4.1. Findings: Bibliometric Analysis
Our bibliometric analysis shows increased studies on Indonesia’s family business, especially since 2015. This shows that only recently did research and discussion about Indonesia’s family businesses begin.
In general, forty-one articles were published in journals, nine as conference proceedings, and seven as book chapters. Upon closer examination of the publication journals, we find that around 15 articles (28%) were published in a Q1 Scopus Journal, such as the Journal of Family Business Management; 16 or 30% of the articles in a Q2 Scopus Journal, such as Journal of Accounting and Organizational Change and Journal of Asian Finance Economics and Business; 15 (28%) in Q3 Scopus journals, such as International Journal of Trade and Global Markets, Pertanika Journal of Social Science and Humanities, and Problems and Perspectives in Management. Seven articles (13%) were published in Q4 Journal articles. Five articles (9%) were published in a discontinued journal, showing a lack of quality in such a publication. This indicates that the quality of published scholarship on Indonesian family businesses is usually of high quality. Overall, research on Indonesian family businesses is dominated by business and management approaches which can be found at Table 1. This can be seen in from majority of articles (35 articles) published in business, finance, and accounting Journals. The productivity of journal articles on Family business in Indonesia can be seen at Fig. 1 below.
Before 2000, only two published articles discussed family business development in Indonesia. From 2000 to 2010, only one article discussing family business in Indonesia was published. Those articles published before 2010 discuss Chinese Indonesian families, especially regarding family business organizations and career development for Chinese family businesses in Indonesia. Studies on family business development in Indonesia have increased from 2010 to 2022, as more than 90% were published in this period. Furthermore, topics of research have diversified in the same period. From 2010 onwards, studies on family businesses in Indonesia began to discuss business performance, culture, and market orientation related to family businesses.
In addition to looking at the keywords used, we also analyze the keywords listed in the abstract. Keywords give us an overview of the existing articles; keyword analysis in the abstract provides a summary of the findings presented in these articles. We found that articles about family businesses in Indonesia still focus on studies on performance, strategy, and aspects of management, leadership, and corporate governance. These keywords reflect the managerial aspect of the discussion. However, there are also non-managerial aspects captured in family business studies in Indonesia, such as discussions on community, organizational, and family values. Family and community values studies mainly gained momentum after 2015. The discussion about family values revolves around the moral and ethical principles traditionally upheld and transmitted within a family. Meanwhile, the discussion on community values emphasizes how the shared beliefs held by individuals in a social group or specified geographical location affect the performance of family companies. List of the keywords can be found at Fig. 2 below
We use co-occurrence analysis to show the network density of our abstract dataset. The co-occurrence technique pays attention to the frequency of occurrence of terms together. In network analysis, network density denotes the measurement of the prevalence of dyadic relationships or direct ties in social networks. The network analysis can be seen at Fig. 3 and the network density can be found at Fig. 4. A cluster is a local area in the network with a relatively high density and relatively few links to other clusters. In general, there are two large clusters in Indonesian studies of family businesses. The first cluster focuses on value. Here the term value is closely related to entrepreneurship, informality, and the dynamics of socioeconomic capability. The first cluster also includes discussions on resilience, innovation, and technology and its role in SMEs; these topics are still connected to the main discussion in the first cluster. We found a close relationship between the discussion of entrepreneurship from a family business and issues such as value, informality, resilience and business performance. The second cluster revolves around political connections’ effects on family business performance. In this cluster, there is also a link between articles discussing the performance of family businesses and family involvement in company management. In the second cluster, there are also high connections in discussions of family business performance and the concepts of filial piety, affective commitment, and pro-social behavior. There are three clusters of outliers that do not have high co-occurrence with other concepts, namely discussions related to Jakarta as a case study of family companies, the concept of market orientation, and also accounting conservatism.
