Strategic divestment in family firms: role of family structure and community culture
Abstract
Timely acquisition and divestment of resources is essential for sustaining the competitive
advantage and longevity of family firms. A combination of past successes, emotional attachments,
and path dependencies can lead to extensive inertia toward divestment in these
firms. This article develops a framework to understand the influence of community culture
and family structure on divestment decisions in family firms. Propositions on the varying
levels of inertia to divest—depending on the values held by the owning family and the
culture prevailing in their community—are developed. Research and practical implications
are discussed.
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