Abstract
Drawing from organizational identity theory, we explore how family ownership and family expectations influence family firm image and entrepreneurial risk taking, and ultimately firm performance. We find support for a fully mediated model, utilizing a sample of 163 Swiss family firms. Family ownership was shown to positively influence the development of a family firm image. High family expectations of the firm leader was shown to promote a family firm image and risk taking. In turn, risk taking and family firm image contributed to firm performance. Accordingly, our study identifies why family ownership and family expectations can benefit family firm performance—through their influence on family firm image and entrepreneurial risk taking.
Highlights
An entrepreneurial orientation provides the entrepreneurial mindset and organizational impetus necessary for corporate entrepreneurship (Lumpkin & Dess, 1996; Memili, Lumpkin, & Dess, 2010)
Consistent with our predictions derived from organizational identity theory, family expectations were found to be associated with both entrepreneurial risk taking and family firm image, in our sample of family firms
While a family-related business culture may foster an entrepreneurial orientation (Nordqvist, in press), our results demonstrate that family expectations of the CEO encourages entrepreneurial risk taking in family firms, which enhances firm growth
Summary
An entrepreneurial orientation provides the entrepreneurial mindset and organizational impetus necessary for corporate entrepreneurship (Lumpkin & Dess, 1996; Memili, Lumpkin, & Dess, 2010). The underlying emphasis on the future and sustainability of the business makes the risk-taking. Higher levels of ownership concentration and intentions to maintain family control of the business have been associated with risk aversion (GomezMejıa, Haynes, Nun ̃ ez-Nickel, Jacobson, & Moyano-Fuentes, 2007; Schulze, Lubatkin, & Dino, 2003). Several studies have demonstrated the risk aversion tendencies of family business owners (Gomez-Mejıa, Nun ̃ ez-Nickel, & Gutierrez, 2001; Romano, A.Tanewski, & Smyrnios, 2001; Schulze, Lubatkin, Dino, & Buchholtz, 2001). The interplay between economic and noneconomic goals makes the risk-taking tendencies of family firm leaders difficult to predict (Gomez-Mejıa et al, 2007)
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