Strategic Decision Making in Small Family Firms: An Empirical Investigation


  • Bakr Ibrahim Concordia University
  • Colette Dumas Suffolk University
  • Jean McGuire Concordia University


Family businesses play a significant role in the national economy. Despite their importance, little attention has been paid to strategic decision making in these firms. This research examines strategic decision making in 74 small family firms. In addition to the firm's internal and external factors traditionally acknowledged in strategy research, strategic decisions in family firms were found to be significantly influenced by family considerations. This finding underscores the unique characteristics of family firms. Based on the research findings a conceptual framework of strategic decision making in family firms is offered.


Aronoff, C.. & Ward, J. ( 1 991). Family business sourcebook. Detroit: Omnigraphics, Inc.

Astley, W.G. & Van de Ven, A.H. ( 1983). Central perspectives and debates in organizational theory. Administrat i ve Science Quanerly, 28, 245-273.

Barney, J. ( 1 991 ). Firm resources and sustained competitive advantage. Journal of Management, 1 7, 99-1 20.

Barney, J. ( 1 997). Gaining and sustaining competitive advantage. New York: Addison Wesley

Banon, S.L., & Matthews, C.H. ( 1983). Small firm financing: Implications from a strategic management perspective. Journal of Small Business Management, 27( I ), 1-7.

Bcckhard, R., & Dyer, W., Jr. (1983). Managing change in the family firm - Issues and strategies. Sloan Management Review, 24, 59-65.

Brockhaus, R.H. (1994). Entrepreneurship and family business research: Comparisons, critique, and lessons. Entrepreneurship Theory and Practice, 1 9( 1), 25-38.

Campbell , D.T., & Stanley, J.C. (1963). Experimental and quasi-experimental designs for research. Boston: Houghton Muffin.

Child, J. ( 1 972). Organizational structure, environment and performance: The role of strategic choice, Sociology, 6(1), 1-22.

Chen, M., & Smith, K. (1987). Sam ples used in strategic management research. Best paper proceed ings: 47lh Annual Meeting: the Academy of Management, Athens, GA. 7-1 1.

Chua, J., Christman, J, & Sharma, P. (1999). Defining the family business by behavior. Entrepreneu rsh i p Theory and Pract ice, 23 (4), 19-39.

Churchill, N.C., & Hatten, K. ( 1 987). Non-market transfers of wealth and power: A research framework for small business. American Journal of Small Business, 1 1(3), 51-64.

Covin, J .G. ( 1991). Entrepreneurial versus conservative finns: A comparison of strategies and performance. Journal of Management Stud ies, 28(5), 33-36.

Daily, C.M., & Dollinger, M.J. (1992). An empirical examination of ownership structure in family and professionally managed firms. Family Business Review, 5(2), 1 17-136.

Dess, G.G., & Robinson, R.B. (1984). Measuring organ izational performance in the absence of objective measures: The case of privately held firm and conglomerate business unit. Strategic Management Journal, 5, 265-273.

Dumas, C., Dupuis, J.P., Richer, F. & St.-Cyr, L. (1995). Factors that influence the next generation's decision to take over the family firm. Family Business Review, 8(2), 99-120.

Dyer, W.G. (1986). Cul!ural change in family firms: Anticipating and managing business and family transitions. San Francisco: Jossey-Bass.

Dyer. W.G. & Handler, W. (1994). Entrepreneurship and family business: Exploring the connections. Entrepreneurship Theory and Practice, 19(I ), 71 -83.

England, G.W. ( 1975). The manager and his values: An international perspective from the United States, Japan, Korea, India and Australia. Cambridge, Mass: Ballinger Publishing.

Fama, E.F. (1980. Agency problems and the theory of the firm." Journal of Political Economy, 88, 288-307.

Fama, E.F., & Jensen, M.C. (1983). Agency problems and residual claims. Journal of Law and Economics, 26, 327-349.

Freeman, R.E., Gilbert, D.R. & Hartman, E. ( 1 988). Va lues and the foundations of strategic management. Journal of Business Ethics, 7, pp. 821-834.

Galbraith, J., & Schendel, D. (1983). An em pirical analysis of strategy types. Strategic Management Journal, 4,. 153-1 73.

