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06.06.2012

Witten Institute for Family Business wins award

Götz Müller and Arist von Schlippe win this year's IFERA Best Paper Award with study on private equity capital in family businesses.


The International Family Enterprise Research Academy (IFERA) awards several prizes per year for the best paper in the field of family business research. Criteria are relevance for the respective workshop focus, and scientific quality.

The "8th Workshop on Family Firm Research" was hosted by the European Institute for Advanced Studies in Management (EIASM) in Jönköping/Sweden from May 31 to June 2, 2012. At this meeting Götz Müller and Prof. Dr. Arist von Schlippe won the Best Paper Award with their study on "Private equity investments in family businesses: an empirical investigation of the organizational metamorphosis". The prize comes with a one-year free IFERA membership and registration for the twelfth annual IFERA World Family Business Research Conference scheduled for June 26 to 29, 2012 in Bordeaux/France. 

The study:
• The key focus is on changes in family businesses as a consequence of private equity investments. Traditionally, private equity investors have to overcome considerable psychological barriers in family firms. But the study of the Witten researchers does not confirm the general image of corporate raiders whose main concern is to exploit any usable parts of a company. 
• Their starting point were organizational changes in family firms in case of acquisition of minority or majority interests. They performed eight case studies of German family enterprises with one or the other of these two investment types.
• They found slight improvements in organizational performance where private equity investors acquired a majority interest, and no changes in cases of minority interest. Business strategy appears to remain unchanged in the latter case. Acquisition of majority interests may lead to sizeable changes; but the researchers found no indication of short-term exploitation instead of a long-term consolidation of resources. The underlying concept of "ambidexterity"  suggested that majority interests expanded strategy options in all respects. The private equity investors under investigation practiced "exploration", i.e. searched for new business fields and opportunities, just as much as "explotation", i.e. made use of existing structures. New investors thus strove not to break up the family business but ensure its long-term stabilization. 
• The relation between family business and private equity in various forms appears to be profitable to both sides. Investment in risky options is offset by a prospective increase in performance. Family firms should consider private equity capital as an attractive financial alternative; the study did not reveal any negative effects on the organization. 

The authors:
• Götz Müller is a doctoral candidate at the Witten Institute of Family Business(WIFU), with "leadership and dynamics in family business" as his specific area of research. His doctoral studies explore organizational changes in family firms as a consequence of private equity. 
• Prof. Dr. Arist von Schlippe is a trained psychologist and psychological psychotherapist with specializations in family therapy and family psychology. In 2005 he was appointed academic director of the WIFU and holds the Chair for Leadership and Dynamics in Family Business. 

More information: Götz Müller, mobile number available at 02302/926-805/849, or goetz.muellerwe dont want spam@no spamgooglemail.com

About us:
Witten/Herdecke University (UW/H) has been a pioneer in German higher education since its foundation in 1982. A model university with approx. 1.450 students of health, economics, and philosophy and culture, the UW/H stands for reforms of the traditional university. Student education at UW/H always has a strong commitment to value orientation and personal growth.   

Witten works. in research, teaching, and in society.

The Witten Institute for Family Business (WIFU, www.wifu.de ) at the Faculty of Management and Economics is a national leader in academic research and teaching of the specific features of family business. Its areas of research and student education - business management, psychology/sociology/ and law - reflect the scientific aspects of family business and form a unique background of expertise in the field. An exclusive club of now about 50 family firms started to sponsor the Institute in 2004; with currently 12 professorships, the WIFU has been contributing significantly to the trans-generational sustainability of family businesses for the past 14 years.

Managing a family business is a complex and frequently paradoxical challenge. This is where the new degree program "Master in Family Business Management (M.Sc.)", which started in October 2010, provides valuable support. The concept was honored with an award in the nationwide "Land if Ideas" competition. Students in the Bachelor program "Business Economics (B.A.)" and in the Master program "General Management (M.A.)" have the option of a specialization (minor) or certificates in family business management. 

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