Raphael (“Raffi”) Amit is the Marie and Joseph Melone Professor and a Professor of Management at the Wharton School. Dr. Amit founded and leads the Wharton Global Family Alliance (WGFA), a unique academic-family business partnership established to enhance the marketplace advantage and the social wealth creation contributions of global families through thought leadership, knowledge transfer and the sharing of ideas and best practices among influential global families.
Dr. Amit holds B.A. and M.A. degrees in Economics, and received his Ph.D. in Managerial Economics and Decision Sciences from Northwestern University’s Kellogg Graduate School of Management. Dr. Amit’s current research and teaching interests center on family business management, governance, and finance, on venture capital and private equity investments, on entrepreneurship, on the design of business models and on business strategy. He has published extensively in leading academic journals and is frequently quoted in a broad range of practitioner outlets.
He has published widely cited, award winning research on a broad range of issues that relate to ownership, management and control of family businesses. He has been working with substantial families around the world on such issues as creating governance systems for families and their businesses, succession, valuation, wealth management and the formation of a family office, and more. Overall, the work of Dr. Amit with families integrates the behavioral and emotional issues that characterize the life of each family, with the economic and financial issues that must be addressed to sustain family harmony and happiness alongside with the long-term prosperity of the family business.
Professor Amit has held a range of management and Board of Directors positions in various companies. He served as Chair of the Board of Directors of Creo Products Inc. for 6 years. (NASDAQ: CREO until May 2005 when it was acquired by Kodak.) Professor Amit has helped form the Korean Global IT Fund, a $100 million VC fund and has served as the first Chairman of the KGIF Advisory Board. He has served on the Board of Directors of Alvarion Ltd. a wireless communication equipment company, and has been a member of the Audit and Compensation Committees of Alvarion. He has also served as the only external director of a private family owned and controlled firm in Hong Kong. Dr. Amit advises numerous private and publicly held family businesses, on a broad range of strategic, governance and financial issues.
Abstract: This paper investigates the relationship between divestitures and firm value in family firms. Using hand-collected data on a sample of over 30,000 firm-year observations, we find that family firms are less likely than non-family firms to undertake divestitures, especially when these companies are managed by family- rather than non-family CEOs. However, we then establish that the divestitures undertaken by family firms, predominantly those run by family-CEOs, are associated with higher post-divestiture performance than their non-family counterparts. These findings indicate that family firms may fail to fully exploit available economic opportunities, potentially because they pursue multiple objectives beyond the maximization of shareholder value. These results also elucidate how the characteristics of corporate owners and managers can influence the value that firms derive from their corporate strategies.
B. Villalonga, Raffi Amit, M. A. Trujillo, A. Guzman (2015), Governance of Family Firms, Annual Review of Financial Economics, 7, pp. 635-654.
Abstract: We review what the financial economics literature has to say about the unique ways in which the following three classic agency problems manifest themselves in family firms: (i) shareholders v. managers; (ii) controlling (family) shareholders v. non-controlling shareholders; and (iii) shareholders v. creditors. We also call attention to a fourth agency problem, unique to family firms: the conflict of interest between family shareholders and the family at large, which can be thought of as the “super-principal” in a multi-tier agency structure akin to those found in other concentrated ownership structures where the controlling owner is the state, a bank, a corporations, or other institutions. We then discuss the solutions or corporate governance mechanisms that have been devised to address these problems and what research has taught us about these mechanisms’ effectiveness at solving these four conflicts in family firms.
Raffi Amit and P. J. H. Schoemaker, “Firm Resources”. In Palgrave Encyclopedia of Strategic Management, edited by M. Augier and David Teece, (2015)
Raffi Amit and C. Zott, “Business Models”. In International Encyclopedia of the Social & Behavioral Sciences, 2nd Edition, Volume 3, edited by J. D. Wright, (Oxford: Elsevier, 2015), pp. 33-36
Raffi Amit, Y. Ding, B. Villalonga, H. Zhang (2015), The role of institutional development in the prevalence and performance of entrepreneur and family-controlled firms, Journal of Corporate Finance, 31, pp. 284-305.
