An examination of strategy development processes in family firms in the south east of Ireland

Abstract

The purpose of this study is to examine the process of strategy development in family firms. The study will apply the generic model developed by Hart & Banbury (1994) of strategy development with some modifications and a modified version of the questionnaire developed by Bailey Johnson and Daniels (2000).

The study evolved from the identification of gaps and deficiencies in the literature in this area. The aim of this research is to review strategy development processes in family firms. To examine this a literature review is conducted. This examination discusses the definition of the family business. Next, an examination of strategy theory is conducted, by performing a thorough analysis of the development of strategy processes.

The theoretical foundation of the study influenced the formation of the research hypothesis and sub hypotheses posed. To test the hypotheses formulated, an electronic survey was conducted and the quantitative data analysed. The unit of analysis was family business operating in the South East region of Ireland. The questionnaire-based survey is applied to a sample of 1,400 businesses in the South East area Ireland. A total of 226 valid responses were received, of which 112 were family firms, which resulted in a valid response rate of 16.2% for the electronic survey conducted.

The major finding of this study is that strategy development in family firms encompasses both family and business objectives and is leader driven. The strategy development process in family firms was found not to differ, except where the influence of the leader is concerned, but family definition age and size are relevant factors that should be considered. The leader is influential in family firms. However this influence in turn affects the other six perspectives. Thus the leader’s influence in the whole process is ever present.