Institution-based view on large family firms: a recap and overview

As part of the broader intellectual movement centered on new institutionalism, this article sketches the contours of an institution-based view of family ownership and control in large firms. Focusing on governance and resources—two important building blocks in family firm research—eight propositions are suggested based on institutional roots, institutional relatedness, and institutional transitions. Complementing existing theories, the institution-based view brings considerable continuity to family firm research. It also offers significant novelty in helping us resolve some puzzles that confront existing theories. Specifically, it answers why the Berle and Means hypothesis on the “inevitability” of separation of ownership and control as family firms grow large has not received support in many parts of the world. Finally, its broad scope enables us to integrate institution-based arguments with an important recent debate on socioemotional wealth (SEW) priorities of family firms, culminating in an institutionally contextualized view of SEW.