A farewell to the business

Championing exit and continuity in entrepreneurial family firms

Carlo Salvato*, Francesco Chirico, Pramodita Sharma

*Corresponding author for this work

Research output: Contribution to journalArticle

147 Citations (Scopus)

Abstract

What factors influence exit from the founder's business and subsequent entrepreneurial renewal in a generational family firm? Guided by this research question, we trace the development of the Italian Falck Group from its inception as a steel company in 1906 - ascension as the largest privately owned steel producer in Italy - losses in the 1970s and 1980s leading to business exit from steel industry in the 1990s - followed by successful entry in the renewable energy business. A combination of insights from the literature and triangulation of data from multiple primary and secondary sources leads to the development of a model describing how inhibitors of exit from the founder's business can be transformed into facilitators of change. The critical role of farsighted 'family champion of continuity' is found central in redirecting the family from its anchoring in past activities to focus on future entrepreneurial endeavours. While the commitment to the founder's business continues, the family champion aided by business savvy and astute non-family executives ably modifies its meaning of 'continuity of the founder's business' from 'steel production' to 'continuity of the entrepreneurial spirit of the family', hence preserving the institutional identity. Insights from this study can help generational family firms which plan to exit from a failing course of action to regenerate so as to create trans-generational value.

Original languageEnglish
Pages (from-to)321-348
Number of pages28
JournalEntrepreneurship and Regional Development
Volume22
Issue number3-4
DOIs
Publication statusPublished - 1 May 2010
Externally publishedYes

Keywords

  • Business regeneration
  • Champions of change
  • Corporate entrepreneurship
  • Entrepreneurial exit
  • Entrepreneurial family firms
  • Entrepreneurial process
  • Leadership

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