MASTER THESIS
Professionalization in Dutch Family Firms
− A customer perspective −
by
JAN SCHAFT
MASTER THESIS
Professionalization in Dutch Family Firms
− A customer perspective −
by
JAN SCHAFT
Date: July 4, 2017 Name: J. Schaft Student number: s2812924 Supervisor: Dr. M.J. BrandFaculty of Economics and Business - University of Groningen
Co-assessor: Dr. W.W.M.E. Schoenmakers
Faculty of Economics and Business - University of Groningen External supervisor: D.H. Eijssen
Gwynt B.V.
Program: MSc Small Business & Entrepreneurship
Faculty of Economics and Business - University of Groningen
ABSTRACT
Professionalization in family firms has received much attention the last decades. Professionalization is a broad concept and primarily includes the implementation of formalized systems and constant improvement and development. Professionalization in family firms has overwhelmingly been researched from the perspective of firms with the aim of improving family firms’ performance. Based on qualitative research of small- and medium-sized Dutch family firms, this study extends the existing literature by considering professionalization from a customer perspective. Twelve semi-structured interviews with customers and five questionnaires from family firm suppliers yields interesting findings. From the customer perspective, family firms that focus on traditional professionalization dimensions may lack success in their endeavors. On the other hand, the attitude of employees is considered to be the difference between a professional organization and an unprofessional organization.
TABLE OF CONTENT
ABSTRACT ... 3
1. INTRODUCTION ... 6
2. THEORETICAL BACKGROUND ... 8
2.1 FAMILY FIRMS ... 8
2.1.1 Defining family firms ... 8
2.1.2 Dichotomies between family firms and nonfamily firms ... 9
2.2 PROFESSIONALIZATION... 10
2.2.1 Different perspectives of professionalization ... 10
2.2.2 Additional dimensions of professionalization ... 13
2.2.3 Reasons for professionalization ... 15
2.2.4 Barriers to professionalization ... 16
2.2.5 Family firms and professionalization ... 16
2.3 THE RELEVANCE OF A CUSTOMER PERSPECTIVE ... 17
2.3.1 Understanding customer needs ... 17
2.3.2 The added value of professionalization ... 18
2.4 RESEARCH FRAMEWORK ... 19
2.5 RESEARCH QUESTIONS ... 20
3. RESEARCH METHOD ... 20
3.1 RESEARCH DESIGN ... 20
3.2 CASE SELECTION CRITERIA ... 21
3.3 DATA COLLECTION ... 22 3.4 ANALYSIS ... 27 3.5 EVALUATING THEORY ... 28 3.6 QUALITY CRITERIA ... 28 3.7 CASE COMPANIES ... 29 3.8 PARTICIPANTS ... 29 4. RESULTS ... 31 4.1 INTRODUCTION ... 32
4.1.1 What are family firms according to customers? ... 32
4.1.2 What is professionalization according to customers? ... 32
4.2 SUPPLIER’S ASSESSMENT OF PROFESSIONALIZATION ... 34
4.2.1 Level of professionalization: entire organization and internal aspects ... 34
4.3 EXPERIENCED PROFESSIONALIZATION BY CUSTOMERS ... 35
4.3.1 Level of professionalization: entire organization and internal aspects ... 35
4.3.3 The relevance of professionalization: external aspects ... 42
4.3.4 Improvement and development ... 46
4.4 ADDED VALUE OF PROFESSIONALIZATION ... 47
4.4.1 Present added value ... 47
4.4.2 Potential Added Value ... 50
4.5 FAMILY FIRM AND PROFESSIONALIZATION ... 51
4.5.1 Recognition of familiness ... 51
4.5.2 Familiness and professionalization ... 52
4.5.3 Do family firms professionalize in a different way than nonfamily firms? ... 53
4.6 THE UNIQUENESS OF FAMILY FIRMS ... 54
4.7 SUMMARY RESULTS ... 57
5. CONCLUSION ... 59
6. DISCUSSION ... 61
7. PRACTICAL RECOMMENDATIONS ... 63
8. LIMITATIONS AND FURTHER RESEARCH ... 63
REFERENCES ... 65
APPENDICES ... 75
APPENDIX A: INTERVIEW OVERVIEW ... 75
APPENDIX B: THEORETICAL FRAMEWORK LINKED WITH QUESTIONS ... 76
APPENDIX C: QUESTIONNAIRE CUSTOMERS ... 77
APPENDIX D: QUESTIONNAIRE SUPPLIERS ... 89
1. INTRODUCTION
Family firms are indispensable and powerful pillars of the Dutch economy. According to recent research by the Centraal Bureau Statistiek (2016), the Dutch economy encompasses 271,7901 family firms, which represents 70% of all firms in the Netherlands. Dutch family firms are responsible for more than 50% of the country’s employment and gross national product (PWC, 2016). These firms generate value through product, process, and service innovations that fuel growth and lead to prosperity (Zahra, Hayton & Salvato, 2004).
Carlock and Ward (2001) have argued that in order to ensure growth, family firms need to professionalize. Similarly, results from the work of Dekker, Lybaert, Steijvers, and Depaire (2015) indicated that family firms can enhance their performance through the implementation of professionalization practices. Professionalization is a broad concept that has received much attention in the last decades. It includes in large part the implementation of formalized systems and constant improvement and development. Therefore, professionalization is occasionally referred to as the holistic transformation of an organization (Hung & Whittington, 2011). Professionalization poses a challenge for family firms, as it can create a dilemma. This occurs because professionalization can be associated with an increase in bureaucracy or rigidity. In this way, it becomes a question of whether family firms will lose their flexibility or entrepreneurial drive in the professionalization process.
The existing literature primarily addresses professionalization in family firms from the firm’s perspective. Although Stewart and Hitt (2012) indicated that a better understanding of professionalization in family firms requires attention to effects of various stakeholders, professionalization has yet to be investigated from the customer perspective. The customer perspective is of interest because family firms should understand customer requirements. Levitt (1960) highlighted that firms should focus on fulfilling the needs of customers instead of merely selling products. When firms focus especially on customer needs, this practice is known as ‘customer centricity.’ Shah, Rust, Parasuraman, Staelin, and Day (2006) argued that a key challenge of customer-centric processes is the ability to combine the customers’ requirements with the proper products or services. This thesis argues that the same applies to professionalization in family firms. Family firms should understand the professionalization requirements and perspectives of customers in more detail, including to what extent suppliers
are professionalized according to their customers, how relevant customers consider different professionalization aspects to be, and how professionalization adds value.
