Changes in decision-making authority when chaebol firms grow: From the perspective of non-family managers

What changes do non-family managers in large family firms such as chaebols (Korean conglomerates) observe in their decision-making authority when their organizations grow? The intuitive expectation is that non-family managers' decision-making authority will grow in conjunction with the successf...

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Main Author: KIM, Changhwan
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2020
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Online Access:https://ink.library.smu.edu.sg/etd_coll/316
https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1316&context=etd_coll
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spelling sg-smu-ink.etd_coll-13162021-03-18T03:33:42Z Changes in decision-making authority when chaebol firms grow: From the perspective of non-family managers KIM, Changhwan What changes do non-family managers in large family firms such as chaebols (Korean conglomerates) observe in their decision-making authority when their organizations grow? The intuitive expectation is that non-family managers' decision-making authority will grow in conjunction with the successful expansion of the business and growth of the firm. Based on 45 in-depth semistructured interviews with non-family managers from a wide range of chaebol firms, this study analyzes how non-family managers perceive the change in their decision-making authority and the cause of this change. The findings indicate that respondents perceive that their decision-making authority does not increase with the growth of the firm due to risk hedging, social acceptance, and socioemotional wealth preservation. As a firm grows and expands its business geographically and within the same or different business domains, top management often needs to delegate decision-making authority, as it becomes increasingly difficult to process all the information and make appropriate decisions at different levels and in various fields. However, the objectives of family-controlled firms usually concern socioemotional wealth; family control and the transfer of management rights within the family are the most important of these objectives. This fact suggests that family-controlled firms may find it challenging to delegate decision-making authority, even as they grow their organizations. Vacant promotion, or promotion without the corresponding authority, is used instead of genuine promotion or monetary rewards, which contributes to job title inflation, decreased decision-making authority, and eventually non-family managers' perception that they all will become field managers. Conversely, respondents perceive family managers' decision-making authority as becoming fortified with the growth of the firm. Even with the misdeeds and unequal practices of family managers, non-family managers prefer family managers over non-family managers because of the benefit of family management's long-term perspective, which enables more stable business practices and job stability. 2020-03-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/etd_coll/316 https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1316&context=etd_coll http://creativecommons.org/licenses/by-nc-nd/4.0/ Dissertations and Theses Collection (Open Access) eng Institutional Knowledge at Singapore Management University Chaebol Family business Socioemotional wealth Decision-making authority Vacant promotion Business Administration, Management, and Operations Entrepreneurial and Small Business Operations
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Chaebol
Family business
Socioemotional wealth
Decision-making authority
Vacant promotion
Business Administration, Management, and Operations
Entrepreneurial and Small Business Operations
spellingShingle Chaebol
Family business
Socioemotional wealth
Decision-making authority
Vacant promotion
Business Administration, Management, and Operations
Entrepreneurial and Small Business Operations
KIM, Changhwan
Changes in decision-making authority when chaebol firms grow: From the perspective of non-family managers
description What changes do non-family managers in large family firms such as chaebols (Korean conglomerates) observe in their decision-making authority when their organizations grow? The intuitive expectation is that non-family managers' decision-making authority will grow in conjunction with the successful expansion of the business and growth of the firm. Based on 45 in-depth semistructured interviews with non-family managers from a wide range of chaebol firms, this study analyzes how non-family managers perceive the change in their decision-making authority and the cause of this change. The findings indicate that respondents perceive that their decision-making authority does not increase with the growth of the firm due to risk hedging, social acceptance, and socioemotional wealth preservation. As a firm grows and expands its business geographically and within the same or different business domains, top management often needs to delegate decision-making authority, as it becomes increasingly difficult to process all the information and make appropriate decisions at different levels and in various fields. However, the objectives of family-controlled firms usually concern socioemotional wealth; family control and the transfer of management rights within the family are the most important of these objectives. This fact suggests that family-controlled firms may find it challenging to delegate decision-making authority, even as they grow their organizations. Vacant promotion, or promotion without the corresponding authority, is used instead of genuine promotion or monetary rewards, which contributes to job title inflation, decreased decision-making authority, and eventually non-family managers' perception that they all will become field managers. Conversely, respondents perceive family managers' decision-making authority as becoming fortified with the growth of the firm. Even with the misdeeds and unequal practices of family managers, non-family managers prefer family managers over non-family managers because of the benefit of family management's long-term perspective, which enables more stable business practices and job stability.
format text
author KIM, Changhwan
author_facet KIM, Changhwan
author_sort KIM, Changhwan
title Changes in decision-making authority when chaebol firms grow: From the perspective of non-family managers
title_short Changes in decision-making authority when chaebol firms grow: From the perspective of non-family managers
title_full Changes in decision-making authority when chaebol firms grow: From the perspective of non-family managers
title_fullStr Changes in decision-making authority when chaebol firms grow: From the perspective of non-family managers
title_full_unstemmed Changes in decision-making authority when chaebol firms grow: From the perspective of non-family managers
title_sort changes in decision-making authority when chaebol firms grow: from the perspective of non-family managers
publisher Institutional Knowledge at Singapore Management University
publishDate 2020
url https://ink.library.smu.edu.sg/etd_coll/316
https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1316&context=etd_coll
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