Ownership and Control in Closely-Held Family-Owned Firms: An Exploration of Strategic and Operational Control

22 Pages Posted: 26 Feb 2007

See all articles by Lloyd C. Harris

Lloyd C. Harris

Cardiff University - Cardiff Business School

Emmanuel Ogbonna

Cardiff University - Human Resource Management Section

Abstract

Much of the existing research into the divorce of ownership and control either focuses on the propensity for the separation of decision functions or upon scrutinizing conceptions, gauges or the practicalities of organizational control in large corporations. Although far from equivocal, such research appears broadly to concur that where ownership is dispersed, de facto control is likely to be exerted by management and that where ownership is closely-held, de facto as well as legal control is exerted by owners. This study examines this assumption through exploring the nature of control in a closely-held family firm. In this regard, the focus of this study is not on consequences of divorced ownership and control but rather on exploring the contingencies where ownership and control diverge. This research reveals a case wherein a closely-held family firm is strategically and operationally controlled by its managers. Case research leads to the development of a range of insights regarding the owner/family and the management characteristics that contribute to this scenario. The paper concludes with a series of implications and conclusions.

Suggested Citation

Harris, Lloyd C. and Ogbonna, Emmanuel, Ownership and Control in Closely-Held Family-Owned Firms: An Exploration of Strategic and Operational Control. British Journal of Management, Vol. 18, No. 1, pp. 5-26, March 2007. Available at SSRN: https://ssrn.com/abstract=965212 or http://dx.doi.org/10.1111/j.1467-8551.2005.00471.x

Lloyd C. Harris (Contact Author)

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Emmanuel Ogbonna

Cardiff University - Human Resource Management Section ( email )

Cardiff CF10 3EU
United Kingdom

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