This study contributes to the existing literature in that it examines professionalization in family firms from a customer perspective. The aims of this research are as follows:
1. To gain insights into the level of professionalism of Dutch family firms, according to their customers;
2. To develop an understanding of how relevant customers consider various professionalization aspects of Dutch family firms to be;
3. To explore the perceived added value of professionalization by the customers of Dutch family firms;
4. To determine if family firms have an influence on professionalization according to customers of Dutch family firms.
2. THEORETICAL BACKGROUND
2.1 FAMILY FIRMS
2.1.1 Defining family firms
Family firms have been abundantly researched, but despite this, a universal definition is still lacking. This has resulted in some studies not providing a definition, population, nor sample (Flören, 1998). To determine a definition of family firm for this study, several characterizations are first detailed.
One of the oldest definitions comes from Longenecker and Schoen (1978). They argued that a generational shift is what defines a family firm. There also have been several definitions developed in terms of shares. For example, Flören (2002) stated that a firm is characterized as a family firm when one family owns more than 50% of the shares. However, according to Chua, Chrisman, and Sharma (1999), the percentage of shares is not a complete enough qualifier to define a family firm. They reviewed more than 250 papers in the literature regarding family firms and distinguished between theoretical and operational definitions. The essence that describes the difference between family firms and other firms is seen as a theoretical definition. Chua et al.’s (1999) theoretical definition is based on the behavior of family firms, which include the visions and intentions of the firms. The operational definition stems from existing literature on family firms and includes more measurable and observable dimensions. Chua et al. (1999) argued that three combinations of family firm definitions can be observed in the existing literature, namely: (1) owned and managed by a family, (2) owned but not managed by a family, and (3) managed but not owned by a family. According to Chua et al. (1999), a firm that is both owned and managed by a family defines a family firm. Chua et al. (1999) added to the existing literature that a family firm should be distinguished from a nonfamily firm by the firm’s vision, intentions, and behavior.
The European Commission (2017) also suggested a definition which contains four criteria:
governance of the firm. (4) Listed companies meet the definition of family enterprise if the person who established or acquired the firm (share capital) or their families or descendants possess 25 per cent of the decision-making rights mandated by their share capital.
The definition proposed in this study is based on the definition of the European Commission. This definition is simple, clear, and easily applicable. This definition of family firms also includes those which are owned by the first generation.
2.1.2 Dichotomies between family firms and nonfamily firms
Family firms can be distinguished from nonfamily firms. Literature provides a wide range of dichotomies, and several are elaborated below. This creates a stronger understanding of the dichotomies relating to family and nonfamily firms, which is beneficial because this study investigates how family firms influences professionalization in particular from a customer perspective.
A first dichotomy comes from Jorissen, Laveren, Martens, and Reheul (2005). They indicated that employees in nonfamily firms are more formally educated while employees in nonfamily firms are more often trained on the job. Furthermore, Zellweger and Astrachan (2008) claimed that the management of nonfamily firms is more rational and analytical in comparison to the emotional and intuitive style of family management. Furthermore, the networks of family versus nonfamily firms seem to be different. Ingram and Lifschitz (2006) indicated that nonfamily employees have external ties based on the business while a family firm’s network is more kinship based. A paper by Ram (1994) suggested that nonfamily firms are more focused on rewarding employees based on performance while family members in family firms are over-rewarded.
More differences between family and nonfamily firms were determined in the research of Flören (1998). He found that there is a higher percentage of chief executive officers (CEOs) in family firms who have maintained leadership for more than eight years compared to nonfamily firms. Second, family firms are less likely to hire recent graduates than nonfamily firms. Finally, the spouse of a family firm’s CEO is more likely to work in the firm than the
Habbershon and Williams (1999) introduced the term “familiness.” They created the following conceptualization of familiness: “the unique bundles of resources a particular firm has because of the systems interactions between the family, its individual members, and the business.” Rutherford, Kuratko, and Holt (2008) stated that familiness does not refer to the general influence of the family firm on the business, but it instead focuses on how ‘family’ a firm is. Familiness entails three unique aspects of a family firm: (1) power, (2) experience, and (3) culture. Klein, Astrachan, and Smyrnios (2005) developed the Family Influence on Power, Experience, and Culture (F-PEC) scale to measure familiness based on these three aspects. The power aspect consists of the influence of ownership, governance, and management on the family firm. Next to that, it refers to dominance through financing the business, such as the shares owned by the family. The second aspect, experience, consists of the involvement and contribution of family members’ experiences in the family firm; generational shifts are seen as new or additional experience. Lastly, the culture aspect focuses on values and commitment and is seen as the overlap between the family values and business values. Ceja and Tàpies (2011) investigated the corporate values posted on the websites of the world’s 100 largest nonfamily-owned firms and the 100 largest family-owned firms. Their results provided a list with the values mentioned most often by family firms and the values mentioned least often by nonfamily firms. Based on these results, two unique values are added to the culture aspect, which are generosity and humility.
2.2 PROFESSIONALIZATION
In the existing literature, professionalization has no uniform definition. It includes in major terms the implementation of formalized systems and structures and the constantly improvement and development of professions. In the case of family firms, the simplest conceptualization entails hiring (full-time) nonfamily employees (Stewart & Hitt, 2012). Professionalization in family firms does not always result in higher performance. A recent article by Dekker et al. (2015) indicated that these inconsistent results are due to a different perspective of professionalization, which is elaborated below.
2.2.1 Different perspectives of professionalization
perspectives of professionalization in family firms: a binary perspective and a multidimensional perspective.
The binary perspective implies that only one dimension of professionalization is investigated. This can be, for example, the percentage of nonfamily employees in the family firm management (e.g., Anderson & Reeb, 2003; McConaughy, Matthews & Fialko, 2001; Miller & Le Breton-Miller, 2006; Barth, Gulbrandsen & Schonea, 2005; Duréndez, Pérez de Lema & Madrid Guijarro, 2007; Scascia & Mazzola, 2008; Daily & Dalton, 1992; Lin & Hu, 2007). Other binary perspectives entail dimensions such as formal training and formalized structures (e.g., Chua, Chrisman & Bergiel, 2009; Chua et al., 1999; Parada et al., 2010; Tsui-Auch, 2004). Most empirical studies on professionalization in the context of family firms have focused only on the level of family involvement and neglected other features (Dekker et al., 2015). The above-mentioned authors found different results on the effect of professionalization on firm performance. This means that positive and negative effects were found. According to Dekker et al. (2015), these difference in these results is due to a binary perspective. They argued that the presence of an external nonfamily executive is not sufficient to mark the turn of a family firm into a professionalized business.