Guth, W.D., & Tagu iri, R . (1965). Personal values and corporate strategy. Harvard Business Review, 27, 25-41.

Habbershon, T. & Williams, M. (1999). A resource based framework for assessing the strategic advantages of fam ily firms. Fam i ly Business Review 7, 1-25.

Harris, D., Mart inez, J. & Ward. J. (1 994). Is strategy different for the fam ily-owned business? Fam ily Business Review, Vll(2), 1 59-1 74.

Hitt, M.A., & Tyler, B.B. ( 1 991 ). Strategic decision models: Integrating different strategic perspecti ves. Strategic Management Journal, 1 2(5), 327-351.

Hollander, B., & Ellman, N. ( 1 988). An emergency field of inquiry. Family Business Review, 1(2), 159.Hoy

Ibrahim, A.B. (1993). Strategy types and small firms' performance: An empirical analysis. Journal of Small Business Strategy, 5, I ,

Ibrahim, A.B., & Ellis, W. (1994). Family business: Concepts and practice. Iowa: Kendal l/Hunt Publishing Company.

Ibrahim, A. B, McGuire, J, Ismail, Y, and Dumas, C. 1 999. Patterns of Strategy Formulation in a Family Firm, Academy of Management, Chicago, I L, August.

James, H. (1999). The owner as manager, extended horizons, and the family firm. International Journal of the Economics of Business. 6 ( I ), 41-55.

Jensen, M.C., & Meckling, W.H. (1976). Theory of the firm: Managerial behavior, agency costs and ownersh ip structure. Journal of Financial Econom ics, 3, 305-360.

Khan, J.A., & Henderson. D. ( 1 992). Location preferences of fam ily firms. Family Business Review, 4(3). 271 -282.

Kim, J., & M ueller, C.W. ( 1 978). Factor analysis-statistical methods and practical issues. Beverly Hills: Sage Publ ications.

Lansberg. I., Perrow E. & Rogalsky, S. (1 988). Family business as an emerging field. Family Business Review I ( I ), 1 -8.

Litz. R.A. (1997). The family firm's exclusion from business school research. Explaining the void: Addressing the opportunity. Entrepreneurship Theory and Practice, 21(3), 55-71 .

Meek, C., Woodworth, W., & Dyer, W.G. (1988). Managing by the numbers: Absentee owners and the decline of American industry. Reading, MA: Addison-Wesley.

Miller, D., & Friesen, P.H. (1983). Strategy making and environment, the third l ink. Strategic Management Journal, 4, 221-235.

Montanari, J.R. ( 1978). Managerial discretion: An expanded model of organ izational choice. Academy of Management Review, 3, 231 -241.

Porter. M.E. ( 1 991 ). Towards a dynam ic theory of strategy. Strategic Management Journal, g, 95-1 1 7.

Prahald, C.K., & Hamel, G. (1990). The core competence of the corporation. Harvard Business Review, 68(3), 79-93.

Pratt, M., & Foreman, P. (2000). Classifying managerial responses to multi ple organizational identities. Academ y of Management Review, 25 ( I ) 18-42.

Robinson, R.B., & Pearce, J.A. ( 1988). Planned patterns of strategic behavior and their relationship to business unit perfonnance. Strategic Management Journal, 19, 43-60.

Sharma, P., Chrisman, J., & Ch ua, J. ( 1 997). Strategic management of the family business: Past research and future challenges. Family Business Review, 1 1, 1-36.

Shri vastava, P.. & G rant, J.11. {1985). Empirically derived mod els of strategic decision­ making processes, Strategic Management Journal, 6, 97-1 13.

Tagiuri, R., & Davis, J.A. ( 1 992). On the goals of successfu l family companies. Family Business Review, 5( I ), 43-62.

Trostel. A.O., & Nichols, M.I. (1982). Privately held and publ icly held companies: A con1parison of strategic choices and n1anage1nent processes. Academy of Management Journal. 25( I ), 47-62.

Victor, B., & Cullen, J.B. (1 988). The organizational bases of ethical work climates. Administrative Science Quarterly, 33, I 01 -1 25.






Small Business Brief

How to Cite

Strategic Decision Making in Small Family Firms: An Empirical Investigation. (2001). Journal of Small Business Strategy (archive Only), 12(1), 80-90.