Entrepreneurship In Family Firms Research Articles

Corporate Entrepreneurship in Family Firms: The Roles of Family Commitment and Long-Term Orientation

Corporate Entrepreneurship in Family Firms: The Roles of Family Commitment and Long-Term Orientation

The Balancing Act: Ownership Structure and Market Dynamism in Entrepreneurial Family Firms

The Balancing Act: Ownership Structure and Market Dynamism in Entrepreneurial Family Firms

Does family power drive the size transition of entrepreneurial family firms? A study on the growth of Italian manufacturing firms

PurposeThis paper explores the drivers and inhibitors of the transition of entrepreneurial family firms from small to large firms. We adopt two contrasting theoretical perspectives, i.e. agency and stewardship, to explore the effects of family power on size transition.Design/methodology/approachWe adopted an original research design that leverages a unique longitudinal database built starting from the list of the 500 best Italian manufacturing family firms published by the AUB Monitor in 2018. Specifically, we tested our hypotheses using a comprehensive set of financial and governance data from 89 Italian manufacturing family firms covering a 10-year period. To test our hypotheses, we conducted a survival analysis using a Cox regression.FindingsWe find an inverted U-shaped relationship between family involvement in ownership and size transition: size transition is more likely to happen at intermediate levels of family involvement in ownership. Additionally, our analysis shows that family involvement in the board of directors negatively impacts size transition, while the presence of a family CEO has a positive influence.Originality/valueTo the best of our knowledge, this study represents the first exploration of the phenomenon of size transition within entrepreneurial family firms. We believe it was worthwhile for two reasons. First, small size is frequently regarded as a weakness when competing in international markets, investing in R&D, or rewarding shareholders. Second, since small family firms are the major contributors to the world economy, understanding the factors that facilitate their transition to large firms can have a significant impact on overall economic development and prosperity.

The Dark Side of Family Embeddedness: Family Firms Engagement in Private-Sector Corruption

This research analyzes how family embeddedness affects the decision of owners in charge of small entrepreneurial family firms operating in an emerging country to participate in private-sector corruption. Prior research has typically assumed that those in charge of family firms choose to participate in corruption to receive an immediate economic benefit. We challenge this assumption and argue that family influences the decision of the owner of small entrepreneurial family firms to participate in private-sector corruption driven by the pursuit of both short-term economic (profit maximization) and long-term non-economic goals, including attaining upper social class status (even if this decreases economic gains) for the family unit. We further find that in the context of an emerging market, trusted intermediaries can be seen as family members by the owners in charge of small entrepreneurial family firms and can influence them to participate in illicit activities. We also contend that those in charge of small entrepreneurial family businesses manage participation in private-sector corruption by dissociating and framing means.

Leadership Succession and Transgenerational Entrepreneurship in Family Firms: an Evolutionary Perspective of Familiness

This article analyses how familiness influences the evolution of entrepreneurial actions undertaken by new-generation family leaders. Despite the recognised importance of familiness in family firms’ entrepreneurship, the mechanism by which it influences transgenerational entrepreneurship during leadership succession remains largely unexplored. Through qualitative analysis of the entrepreneurial processes carried out by five multigenerational family firms, we identify how resources associated with familiness shape strategic renewal and their evolution across the transgenerational entrepreneurship process. Our results shed light on the critical role of leaders’ managerial capabilities in orchestrating the resources of family firms and engaging key stakeholders to support entrepreneurial ventures and growth opportunities. Among the practical contributions, the article offers a set of strategies for assisting new leaders of family firms in their entrepreneurial pursuits.

Family business origin and investment preference: An empirical study of imprinting theory

Family businesses in China differ acutely with respect to their historical origins. The initial institutional differences based on their origins affect investment behavior, which then impacts on the real economy. This paper investigates how the origins of family businesses affect their investment preferences. Using data on Chinese family firms for the period 2009–2021, we find that family businesses restructured by state-owned enterprises (SOEs) make more financial investments than those established through entrepreneurial activities. The period during which the business is under the control of the founding family and intergenerational succession moderates the differences in investment preferences between restructured and entrepreneurial family businesses, while the time of being as an SOE can strengthen the differences. Mechanism tests demonstrate that restructured family firms (RFFs) participate in less risky activities than entrepreneurial family firms (EFFs), suggesting that preference imprinting contributes to divergent investments. Such a divergence is unlikely to be driven by differences in entrepreneurship, agency costs, or resource endowments. Following robustness tests and after overcoming endogeneity problems, our results remain conclusive. Overall, this study demonstrates that a business's risk propensity during its founding phase has a long-term impact on future preferences.

