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Company Metamorphosis: Professionalization Waves, Family Firms and Management Buyouts

Howorth, C.; Wright, M.; Westhead, P.; Allcock, D.

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Authors

C. Howorth

M. Wright

D. Allcock



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.

Citation

Howorth, C., Wright, M., Westhead, P., & Allcock, D. (2016). Company Metamorphosis: Professionalization Waves, Family Firms and Management Buyouts. Small Business Economics, 47(3), 803-817. https://doi.org/10.1007/s11187-016-9761-6

Journal Article Type Article
Acceptance Date Jun 7, 2016
Online Publication Date Jul 21, 2016
Publication Date Oct 1, 2016
Deposit Date Dec 10, 2015
Publicly Available Date Aug 3, 2016
Journal Small Business Economics
Print ISSN 0921-898X
Electronic ISSN 1573-0913
Publisher Springer
Peer Reviewed Peer Reviewed
Volume 47
Issue 3
Pages 803-817
DOI https://doi.org/10.1007/s11187-016-9761-6
Public URL https://durham-repository.worktribe.com/output/1394049

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Publisher Licence URL
http://creativecommons.org/licenses/by/4.0/

Copyright Statement
Advance online version © The Author(s) 2016 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.





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