Soft Issues in Family Firms: A Study About Content And Process Advisors

Abstract: Background: Family firms have a strong impact on the world’s well-being, in terms of social stability, international wealth creation, and global development. Advisors appear essential to ensure the family firms’ prosperity and success, representing a potential source of advantage. There are several types of advisors working for family firms. Our study focuses on formal advisors (i.e. professionals, legally hired and paid by family firms), that either provide process or content advisory. Process advisors focus more on family dynamics and processes (e.g. relational and emotional aspect), while content advisors provide strategic services and specialized knowledge. Research Purpose: To understand how the approaches of advising family firms differ among formal business advisors.Research Problem: When advising family firms, two main type of issues can emerge. Soft issues regard personal and relational features, like emotions, while hard issues are emitted from the business, and are related to profitability and finance. In our critical literature review, we identify a gap in the existing knowledge regarding how advisors deal with soft issues when advising family firms. Although the unique characteristics and issues of family firms lead them to seek for specialized advice, they seem to be dissatisfied with the advisors’ ability to address soft issues. On the other side, content advisors show frustration in dealing with them. Research Questions: (1) How do content advisors perceive and address family firms’ soft issues? (2) How do process advisors perceive and address family firms’ soft issues? Method: Ontology – Relativism; Epistemology – Social constructionism; Methodology –Exploratory Qualitative Interview-based Study; Data collection – In-depth Interviews; Sampling – Two Purposive Criterion Samples of Content (i.e. accountants) and Process Advisors (i.e. family business advisors) (seven respondents each one); Data Analysis – Content Analysis (creation of a tree-diagram based on codes, sub-categories, categories, main categories)Conclusion: We develop a model describing how content and process advisors perceive and address soft issues, pointing out the identified differences in their approaches. Furthermore, our results suggest the existence of two level of soft issues, which adds new insights to the existing academic knowledge. Managerial Implications: We develop six main managerial implications for both content and process advisors, which we recommend as inputs facilitating the advisors’ work with family firms.