Family values and inter-institutional governance of strategic decision making in Indian family firms

Abstract

In this paper we use new venture creation in Indian family firms to explore the family firm as an inter-institutional system. We argue that in societies where the traditional family dominates social and economic life, the relationship between the two institutions, the firm and the family, is managed via inter-institutional logics. These inter-institutional logics help reconcile the tensions that often arise in the family firms during strategic decision making. We use archival and interview data on 36 new ventures in eight Indian family firms to identify these logics. Our analysis shows that the interaction between firm and family institutional logics in Indian family firms generates four sub-logics: economic, expertise, reputation and attachment. These four logics are used to frame and screen new venture opportunities and justify resource allocation.