Table 1
Theme of key findings and its authors
No | Theme of key findings | (Authors, year) | Year | Method |
---|
1. | Cultural Values | (Anggadwita et al., 2019) | 2019 | Qualitative method |
(Hertzman, 2020) | 2019 | Qualitative & Quantitative Method |
(Barral, 2018) | 2019 | Qualitative method |
Ravi (Sharma, Ratri and Krishnamachari, 2012) | 2012 | Qualitative method |
(Pekerti, 2008) | | Qualitative Method |
(Farh et al., 2008) | 2008 | Qualitative Method |
(Redding, 1986) | 1986 | Qualitative Research |
2. | Family Values | (Rachmawati and Suroso, 2020) | 2022 | Qualitative Research |
(Sunarti et al., 2021) | 2021 | Qualitative & Quantitative Method |
(Pendrian et al., 2018)*, | 2018 | Quantitative Method |
(Farh et al., 2008) | 2008 | Qualitative Method |
(Redding, 1986) | 1986 | Qualitative Research |
3. | Corporate Values | (Rosen, Luddin and Supriyati, 2019) | 2019 | Qualitative Research |
(Sharma, Ratri and Krishnamachari, 2012) | 2012 | Qualitative method |
(Koentjoro and Gunawan, 2020) | 2020 | Qualitative research |
(Tanjung, 2020). | 2020 | Quantitative method |
(Rachmawati and Suroso, 2020) | | Quantitative Method |
(Joni, Ahmed and Hamilton, 2020) | 2020 | Quantitative method |
(Wicaksono and Setiawan, 2019) | 2019 | Quantitative method |
(Zainal et al., 2018) | 2018 | Quantitative-exploratory |
(Ambarriani and Purwanugraha, 2012). | 2012 | Quantitative method |
(Redding, 1986) | 1986 | Qualitative Research |
5. | Strategy | (Sunarti et al., 2021) | 2021 | Qualitative & Quantitative Research |
(Hendayani and Febrianta, 2020) | 2020 | Quantitative method |
(Joni, Ahmed and Hamilton, 2020) | 2020 | Quantitative method |
(Barral, 2018) | 2019 | Qualitative method |
(Putri and Viverita, 2019) | 2019 | Quantitative Research |
(Pendrian et al., 2018), | 2018 | Quantitative Method |
(YULDINAWATI and YODI, 2016) | 2016 | Qualitative method |
(Sharma, Ratri and Krishnamachari, 2012) | 2012 | Qualitative Research |
(Pekerti, 2008) | 2008 | Qualitative Method |
6. | Succession | (Tirdasari and Dhewanto, 2020) | 2020 | Qualitative method |
(Anggadwita et al., 2019) | 2020 | Qualitative method |
(Rosen, Luddin and Supriyati, 2019) | 2019 | Qualitative method |
(Tan et al., 2019) | 2019 | Qualitative research |
(Putri and Viverita, 2019) | 2019 | Quantitative Research |
(Tan and Fock, 2001) | 2001 | Qualitative method |
7. | Management | (Koentjoro and Gunawan, 2020) | 2020 | Qualitative research |
(Rosen, Luddin and Supriyati, 2019) | 2019 | Qualitative method |
(Augendra, Bernard and Ani, 2019) | 2019 | Qualitative method |
(Wicaksono and Setiawan, 2019) | 2019 | Quantitative method |
(Zainal et al., 2018) | 2018 | Quantitative-exploratory |
(Fendiani and Tandiono, 2016) R. | 2018 | Quantitative Research |
(Efferin and Hartono, 2015). | 2015 | Qualitative method |
(Ambarriani and Purwanugraha, 2012) | 2012 | Quantitative method |
8. | Corporate governance | (Tanjung, 2020) | 2020 | Quantitative method |
9. | Leadership | (Efferin and Hartono, 2015) | 2012 | Quantitative method |
(Farh et al., 2008) | 2008 | Qualitative Method |
4.2. Discussions: Insights on Family business studies
What do socio-cultural values mean to the family business?
