Agency Relationships

Marcelo S. Pagliarussi and Flávia O. Rapozo, both of FUCAPE Business School, published “Agency Relationships in a Brazilian Multifamily Firm” in the June 2011 issue of Family Business Review. Professor Pagliarussi kindly shared some background on this article.

Who is the target audience for this article?

We believe that anyone interested in the governance of family firms might find our article worth of reading. Also, researchers and professionals interested in knowing more deeply the particularities of doing business in Brazil.

What inspired you to be interested in this topic?

Actually the initial step for the research was a suggestion made by a colleague of ours. We are grateful to him for the inspiration he offered.

Were there findings that were surprising to you?

 For sure. We started our case study with an objective in mind and we ended finding something very different. That is the beauty of qualitative research. Initially we focused the research on conflicts between professional managers and owner-managers of a multi-family firm. Then, when we started to analyze our data we understood that we could link the Brazilian cultural traits to the results that were uprising.

How do you see this study influencing future research and/or practice?

Well, we believe that future research may advance the knowledge about the link between family business governance and culture in other countries. Agency theory has been used to understand family business irrespectively of their institutional context. We have shown that the context matters. On the other hand, foreign firms that plan to establish themselves in Brazil may benefit from our work when designing both incentive and monitoring mechanisms for intermediate and upper level managers.

How does this study fit into your body of work/line of research?

This study was our first attempt in the family business field, and we were lucky enough to have it published. From now on, we plan to explore the link between culture and value creation in family business. This will represent a move into a more positive perspective of the family involvement in family firms.

How did your paper change during the review process?

 The paper changed a lot. Yet, it preserved its central argument. The reviewers and the associate editor were very generous to us. They helped us to structure our argument in a more robust form. They envisioned that we had a potential to contribute to the literature and they pointed out weaknesses and loose ends. Our work was to think through all their questions and find solutions to the problems they presented.

What, if anything, would you do differently if you could go back and do this study again?

It is hard to think retrospectively without risking to commit anachronisms. We rather focus on what we need to do in order to produce another publishable work. In this way, we think we should concentrate our research efforts on the understanding of how family firms create value in Brazil.

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