Company metamorphosis: professionalization waves, family firms and management buyouts

Howorth, C., Wright, M., Westhead, P. and Allcock, D. ORCID: 0000-0002-6961-1470, 2016. Company metamorphosis: professionalization waves, family firms and management buyouts. Small Business Economics, 47 (3), pp. 803-817. ISSN 0921-898X

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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.

Item Type: Journal article
Publication Title: Small Business Economics
Creators: Howorth, C., Wright, M., Westhead, P. and Allcock, D.
Publisher: Springer
Date: October 2016
Volume: 47
Number: 3
ISSN: 0921-898X
Rights: © the author(s) 2016.This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (, which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.
Divisions: Schools > Nottingham Business School
Record created by: Linda Sullivan
Date Added: 21 Feb 2020 11:41
Last Modified: 17 Mar 2020 14:20

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