Does familial decision control affect the entrepreneurial orientation of family firms? The moderating role of family relationships

Abstract

Drawing on the theory of socioemotional wealth (SEW), we propose that family relationships have implications for entrepreneurial orientation (EO) through enhancing energy and reducing stress, and that this is especially important when family decision-making is not inclined towards EO. Survey data from 528 family firms, collected from across China, generally supports our model, which in turn explains the heterogeneity behind family firms’ priorities and routines. The results indicated that family decision control negatively affects a firm’s EO, while family cohesion and adaptability play a negative moderating role in this relationship. Our findings help explain how family provides a powerful source of motivation that can boost EO in the family business, offering meaningful implications for research on entrepreneurship.