Does a family-first philosophy affect family business

Preparing to load PDF file. please wait...

0 of 0
100%
Does a family-first philosophy affect family business

Transcript Of Does a family-first philosophy affect family business

Purdue University
Purdue e-Pubs
Open Access Theses

Theses and Dissertations

Spring 2015
Does a family-first philosophy affect family business profitability? An analysis of family businesses in the midwest
Maria Victoria Iglesias
Purdue University

Follow this and additional works at: https://docs.lib.purdue.edu/open_access_theses Part of the Agricultural Economics Commons
Recommended Citation
Iglesias, Maria Victoria, "Does a family-first philosophy affect family business profitability? An analysis of family businesses in the midwest" (2015). Open Access Theses. 498. https://docs.lib.purdue.edu/open_access_theses/498
This document has been made available through Purdue e-Pubs, a service of the Purdue University Libraries. Please contact [email protected] for additional information.

iv
DOES A FAMILY-FIRST PHILOSOPHY AFFECT FAMILY BUSINESS PROFITABILITY? AN ANALYSIS OF FAMILY BUSINESSES IN THE MIDWEST
A Thesis Submitted to the Faculty
of Purdue University
by Maria Victoria Iglesias
In Partial Fulfillment of the Requirements for the Degree
of Master of Science
May 2015 Purdue University West Lafayette, Indiana

ii Para mamá, papá, Rodri, y Bjørn

iii
ACKNOWLEDGEMENTS I would like to thank my thesis committee members Dr. James Binkley, Dr. Craig Dobbins, and especially my major professor Dr. María Marshall for their help and support.

iv
TABLE OF CONTENTS
Page LIST OF TABLES ............................................................................................................. vi LIST OF FIGURES .......................................................................................................... vii ABSTRACT..................................................................................................................... viii CHAPTER 1: INTRODUCTION ........................................................................................1 CHAPTER 2: LITERATURE REVIEW .............................................................................3
Sustainable Family Business Model ............................................................................... 3 Family-First vs Business-First ........................................................................................ 6 Business Goals and Values ............................................................................................. 9 Succession ..................................................................................................................... 11 Management Strategies ................................................................................................. 14 Family Tension.............................................................................................................. 16 Other Factors Affecting Business Success .................................................................... 19 Hypotheses .................................................................................................................... 24
Family-First as a Determinant of Profit .....................................................................24 Business Succession Plans as a Determinant of Profit ...............................................25 Management Strategy as a Determinant of Profit ......................................................26 CHAPTER 3: METHODOLOGY .....................................................................................27 Data ............................................................................................................................... 27 Dependent Variable....................................................................................................... 28 Independent Variables................................................................................................... 29 Family-First vs Business-First....................................................................................29 Management Strategy.................................................................................................35 Factor Variables ............................................................................................................ 35 Family Business Goals ...............................................................................................36 Succession ..................................................................................................................36 Family Tension ...........................................................................................................38

v
Page Other Factors Affecting Business Profit.....................................................................40 Business Profit Model ................................................................................................... 42 CHAPTER 4: RESULTS AND DISCUSSION.................................................................45 Family-First as a Determinant of Profit ........................................................................ 46 Business Distribution as a Determinant of Profit.......................................................... 47 Management Strategy as a Determinant of Profit ......................................................... 48 Other Determinants of Profit......................................................................................... 49 Layoffs Based on Performance not Family Status .....................................................49 Business Investment as a Priority...............................................................................49 Management Transfer Plan.........................................................................................50 Resolving Business Conflicts .....................................................................................51 Female Business Owners............................................................................................52 Children ......................................................................................................................53 Total Employees .........................................................................................................54 CHAPTER 5: CONCLUSIONS ........................................................................................57 Limitations .................................................................................................................... 59 Directions for Future Research ..................................................................................... 60 REFERENCES ................................................................................................................621

vi

LIST OF TABLES

Table

Page

Table 1: Family-First vs Business-First Family Business Philosophy ............................... 9

Table 2: Profit Midpoints Detailed Distribution ............................................................... 29

Table 3: Business Philosophy Description for Non-Farm Family Businesses (N=174) .. 33

Table 4: Business Philosophy Description for Farm Family Businesses (N=402).......... 34

Table 5: Statistical Analysis for Non-Farm Family Businesses (N=174)......................... 43

Table 6: Statistical Analysis for Farm Family Businesses (N=402)................................. 44

Table 7: OLS Model Results for Non-Farm Family Businesses (N=174)........................ 55

Table 8: OLS Model Results for Farm Family Businesses (N=402)................................ 56

vii

LIST OF FIGURES

Figure

Page

Figure 1: Sustainable Family Business Model.................................................................... 5
DeterminantAnalysisFamily Business ProfitabilityFactors