Entrepreneurship in family firms: What’s next? Multilevel embeddedness and individuals’ cognition

This special issue contributes to the literature on entrepreneurship in family firms by leveraging the family embeddedness perspective. In doing so, the papers of the special issue bridge entrepreneurship at firm level with analyses at the individual and the enterprising family levels. Starting from and extending such contributions, in this introductory article we offer a “multilevel” embeddedness perspective on entrepreneurship in family firms. We do so first by considering that, in family firms, each individual's cognition ultimately depends on whether they belong to the enterprising family, and whether and how they are active in the family business. Second, we advance that individual entrepreneurial orientation is a key cognitive factor resulting from the multilevel embeddedness and bridging it with entrepreneurship at firm level. We derive theoretical implications for entrepreneurship in family business and highlight avenues for future research.

Non-family shareholder governance and green innovation of family firms: A socio-emotional wealth theory perspective

We draw on socio-emotional wealth (SEW) theory to investigate the influence of non-family shareholder governance (NFSG) on green innovation in family firms. We find that non-family shareholder holding has no significant impact on green innovation, but the directors appointed by non-family shareholders (NFSDAs) significantly promote the implementation of green innovation strategies in family firms. The underlying mechanisms are characterized by NFSG bringing valuable resources and promoting the firm reputation, which further facilitates green innovation. The effect of NFSG is more pronounced for entrepreneurial family firms and family firms located in high institutional efficiency areas. The green professional backgrounds of NFSDAs and having excess NFSDAs also effectively promote green innovation. Finally, green innovation promotes the long-term orientation of family firms. Through this study, we draw on SEW theory to enrich research on NFSG and green innovation in family firms. Our findings can help family firms achieve a solid basis for long-term orientation.

Entrepreneurship in family firms: an updated bibliometric overview

Research on entrepreneurship in family firms has grown exponentially over the past two decades. Due to the various theoretical perspectives and contexts found here however, this body of research remains fragmented, with a unified understanding of the current state of knowledge and the opportunities for future research in the field continuing to lack. In this study, we address this gap by conducting an updated bibliometric analysis of the research on entrepreneurship in family firms. Here we integrate two different bibliometric methods to provide a more comprehensive picture of the field, unveiling its intellectual foundations and current research discourses and how these two are related. To do this, we first conduct a co-citation analysis clustering the intellectual foundations of the research on entrepreneurship in family firms. Second, a bibliographic coupling of recent publications from 2010 to 2021 provides a transparent structure of current research discourses. Third, analyzing which intellectual foundations are primarily cited in each current research stream unveils the dominant theoretical paradigms in the current state of research. Analyzing 570 published studies, we identified four intellectual foundations of entrepreneurship in family firms: socioemotional wealth (SEW), entrepreneurial orientation, family-embedded resources, and agency theory. The current research can be clustered into seven main discourses: entrepreneurial motivation, gender and success, entrepreneurial orientation, individual and firm-level characteristics, the family embedded network, family firm internationalization, and family heterogeneity. An integrative network diagram provides an overview of the research field’s development while also identifying the gaps to be addressed by future research.

The Entrepreneur’s Multiple Identities Dynamic Interaction and Strategic Entrepreneurial Behavior: A Case Study Based on Grounded Theory

Family firms face many uncertainties in a dynamic entrepreneurial context. Previous studies have shown strategic entrepreneurship can help firms effectively cope with uncertainties. There are few studies on how family-firm entrepreneurs make strategic decisions and engage in strategic entrepreneurial behavior. This may prevent managers lacking the necessary action guidelines from effectively implementing entrepreneurial behavior. we aim to explore the micro-behavioral mechanisms of strategic entrepreneurship in family firms. A longitudinal single case study based on grounded theory was conducted to explore these issues. Results show that (i) the entrepreneur's identity will constantly evolve to adapt to the entrepreneurial context during the life cycle of the corporation; (ii) entrepreneurs influence strategic entrepreneurial activities through the dynamic evolution and interaction of their identities; (iii) different entrepreneurial emotional states affect the strategic entrepreneurial behavior mechanisms. As a result, dynamic interactions between entrepreneurial identities have a significant impact on emotional states such as entrepreneurial well-being, which may significantly affect the implementation pattern of strategic entrepreneurial behaviors and the sustainable development of the firm. This paper provides a novel theoretical perspective on the path and behavioral choices of strategic entrepreneurship in firms, and also provides action guidelines and theoretical references for family business managers to implement strategic entrepreneurial behavior.

