Impact of risk culture on supplier selection decisions in family firms

Sourcing decisions are one of the most crucial strategic decisions in companies and often confronted with inherent unexpected uncertainties and risks. This study aims to investigate the impact of ownership involvement on purchasing (PUR) supplier selection activities, including risk consideration in family firms (FFs).

The investigation is based on a structured literature review (SLR) of 83 studies to identify FF-specific supplier sourcing characteristics. To verify these propositions, the authors conducted a second SLR of non-FF behaviour research (179 papers) to generate a non-FF reference base for the respective behavioural characteristics. Following this analysis, the authors conducted 16 qualitative and explorative-oriented expert interviews (EIs).

Based on reviews, the authors deduce that PUR activities of family and non-FFs are different regarding the PUR decision processes and PUR risk behaviour, and that suppliers' selection criteria like sustainability, partnership and long-term orientation are prioritised in FFs. Additionally, several trends of family and non-FF behaviour approximation were identified. Besides these findings, it might be expected that the differentiating characteristics of family and non-FFs vary based on their region or industry sector. The EIs indicated that “the depth of added values” should be considered as a further potential differentiating influence factor.

The analysis encourages to execute further quantitative studies on FF sourcing activities and requests managers to strengthen the position of the PUR departments in FFs.