Defense Date

Fall 11-16-2016

Degree Type





Business Administration

Chair or Co-Chair

Torsten Pieper

Committee Member or Co-Chair

Joseph Astrachan


Thomas Zellweger


How a company structures its capital greatly affects its strategic options and its strategic decisions according to contemporary thinking. However, while there is ample literature on how publicly held companies’ capital should be structured, less is known about private companies. Additionally, one or more members of a single family typically own the majority of private companies, and unlike public companies, family dynamics influence these firms’ non-financial and financial goals and strategic decisions. This overlap of family dynamics into the business arena complicates conventional approaches or at least makes conventional approaches more difficult to apply.

This dissertation focuses on privately held, family-owned companies, and on how family dynamics challenge or make conventional approaches inapplicable or, at least, more complicated to apply. Utilizing a grounded theory-influenced approach on a sample of 11 family companies with different capital structures, the study explores the effects of family influence and family dynamics on capital structure decisions and vice versa in family owned companies. The qualitative inquiry took place in the South American country of Colombia, because this country is a representative capital market in Latin America from the financial development perspective, where the foreign investment growth has been high in the last years. The findings of this study advance the research of family dynamics and its effect on family business, and will be of help to family boards, managers, advisors, and family shareholders when making decisions on capital structure.