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Successful Digitalization Strategies of Lower Austrian family-managed SME in the production sector: The influence of digitalization orientation and digitalization resources

Today, digital change is permeating all areas of private and public life. Established family firms are increasingly under pressure from dynamic market entrants who use digitalization to their advantage. Digitalization can revolutionize production, marketing, planning, logistics, communication or entire business models by enabling new functionalities and making processes more reliable and efficient. In this way, it contributes to value creation and increases competitiveness. The adaptation of digital technologies is therefore indispensable for family firms. However, it implies rethinking and re-learning tried and trusted practices in sometimes radically ways.

This study draws a comprehensive picture of prerequisites for successful digitalization in Lower Austrian family-managed SME by taking a mixed methods approach. Specifically, (1) it explores the digitalization context identifying triggers and restraints for digitalization, (2) it observes digitalization measures already taken or planned by the family firms to portrait the Lower Austrian digitalization status, (3) it takes a look at the organizational culture to investigate why many family firms find it so difficult to identify and exploit entrepreneurial opportunities for digitalization, (4) it identifies key resources needed for digitalization and (5) it measures the objective and subjective success of implemented digitalization measures.

Duration: October 2019 - August 2021 

Sponsor: Amt der Niederösterreichischen Landesregierung/Abteilung Wissenschaft und Forschung/Abteilung Wirtschaft, Tourismus und Technologie 

Researchers: Hermann Frank, Elena Fuetsch, Alexander Keßler

Other project staff: Bettina Habel, Tea Hrvacanin, Georg Kriegl, Konstantin Langhans, Katharina Müller, Nico Troiani

Please click here to read the executive summary of this study.

Is there a future for family-owned trading businesses?

Providing jobs for approximately one fifth of all employees in Vienna makes trading businesses the biggest group of employers. Most of them are family businesses. Market-driven developments such as the emergence of online trade and the rise of “everything stores” forces particularly small- and medium-sized trading businesses to adapt their strategies if they want to survive in the long run. Being a family business can be a resource to achieve a competitive advantage. This study aims to identify the success factors of family-owned trading business in Vienna. More specifically, it investigates (a) the organizational and decision structures, (b) the succession situation and (c) the configuration and role of the business family that lead to their success.

Duration: June 2019 - December 2019 

Sponsor: Vienna Economic Chamber, Devision Commerce 

Researchers: Hermann Frank, Elena Fuetsch, Alexander Keßler

Managing Business Families: Success Factors of Business Families in Different Generational Stages

Business families are of enormous importance for the development of any economy. Well-functioning business families are an indispensable prerequisite for prospering family businesses and successful business families contribute substantially to the reproduction of entrepreneurship. However, the societal and politico-economic relevance of business families is still undervalued. This shortcoming is also represented in family business research which has almost exclusively focused on the functioning of family businesses whilst neglecting the “family variable”. By bringing business families and their multidimensional challenges into focus, this research project aims to carve out characteristics that are relevant to understanding the mode of operation of business families and their specific approach to success and failure.

Duration: July 2017 - October 2018
Sponsor: Österreichische Nationalbank (OeNB/Austrian Central Bank) Anniversary Fund
Researchers: Hermann Frank, Elena Fuetsch, Alexander Keßler, Manfred Lueger, Julia Süss-Reyes

The project: This research project aims to analyze (1) how business families define their boundaries, (2) which basic orientations they pursue (indicating their success) and (3) which factors explain their basic orientations. To address these research questions, we divide our research project into four project phases: After conducting a methodically rigorous state-of-the-art literature review (phase 1), several focus group discussions with business families will be organized in order to identify and take up the core family subjects and problems with the highest practical relevance (phase 2). Subsequently, we will develop a comprehensive quantitative measurement instrument that will be employed in an empirical study involving a large sample of Austrian business families (phase 3). Finally, phase 4 serves as a concluding consolidation phase, in order to synthesize the main results of our theoretical and empirical work and to introduce the knowledge obtained to the scientific community as well as passing it on to practitioners in a series of workshops. The different project phases guarantee a cumulative progress of knowledge production and balance scientific rigor and relevance requirements. From a practical point of view, the study opens up possibilities for business families to locate and compare themselves with different types of business families. This enables them to reflect on possibilities for developing their functionality.