Abstract: We investigate the role played by institutional development in the prevalence and performance of firms that are owned and/or managed by entrepreneurs or their families, while controlling for the potential effect of cultural norms. China provides a good research lab since it combines great heterogeneity in institutional development across its provinces with homogeneity in cultural norms, law, and regulation. Using hand-collected data from publicly listed Chinese firms, we find that, when institutional efficiency is high, entrepreneur- and family-controlled firms are more prevalent and exhibit superior performance than non-family firms. We find that the positive effects of family ownership and the negative effects of family control in excess of ownership that have been documented in earlier studies around the world are only significant in high-efficiency regions, and only for family-controlled firms proper, but not for entrepreneur-controlled firms. Institutional development also helps reconcile the divergence of results across prior studies regarding the performance impact of founders and their families as managers and not just owners. When institutional efficiency is high, the sign of the management effect is entirely contingent of whether the Chairman or CEO is the entrepreneur himself/herself (positive) or a family member (negative); when institutional efficiency is low, the effect is positive in both cases, and more strongly so in the case of a family member serving as CEO.
Raffi Amit and C. Zott, “Business Model Innovation: Toward A Process Perspective”. In The Oxford Handbook of Creativity, Innovation, and Entrepreneurship: Multilevel Linkages, edited by C. Shalley, M. Hitt, J. Zhou, (2014)
Raffi Amit and B. Villalonga, “Financial Performance of Family Firms”. In The Sage handbook on family Business, chapter 9, edited by L. Melin, M. Nordqvist, P. Sharma, (Sage, 2013)
C. Zott and Raffi Amit (2013), The Business Model: A Theoretically Anchored Robust Construct for Strategic Analysis, Strategic Organization, 11 (4), pp. 41-49.
Abstract: Anchored in our research on business models we delineate in this article a future research agenda. We establish that the theoretical and empirical advancements in business model research provide solid conceptual and empirical foundations on which scholars can build in order to explore a range of important, yet unanswered research questions. We draw inspiration on the direction of the business model research agenda by briefly reviewing several distinct bodies of literature adjacent to the business model literature including: new organizational forms, ecosystems, activity systems, and value chain. In doing so, we also distinguish the business model concept from seemingly similar concepts that have been proposed by researchers.
Raffi Amit and Belén Villalonga (2013), Primer on Governance of the Family Enterprise, World Economic Forum Report.
This course focuses on venture capital management issues in the context of a high-growth potential start-up company. The course is motivated by rapid increases in both the supply of and demand for private equity over the past two decades. The topic is addressed from two distinct perspectives: issues that relate to the demand for private equity and venture capital (the entrepreneur's perspective) on the one hand, and issues that relate to the supply of capital (the investor's perspective) on the other. As well, we will address management issues that relate to how the VC and the entrepreneur work together once an investment has been made, compensation issues, and governance issues in the privately held venture capital backed company. Format: Case/discussion format, supplemented by lectures and guest speakers. Requirements: Classroom participation, written case assignments, late midterm. Materials: Required Coursepack and supplemental recommended reading.
This elective half-semester course will highlight venture capital and entrepreneurship in general and will explore selected aspects of this industry, including: industry trends and dynamics in Silicon Valley and the South of Market area (SOMA) of San Francisco; the recent emergence of alternative sources of startup financing, including incubators/accelerators and crowdfunding platforms, angel groups and stage-agnostic institutional investors; business and operational aspects of early stage companies in transition to mezzanine-level stages of growth; and company "exits," including both initial public offerings and merger/sale transactions. MGMT765 and MGMT804 cover separate issues within the same general industry and are not redundant. This course addresses issues faced by later stage VC backed firms, while MGMT804 centers on early stage, pre-revenue startups. The format of this course relies heavily on site visits and recognized leaders within the Bay Area to bring forth on-the-ground perspectives of a changing and important industry. While MGMT804 is not a prerequisite, the two courses are complementary.
Management 801 is the foundation course in the Entrepreneurial Management program. The purpose of this course is to explore the many dimensions of new venture creation and growth. While most of the examples in class will be drawn from new venture formation, the principles also apply to entrepreneurship in corporate settings and to non-profit entrepreneurship. We will be concerned with content and process questions as well as with formulation and implementation issues that relate to conceptualizing, developing, and managing successful new ventures. The emphasis in this course is on applying and synthesizing concepts and techniques from functional areas of strategic management, finance, accounting, managerial economics, marketing, operations management, and organizational behavior in the context of new venture development. The class serves as both a stand alone class and as a preparatory course to those interested in writing and venture implementation (the subject of the semester-long course, MGMT806). Format: Lectures and case discussions Requirements: Class participation, interim assignments, final project
This elective half-semester course focuses on venture capital management issues in the context of the typical high-growth potential early stage start-up company. The course is fundamentally pragmatic in its outlook. It will cover seven principal areas relevant to the privately held high-growth start-up which include: commentary on the venture capital industry generally, as well as a discussion of the typical venture fund structure and related venture capital objectives and investment strategies; common organizational issues encountered in the formation of a venture backed start-up, including issues relating to initial capitalization, intellectual property and early stage equity arrangements; valuation methodologies that form the basis of the negotiation between the entrepreneur and the venture capitalist in anticipation of a venture investment; the challenges of fundraising, financing strategies and the importance of the business plan and the typical dynamics that play out between VC and entrepreneur. typical investment terms found in the term sheet and the dynamics of negotiation between the entrepreneur and the venture capitalist; compensation practices in a venture capital backed company; and corporate governance in the context of a privately-held, venture capital-backed start-up company and the typical dynamics that play out between VC and entrepreneur in an insider-led, "down round" financing. Requirements: Classroom participation, weekly case assignments, and final exam Format: Lecture, case studies, class participation, weekly case assignments, and final exam.