Family firm ambidexterity: the influence of paradoxical tensions and the Entrepreneurial Family’s cohesion

This study presents paradoxical tensions as the ‘missing link’ at the intersection of the entrepreneurial family and family firm management: a link that crucially affects innovation-related decisions such as ambidexterity. Specifically, the study argues that the relationship between family cohesion and organizational ambidexterity within entrepreneurial family firms is mediated by paradoxical tensions (latent and salient). Drawing on survey data from 206 German family firms, support is found for the hypotheses advanced. Building on cognitive resource theory, this study demonstrates that differently perceived paradoxical tensions in entrepreneurial family firms have different meaningful effects on organizational ambidexterity. Implications for theory and future research are discussed.

Origin matters: Institutional imprinting and family firm innovation in China

During the early 1990s, a swathe of small state-owned enterprises (SOEs) was privatized as family businesses in China. This paper examines whether and how the origin (i.e., restructured vs. entrepreneurial) of family firms affects corporate innovation. Using the data of Chinese family firms from 2009 to 2018, we find that restructured family firms generate fewer patents generally than entrepreneurial family firms, but create more high-quality patents than their entrepreneurial counterparts. This effect is more pronounced for those family firms which had formerly been SOEs for a more extended period, without generational succession, and previously controlled by governments entirely. Further mechanism tests show that restructured family firms have a higher likelihood of hiring professional managers, are subject to less intervention from family members, and have fewer informal hierarchies, providing direct evidence for the institutional imprinting channel. Our findings suggest that the institutional imprint underlying the origin of family firms can be critical to their innovation decisions.

Transgenerational entrepreneurship in family firms: a configurational approach

Transgenerational entrepreneurship in family firms: a configurational approach

Growth implications of creation and discovery behavior among family firms: the moderating role of venture age

PurposeThe aim of the study is to examine the effects of opportunity creation and discovery on the performance of family firms. Specifically, from the tenets of dynamic capabilities and organizational contingency perspectives, this study proposes and tests a framework of how family firms' creation and discovery behavior impact venture growth and the conditions under which such impact can vary.Design/methodology/approachThe study uses moderated-hierarchical regression to analyze survey data from 156 family-owned small and medium-sized enterprises (SMEs) operating within a sub-Saharan African economy.FindingsThe findings indicate that creation behavior has a curvilinear U-shaped relationship with venture growth, while discovery behavior has a direct positive relationship with venture growth. Further analysis reveals that the curvilinearity of the U-shaped relationship between creation and venture growth will be stronger for older family firms than for younger ones.Research limitations/implicationsThe study findings may be limited by the cross-sectional nature of the data and the specific focus on family firms only.Practical implicationsThe results highlight the significance of pursuing both opportunities among family firms. In fact, both creation and discovery opportunities are significant drivers of family firm growth, albeit in different capacities. Relatedly, managers of older family firms (compared to younger firms) can invest more in exploiting creative opportunities.Social implicationsFrom these findings, governments and other stakeholders should create enabling environment and institutional frameworks conducive to exploiting opportunities by entrepreneurial firms.Originality/valueThe study is novel – as it provides unique findings on the performance implications of creation and discovery behavior of entrepreneurial family firms within developing economies.

Origin matters: How does institution imprint affect family business TFP?

Initial imprint rooted in family business origin renders us great support to identify how current institution conditions and then governance characteristics influence productivity. This study investigates an underexplored institutional imprint effect moulded amid the central planning-to-market orienting transition—the lasting influence of family business origin. Focusing on China, we find that restructured family firms have higher TFPs compared with their entrepreneurial counterparts, thanks to institutional imprint differences. The effect is causal and barely varied with CEO's professional capacity and economic policy uncertainty. The imprints of institutional environment in founding phase and incurred current behavior preferences contribute to divergent productivities, isolating the effect of intervention from the alternative explanation about resource endowment discrepancy across restructured and entrepreneurial family firms.

Entrepreneurial Leadership in Austrian Family SMEs: A Configurational Approach

This article explores the role of stewardship practices related to entrepreneurial leadership in turning entrepreneurial orientation (EO) into family firm performance while considering its environmental context. Family business research has not fully investigated how the EO–financial performance relationship depends on configurations of internal and external factors which establish strategic fit. We argue that family firms can overcome the often-highlighted paternalism-entrepreneurship paradox by employing stewardship practices related to entrepreneurial leadership (internal factor), which in turn can help them leverage strategic fit between EO and dynamic environments (external factor). The results of a survey of 162 Austrian small and medium-sized family enterprises (family SMEs) show that family SMEs can only profit from EO under certain configurations of internal and external factors. Employing stewardship practices related to entrepreneurial leadership turns out to be an efficient and necessary condition for transforming EO into performance. Environmental dynamism is, furthermore, a double-edged sword facilitating and impeding the transformation of EO into performance. These findings contribute to existing research by shedding light on the role of stewardship practices in establishing strategic fit in entrepreneurial family firms.