Please click here to read the executive summary of this study.

Innovations in family businesses: contextual factors, processes and performance effects

Innovation can be key for the creation of competitive advantage and thus plays a central role in driving business performance and business growth. In family businesses, innovation behavior is often largely shaped by the idiosyncrasies of the business family. For instance, the business family’s desire to sustain the business over generations provides long-term capital (patient capital) to the business and prompts family managers to make far-sighted investment decisions. Furthermore, family businesses are often in possession of strong and trust-filled social networks with stakeholders which creates high potential to mobilize people for new ideas. Yet, although family businesses retain a number of assets that are conducive to innovation, investigations comparing the innovation output in family businesses and non-family businesses show ambiguous results. These results suggest that family businesses are both more and less innovative. These inconsistencies may be due to paradoxical effects of family involvement, as the family not only constitutes a resource but also a liability for innovation. For instance, family businesses prefer to avoid projects associated with high risk because they do not want to endanger family heritage. They prefer continuity which prompts them to rely on the tried and trusted and adhere to family traditions, instead of trying new things. Empirical evidence also indicates that the innovative capacity of family businesses frequently decreases across generations. Thus, although family businesses often have great innovation potential, they are sometimes reluctant to make use of this. This phenomenon is also known as the ability-willingness paradox.

Duration: July 2016 – August 2017
Sponsor: Amt der Niederösterreichischen Landesregierung/Abteilung Wissenschaft und Forschung
Researchers: Reinhard Altenburger, Hermann Frank, Elena Fuetsch, Alexander Keßler, Julia Süss-Reyes

The project: The question of how family businesses make use of their innovation capacity and why some family businesses are better innovators than others is therefore the focus of the current research project at the Research Institute for Family Businesses (in cooperation with the University of Applied Sciences Krems). Building on the approach of "learning from the best", we aim to analyze five Lower Austrian family businesses that can be considered as best practice examples in terms of their innovativeness. More specifically, we focus on older family businesses that have preserved or recovered their innovative capacity and act exceptionally innovatively. Each case is analyzed individually and finally contrasted with the remaining cases. This enables the development of “innovative role models” for family businesses practitioners.

Please click here to read the executive summary of this study.

Agricultural family businesses in Lower Austria: How innovative, entrepreneurial and sustainable are they?

The Lower Austrian agriculture is dominated by family businesses. These are characterized by the participation of several family members and frequently even several family generations. Likewise, these businesses usually have a long-standing tradition to pass the business on to the next generation of family members. However, having a look at the recent figures, this tradition is facing severe challenges: Permanent budget cuts, climate-related crop losses, hardly predictable price fluctuations and the lack of successors ready to take the business over are among the main factors that lead to a decline in the number of agricultural family businesses. Therefore the traditional agriculture is increasingly forced to act in a more innovative, entrepreneurial and sustainable way.

Duration: February 2015 – March 2016
Sponsor: Amt der Niederösterreichischen Landesregierung/Abteilung Wissenschaft und Forschung, Gutsverwaltung Hardegg, Erste Bank
Researchers: Hermann Frank, Julia Süss-Reyes, Elena Fuetsch, Alexander Keßler

The project: With this research project, the Research Institute for Family Business provides first insights into the innovativeness, entrepreneurial orientation and sustainability of agricultural family businesses in Lower Austria and provides recommendation for practice. The research project contains four main project phases: First, we provide a comprehensive literature review to gain a basic understanding of the latest state of research in innovation, entrepreneurial orientation and sustainability in agriculture. Second, we organize a kick-off to gain input from agricultural experts and use this information for phase three - a quantitative study to gain knowledge about the degree of innovativeness, entrepreneurial orientation and sustainability of agricultural family businesses in Lower Austria. Fourth, we consolidate the research results of the single project phases and formulate recommendations for practice.