Multidimensional perspectives contain more measurements of professionalization; Dekker et al. (2015) supplied an overview of the most commonly used dimensions in the literature. Thereafter, they conducted an exploratory factor analysis to determine five dimensions of professionalization. Finally, the effect of the dimensions on firm performance was measured by a regression analysis. For more details, refer to the article of Dekker et al. (2015). The five non-correlating dimensions of professionalization are as follows: (1) nonfamily involvement in governance systems, (2) financial control systems, (3) human resource control systems, (4) decentralization of authority, and (5) top level activeness. The five dimensions are explained shortly below.
Nonfamily involvement in governance systems emphasizes hiring nonfamily managers in a family firm, which is a tactic used to limit self-serving decision making by family members. This aspect is elaborated further in sections 2.2.2 and 2.2.3.
the implementation of financial control systems such as budget systems, planning systems, and performance evaluation systems.
The third dimension, human resource control systems, focuses on performance evaluation and incentive compensation systems (Chua et al., 2009). Additionally, practices such as selectivity in recruiting and training and skill development are part of human resource control systems (Pfeffer, 1994).
The same authors also introduced the fourth measure: decentralization of authority. Decentralization of authority entails whether employees can make decisions without the CEO or top management. The power of employees to report to lower levels rather than to the management is also part of the decentralization of authority.
The fifth dimension, top level activeness, refers to the frequency of official board meetings by the active board as well as the management team (Jackling & Johl, 2009). The management board should be present for actively managing the firm and not for meeting legal requirements. Top level activeness also entails scheduled meetings and internal management communication. Flamholtz and Randle (2007) argued that more and regularly scheduled meetings lead to better internal communication and subsequently higher team performance (Hyatt & Ruddy, 1997). Besides meetings, the interactions between board members also positively influence performance. This is mainly due to more effective communication and a more efficient implementation (Raes, Heijltjes, Glunk & Roe, 2011). The professionalization dimensions by Dekker et al. (2015) are summarized in table 1.
Table 1
Overview of professionalization dimensions by Dekker et al. (2015) including aspects
Non-family involvement in governance systems Financial Control Systems Human Resource Control Systems Decentralization of Authority Top Level Activeness
External board directors Use of budgets Formal recruitment system Centralization of authority Board activeness Family involvement in management team Budget evaluation system
Formal training system Delegation of control
Management activeness Nonfamily CEO Formalized financial
goals and objectives
In conclusion, the traditional view of professionalization in family firms, namely the presence of external nonfamily managers, seems to be insufficient nowadays. The multidimensional perspective leads to more consistent results compared to the binary perspective, namely that professionalization has a positive effect on the performance of family firms (Chua et al., 2009; Dyer, 2006; Hall & Nordqvist, 2008; Songini, 2006; Yildrim-Öktem & Üsdiken, 2010; Stewart & Hitt, 2012; Tsui-Auch, 2004; Gedajlovic, Lubatkin & Schulze, 2004; Flamholtz & Randle, 2007). Furthermore, the multidimensional view addresses a wider range of professionalization dimensions. For these reasons, this study applies the multidimensional perspective.
2.2.2 Additional dimensions of professionalization
The existing literature indicates that professionalization is more complex than the dimensions set forth by Dekker et al. (2015). For example, professionalization, according to Hwang and Powell (2009), Von Nordenflycht (2010), and Stewart and Hitt (2012), is based on the term ‘professional’ which is discussed below.
Improvement and Development
review, there comes regulation of knowledge and the ability for professionals to maintain control over vocational knowledge (Freidson (2001).
Professionalization in terms of improvement and development of activities, knowledge, and skills can take place at two levels: (1) at the level of the profession and (2) at the level of the individual. At the level of the profession, improvement is also known as vocational training. At the individual level, the improvement of the professionals’ competencies is considered (R.H. Hall, 1968; Hwang & Powell, 2009 & Chittoor & Das, 2007). Kwakman (2003) stated that processes of professionalization on both levels are closely connected. The higher the power and recognition of the profession, the more control the professionals have over their own competencies and the way these competencies could be improvement and deployed. Conversely, competencies of individual professionals are the foundation for power and recognition of the profession. Because it is expected that improvement and development by the supplier is visible from a customer perspective, this is part of the external professionalization aspects.
Operational Management
The conceptualization of family firm professionalization which is applied in this study is shown in figure 1. In conclusion, internal aspects of family firm professionalization (A) consist of formalizing and structuring the family firm. External aspects of family firm professionalization comprise operational activities by the family firm (B1) and the improvement and development of these activities (B2). Operational activities are simultaneously discussed with the operationalization of professionalization within the research method.
Figure 1: Conceptualization of family firm professionalization
2.2.3 Reasons for professionalization
There are several reasons why family firms professionalize. The first reason for professionalization is to reduce self-serving decision making and altruistic tendencies in family firms. Self-serving decisions occur when family employees use their power to pursue their own interests (Bozec & Laurin, 2008). Altruistic tendencies are the opposite, and these transpire when family employees express unselfishness. Family firms can reduce these problems through the implementation of professionalization practices. For example, hiring nonfamily managers could bring relevant expertise and counter the abovementioned problems. Furthermore, introducing more formal objectives and performance evaluation systems can help to reduce these problems (Flamholtz & Randle 2007). Professional control systems could also reduce the danger of resources being squandered by the family.
A second reason for professionalization was mentioned by Yildirim-Öktem and Üsdiken (2010). They indicated that family firms feel coercive pressure from external environments. For example, customers may require their supplier to take professionalization steps.
Professionalization
Thirdly, professionalization provides firms with better financial terms at the bank and better opportunities to acquire equity in public equity markets (Barden, Copeland, Hermanson & Wat (1984).
2.2.4 Barriers to professionalization
Besides reasons to engage in professionalization, family firms can also have barriers to professionalization. For example, this could involve costs or resistance from employees. This section elaborates on some of the barriers to professionalization.
Although hiring nonfamily employees has its advantages, it also brings disadvantages. This leads to the first barrier to professionalization: agency costs (Anderson & Reeb, 2003; McConaughy et al., 2001; Miller & Le Breton-Miller, 2006). Jensen and Meckling (1976) were some of the first authors to introduce the term “agency costs.” In their article, they explained that all individuals are rational, risk averse, and inclined to take actions to maximize their personal welfare. Conflicting interests could be the result of hiring nonfamily managers because both nonfamily and family managers pursue their own goals. In addition, the goals of nonfamily managers are often short term.
The second barrier to professionalization is the financial capacity of the family firm (Carrasco-Hernandez & Sánchez-Marin, 2007; Cater & Schwab, 2008; McConaughy, 2000); family firms can lack the financial capacity to hire nonfamily managers.
The third barrier to professionalization comes from Eijssen (2013). He indicated that family firm executives are afraid to lose their firms’ identity by formalizing their leadership style, and family firm executives may find it difficult to delegate to nonfamily executives.
