We examine governance systems within the contexts of family and non-family owned firms. Specifically, we suggest that while a formal governance mechanism (i.e., formal strategic planning) is positively associated with financial performance in both family and non-family firms, the relative benefit of such a formal governance structure is greater for non-family firms. We posit that strategic flexibility can also be used as a governance mechanism, but the value of this informal governance mechanism is greater for family firms. In a study of 354 firms using moderated regression analysis, we discovered the relative benefit of formal and informal governance mechanisms in family- and non-family-owned firms. In the case of family firms, strategic flexibility moderated the strategic planning to firm financial performance relationship. In non-family firms, we found direct relationships from strategic planning and strategic flexibility to firm performance, but we did not find an interaction effect between strategic planning and strategic flexibility to firm financial performance. This project contributes by demonstrating the individual and combined roles of strategic planning and strategic flexibility as formal and informal governance mechanisms and their usage in family and non-family firms.
|Title of host publication||Proceedings of 11th IFERA Annual World Family Business Research Conference|
|Subtitle of host publication||Intelligence and courage-family firms' vision in the era of economic turmoil|
|Place of Publication||Madrid, Spain|
|Publisher||International Family Enterprise Research Academy|
|Number of pages||21|
|Publication status||Published - 2011|
|Event||International Family Enterprise Research Annual World Family Business Research Conference - Sicily, Sicily, Italy|
Duration: 28 Jun 2011 → 1 Jul 2011
Conference number: 11th
|Conference||International Family Enterprise Research Annual World Family Business Research Conference|
|Abbreviated title||IFERA Annual World Family Business Research Confernce|
|Period||28/06/11 → 1/07/11|
Dibrell, C., Craig, J. B., & Neubaum, D. O. (2011). Strategic planning and flexibility: Governance control mechanisms in family and non-family firms. In S. Tomaselli (Ed.), Proceedings of 11th IFERA Annual World Family Business Research Conference: Intelligence and courage-family firms' vision in the era of economic turmoil (pp. 1-21). International Family Enterprise Research Academy.