TY - JOUR
T1 - Goal tolerance, outside investors, and family firm governance
AU - Villanueva, Jaume
AU - Sapienza, Harry J
PY - 2009/11/1
Y1 - 2009/11/1
N2 - Le Breton-Miller and Miller argue that as the family becomes more embedded in the firm, the firm's decision makers become more susceptible to influence by the family, and agency problems rise for outside investors. We contend that the family's embeddedness in the business does not, in itself, explain whether the assumptions of agency theory are warranted. Our commentary offers an alternative way in which outside investors might look at family firms' goals. Outsiders should assess the complementarity of the family firm's objectives with their own if they are to make rewarding investments in family firms.
AB - Le Breton-Miller and Miller argue that as the family becomes more embedded in the firm, the firm's decision makers become more susceptible to influence by the family, and agency problems rise for outside investors. We contend that the family's embeddedness in the business does not, in itself, explain whether the assumptions of agency theory are warranted. Our commentary offers an alternative way in which outside investors might look at family firms' goals. Outsiders should assess the complementarity of the family firm's objectives with their own if they are to make rewarding investments in family firms.
UR - http://www.scopus.com/inward/record.url?scp=70649101505&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=70649101505&partnerID=8YFLogxK
U2 - 10.1111/j.1540-6520.2009.00340.x
DO - 10.1111/j.1540-6520.2009.00340.x
M3 - Article
AN - SCOPUS:70649101505
SN - 1042-2587
VL - 33
SP - 1193
EP - 1199
JO - Entrepreneurship: Theory and Practice
JF - Entrepreneurship: Theory and Practice
IS - 6
ER -