2.2.5 Family firms and professionalization
influenced by the family (Chua et al., 2009; Flamholtz & Randle, 2007; Songini, 2006; Stewart
& Hitt, 2012). Therefore, the influence of the family on professionalization is also investigated
from a customer perspective.
2.3 THE RELEVANCE OF A CUSTOMER PERSPECTIVE
2.3.1 Understanding customer needs
As previously mentioned, professionalization in family firms has only been investigated from the firms’ perspective to this point. The question then arises why investigating professionalization from a customer perspective could be relevant. According to Butzs and Goodstein (1996), most firms assume that they know their customers’ requirements and needed value. Unfortunately, there are several examples in which those assumptions have been wrongly estimated. For example, manufacturers in the American auto industry failed to respond to growing customer requirements for smaller and more fuel-efficient cars (Butzs & Goodstein, 1996).
Customer centricity is widely discussed and emphasizes the need to understand customer requirements in detail. Customer centricity is a strategy where firms put their customer first, at the core of their business (MacDonald, 2017). When this occurs, firms focus on fulfilling customer needs instead of just selling products (Levitt, 1960). The Gartner Group Report (2003) confirmed the effects of performing in a customer-centric manner. Their report shows that marketers who focus on customer centricity can achieve 30% higher marketing returns on investment than their peers.
Firms that focus on customer centricity can be summarized by the following characterizations (MacDonald, 2017):
1. Put customers first. Without the customer, firms cannot succeed in the business. These firms want to see the world through the customers’ eyes.
2. Develop product and services around customer needs.
4. Analyze, plan, and implement strategies that focuses on keeping profitable and loyal customers.
Customer centricity can result in intangible assets, such as customer satisfaction, loyalty, and reduced price sensitivity (e.g., Hart, 1999; Gupta, Lehmann, & Stuart, 2004). Eventually, an increase in customer satisfaction, loyalty, and retention leads to a decrease in the volatility of a firm’s sales (Persson & Ryals, 2010). Shah et al. (2006) argued that a key challenge of customer-centric processes is the ability to combine customer requirements with the right products or services.
In conclusion, despite that the customer perspective has been neglected, the above reasons emphasize the relevance of understanding customer requirements and needs. In this way, looking at professionalization from a customer perspective could provide insights of customer professionalization requirements. These insights could be valuable for family firms to fit their professionalization to customer requirements.
2.3.2 The added value of professionalization
Section 2.2.3 explained that one of the reasons to engage in professionalization could be pressure from the external environment, for example customer requirements (Yildirim-Öktem & Üsdiken, 2010). When customers set several requirements, it suggests that customers are looking for a certain added value from their supplier, but it is worth considering who defines the added value. Butz and Goodstein (1996) emphasized that this decision is made by customers. The simplest definition of added value entails when customers benefit more than they sacrifice.
In conclusion, customers decide if there is added value or not, therefore this study considers if customers experience added value and how improvements can be made by the supplier to improve the added value.
2.4 RESEARCH FRAMEWORK
By adopting an entirely new perspective, this research contributes to the existing literature by investigating professionalization of family suppliers from a customer perspective. To this end, this study concerns to what extent suppliers are professionalized according to their customers and how relevant customers consider the different aspects of professionalization. It also addressed how professionalization adds value.
This research also has practical contributions. Post (1993) implied that family firms have to generate new strategies for the next generation to remain successful. For this reason, this research can contribute to a better understanding of professionalization for both the existing generation as well as successors.
Considering all of the above, a theoretical framework was created and is shown in figure 2. First, the professionalization of suppliers was investigated through suppliers’ own assessments. Second, the professionalization of the suppliers was examined through assessment by their customers, which is referred to as “the experienced professionalization by the customer.” Third, whether professionalization of suppliers adds value for customers was studied. Finally, the influence of familiness on the professionalization of suppliers was assessed by customers. Professionalization of family firm suppliers Experienced professionalization by customers
Added value for customers
Familiness
2.5 RESEARCH QUESTIONS
The research question that leads this study is as follows:
How do customers of Dutch family firm suppliers perceive professionalization? In order to answer the research question, the following sub-questions are presented:
1. How do Dutch family firm suppliers assess their professionalization?
2. How do customers assess the level of professionalization of Dutch family firm suppliers, and how relevant do they consider professionalization?
3. How does professionalization of Dutch family firm suppliers provide value to their customers and how can it be improved?
4. How does a family firm influence professionalization according to customers?
3. RESEARCH METHOD
3.1 RESEARCH DESIGN
3.2 CASE SELECTION CRITERIA
For this research, six case companies were approached. As the focus of this research is on family firm professionalization, the chosen cases are family firms. Each firm provided one to three participating customers, which could be both family firms or nonfamily firms. To enhance the visibility, table 2 is presented. This research focuses on the marked cells.
Table 2
Possibilities of case firms and customers
Nonfamily firm customer Family firm customer Nonfamily case firm Family case firm √ √
Firms that were eligible for this research met the developed requirements. First of all, the case firms met the family firm criteria by the European Commission (2017). The chosen firms’ participating customers were able to be family firms and nonfamily firms. A complete list of family firm criteria is described in section 2.1.2. The effect of family firms on professionalization is investigated through the F-PEC scale. This scale is further explained in section 2.1.2.
In regard to the size of the case firms, the European Commission’s (2017) criteria for a small- to medium-sized firm was also applied. This means that the case firms should have a minimum of 10 employees and a maximum of 250 employees. One exception was made for participant 3.1, as his firm counts 2.5 full-time employees. The reason for this is that he explained that he has a lot of experience in professionalization, and his firm has 2.5 full time employees because it outsources production and documentation to case firm 3. The majority of this firm’s operations are automatic, so more employees are not necessary. Only sales and development is done in the firm. The number of employees at each firm was verified by the contact person of the case firms during the interview invitation.
population, though the goal of this study is not necessarily to generalize the results to the population. Nevertheless, steps are taken to improve the creditability, which are explained in section 3.5.
Since the main focus of this research is the customer perspective, the intention was for each case firm to provide more than one customer to ensure the ability to conduct cross-case analysis. Due to time restrictions, this was not possible, therefore cross-case analysis was not completed with every case. In order to avoid differences in results through industries, case companies are active in the manufacturing sector. Furthermore, the relationship between the case firm and their customers was characterized as a business-to-business relation. A description of the case firms and participants can be found in sections 3.6 and 3.7.
3.3 DATA COLLECTION
Primary data was the basis for this research and was obtained through semi-structured interviews and questionnaires. Semi-structured interviews took place with the customers of the case firms. A questionnaire was sent to the case firms. The interview questionnaires can be found in appendix C and D.