Please click here to read the executive summary of this study.

Family Business Governance in Austria: Good Practice Case Studies

The main characteristic of family businesses is the overlap of at least two social systems (family – business). Since social processes are organized in a different way in the family and in the business, discrepancies of interest might occur. Depending on the handling of these diverging interests, the family influence on the business can affect the sustainable development of competitive advantages positively or negatively and consequently the success of the family business. Family business governance supports a family through managerial, supervisory and advisory bodies, or a binding set of rules to reduce the possible negative influence of the family, and to boost the positive potential of the business family in a sustainable and professional manner.

Duration: September 2012 – December 2014
Sponsor: Federal Ministry of Economy, Family and Youth (BMWFJ)
Researchers: Manfred Lueger, Hermann Frank, Daniela Weismeier-Sammer, Julia Süss

The project: Large businesses more often involve family business governance institutions (e. g. advisory councils) or use mediation as a tool for conflict management than SMEs. Despite the importance of family businesses for the local economy, there is a lack of research focusing on the question if or how such governance activities could be useful for this type of business. With this research project, the Research Institute for Family Business provides a comprehensive examination of good practices of corporate governance in Austrian family businesses by conducting a set of research case studies. The main focus of our case studies will be on advisory boards, family constitutions, mediation, codes of governance and legal aspects of family business governance.

Please click here to read the executive summary of this study.

The Measurement of Familiness: Capturing the development, manifestations and impacts of family influence

The involvement of the family in the business is of vital interest within the scientific community, especially regarding the influence of the family in the business and its relation to performance, innovation or competitive advantage. The concept of familiness provides a promising lens not only for capturing the potential influence the family has on the business (e.g. through ownership or management), but the essence of the family’s influence.

Duration: December 2011 – January 2014
Sponsor: Österreichische Nationalbank (OeNB/ Austrian Central Bank) Anniversary Fund
Researchers: Hermann Frank, Daniela Weismeier-Sammer, Julia Süss

The project: With this research project, the Research Institute for Family Business provides an all-embracing examination of familiness by various means. The research project contains three main project phases based on each other: First, we provide a thorough literature review to show how the topic of familiness developed over time. With this review we not only provide a descriptive overview of the literature, but also discuss the different theoretical lenses applied to familiness, the development and impact of familiness on the business, and the different methodical approaches to assess familiness. In doing so, we are able to structure this sub-field of family-business research by consolidating familiness research, leading to promising directions for future research. Second, we employ a case-based approach to gain in-depth insights into Austrian family businesses to reconstruct their specific familiness. Altogether, we interviewed family members of sixteen family businesses of different sizes, ages and sectors, enabling us to contrast cases and establish a familiness typology that reflects the heterogeneity of family businesses and their specific familiness. We take a systems theory-based perspective on familiness and employ objective hermeneutics (fine analysis, systems analysis) to reconstruct latent meaning structures of the businesses incorporating familiness. The third project phase targets the creation of a familiness scale, as to date there is no measure available that might be capable to capture the essence of familiness. After consolidation of the results of the preceding project phases, we test the developed familiness scale by applying it to an Austrian sample of family businesses.

Please click here to read the executive summary of this study.

Success Indicators of Austrian Family Businesses

The project: The focus of the interdisciplinary study “Success Indicators of Austrian Family Businesses – The Interplay between Family and Business in Decision Processes” was on decision processes and the handling of conflicts and consensus in family businesses. We used qualitative as well as quantitative research methods and were supported by two additional dissertation projects. Conflict and decision aspects were particularly analyzed, as well as the handling of challenging situations.

A German executive summary of the study’s results can be found here.