The founder’s psychological ownership and its strategic implications
Journal of Small Business and Enterprise Development
ISSN: 1462-6004
Article publication date: 9 December 2019
Issue publication date: 4 February 2020
Abstract
Purpose
The purpose of this paper is to understand the change of the founder’s psychological ownership when s/he sells the business and its implications for the organization’s strategy.
Design/methodology/approach
The study contributes with a longitudinal study of psychological ownership, accounting for its development over time in a Swedish e-commerce company. By applying a case study methodology, conclusions are drawn from a vast amount of archival data and interviews. The empirical material covers the transition from a founder-run, family-owned to a first foreign-owned, and currently private-equity owned company.
Findings
Theoretically, it extends understandings of psychological ownership and its strategic implications by including former legal owners; that is, how psychological ownership changes after legal ownership ceases. Thereby, it develops the individual dimension (founder and former owner) of psychological ownership as well as its collective dimension (employees toward founder). The paper contributes to the psychological ownership founder and exit-literatures by highlighting continuity after the formal sale of legal ownership and its consequences for the organization.
Practical implications
It finds that new legal owners can use this heritage to signal continuity and launch strategic changes by transforming it into artifacts.
Originality/value
This study extends the understanding of development of psychological ownership of founders from foundation to exit and its consequences for the organization’s strategy. This extension sheds new light on founders as artifacts of organizations and thereby their role for the organizational heritage.
Keywords
Citation
Ljungkvist, T. and Boers, B. (2020), "The founder’s psychological ownership and its strategic implications", Journal of Small Business and Enterprise Development, Vol. 27 No. 1, pp. 85-102. https://doi.org/10.1108/JSBED-12-2018-0386
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited