Balancing Local Identity and Global Aspirations
Article #4 | July 2024 | Massimo Baù
Massimo Baù, a distinguished scholar in family business studies, has significantly contributed to understanding the dynamics of family firms, particularly regarding their local roots and internationalization strategies. Serving at the Centre for Family Enterprise and Ownership at Jönköping International Business School, Baù's work explores the intersection of local embeddedness and global expansion, offering valuable insights into how family firms navigate these dual pressures.
In his influential article "Locality and Internationalization of Family Firms," Baù explores the challenges family firms face in maintaining their local identity while expanding globally. He emphasizes that family firms are deeply rooted in local communities, fostering a strong sense of identity and community engagement. This engagement often leads to community development and philanthropy, which build a positive local reputation. However, Baù also highlights that these local roots, while advantageous, can pose challenges when family firms seek international growth. He argues, "Family firms need to balance their local identity with global ambitions, utilizing their unique local attributes to differentiate themselves in the global marketplace." This balance is crucial for sustaining firm growth and performance across generations.
In "Contextualizing Corporate Entrepreneurship: A Systematic Review and Future Research Agenda," Massimo Baù and his colleagues propose a conceptual model emphasizing context's importance in understanding corporate entrepreneurship (CE). They highlight the need to consider various contextual factors—such as business, social, spatial, institutional, organizational, and ownership—when studying CE. The model organizes CE into three phases: input, process, and output, showing how different contexts influence each phase. For instance, business context factors such as industry competition and technological change can shape the enablers of entrepreneurial opportunities by determining the resources available and the strategic options a firm might pursue. Social and organizational contexts influence the internal dynamics of entrepreneurial behavior, such as how management supports innovation or how organizational culture fosters risk-taking. Outcomes of CE activities, like corporate venturing and strategic renewal, are also impacted by these contexts.
Another notable contribution by Baù is found in the article, "Employee Layoffs in Times of Crisis: Do Family Firms Differ?" In this article, Baù examines how family firms respond to economic crises. Family firms are more likely to retain employees during tough economic times, reflecting their long-term orientation and strong ties to the local community. This commitment to employee retention helps maintain workforce stability, enhances the firm's reputation, and strengthens community relations. Baù argues that this behavior stems from the socio-emotional wealth (SEW) concept, where family firms prioritize non-financial goals that contribute to the family's emotional satisfaction and legacy. He states, "The focus on socio-emotional wealth often leads family firms to make decisions that favor long-term sustainability over short-term financial gains," differentiating them from non-family firms during economic downturns.
Massimo Baù's research provides valuable insights into the unique strengths of family firms. His studies highlight how these businesses are rooted in their local communities and demonstrate remarkable adaptability when facing challenges. Baù’s findings serve as practical guidance for family business owners, enabling them to capitalize on their distinctive qualities to achieve sustainable development. The research hints at how family firms can become more resilient and increase their positive impact on society while thriving in a complex and connected business landscape.
References
Baù, M., Block, J. H., Discua Cruz, A., & Naldi, L. (2017). Locality and internationalization of family firms.
Girma Aragaw, Z., Haag, K., & Baù, M. (2024). Contextualizing corporate entrepreneurship: a systematic review and future research agenda. Entrepreneurship & Regional Development, 1-37.
Baù, M., Karlsson, J., Haag, K., Pittino, D., & Chirico, F. (2024). Employee layoffs in times of crisis: do family firms differ? Entrepreneurship & Regional Development, 36(5-6), 722-744