Growth Experiences of the Second Generation and Portfolio Entrepreneurship in Family Firms: Insights from the Imprinting Theory

Portfolio entrepreneurship refers to the simultaneous identification and utilization of two or more business opportunities, and is an important means for family firms to address the dual challenges of intergenerational inheritance and upgrading. In fact, the essence of entrepreneurship is the process of identifying and utilizing opportunities, in which the cognition and ability shaped by entrepreneurs’ own experiences play an important role. In the context of inheritance, the second generation is the main family entrepreneur, so studying the antecedents of portfolio entrepreneurship requires examining the second generation’s growth experiences. Given this, our study proposes a model of the second generation’s growth experiences, industry prosperity and portfolio entrepreneurship, and constructs the hypothesis based on the imprinting theory.The study empirically tests the hypothesis using an ordinal logistic regression on a sample of 215 Chinese listed family firms during 2004—2016. The results show that the second generation with the experience of witnessing parental entrepreneurial process, studying abroad and working outside family firms will form values, beliefs and norms distinct from their parents, resulting in strong entrepreneurial intentions. At the same time, they possess strong information identification ability, resource acquisition ability and risk-taking ability, thus they are able to promote portfolio entrepreneurship. Furthermore, the lower industry prosperity will reduce the second generation’s identification with family firms, make them have a stronger entrepreneurial intention, and promote them to carry out entrepreneurial learning, strengthen their entrepreneurship ability, thus promote the portfolio entrepreneurship. Additionally, the second generation with the above growth experiences is more willing to enter high prosperity industries.The study makes several theoretical contributions: First, it focuses on the relationship between the second generation’s growth experiences and portfolio entrepreneurship, which enriches the antecedent of portfolio entrepreneurship. Second, it explains the formation of entrepreneurs’ cognition and ability from the historical perspective, breaking through the limitations of previous static studies. Third, it finds that the impact of the second generation’s imprint varies with industry prosperity, which not only expands the application scope of the imprinting theory, but also enriches the contextual factors of family entrepreneurship.The practical implications are that: First, family firms need to develop appropriate training plans for successors to nurture transgenerational entrepreneurship. Second, decision-makers of family firms should avoid the constraints of the imprint formed by experiences.

Old flames never die – the role of binding social ties for corporate entrepreneurship in family firms

This paper investigates the role of social ties and family embeddedness for corporate entrepreneurship in family firms. Family firms are mostly characterized by close and often inseparable ties between the dominant family coalition and the firm and offer specific resources within a context of both rational as well as non-rational factors that influence entrepreneurial strategies. We empirically test (n = 181) the relationship between binding social ties and innovation, strategic renewal, and corporate venturing. Our findings indicate a strong significance for networks and close and stable relationships both to inside the firm and the outside in decision making for corporate venturing and innovation. In contrast, the results for strategic renewal show no relevance of strong social ties. We link up with the debate on the role of owners as an important stakeholder group.

System‐Spanning Values Work and Entrepreneurial Growth in Family Firms

AbstractCulture and values are key drivers of corporate entrepreneurship in early stages of family firm development, but value conflicts often arise over time that progressively inhibit their entrepreneurial efforts. How can family firms reconcile conflicting values to sustain corporate entrepreneurship over time? Our 45‐year longitudinal case study of a large global family firm shows that family business leaders’ practices of invoking and flexibly using family and business values were crucial to achieve sustained entrepreneurial behaviour and growth over an extended period of time. We theorize these efforts as system‐spanning values work enfolding through specific family, business, and temporal mechanisms. By identifying and elucidating three types of values work (i.e., rooting, revitalizing, and spreading), our study advances current understanding of the micro‐foundations underpinning the relationship between values and entrepreneurship in family firms.

A Causal Mechanistic Perspective on Micro-Foundations in Family Business: The Case of CE

This paper is a conceptual contribution to the debate on micro- foundations in family business research. We advocate a causal- mechanistic approach to micro-foundations which is centered on the notion of causal mechanisms as responsible for the emergence of phenomena at the organizational level, such as corporate entrepreneurship in family firms. We distinguish two alternative purposes of the research process that can take advantage from it: prediction and explanation. First, we argue that knowledge of causal mechanisms can be exploited when testing hypothesis that draw on the mechanistic potential of dominant theories in family business research thus leading to better predictions. Second, we show how the mechanistic reasoning is a natural ally of major forms of explanation in the field thus improving current explanatory accounts in terms of internal validity, completeness and accuracy. The paper concludes by summarizing the epistemic benefits of the causal-mechanistic approach and offering suggestions for future research.