Abstract
We explore the process of professionalization pre- and post-buyout (MBO) or buyin (MBI) of former private family firms using longitudinal evidence from six UK family firms undergoing an MBO/I in 1998. Professionalization behaviour was monitored up to 2014. Previous studies have conceptualized professionalization as a threshold to be attained. We demonstrate that professionalization is a complex process occurring in waves, triggered by changes in firm ownership and management. Waves of professionalization converge during the MBO/I process. Buyouts provide a funnelling mechanism enabling diverse control systems to be standardized. Post-MBO/I, divergence in the professionalization process reoccurs contingent on firm-specific contexts. Professionalization focuses on operations when stewardship relationships predominate, but on agency control mechanisms when there is increased potential for agency costs. Buyout organizational form is an important transitory phase facilitating the professionalization process. Professionalization is not a once-for-all development stage.
| Original language | English |
|---|---|
| Pages (from-to) | 803-817 |
| Number of pages | 15 |
| Journal | Small Business Economics |
| Volume | 47 |
| Issue number | 3 |
| Early online date | 21 Jul 2016 |
| DOIs | |
| Publication status | Published - Oct 2016 |
Bibliographical note
© The Author(s) 2016.Keywords
- Agency
- Family firms
- Management buyout
- Professionalization
- Stewardship
Profiles
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Carole Howorth
- The York Management School - Chair in Sust. & Ethical Entrepreneuship, Former employee
Person: Academic