Goal tolerance, outside investors, and family firm governance

Jaume Villanueva, Harry J Sapienza

Research output: Contribution to journalArticlepeer-review

41 Scopus citations


Le Breton-Miller and Miller argue that as the family becomes more embedded in the firm, the firm's decision makers become more susceptible to influence by the family, and agency problems rise for outside investors. We contend that the family's embeddedness in the business does not, in itself, explain whether the assumptions of agency theory are warranted. Our commentary offers an alternative way in which outside investors might look at family firms' goals. Outsiders should assess the complementarity of the family firm's objectives with their own if they are to make rewarding investments in family firms.

Original languageEnglish (US)
Pages (from-to)1193-1199
Number of pages7
JournalEntrepreneurship: Theory and Practice
Issue number6
StatePublished - Nov 1 2009


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