Entrepreneurial Behavior in Family Business: Do Steward-oriented Managers Matter?

Abstract

Although the literature on entrepreneurial behavior of family firms has been accumulating, the causes remain inconclusive. While some view family businesses as the breeding ground of innovation and entrepreneurship, others consider family businesses conservative and resistant to change. Drawing on the stewardship perspective, this study aims to argue how managers' stewardship orientation, in terms of decision comprehensiveness, participative governance and long-term orientation, shapes firm innovativeness through altering the company-wide explorative orientation. In a sample of 186 Taiwanese family firms, the empirical results show that stewardship orientation drives managers to initiate explorative activities which in turn enhance the performance of new product development (NPD). Furthermore, the NPD performance effect of stewardship orientation is strengthened in the presence of family social capital. Our study contributes to entrepreneurship literature by highlighting the importance of managers' stewardship orientation to the entrepreneurial orientation and the innovation outcome in the context of family business.