From family identity to strategic deferral: how family household businesses evaluate enterprise conversion in Vietnam

Purpose This research paper aims to explore how owner-managers of family household businesses evaluate conversion to an enterprise and assess when it is acceptable to commit to such a different legal form. Design/methodology/approach This study adopts an interpretive qualitative interview study design. Twenty owner-managers of family household businesses from Ho Chi Minh City, Vietnam, were interviewed in this study. Data from the interviews were analyzed using a Gioia-informed abductive approach to examine how the above owner-managers made sense of the consequences of enterprise conversion and of when commitment to conversion is acceptable. Findings Family identity serves as an evaluative anchor by defining what owners seek to preserve regarding control, authority, identity and continuity. Economic and organizational, institutional and relational aspects of enterprise conversion are currently assessed and considered acceptable. Perceived irreversibility affects the timing of commitment with respect to the value of preserving future options. If conversion is possible, these conditions are continuously monitored. In the case of continued household business status, this does not necessarily mean incapacity, inaction or resistance to change, but rather a strategic deferral of conversion. Such triggers include corporate customer requirements, financing needs, expansion, workforce growth and succession. Originality/value The paper extends research on family businesses and formalization by identifying how family members construct and use family identity in shaping perceptions of irreversibility. Furthermore, the paper introduces the concept of strategic deferral and studies formalization as a matter of strategic optionality, that is, as preserving legal form options. It offers an interpretive perspective on real options reasoning, explaining how perceptions of irreversibility and waiting value are shaped by a combination of factors, including family, organizational, institutional and relational factors.