Process
Figure 3: Participant approaching process
To control for differences among situations, interviews were planned at different times and days (Aken, Berends & Bij, 2012). The interviews were conducted during firm visits and were audio recorded and summarized. These records increase the reliability and help to control for research biases. In addition, this allowed the possibility to re-listen to the interviews, thus ensuring that note-taking during the interview did not overwhelm the time. The semi-structured interviews were a combination of closed questions and open-ended questions to let the case companies explain their experiences. Probing was used to gather details about several situations. The closed questions are based on a Likert scale ranging from one to five.
Customer perspective
Existing literature on professionalization in family firms has been approached from the firms’ perspective, which is internally focused. Since this research is concerned with professionalization from the customer perspective, it is expected that several professionalization dimensions (e.g., financial control systems and human resource systems) are not directly recognized and understood by customers. The reason for this is that these systems are largely invisible to customers.
A coherent interview is necessary in order to avoid misunderstandings by customers. For this reason, an interview requires clear definitions of the professionalization dimensions. Murray (1999) explained that the translation of definitions and concepts into more understandable terms can be made with the help of brainstorm sessions with experts and literature research. The use of jargon, unusual words, acronyms, and abbreviations should therefore be avoided (Murray, 1999). This ensure the questions are understandable and the responses are valuable.
(4) Invitation letter (5) Introduction call (6) Face-to-face interviews (1) Introduction call (2) Invitation letter (3) Questionnaire
Researcher's network & Gwynt's network
Case firms (family firms)
Table 3
Procurement process including professionalization dimensions and operational terms
Procurement process (Van Weele,
2010) Prof. dimensions
Specify Select Contract Order Monitoring After sales and evaluation Nonfamily Involvement
(Dekker at al., 2015) Involvement of family and nonfamily members (Dekker et al., 2015)
Im p ro v e a n d d ev elo p (Va n Da m & Vla a r, 2 0 0 7 ) Financial Control Systems (Dekker et al., 2015) -Quality of tendering process (NEVI, 2012) -Price/quality level with market developments (NEVI, 2012) -Quality of contracts (Van Weele, 2010) -Correct documents (invoices, export documents etc.) (Gwynt, 2017) Human Resource Systems (Dekker et al., 2015) -Well educated employees (Moretti, 2016) -Empathy in customer needs (Gwynt, 2017)
-Comply with agreements (Gwynt, 2017)
-Engagement of organization (after sales, warranty, etc.) (Moretti, 2016) Decentralization Of Authority (Dekker et al., 2015) -Codified decision-making power of employees (Gwynt, 2017)
Top Level Activeness
(Dekker et al., 2015) Active and involved directors (Dekker et al., 2015) Operational
Management Systems ( Chase et al. 1998)
-Transparent availability of the planning (NEVI, 2012)
-Transparent flexibility of the planning (NEVI, 2012)
At this point, a complete overview of the conceptualization and operationalization of professionalization can be presented and is shown in table 4. As previously discussed, professionalization in this study is divided into internal aspects (A) and external aspects (B).
The internal aspects consist of the professionalization dimensions by Dekker et al. (2015) as well as operational management by Chase et al. (1998). Operational management is divided into quality systems and planning systems.
External aspects can be divided in operational activities (B1) and improvement and development (B2). Improvement and development is based on the article by Van Dam and Vlaar (2007), while operational activities are based on purchasing literature (i.e., NEVI, 2012; Moretti, 2016, Van Weele, 2010) and brainstorm sessions with field experts (Gwynt, 2017).
Table 4
Operationalization of family firm professionalization
Internal aspects (A) External aspects (B)
Conceptualization
Formalization and structuring (A1) Operational activities (B1) Improvement and development (B2)
Operationalization
Dimensions Literature Dimensions Literature Dimensions Literature
1. Nonfamily involvement in
governance systems
2. Financial control systems
3. Human resource control
systems
4. Decentralization of
authority
5. Top level activeness.
Dekker et al. (2015) 1. Well-educated employees 2. Engagement of the organization 3. Empathy in customer needs 4. Quality of the organization 5. Comply with agreements 6. Correct documents 7. Quality of tendering process
8. Price/quality ratio with
market developments 9. Transparency in availability of the planning 10. Transparency in the flexibility of the planning 11. Reliability of the delivery
12. Quality of the contracts 13. Codified decision-making power Moretti (2016) Gwynt (2017) NEVI (2012) Van Weele (2010) Newxview (2017) Improving and developing of operational activities (B1)
Van Dam & Vlaar (2007)
6. Quality systems
3.4 ANALYSIS
The data was analyzed by building individual case studies and then comparing across cases (Eisenhardt, 1989). The process of analyzing the data is elaborated below:
First, all interview answers were recorded in a Microsoft Excel database. This includes ratings on Likert scales, explanations on their ratings, and explanations of open questions.
Next, extensive summaries were created including citations. Due to time and budget restrictions, interview transcripts were not feasible.
From this point forward, the well-respected and oft-cited article of Burnard (1999) is used to analyze the data. Burnard’s developed stages three through five are used to code the interview data.
Data was coded starting with the third stage of Burnard (1999). Data coding is possible in two main ways: inductive coding and deductive coding. Deductive coding involves making codes which are already prepared, for example, based on existing literature, experiences, or a theoretical framework. In contrast, inductive coding is dependent on the obtained interview data, and codes are not determined prior to the interview. These codes can be generated through open-minded coding. Both deductive and inductive coding were used for this research. Deductive coding was used as a starting point for introduction questions, such as when participants were asked for a definition of family firms or professionalization. As this research is concerned with professionalization from a customer perspective and finding new insights on professionalization, inductive coding was the main focus of the coding process. There are disadvantages of inductive coding, but gaining new insights is the goal of this study rather than results that are comparable to existing theory (Krippendorff, 1980).
The fourth stage of Burnard (1999) minimized the different categories through combining overlapping categories.
With the methods suggested by Miles and Huberman (1984) and Eisenhardt (1989), the conceptual insights were developed. With the cross-case analysis, data between different case firms was compared. The expectation was to find common or contradictory beliefs about the relevance and level of the suppliers’ professionalization. The first tactic of Eisenhardt (1989) was used to search for cross-case patterns. The first tactic focuses on selecting categories or dimensions and then determining within-group similarities or differences. By doing this, initial impressions are traversed in order to view the data through different lenses. In addition, these tactics improved the likelihood of accuracy and reliability. While analyzing the data, the researcher took enough breaks to keep optimal focus, decrease the potential of biases, and increase the reliability in regard to the circumstances.
