.
5.2.3 Family enrichment
While coding we derived two perceptions that are owner’s perception towards other family members and siblings to address family enrichment which supports the idea of keeping forth the family bonds and involving the other siblings in decision making. In providing evidence to the R&D investment influence, these perceptions under family enrichment play a major role. In theory by Debicki et al.(2016), family enrichment determines how family member's harmony is enhanced by the operation of the business and how important it is to consider family members in business decision making. Below an extensive discussion is