Panikkos Poutziouris, Yong Wang and Sally Chan
This explorative paper considers the recent developments in the emerging small family business sector in post‐reform China as the country embraces socio‐economic and structural…
Abstract
This explorative paper considers the recent developments in the emerging small family business sector in post‐reform China as the country embraces socio‐economic and structural transition from a centrally planned to a market‐orientated system. The important contributions that Chinese small family firms play in the acceleration of private sector development across the social and industrial sectors as well as the geographic boundaries of the Pacific Rim are highlighted. The authors propose typologies of Chinese entrepreneurship and tentative enterprise policy recommendations for the future development of small private family businesses in China.
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Panikkos Poutziouris, Francis Chittenden and Nicos Michaelas
This paper documents the findings from an extensive postal survey conducted in 1997‐98, which looks at the tax affairs of small firms, both incorporated and unincorporated. Tax…
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This paper documents the findings from an extensive postal survey conducted in 1997‐98, which looks at the tax affairs of small firms, both incorporated and unincorporated. Tax planning practices of small firms in the UK, and the implications of these practices on working capital and investment in these businesses, are considered. The results indicate that tax planning in most small firms is not very sophisticated and this has an effect on investment decisions in these businesses. As a result of poor tax planning practices small firms are not in a position to utilise fully all available tax reduction mechanisms. Instead they have to rely on mechanisms that can be decided upon after the accounting year end; unfortunately these involve the withdrawal of money from the business (eg pension schemes, salaries/bonuses). The results presented in this paper illustrate that the decision concerning the level of pension fund contributions and drawings/salaries, and subsequently the level of retained profits, will depend on both financial (business needs and market characteristics) as well as non‐financial (management characteristics) factors. However, the present combination of these factors in the small business sector favours the extraction of profits out of the business rather than the reinvestment of profits that will enhance the creation of wealth and employment. Based on the beliefs and expectations of small business owner/directors a number of tax incentives are discussed that the government could introduce in order to enhance the financial development and prosperity of small firms.
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Panikkos Poutziouris, Martin Binks and Alistair Bruce
The development of small firms tends to follow certain growth patterns usually referred to as business growth models. This paper reports on the conceptualisation of a…
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The development of small firms tends to follow certain growth patterns usually referred to as business growth models. This paper reports on the conceptualisation of a “problem‐based phenomenological life cycle model”, which delineates the growth pattern of micro and small manufacturing firms in Cyprus. The empirically validated model offers guidance to small business managers, financiers and advisers as to the challenges and growth complexities accompanying the transitions taking place in small businesses as they develop along their organisational life cycle. Enhanced understanding of the barriers to the development of small business contributes to the better design of policy initiatives that seek to foster the survival, sustainable growth and prosperity of small enterprises.
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This explorative research paper considers the strategic development objectives of small owner‐managed ventures in order to have an insight into how to systematically categorise…
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This explorative research paper considers the strategic development objectives of small owner‐managed ventures in order to have an insight into how to systematically categorise the heterogeneous owner‐managed small business economy. It commences with a review of the literature and other studies pertinent to the strategic objectives of small business owner‐ managers from which the general research hypothesis is established; small firms have a variant form of strategic orientation owing to a plethora of internal (behavioural) and external market economic factors. This is followed by the research methodology and statistical analysis of a database which incorporates the views of 922 small firm owner‐managers on strategic objectives. The empirical evidence identifies four generic clusters of owner‐managers namely: growth stars, exiteers, survivors, and controllers. In order to throw more light on the profile of the variant clusters of owner‐managed small firms, the paper briefly examines the inter‐relationship of small business strategic orientation with structure (e.g. size, age, sectoral distribution), behaviour (e.g. legal form, family business control) and performance (e.g. growth, profitability). In conclusion, some tentative policy implications from the perspective of management, service providers (financiers and advisors) and policy makers, are discussed.
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Panikkos Poutziouris and Yong Wang
This empirical research paper draws evidence from a database of UK independent private companies (n=250) and reports on the financial aspirations of owner‐managers of family firms…
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This empirical research paper draws evidence from a database of UK independent private companies (n=250) and reports on the financial aspirations of owner‐managers of family firms with respect to the flotation route. Following a brief review of the literature, the paper proceeds with an introduction of the UK survey into the financial development of private SMEs. Then evidence is presented on the perceived factors that influence the decision of owner/directors of family companies to consider the flotation option. Phase A employs univariate statistical analysis to contrast financial philosophies of the owner‐managing directors (OMDs) of family firms against those of their mainstream private counterparts. Phase B employs cluster analysis to categorise sample family companies into four generic groups that evidently highlight that the PLC route is not always tailored to financial issues. The empirical results demonstrate that the financial strategies of family companies are more or less in line with the behavioural issues shaping all private companies irrespective of family control. Finally, the paper concludes with a set of tentative policy implications. To encourage the public equity development of smaller privately held companies, particularly family firms, there is scope for more policy initiatives that are tuned to the “socio‐behavioural‐cultural” ethos of private‐OMDs as they master their corporate and entrepreneurial odyssey.