3.5 EVALUATING THEORY
According to Eisenhardt (1989) there is no generally accepted manner of evaluating theory-building research, however, several criteria are appropriate. Pfeffer (1982) stated that strong theory is concise and logically coherent. Furthermore, the quality of theory-building research is dependent on empirical issues, such as the strength of the method. In the end, the research should provide new (groundbreaking) insights.
3.6 QUALITY CRITERIA
The research-oriented quality criteria of controllability, validity, and reliability were taken into account to improve the research (Swanborn, 1996; Yin, 2003). The controllability was increased by logging the research process and activities (Corbin & Strauss, 2008). With the help of logging activities, other researchers can replicate the research and, if desired, evaluate the quality. A brainstorm session with the help of an experienced professional improved the interview questions and increased the internal validity (Murray, 1999). All interviews were audio recorded and elaborated in summaries. Due to the length of the summaries and anonymity of participants, they are not attached in the appendix.
locations. Therefore, all the interviews were planned at the participants’ firms. Lastly, analyst triangulation was used with the help of an external consultancy firm, a supervisor of the Faculty of Business and Economics, and an alumni student of the Faculty of Business and Economics. The reason for this is to tackle researcher bias and prevent an oversight by the researcher. Additionally, data was investigated in multiple ways.
3.7 CASE COMPANIES
Six case firms confirmed their willingness to participate. However, case firm six explained that he was unsure about the additional interview with customers. He indicated that the relationship with his customers can be characterized as short and distant. As the interview involved questions that were focused on in-depth knowledge about the supplier, experience with the case firm was desirable. With mutual approval, it was decided to continue the research without case firm six. The final five companies are summarized in table 5.
3.8 PARTICIPANTS
Table 6 presents an overview of the customers provided by the case companies. This table shows that all firms have done business with their supplier for more than six years. There are 2 nonfamily firms and 10 family firms. There is also a variety in the firm’s family generation, ranging from the first generation to the third generation. Not all firms were willing to share their turnover amount due to it being sensitive information.
Table 5
Overview case companies and contacts
Function of contact Years in
firm Employees Industry Generation
Turnover in €
Provided customers Case firm 1 Director shareholder - - - 1st - 3
Case firm 2 Director shareholder - - - 2nd - 2
Case firm 3 Key account manager - - - 2nd - 1
Case firm 4 Account manager - - - 2nd - 3
Table 6
Overview customer companies
Customer Employees Relationship with supplier Turnover in € Shares Family members in board Generation Case firm 1 Customer 1.1 - - - 100% family 2 3rd Customer 1.2 - - - 100% family 6 2nd Customer 1.3 - - - 100% family 3 3rd
Case firm 2 Customer 2.1 - - - 100% family 2 3
rd
Customer 2.2 - - - 100% family 1 1st
Case firm 3 Customer 3.1 - - - 100% nonfamily - -
Case firm 4 Customer 4.1 - - - 100% family 1 1st Customer 4.2 - - - 100% family 1 2nd Customer 4.3 - - - 100% nonfamily - - Case firm 5 Customer 5.1 - - - 100% family 2 1st Customer 5.2 - - - 100% family 2 3rd Customer 5.3 - - - 90% family, 10% nonfamily 3 1 st
Table 7 provides an overview of the interviewed participants. The interviewees are mainly director shareholders or purchasers. The educational level ranges from higher academic education to primary education. Although 2 out of the 12 firms are nonfamily firms, half of the participants (6) are nonfamily members.
Table 7
Overview customer contacts / participants
Case Customer Function Gender Education Active years Family member Case firm 1 Customer 1.1 - ♂ - - Yes Customer 1.2 - ♂ - - Yes Customer 1.3 - ♂ - - Yes Case firm 2 Customer 2.1 - ♂ - - No Customer 2.2 - ♂ - - Yes
Case firm 3 Customer 3.1 - ♂ - - No
Case firm 4 Customer 4.1 - ♂ - - Yes Customer 4.2 - ♂ - - No Customer 4.3 - ♂ - - No Case firm 5 Customer 5.1 - ♂ - - No Customer 5.2 - ♂ - - No Customer 5.3 - ♂ - - No
4. RESULTS
The results are presented in line with the sub-questions. Each section ends with a short conclusion.
Section 4.1 is not related to a research sub-question, but it instead introduces definitions of family firms and professionalization. Participants were asked to define family firm and professionalization in general.
In section 4.2, the first research sub-question is central: how do Dutch family firm suppliers assess their professionalization? Case firms, henceforth known as suppliers, assessed their own level of professionalization. Internal aspects of professionalization are discussed.
In section 4.3, the second research sub-question is the focus: how do customers assess the level of professionalization of Dutch family firm suppliers, and how relevant do they consider professionalization? The customer perspective is discussed from here on. Customers were asked to assess their suppliers and indicate how relevant professionalization is. Both internal and external aspects of professionalization are discussed.
The third sub-question is central to section 4.4: how does professionalization of Dutch family firm suppliers provide value to their customers and how can it be improved? Customers were asked to indicate how they perceive added value of the professionalization of their supplier. They were also asked how suppliers can add more value.
4.1 INTRODUCTION
4.1.1 What are family firms according to customers?
In the literature, there is not one commonly accepted definition of family firms. The interview results support this. The most commonly mentioned definition or requirement in the interviews (6 of 12 participants) is that the firm must be in the control – in terms of shares – of the director shareholder:
“Het woord directeur eigenaar. Maar die wel zelf in de zaak zit, die zelf mee doet en op de loonlijst staat. Geen aandeelhouders o.i.d.” (participant 5.1)
“Een bedrijf dat volledig van de eigenaar is, die het zelf heeft opgebouwd, en er geen externe niet-familie aandeelhouders zijn.” (participant 2.2)
A generational shift was also often mentioned (5 of 12 participants). One nonfamily firm participant characterized a family firm as a small firm that may be disadvantaged due to too much dependency of the employees on the director shareholder:
“Familiebedrijven denk ik vaak aan kleine bedrijven. Familiebedrijf is vaak een bedrijfje van 4-5 medewerkers waar je ook echt goed last van hebt als er een keer een zieke werknemer is.” (participant 4.3)
