Board of Directors on the Strategic Flexibility of Family Businesses

Abstract

Strategic flexibility is an important quality for companies to remain competitive and active, so understanding what is behind this characteristic of companies is essential, especially when it comes to family businesses, which value business continuity for the next generations. Thus, this study aims to analyze family control and the composition of the board of directors in the Strategic Flexibility of family businesses. To this end, this research is characterized as descriptive, survey, and with a quantitative approach. The research sample corresponded to 109 Brazilian family food businesses, to which an electronic questionnaire was sent. For data analysis, K-means clustering was performed. It was confirmed through the tested empirical model that companies controlled by just one family and with less family participation on the board have greater strategic flexibility (Cluster 3). It was confirmed that more than one family in control of the company and the absence of a board of directors resulted in less strategic flexibility (Cluster 2). Cluster 1 is made up of companies controlled by one or more families and mostly companies that have more family members on the board of directors. Finally, Cluster 3 showed a difference in mean strategic flexibility when compared to Cluster 1 and Cluster 2. This study contributes to family business managers by providing insights into the influence of family members' participation in the board of directors and how this is linked to strategic flexibility.