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Panikkos Zata Poutziouris, Lloyd Steier and Kosmas X. Smyrnios
Introduces the special issue which focuses on family business entrepreneurial developments. Outlines the articles in the issue which not only increase our repository of family…
Abstract
Introduces the special issue which focuses on family business entrepreneurial developments. Outlines the articles in the issue which not only increase our repository of family business research, but also provide useful insights for new research addressing topics such as family business centred ethnic entrepreneurship, “interpreneurship” and “intrapreneurship”, succession planning, financial philosophies; governance‐boards, consultation‐communication practices, and strategy formulation.
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Nicos Michaelas, Francis Chittenden and Panikkos Poutziouris
Although earlier capital structure theories, grounded within the finance paradigm (agency theory, transaction cost theory etc), have contributed to a deeper understanding of the…
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Although earlier capital structure theories, grounded within the finance paradigm (agency theory, transaction cost theory etc), have contributed to a deeper understanding of the capital structure puzzle, recent efforts suggest that research for the missing pieces of the puzzle should continue. This paper considers that these missing pieces of the puzzle could be diverse non‐financial and behavioural factors influencing capital structure decisions, that have received relatively little attention from finance researchers. The paper reports on an exploratory attempt to use interview techniques for the study of capital structure in small firms. Interviews can provide evidence about non‐financial and behavioural variables that quantitative analysis cannot. The paper develops a model for understanding capital structure decision making in small firms. It analyses the responses of small business owners/managers concerning the management of the financial structure of their firms and the factors that influence their capital structure decisions. Small business owners’ responses indicate that although a number of different financial variables may affect their capital structure decisions, other non‐financial and behavioural factors such as the need for control, risk propensity, experience, knowledge and goals may be more important in influencing the capital structure of their firms, at any time. The results indicate that significant progress in understanding the factors that influence capital structure may be achieved if financial researchers incorporate management theory in their studies, so that financial as well as non‐financial and behavioural factors are explored.
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Yong Wang and Panikkos Poutziouris
The theme of this paper is entrepreneurial risk taking. Specifically, the paper has twofold objectives: to develop insights into individual and familial correlates of risk‐taking…
Abstract
Purpose
The theme of this paper is entrepreneurial risk taking. Specifically, the paper has twofold objectives: to develop insights into individual and familial correlates of risk‐taking propensity in family firms; to explore impacts of risk taking on business performance.
Design/methodology/approach
A quantitative survey was conducted with the sampling frame outlined based on the FAME database. A total of 236 companies participated in this survey.
Findings
The results suggest that individual and familial variables will determine the risk‐taking propensity, specifically entrepreneur's industrial tenure, age, and the controlling generation in family businesses. Furthermore, risk‐taking intensity correlates with business performance.
Research limitations/implications
The cross‐sectional rather than longitudinal design of the study determines that it can only proffer a snapshot of the scenario. Further, the current study excludes non‐incorporated firms. Future explorative studies in a similar vein may be executed through channels of national and local development agencies to capture non‐incorporated firms.
Originality/value
Recent recognition of the intertwinement of family and business in family firms has led to the assumption that risk‐taking propensity in family firms is influenced by family ownership and family associated concerns. Nonetheless, rarely has the influence of family on risk‐taking propensity and the ensuing performance been addressed in the literature. The insights developed by this original exploration will broaden the knowledge landscape of family firms and entrepreneurial venturing allowing us to better understand how family firms can survive and prosper in the increasingly competitive market.
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Elias Hadjielias and Panikkos Poutziouris
The purpose of this paper is to investigate the conditions underpinning the cooperative relationships between family businesses. The role of trust is also explored, given the…
Abstract
Purpose
The purpose of this paper is to investigate the conditions underpinning the cooperative relationships between family businesses. The role of trust is also explored, given the focus on informal conditions nested within the cooperation between firms.
Design/methodology/approach
A case study research method is adopted in this paper. This research is conducted within a cooperative association in Cyprus where 40 retail family businesses trade under the same brand.
Findings
The findings suggest that cooperation between family businesses emerges and unfolds as a result of the presence and interrelationships between a number of critical conditions: trust, altruism, collective thinking, stewardship, friendship, and family values congruence. The work illustrates that trust becomes a catalyst to the emergence and maintenance of cooperative relations between family businesses. Trust between family leaders is important in building altruism, collective thinking, and stewardship norms amongst them, and helps in sustaining the cooperation between their respective firms. At the same time, trust (stemming from past friendship and values congruence between diverse family leaders) becomes important in bringing family businesses to cooperate together at first instance. Further, the findings stress the role of critical events and self-interest in moderating the role and influence of trust on the cooperation between family businesses.
Originality/value
This paper contributes to the family business field through new knowledge on the relations between family businesses and the unique conditions that shape their long-term cooperation.