4.1.2 What is professionalization according to customers?
Participants were also asked to share their definition of professionalization. The results confirm that professionalization is a broad topic, and both definitions mentioned in the conceptualization of professionalization were mentioned as well as new definitions. The most frequently suggested definitions of professionalization are “optimizing” and “improving” which can be linked to Van Dam and Vlaar (2007):
“Continu verbeteren en optimaliseren. Innoveren begint waar de comfort zone ophoudt.” (participant 5.1)
“Sowieso dat processen worden vastgelegd. Minder houtje touwtje werk, minder ‘komt wel zoals het komt.’” (participant 1.2)
“Logistieke stromingen (bijvoorbeeld informatie voorziening en goederenstroom) allemaal structureren.” (participant 5.2)
Knowledge improvement (i.e. Noordegraaf, 2007), automation, innovation, pro-active communication, obtaining official standards, traceability of products, improvement of price/quality ratio, and the implementation of systems were additionally mentioned:
“Aan normeringen voldoen; bijvoorbeeld AS 9100. Gecertificeerde producten en kritische componenten moeten traceable worden. Leveranciersmanagement systemen moet je opzetten. Stappenplan voor leveranciersselectie: bezoek, tegen bezoek, audit voor kwaliteit vindt plaats, op directie niveau vrijgave om zaken te doen, managen met een regulier gesprek.” (participant 4.1)
The answers varied in their depth. For example, one participant could not determine a definition of professionalization, and a few participants discussed jargon. For example:
“Doorlooptijdverkorting, QRM (quick response management en one piece flow). Maken alle producten op klant order, dus geen voorraden.” (participant 5.3)
After asking for a definition, participants were asked for criteria to determine the level of professionalization of a family firm. By far, the price/quality ratio was mentioned most often (5 of 12 participants).
Conclusion
4.2 SUPPLIER’S ASSESSMENT OF PROFESSIONALIZATION
4.2.1 Level of professionalization: entire organization and internal aspects
To determine the suppliers’ level of professionalization, suppliers were asked to assess their own level of professionalization. Both the entire organization and internal aspects of professionalization were assessed. The results show that no supplier sees their organization as unprofessional. Although they view their organization as professional, three of the five suppliers highlighted that there are (always) possibilities for improvements. This explanation is in line with the professionalization definition by Van Dam and Vlaar (2007). Two case firms saw improvement opportunities in employees’ levels of education. Suppliers would like to hire professionals or focus on internal training. Implementing new systems was also mentioned as improvement:
“Verbetering op alle vlakken, vandaar verdieping van organisatie gaande. Nieuw ERP systeem en planningsysteem in 2018. Daarnaast zoekende naar visie door veranderde markt.” (case firm 2)
Figure 4 shows the level of professionalization of the internal aspects. Only one case firm gave an explanation for his ratings. Case firm 1 assessed non-family involvement, financial systems, and human resources (HR) systems as very professional and supplied the following explanation:
“Het management bestaat uit externe controller, productieleider, verkoopleider en mij.” (case firm 1) “De financiële doelen zijn bekend, cijfers zijn dagelijks zo ver als mogelijk bijgewerkt maar sowieso bij de maandafsluiting.” (case firm 1)
Figure 4: Professionalism internal professionalization aspects and entire organization (suppliers’ assessment)
0 1 2 3 4 5 6 Entire organization Nonfamily involvement Financial control systems HR control systems Operational systems No opinion Very unprofessional Unprofessional
Neither professional nor unprofessional
Conclusion
Case firms assessed their own organizations as professional, although they all noted room for improvement and development. For example, the education level of their employees, hiring new professional, internal training, and the implementation of systems were noted as areas to be improved. One case firm explained why he assessed his organization as professional, which is that the management has nonfamily involvement and elaborated financial goals and objectives.
4.3 EXPERIENCED PROFESSIONALIZATION BY CUSTOMERS
From this point forward, the results adopt the customer perspective. The first section discusses the professionalism of the suppliers’ entire organization and internal professionalization aspects. The second section explains the professionalism of the suppliers’ external professionalization aspects. In the third section, the relevance of external professionalization aspects is detailed.
4.3.1 Level of professionalization: entire organization and internal aspects
Figure 5 shows the professionalism of the entire supplier and their internal professionalization aspects assessed by customers. These results were generated through a Likert scale question with an explanation possibility. The figure shows that the entire supplier has been rated as professional by 7 of the 12 participants and 3 of the 12 as very professional.
Figure 5: Professionalism of internal professionalization aspects and entire organization (customers’ assessment)
0 2 4 6 8 10 12 14 Entire organization Nonfamily involvement Financial control systems HR control systems Operational systems
No opinion / not applicable Very unprofessional Unprofessional
Neither professional nor unprofessional
The foundation of their rating has to do with being ‘accurate and tidy’ and ‘proactive.’ Two participants mentioned that their supplier has transformed from a supplier into a partner over the years:
“Je ziet dat ze elk jaar op een hoger niveau komen. Toen we voor de eerste keer dat daar binnen kwamen, bogen ze alleen producten. Je ziet nu dat alles op een hoger niveau gaat; werknemers, het kantoor, actievere rol, kennisniveau. Vroeger alleen toeleverancier, nu partner.” (participant 5.1)
“Manier van werken en meedenken. Willen veranderen. Ken ze al wat langer, weet dus ook hoe ze waren. Zijn goed verbeterd, van een klein bedrijfje uitgegroeid tot grote partner. Zijn begonnen als verkoop van ruw materiaal en we hebben samen vervolgens het snijden van materiaal geïntroduceerd. In het begin is hier best wel wat fout gegaan. Op dit moment krijgen we volledige pakketten. Per kit wordt het geclusterd, verpakt en gelabeld, alles erop en eraan.” (participant 4.3)
It seems that the internal professionalization aspects are not visible from a customer perspective. For example, nonfamily involvement in the management of their supplier was not visible for 9 of the 12 participants. Operational systems are more visible from a customer perspective. The results indicate that 5 of the 12 participants assessed the operational systems (quality systems and planning systems) of their supplier as professional.
Differences between cases
Table 8
Professionalism of internal professionalization aspects + entire organization (average customers’ assessment) Participants En tire o rg a n iza ti o n No n fa m il y em p lo y ee s in m a n a g em en t Fi n a n ci a l co n tr o l sy ste m s H R co n tr o l sy ste m s O p er a tio n a l sy ste m s Participant 1.1 4 4 - - - Participant 1.2 5 - - - 4 Participant 1.3 4 - - - -
Average case firm 1 4.3 4 - - 4
Participant 2.1 4 - - - -
Participant 2.2 3 - - - -
Average case firm 2 3.5 - - - -
Participant 3.1 4 4 4 4 3
Average case firm 3 4 4 4 4 3
Participant 4.1 - - - - 4
Participant 4.2 4 - - - 4
Participant 4.3 5 4 - - 4
Average case firm 4 4.5 4 - - 4
Participant 5.1 4 - - 4 4
Participant 5.2 5 - - - -
Participant 5.3 4 - - - 3
Average case firm 5 4.3 - - 4 3.5
It is notable that financial control systems were only assessed as professional by participant 3.1, while this was not visible for the other participants. However, this participant is a former employee of this case firm so the results are probably biased. The same is visible for the assessment of HR control systems. Although HR systems are not easily visible, two participants assessed this as professional. This is due to, for example, visible health plans. For participant 5.1, this was visible due to intensive cooperation with case firm 5:
“Stoppen heel veel tijd in mensen. Hebben een heel gezondheidsplan opgesteld voor hun mensen. Zijn heel hard bezig om mensenniveau omhoog te krijgen, dat zijn uiteindelijk de mensen die geld verdienen. Er is nog genoeg te doen maar dat kost tijd. Het kost tijd om veranderingen in de genen van mensen te krijgen.” (participant 5.1)
“Van planningssystemen merken we wat. Ze kunnen redelijk goed voorspellen wanneer iets uitgeleverd wordt en dit komt dan ook uit.” (participant 1.2)
Additionally, product development was mentioned as an explanation for their rating on operational systems:
“Bij afkeur van maatvoeringen die niet kloppen wordt het netjes opgelost. Product ontwikkeling liep achter maar hebben ze mooie stappen ingezet.” (participant 4.2)
Conclusion
Customers evaluated the supplier as a whole as professional or very professional in most cases. As expected, the internal professionalization aspects were not visible from the customer perspective. A few participants considered the financial control systems or HR control systems as professional, but this is due to extensive cooperation or consultancy services for the case firms.