Socio-political situations during the new order era closely relate to the domination of Chinese family businesses in Indonesia(Redding, 1986). The policies to distinguish them as economic actors, combined with their entrepreneurship and survival spirit as immigrants in Indonesia, have driven them to serve as dominant economic forces by successfully developing their family businesses(Redding, 1986). This phenomenon is also closely related to the cultural origins that encourage them to maintain their identity and togetherness, providing a robust social network.
Literature shows that most of them migrated from China a hundred years ago because of their spirit to get new economic opportunities, which was impossible at the time in China due to political distress(Redding, 1986). It encouraged them to spread widely on a significant scale around the world. Although spreading as a diaspora in various regions, they still maintain cultural origins, which contribute to the successfulness of their economic functions in Indonesia, particularly their ability to maintain social networks amongst themselves to support their business(Hertzman, 2020). In other words, but in a similar vein, the socio-political situation during the new order regime led the Chinese Ethnics to serve economic functions(Redding, 1986). It encouraged them to maintain cohesiveness and cooperation, which led to the success of their business(Rademakers, 1998).
Although literature emphasizes cultural acculturation between the Chinese family business in Indonesia and the local wisdom, when exploring the dynamics of family values, literature also presents a cultural tension between globalized and local behavior(Rademakers, 1998). It is found in various medium family businesses in several small cities in the outer Java islands, where they are wealthy enough to send their children to foreign companies. These wealthy business owners will then call their children back home to run their businesses in their hometown. Living in a foreign metropolis makes them absorb various global attitudes that differ starkly from the local daily realities of running a family business in a small town(Hertzman, 2020).
Community values also influence the way succession works within the business organization(Istiatin and Susanti, 2021). A successor is perceived as an important individual within the organization; thus, as Confucianist culture tends to prioritize their sons(Farh et al., 2008), they are usually regarded as the primary successors in Indonesian Chinese family businesses (Anggadwita et al., 2019). This value is vigorously implemented throughout these businesses. However, literature found that non-Chinese’s family businesses in Indonesia have implemented different succession methods. Rosen et al (2019) found that a large family business has its methodology of succession, which emphasizes the capability of its successor in running a business rather than their gender or rank within the family. Whether or not the successor is coming from the family, they must be able to fulfil their duties per the company values. Some are allowed to manage their parents’ business under their supervision, and others are required to be formally educated and will be indirectly tested with any project of their parent business to see if they can be the next leader (Rosen, Luddin and Supriyati, 2019).
The literature on Indonesia’s family businesses found that sociocultural and political dynamics are closely related to the development and implementation of family businesses. The local indigenous and Chinese values interact, enriching how the businesses manage the business and succession processes(Istiatin and Susanti, 2021). Preparing their successors by equipping them with an international standard of a foreign educational system is also chosen by many parents to enhance the capability of their children in running the business(Tan et al., 2019). For businesses in small towns, tension will arise between transnational, cosmopolitan life and local small-town realism, which is perceived as contradictory(Hertzman, 2020). Nevertheless, respect for their values—Confucianism—drives them to obey directives to return home. However, no cultural tension may occur for a sizable family business operating in cities such as Jakarta(Tan et al., 2019). Community values influence family businesses, particularly in succession processes and business operations.
Succession: inheriting the family entrepreneurship values.
This research shows that family businesses in Indonesia maintain and develop entrepreneurial orientation in various ways. A new family business must follow a frugal paradigm to reach prosperity(Tan and Fock, 2001). The family’s orientation serves a crucial role in businesses regarding the preparation of their successors. However, the generation which starts the business has different characteristics compared to the second or third generation. The first generation has more survival spirit due to the desire to make their business succeed, but the second and third generations have grown up in wealthy circumstances.
That situation challenges the succession process, not just inheriting the family business to the next generation. Thus, the business must ensure that the next generation can preserve the family’s values, which prize the entrepreneurial spirit as the core of the family business. The next generation of successors must inherit it to help them lead the business.
