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We explore the circumstances under which a non-family business (NFB) might adopt some of the characteristics of a family business (FB). We conduct an in-depth analysis of the recent developments at Infosys Technologies, a listed company that over its 32 year history had taken great pains to adopt the corporate governance characteristics of an NFB. In June 2013, the board made an announcement that seemed to move its corporate governance towards an FB model. We assess the pros and cons of such a transition for the interests of minority shareholders, who are considered most vulnerable relative to large block shareholders and managers. We also discuss why such a transition might take place and suggest the socio-emotional wealth of the founding families in their organizations as a possible explanation.

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Corporate governance ;  Family business ;  professional organization

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We theorize about how founder identity threat, which we define as an experience that presents potential harm to the meaning or enactment of the founder identity in creating successful new ventures, arises during new venture distress and how individual appraisal and social support influence this experience. We also discuss the psychological and behavioral consequences of founders¡¯ threatened identity during new venture distress, and elaborate on its performance implications to better understand the challenges of entrepreneurship.

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entrepreneurship ;  identity threat ;  new venture distress

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This paper extends tertius iungens social network dynamics to theorize the micro-social level of entrepreneurial activity – the social dynamics of relatively small numbers of actors surrounding the formation and early growth of new ventures. We animate these ideas with a focus a project-based view of entrepreneurship that emphasizes the collective action in which initial entrepreneurial groups define emergent goals and aggregate people and resources toward realizing them. This theoretical framework has as its central conceptual components tertius iungens connecting activity and creative project action trajectories. Our perspective offers insights into the social processes associated with new venture formation while integrating and extending key elements from a growing body of work on entrepreneurial action. By illuminating the initial stages of emergent entrepreneurial action, our study clarifies social processes surrounding new venture initiatives while suggesting ways to advance entrepreneurship theory going forward.

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We examine whether deploying host-country nationals (HCNs) as subsidiary CEOs in multinational enterprises (MNEs) overseas subsidiaries may lead to stronger relational ties to key host-country business contacts and government officials. Furthermore, drawing on an agency perspective of MNE-subsidiary relationship, we examine how strong relational ties may hurt subsidiary performance and how incentive compensation and monitoring may influence this relationship. We combined archival and survey data for 272 MNE subsidiaries operating in South Korea. Our results reveal a paradox in which appointing HCNs subsidiary CEO enhances relational ties to host- country business contacts but such strong relational ties also hurts subsidiary performance, while incentive compensation and monitoring can mitigate such agency costs. Our theory and findings provide unique insights to MNE overseas subsidiary staffing, social embeddedness, and subsidiary performance.

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host country nationals ;  relation ties strength ;  subsidiary performance

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Summer 2014 marks the 100th anniversary of the opening of the Panama Canal, considered the riskiest, most technologically complex project of its time. Project management is not so much a miracle -- as the naysayers once said it would take to complete the Panama Canal under Ferdinand de Lesseps -- but rather a science for which executives need to make sure they are fully prepared.

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In today’s rapidly changing environment, employee creativity is important for organizations to have competitive advantages for an organizational innovation, survival and long term success. Consequently, to examine how organizations can foster employee creativity can be extremely valuable to increase organizational competitiveness. Creativity researchers have examined the antecedents of employee creativity and found that personal characteristics (e.g., creative personality and openness), job characteristics (e.g., job autonomy), and work environment (e.g., team characteristics) independently or interactively influenced employee creativity. Although current creativity research has enhanced our understating about what factors influence employee creativity, less research has focused on examining how personal characteristics, job characteristics, and work environment jointly influence employee creativity. To address this issue, we examined how creative personality, skill variety, and team characteristics (i.e., team climate for creativity and team empowerment) influenced employee creativity independently and jointly. We collected data from 157 employee-supervisor pairs from research and development (R&D) departments in 14 organizations in South Korea. The organizations include three software development companies, three pharmaceuticals companies, two construction companies, and six manufacturing companies. The employees reported on their creative personality, skill variety, team climate for creativity, team empowerment, and their own creativity, while the supervisors assessed the employees’ individual creativity. We conducted hierarchical multiple regression analyses to test our hypotheses regarding the direct relationships between creative personality, skill variety, and team characteristics and employee creativity, as well as their interactive effects on employee creativity. The results show that creative personality, skill variety, team climate for creativity, and team empowerment significantly influenced employee creativity, respectively. In addition, as expected, creative personality, skill variety, and team climate for creativity jointly influenced employee creativity. Specifically, when skill variety and team climate for creativity were both low, the relationship between creative personality and employee creativity (assessed by the employees) was the lowest. On the other hand, when skill variety was high and team climate for creativity was high, the relationship between creative personality and employee creativity (assessed by the employees) was the highest. The similar patterns were found for the interactive effects of creative personality, skill variety, and team empowerment on employee creativity (assessed by both the employees and the supervisors). This study provides several theoretical and practical implications. For example, the present study can contribute to creativity research by generalizing the effect of creative personality on employee creativity in South Korea context. It also extends current creativity research by examining the effects of skill variety and team characteristics on employee individual creativity. More important, this study theorized and examined how creativity personality, skill variety, and team characteristics jointly influence employee creativity. This approach has seldom been used in the literature and supports the arguments that personal characteristics, job characteristics, and work environment jointly influence employees’ attitudes and behaviors (cf. Johns & Saks, 2005; Tett & Burnett, 2003). Findings in this study have also some practical implications in organizations. For example, organizations can enhance individual creativity by selecting people who have high creative personality. Organizations that aim to encourage individual creativity need to design jobs to enhance skill variety and build team characteristics that emphasize creativity and empower team members.

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http://en.ceibs.edu/what-makes-country-rich-friendly

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Using the theories of the political marketplace and political instability, we examine the effect of political capital on firms’ access to bank loans in relation to the political environment. In particular, we use political capital inequality and political instability to characterize the political environment. Using a nationwide survey of private firms in 2010, we find that private firms have more difficulty in gaining access to bank lending as the degree of political capital inequality increases. Furthermore, political capital exerts a positive effect on access to bank loans only when political capital inequality and instability are above certain thresholds.

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