A historical investigation of the strategic process within family firms

Purpose – The primary purpose of this paper was to perform an in‐depth analysis of the strategic process that occurs within family firms. Design/methodology/approach – This study analyzed the historical development of the growth strategies of four family firms in the US, Finland, and Sweden. Findings – The results of this study suggest that family firms typically adopt conservative strategies in the early part of their life cycle. During their formative years, family firms often implement financially conservative strategies and place an emphasis on maintaining tight control of the strategic decision‐making process within the family unit. However, the competitive pressures experienced by family firms over time often force these companies to embrace a more entrepreneurial posture during the latter stages of their life cycle. Research limitations/implications – The stage in the company life cycle plays an important role in determining the strategic behavior of family firms. Future research aimed at replicating the results of this study may help shed further light on the strategic process that occurs within family firms. Practical implications – Although the firms examined in this study were from various cultures, their strategic development over time was very similar. This tentatively suggests that the evolution of the strategic process that occurs within family firms may be generalizable across cultures. Originality/value – Our findings indicate that there may be an important distinction between family firms and entrepreneurial organizations. That is, all family firms are not necessarily entrepreneurial, especially early on in their company life cycle.