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Waves of Professionalization Before, During and After Management Buyouts and Buy-ins of Private Family Firms
Howorth, Carole Wright, M. Westhead, P. Allcock, D.
Howorth, Carole
Wright, M.
Westhead, P.
Allcock, D.
Publication Date
2015-11
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© 2015 Enterprise Research Centre. Reproduced in accordance with the publisher's self-archiving policy.
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Abstract
We explore the process of professionalization pre- and post- buyout (MBO)
or buyin (MBI) of former private family firms using longitudinal evidence
from six UK family firms undergoing an MBO/I in 1998. Professionalization
behaviour was monitored up to 2014. Previous studies have
conceptualized professionalization as a threshold to be attained. We
demonstrate that professionalization is a complex process occurring in
waves, triggered by changes in firm ownership and management. Waves
of professionalization converge during the MBO/I process. Buyouts provide
a funnelling mechanism enabling diverse control systems to be
standardized. Post-MBO/I, divergence in the professionalization process
reoccurs contingent on firm-specific contexts. Professionalization focuses
on operations when stewardship relationships predominate, but on agency
control mechanisms when there is increased potential for agency costs.
Buyout organizational form is an important transitory phase facilitating the
professionalization process. Professionalization is not a once for all
development stage.
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Citation
Howorth C, Wright M, Westhead P et al (2015) Waves of Professionalization Before, During and After Management Buyouts and Buy-ins of Private Family Firms. Enterprise Research Centre. Research paper 37.
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