4.3.2 Level of professionalization: external aspects
In this section, the external professionalization aspects are presented. Customers were asked to judge the external professionalization aspects of their supplier. Figure 6 shows that the external professionalization aspects are more visible than the internal professionalization aspects, as discussed in the previous section. There seems to be a division between aspects that are rated as professional or very professional and aspects that are not applicable or customers had no opinion about. (i.e., quality of the contracts). Explanations indicate that this is related to trust between supplier and customer, not the use of official contracts.
Figure 6: Professionalism of external professionalization aspects (customers’ assessment)
Codified decision-making power was not applicable for 6 of the 12 participants. Participants who rated codified decision-making power of employees within their supplier as professional indicated that there is a distinction between operational level and strategic level. Participant 5.1 explained that standard projects can be decided without this direction, but special projects are decided at the strategic level:
“Standaard werk kan gewoon door. Als het grote of speciale projecten zijn dan is het op direct niveau.” (participant 5.1)
The most professional external aspects that were mentioned are being compliant with agreements and the reliability of the delivery. All participants measured this as professional or very professional.
Differences between cases
The average level of professionalization per external aspect is summarized in table 9. Average numbers assessed by both the customers and the case firms’ own assessments are shown. The numbers indicate the level of professionalization where 1 is very unprofessional and 5 is very professional. All green-colored cells are assessed ≥ 4.0 while the red-colored cells are assessed as <4.0. 0 2 4 6 8 10 12 14
No opinion / not applicable Very unprofessional Unprofessional Neither professional nor unprofessional
Table 9
Level of external professionalization aspects (case firms’ own assessment + average customers’ assessment)
We ll e d u ca te d empl o y ee s E mp a th y i n cu st o m er n ee d s Qu a li ty o f te n d er in g p ro ce ss Qu a li ty o f th e o rg a n iz a ti o n Pr ic e/ q u a li ty ra ti o w it h ma rk et d ev el o p me n ts Qu a li ty o f th e co n tr a ct s C o d if ie d d ec is io n -ma k in g p o w er T ra n sp a re n cy i n th e a v a il a b il it y o f th e p la n n in g T ra n sp a re n cy i n th e fl ex ib il it y o f th e p la n n in g C o mpl y w it h a g re eme n ts R el ia b il it y o f th e d el iv er y C o rr ec t d o cu m en ts E n g a g em en t o f th e o rg a n iz a ti o n T OTA L A V E R A GE C1: participant average 4.3 4.3 4 4.7 3.7 - - 3.3 4 4 4 4 4.3 4.1 C1: own assessment 3 4 4 4 5 5 4 4 4 4 4 5 5 4.2 C2: participant average 3.5 3.5 4 4 4 - 4 3 - 4.5 5 4 4 4 C2: own assessment 4 4 4 3 3 2 3 2 2 3 3 4 3 3.1 C3: participant average 4 4 4 5 4 - 4 3 4 4 4 4 4 4 C3: own assessment 3 4 4 3 4 3 4 4 - 4 4 4 4 3.8 C4: participant average 4 4 4.5 4 4 4 4 4 4 4 4 4 4 4 C4: own assessment 5 5 4 5 4 4 5 3 3 3 4 3 3 3.9 C5: participant average 3.5 4 3.7 4 4 2 4 4.3 4 4 4 3.5 4 3.8 C5 own assessment 3 4 2 3 3 2 3 3 3 3 3 3 3 2.9
On the far right column, the average numbers of all external professionalization aspects are shown. Based on these results, it is visible that all case firms assessed the professionalism of external aspects on average lower than their customers, except case firm 1. This could imply that suppliers are not aware of their abilities or they are too modest.
It is also notable that case firms 2 and 5 evaluated their organization lower than the other case firms. Unfortunately, there was no explanation provided as to why case firms assessed the external professionalization aspects as unprofessional. The low assessments seem to be unrelated to the function of the participant, as the respondent from case firm 5 is a sales manager while the point of contact from case firm 2 is a director shareholder. So, two different functions rated their organization lower compared to other case firms. These case firms perhaps have just implemented fewer steps for professionalization.
tendering process higher than purchasers. Therefore, it could be the case that purchasers are more critical of this criterion because it is their direct responsibility.
Another notable outcome is the relatively low assessment of empathy in customer needs from case firm 2. This seems to be related to the proactivity of employees. Participants from case firm 2 indicated that employees are only active when there something is asked, while customers from other case firms specified that their contact person is proactive.
Furthermore, the results seem to indicate that empathy for the customer has to do with proactivity of the organization or account managers. Case firms that were rated as professional had the explanation of being proactive, while neither the professional nor unprofessional rating seems correlated with explanations in terms of a passive organization or account managers. In the case of a proactive organization, the following explanation was given:
“We zijn bezig met twee verschillende projecten. Hierin komt de leverancier echt met voorstellen en neemt zelf initiatieven om ons van dienst te zijn. Niet alleen als we vragen, maar zijn echt proactief bezig.” (participant 1.2)
In the case of a passive organization or account managers, participants gave the following explanations:
“Moeten zelf wat aangeven en denken dan wel mee.” (participant 2.2)
“Passief van weerzijde. Meer moeite gezamenlijk = meer uit de relatie halen.” (participant 4.1)
Transparency in the availability of the planning was rated as neither professional nor unprofessional by four participants. The reason for this seems to be that suppliers only communicate a delivery date. The next section discusses whether transparency in the availability of planning is relevant for customers.
Conclusion
