Strategic planning and flexibility: Governance control mechanisms in family and non-family firms

Clay Dibrell, Justin B Craig, Donald O. Neubaum

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Abstract

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.
Original languageEnglish
Title of host publicationProceedings of 11th IFERA Annual World Family Business Research Conference
Subtitle of host publicationIntelligence and courage-family firms' vision in the era of economic turmoil
EditorsS. Tomaselli
Place of PublicationMadrid, Spain
PublisherInternational Family Enterprise Research Academy
Pages1-21
Number of pages21
Publication statusPublished - 2011
EventInternational Family Enterprise Research Annual World Family Business Research Conference - Sicily, Sicily, Italy
Duration: 28 Jun 20111 Jul 2011
Conference number: 11th
http://www.ifera2011.com/Pagg/docs.html

Conference

ConferenceInternational Family Enterprise Research Annual World Family Business Research Conference
Abbreviated titleIFERA Annual World Family Business Research Confernce
CountryItaly
CitySicily
Period28/06/111/07/11
Internet address

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Strategic planning
Control mechanism
Governance
Strategic flexibility
Governance mechanisms
Financial performance
Family firms
Regression analysis
Interaction effects
Firm performance
Governance structure

Cite this

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). Madrid, Spain: International Family Enterprise Research Academy.
Dibrell, Clay ; Craig, Justin B ; Neubaum, Donald O. / Strategic planning and flexibility: Governance control mechanisms in family and non-family firms. Proceedings of 11th IFERA Annual World Family Business Research Conference: Intelligence and courage-family firms' vision in the era of economic turmoil. editor / S. Tomaselli. Madrid, Spain : International Family Enterprise Research Academy, 2011. pp. 1-21
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Dibrell, C, Craig, JB & Neubaum, DO 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. International Family Enterprise Research Academy, Madrid, Spain, pp. 1-21, International Family Enterprise Research Annual World Family Business Research Conference, Sicily, Italy, 28/06/11.

Strategic planning and flexibility: Governance control mechanisms in family and non-family firms. / Dibrell, Clay; Craig, Justin B; Neubaum, Donald O.

Proceedings of 11th IFERA Annual World Family Business Research Conference: Intelligence and courage-family firms' vision in the era of economic turmoil. ed. / S. Tomaselli. Madrid, Spain : International Family Enterprise Research Academy, 2011. p. 1-21.

Research output: Chapter in Book/Report/Conference proceedingConference contributionResearchpeer-review

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Dibrell C, Craig JB, Neubaum DO. Strategic planning and flexibility: Governance control mechanisms in family and non-family firms. In Tomaselli S, editor, Proceedings of 11th IFERA Annual World Family Business Research Conference: Intelligence and courage-family firms' vision in the era of economic turmoil. Madrid, Spain: International Family Enterprise Research Academy. 2011. p. 1-21