Do agency concerns inhibit internationalisation of family owned firms?: a comparative study of the USA and Poland
by Harinder Singh; Joanna Wyrobek
International Journal of Business Innovation and Research (IJBIR), Vol. 7, No. 3, 2013

Abstract: Although family firms are a dominant part of the industrial landscape in the USA and Poland, they normally do not capitalise on international opportunities. We hypothesise that the lack of internationalisation is primarily due to agency concerns such as losing control of executive power, difficulty in external coordination, and diluting the firm's mission. We investigate the structural and cultural differences of family firms in the USA and Poland based on sample surveys. A more comprehensive definition of family firms is employed based on the F-PEC scale of power, experience, and culture. Preliminary survey results indicate that agency concerns are substantial in both countries and could be a major impediment to internationalisation. Moreover, family firms generally prefer a low control mode of entry such as a sales agreement/representative, supporting the incremental approach to internationalisation. The main driver for internationalisation seems to be the lure of expanding markets rather than lower costs of production.

Online publication date: Fri, 27-Dec-2013

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