Familiness in the context of international business: descriptive-explorative investigation of the significance of social capital over the process of family business internationalization

Active investigation of the family business and its internationalization process has started at the beginning of the 21 st century. Before that, family enterprises had been studied as a particular case of small and medium-sized enterprises (SMEs) (Kontinen, 2011). Such underestimation of the family business in the internationalization process was caused by assumptions about the overpowering role of multinational corporations on the international arena (Oviatt and McDougall, 1994). However, investigations of SMEs at the beginning of the 21 st century have helped to identify the great amount of family companies that have expanded its operations over the national borders and hence, have become international family enterprises. Moreover, in the unfavourable economic environment family enterprises have been recognized as more stable and successful in contrast to other forms of business (IFC, 2008). As a result, the process of family business internationalization occurs as the field for scientific study. In this field variety of topics require profound attention of researchers. One of them is the topic of social capital phenomenon in the internationalization process of family business. Within the frame of the current Master Thesis the essence of social capital over the process of family business internationalization is explored through the lens of familiness concept. In terms of theory, the Master Thesis aims to investigate theoretical perspectives of social capital in order to explain the creation of familiness. In this part of the Master Thesis family capital is presented as a specific form of social capital over the process of family business internationalization. Elements that shape social capital and reinforce family business over the process of internationalization are highlighted in theoretical part of the Master Thesis as well. Theoretical part of the Thesis ends with the development of the research model, where the phenomenon of social capital is visualized in terms of the familiness concept in order to interpret the process of family business internationalization. The research model contributes to consider familiness as the trigger mechanism for the family business internationalization. From the empirical perspective, the Master Thesis aims to recognize in action the value of social capital over the internationalization process of family business. This part of the Thesis presents investigation of the inquiry theme on the instance of three family businesses: Ukrainian, Russian and German family companies. The research model, developed at the theoretical part of the Thesis, is served as an “indicating hand” for the empirical investigation of the Master Thesis. At the final stage of the Master Thesis the significance of familiness over the internationalization process of family enterprises is considered in the frame of the strategic management technique of the company – the balanced scorecard. In accordance, elements of social capital are presented as an internal strategic potential of the family company. The familiness concept is recognized as the synergistic effect for the process of family business internationalization.