The application of strategic management schools in fast growth UK family firms : the influence of ethnicity

• Main Author: Bhalla, Ajay
• Published: Southampton Solent University 2000
• Subjects: 158.7; Business and Management : Trade and Commerce
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.393055

This research addresses the gap in the family firms strategy literature by distancing itself from the traditional classical paradigm, which is often applied to study strategy in the family firms. It also represents the first exploratory attempt to map the strategic choices of ethnic South Asians family firms. The contributions also lie in the domain of small to medium-sized enterprises (SMEs), where abundant support has been generated for the application of formal planning in the literature. In this research, propositions were generated using the prerequisites of contrasting strategy paradigms in the context of Whittington's (1993) model of perspectives on strategy which classifies the strategy literature into four schools of thought, classical, evolutionary, processual and systemic. An additional fifth school of thought regarded as resource based view was added. The primary hypotheses aim to investigate whether firms controlled by Anglo-Saxons and South Asians differ in telation to the five schools of strategic management. A secondary hypotheses which aims to investigate if family firms can be visualised in groups following particular schools of strategy was also submitted. The research also aimed to examine the relationship between summary independent variables such as age of business, ethnic origin, turnover and schools of strategic management as a dependent variable. By investigating fast growth firms, the domaninace of the classical paradigm of strategy in enhancing the firm's performance in literature is also examined in relation to other schools of strategy. A sample of 301 fast grwoing family firms was selected from the FAME database, and regional South Asian directories maintained by enterprise agencies using the UK SIC codes of 5139, 5134 and 7220. 76 firms agreed to participate in research. Questionnaires were filled in by the managing directors or senior managers of all the firms and in-depth interviews were conducted with 48 of them. The usable questionnaires numbered to seventy one. The questionnaire statements were developed adhering to the central premises of each school of thought. Statistical tests involved conducting hierarchical cluster analysis to group the family firms and study the commonalities amongst these firms. One way ANOVA was conducted to determine the inflcuence of ethnicity variable in each school of thought. In addition, regression analysis was performed to examine the relationship between summary independent variables and schools of strategic management. This project attempts to study strategy in family firms by applying the wider dimensions of strategy management concept. The findings are contradictory to the research stream which has argued that fast growth firms are likely to follow the classical school of strategy. It is proposed that ethnic origin has an important influence in determining the dominance of a particular strategy paradigm in a firm, and that no one particular school of thought dominates the managerial thinking when the firms are grouped together. The findings also question the application of theoretical strategy models when studied in the context of real managerial world