Literature shows two ways of educating the successors with a family entrepreneurial orientation. The first involves the successors in the daily activities of the family business, which helps the successors reach knowledge and skills in handling the business(Tan et al., 2019). The learning-by-doing practices help successors to absorb knowledge and skills to run the business. It also helps them understand how the business works daily and arouses their passion for running the family business—the essence of the entrepreneurial spirit. They mostly begin at lower-level job positions, working their way up to top-level management. This approach helps the successor develop employee engagement, even when bound in family-ordained roles. It also builds belonging and trust between the family and employees. Furthermore, this kind of relationship enhances job satisfaction as employees feel respected and appreciated by their employers. This process benefits both successors and employees, leading to the enhancement of employees’ productivity.
Second, the family sends the successors to learn in a foreign country, which is believed to enhance business knowledge and skills(Efferin and Hartono, 2015; Rosen, Luddin and Supriyati, 2019; Tan et al., 2019). This process is expected to enhance the capability of the children to manage the business when they return to Indonesia. Moving overseas also enhances the successors’ immigrant spirit. They learn to adapt to new environments, which is a perceived benefit to managing the business. For Chinese family businesses, this process is rooted in the first generation’s memorable migration from China to Indonesia one hundred years ago, regarded as opening the opportunity to prosperity and growth. For those interested in developing their career overseas, this process sometimes negatively impacts them by restricting their career choices. Consequently, it also restricts the opportunity of the successors to grow within a different type of job or handle different challenges.
Literature shows that inheriting entrepreneurship values to the next generation of family business owners challenges the first generation.(Tan et al., 2019) They perceive that inhering the values is the essence of family business sustainability. Indeed, the business was developed from the spirit of reaching the family’s prosperity. The first generation believes their entrepreneurial spirit and survival to reach the family’s prosperity is the foundation of business growth.
How to understand the way family values are reflected in family business organization management?
Family values are reflected in the community where the family lives, and contrasting values interact. For example, individuals who belong to a community will usually learn and absorb the way of the community, sharing its values. Simultaneously, the individual influences the way the community lives. It is, therefore, a reciprocal relationship. For example, Chinese family businesses adopt indigenous values while operating their businesses. Bapakism, a strong paternalistic community relationship that is part of Javanese culture, is reflected in the way the companies in the jamu industry operate(Rademakers, 1998). They maintain a high level of collectivism at a micro-society level, a part of local indigenous daily behavior.
Chinese and Javanese family businesses have different characteristics reflecting their ethnic values. According to Rademakers (1998), differences are notable in distribution management between Peranakan and Pribumi jamu companies. The Peranakan jamu company has its distribution force responsible for a sizable number of sales. By contrast, the Pribumi jamu company run has a small salesforce. It sells most of its products to independent distributors, with the oldest firm in the group handling some of the distribution directly. To “stay in contact with the market,” the Peranakan JPC managers claimed, it was vital for them to distribute jamu. In contrast, the three Pribumi companies deployed their own, albeit modest, sales and promotion teams to gather market data. Both the Peranakan and Pribumi relationships to this "external sales force" are paternalistic.
Hence, family values also manifest in the way corporate social responsibility programs function within corporations. For instance, Sharma et al. (2012) found that Sampoerna strengthens small and medium-sized businesses (SMEs) through collaboration reflecting family values. Family values emphasize the need to serve others. The company's corporate social responsibility focuses on enhancing local entrepreneurship and maintaining and developing a business network amongst small businesses that support the competitive advantage.
The family values, specifically the founders of the family business’ values, are reflected by the corporate values. The founder commonly chooses those who align with their values. It is common to maintain the sustainability of the business and minimize potential organizational conflict amongst the management. At the management level, the founder’s values will reflect the corporate identity established in the corporation’s institutional standards of behavior and ethical behavior.
Our literature review shows that the values of the family are primarily reflected in the corporate culture. Although family involvement is common practice within family businesses in Indonesia, the need to professionally distinguish between family engagement and business management is critical. In other words, there is a need to restrict family involvement and differentiate the company’s ownership and company’s management. It is considered to ensure that the business runs professionally, which affects the sustainability of the business itself.