Family governance and strategic orientation of family firms in China: an institutional logics perspective

Abstract

ABSTRACTFamily firms have attracted significant attention, prompting a surge of inquiry into their strategic choices. Drawing on institutional logics theory, we view the strategic choices of family firms as the interactive outcome of the dualistic system and the institutional environment. Empirical research conducted on listed family firms in China reveals that as family control increases, these firms tend to adopt conservative strategies. However, this relationship is influenced by the institutional environment. Specifically, the positive association is strengthened as marketization progresses but weakened as religious culture intensifies. These findings shed light on how the behavioural characteristics and strategic decisions of family firms, as an integral part of Chinese culture, are shaped and influenced by regional cultural institutions. We contend that during the process of marketization transformation, it is crucial to establish an internal culture within family firms that can reconcile the contradictions of internal logics. Additionally, significant importance should be placed on adapting to and leveraging the external institutional environment.KEYWORDS: Institutional logics theoryChinese family firmsstrategic orientationmarketizationtraditional culture Disclosure statementNo potential conflict of interest was reported by the author(s).Additional informationFundingThis work was supported by the National Natural Science Foundation of China [No. 71972119; No.72272090], Provincial major research projects in Guangdong universities [No.2022WCXTD006] and the STU Scientific Research Initiation Grant [No. STF22027].Notes on contributorsQiang LiangQiang Liang is a Professor at the School of Business, Shantou University. He obtained his PhD from Sun Yat-sen University. His research focuses on family firm and innovation. He has published many papers in English and Chinese journals such as Chinese Management Studies, Asia Pacific Journal of Management, Journal of Business Ethics, Management World, etc.Xi HuangXi Huang is a graduate student at the School of Business, Shantou University. His research focuses on family firm and innovation.Yuanrui XuYuanrui Xu is a graduate student at the School of Business, Shantou University. Her research focuses on family firm and innovation.Bo WangBo Wang is an Assistant Professor at the School of Business, Shantou University. He obtained his PhD from Sun Yat-sen University. His research focuses on family firm, entrepreneurship and institution. He has published many papers in English and Chinese journals such as Management World, Nankai Business Review, etc.