FAMILY BUSINESS: FROM AN INFORMALLY MANAGED AND UNSTRUCTURED MODEL TO A STRUCTURED, FORMALLY MANAGED LARGER ENTERPRISE

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Alessandro Capodaglio, Giuseppina Iacoviello ORCID logo, Gianpaolo Neri

https://doi.org/10.22495/cocv15i1art12

Abstract

The family business is a fundamental element of the Italian economic development and wealth. One of the main reasons of failure of this type of firm is the business succession, within the family members. The aim of this paper is to analyse a fundamental task of the family business: the role played by a top management team that includes family members belonging to different generations in the strategy renewal process. In particular, we are interested in understanding how plurigenerational family business can apply incremental or radical strategic initiatives. A qualitative methodology is used to conduct a longitudinal case-study, using a deductive-inductive-deductive approach that is typical of the business administration studies. We use this approach to analyse the main influence among the corporate governance practice and the strategic changes of the family business. The case study method allows us to retain the meaningful characteristics of the real-life family business, such as organizational and managerial processes. Through a case study, we highlight the possibility of IS being able to support and facilitate the development of global knowledge, as well as the preparation of the cost accounting system for the calculation of the product cost and margin per customer, and the realization of a business intelligence and reporting system both for the board and the managers. This paper leads to the conclusion that traditional Italian entrepreneurial model can be considered still relevant and successful if supported by a prudent and conscious corporate management. This work contributes to a discussion of the potential benefits of the family business transition from the informally managed, unstructured directly controlled model to a delegated, structured, formally managed the larger enterprise. This paper reports on a study which aims to add to the theoretical understanding of how and why family business use IS in their strategies. The material from this paper can be used as the basis for future research as long as there are "significant" revisions from the original.

Keywords: Family Business, Management Succession, Corporate Governance

Received: 11.05.2017

Accepted: 31.07.2017

How to cite this paper: Capodaglio, A., Iacoviello, G., & Neri, G. (2017). Family business: From an informally managed and unstructured model to a structured, formally managed larger enterprise. Corporate Ownership & Control, 15(1), 123-132. https://doi.org/10.22495/cocv15i1art12