A case study of spontaneous diversification: evidence from a small Thai family firm

Abstract

Among the wealth of research in family firm diversification, whether family firm diversification can be spontaneous continues to be an under-analysed topic. We fill this gap by conducting a single-case study illustrating how spontaneous diversification occurs and its consequences using Chug Yont Engineering Co., Ltd., a small-sized Thai family firm. Our findings suggest four important implications. First, Buddhism has a strong implication on the mindset of corporate social responsibility (CSR). Second, through CSR engagement, family firms can develop new and unsought internal capabilities allowing them to diversify products and/or services spontaneously. Third, spontaneous diversification triggered by CSR engagement may allow family firms to exercise greater discretion in projects that they undertake and, consequently, the firms become conscientious of available resources with little regard for competition. Finally, using CSR-driven spontaneous diversification, family firms may rely little on formal marketing campaigns because spontaneous diversification helps establish social connections crucial to new ventures.