MGMT 811 focuses on the theoretical, strategic, analytics, and practical issues of acquiring a business. Topics include: locating a business, due diligence, reviewing and analyzing data, valuation, raising capital/financing the deal, structuring the acquisition, letters of intent, contracts/asset purchase agreements, and integrating the target. Format: The class consists of lectures, in-class discussions of caseletts, assigned readings, homework problems, and a group or individual project.
This quarter-length doctoral seminar deals with major streams of management research in technology strategy and innovation. We will focus on both classical topics such as technological change and industry evolution and new emergent topics such as ecosystems and platforms. The focus will be to understand the link between technologies and firms in terms of both strategy choices and performance outcomes.
The seminar seeks to expose students to theoretical and empirical perspectives on entrepreneurship research. We will focus on the main questions that define the field and attempt to critically examine how, using a range of methodologies, researchers have approached these questions. As we review the literature, we will seek to identify promising research areas, which may be of interest to you in the context of your dissertation research. In addition to addressing the content of the received literature, we will examine the process of crafting research papers and getting them published in top tier journals. Towards that end we will characterize the key elements of high impact papers and review the development process of such studies. Students are expected to come fully prepared to discuss and critique the readings that are assigned to each class meeting (see details below). Each student will serve as the discussion leader for one or more of the class sessions. Discussion leaders are expected to critically review several articles, identify new insights in the research that is being reviewed and evaluate its contribution to the literature, position the articles within the literature on the subject matter, raise discussion question, and act as the discussion moderator for the class session. Each discussion leader is asked to prepare a one or two page summary of the assigned papers which includes a statement of the main research question(s), the methodology, data set if any, summary of findings, a commentary with your thoughts on the reading, and proposed discussion questions. Prior to each class, the discussion leader will meet the instructor to help plan the class meeting. Towards the end of each class meeting, each student will be asked to articulate a research question that emerged from the session and describe the research design used to investigate the issue.
Family firms differ in a number of ways from non-family firms. These differences may result in differential behavior by and performance of family firms versus non-family firms. Although family-controlled firms make up the vast majority of businesses around the world, academic research in this space is sparse. This seminar seeks to expose students to theoretical and empirical perspectives on family businesses. Throughout the course, we will focus on the ownership, control, and management issues that set family firms apart. We will focus on the main issues faced by family firms, and attempt to critically examine how, using a range of methodologies, researchers have approached these issues. As we review the literature, we will seek to identify promising research areas, which may be of interest to you in the context of your dissertation research. In addition to addressing the content of the received literature, we will examine the process of crafting research papers and getting them published in top tier journals. Towards that end, we will characterize the key elements of high-impact papers and review the development process of such studies. Students are expected to come fully prepared to discuss and critique the readings that are assigned to each class (see details below). Each class will center on discussing in depth 4-5 papers from the reading list assigned to that class. Before each class, I will let you know which papers to prepare. Each student will serve as the discussion leader for one of more of the class sessions. Discussion leaders are expected to critically review several articles, identify new insights in the research that is being reviewed and evaluate its contribution to the literature, position the articles within the literature on the subject matter, raise discussion questions, and act as the discussion moderator for the class session. Each discussion leader is asked to prepare a one or two page summary of the assigned papers which includes a statement of the main research question(s), the methodology, data set if any, summary of findings, a commentary with your thoughts on the reading, and proposed discussion questions. Prior to each class, the discussion leader will meet the instructor to help plan the class meeting. Towards the end of each class, each student will be asked to articulate a research question that emerged from the session and describe the research design used to investigate the issue.
Family companies -- some publicly traded, some private -- constitute about 80% of firms worldwide. But why does the family business model work better in some markets than others?Knowledge @ Wharton - 2016/05/31