We apply a key construct from the entrepreneurship field, entrepreneurial orientation (EO), in the context of long-lived family firms. Our qualitative in-depth case studies show that a permanently high level of the five EO dimensions is not a necessary condition for long-term success, as traditional entrepreneurship and EO literature implicitly suggest. Rather, we claim that the level of EO is dynamically adapted over time and that the original EO scales (autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness) do not sufficiently capture the full extent of entrepreneurial behaviors in long-lived family firms. Based on these considerations we suggest extending the existing EO scales to provide a more fine-grained depiction of firm-level corporate entrepreneurship in long-lived family firms
Die vorliegende Studie geht der Frage nach, wie emotionale Aspekte im Zusammenhang mit Unternehmenseigentum bewertet werden. Sie gibt einen vertieften Einblick in die Psychologie von Unternehmensbesitzern, für die eben nicht nur der finanzielle Wert zählt, sondern für die emotionale Gesichtspunkte eine überaus wichtige Rolle spielen. Unsere Studie analysiert wichtige Einflussfaktoren und nimmt auch eine quantitative Bewertung der emotionalen Komponente vor.
Recent evidence suggests that successors do not simply inherit their parents' firm, but have to pay a certain price. Building on institutional logics literature, we explore successors' family discount expectations, defined as the rebate expected from parents in comparison to nonfamily buyers when assuming control of the firm. We find that family cohesion increases discount expectations while successors' fear of failure and family equity stake in the firm decrease discount expectations. Higher education in business or economics weakens these effects. On average, in our study comprised of 16 countries, successors expect a 57% family discount.
Building on institutional theory and family sociology literature we explore the logics that underlie the formation of transaction price expectations related to the intergenerational transfer of corporate ownership in private family firms. By probing a sample of 3'487 students with family business background from 20 countries we show that next generation family members expect to receive a 56.58% discount in comparison to some nonfamily buyer (i.e. the family discount) when taking over the parent's firm. We also show that the logic underlying the formation of family discount expectations is characterized by parental altruism, filial reciprocity, filial decency and parental inducement. These norms embrace both the family and market logics and accommodate the duties and demands of children and parents in determining a fair transfer price. These findings are important for institutional theory as well as for family business and entrepreneurial exit literatures.
This paper develops a social identity based rationale for why firms strive for non-pecuniary performance outcomes. It extends current social and financial rationales for such motivations. Drawing from social identity and organizational reputation theories, we show that identity overlaps between managers and organizations create incentives to protect and build corporate reputation. These incentives motivate managers to produce non-pecuniary performance outcomes that satisfy stakeholders. We argue that emotional bonds of managers to their organizations create identity overlaps. Further, the incentives to build and protect corporate reputation is moderated by the type of the manager's commitment. We use the family business, a particularly high identity overlap organization, as a context to explore our arguments. Propositions and future directions are included.
This paper develops an organizational identity based rationale for why family firms strive for nonfinancial goals. We show that the visibility of the family in the firm, the transgenerational sustainability intentions of the family, and the capability of the firm for self-enhancement of the family positively influence the importance of identity fit between family and firm as well as the family's concern for corporate reputation. We suggest that the concern for corporate reputation leads the family to pursue nonfinancial goals to the benefit of nonfamily stakeholders. We also discuss reinforcing feedback loops in these processes
While existing research on the longevity of family firms has focused on the survival of firms, this article investigates transgenerational entrepreneurship of families. By building on the transgenerational entrepreneurship research framework, we argue that by shifting from firm to family level of analysis, we gain a deeper understanding of family firms' ability to create value across generations. We find evidence for our argument in that such a level shift reveals extended entrepreneurial activity which is missed when focusing exclusively on the firm level. We introduce and empirically explore the construct of family entrepreneurial orientation (FEO) which may serve as an antecedent to transgenerational value creation by families.
Based on recent calls by researchers to apply concepts established in entrepreneurship theory in the family business context in order to advance both fields of research, this chapter examines to what degree the EO construct explains business activity of trans-generational firms. In particular, we challenge the fundamental claim by entrepreneurship scholars that the more entrepreneurial the firm, the higher it scores in the five EO dimensions and the more successful it should be over time. Indeed, a wide stream of literature proposes that entrepreneurial attitudes and behavior are crucial antecedents for a company's short- and long-term success (Dess, Ireland, Zahra, Janney & Lane, 2003; Zahra & Covin, 1995).
Applying a behavioral perspective, we investigate how threats to firm survival, measured through reduced performance and heightened leverage, impact risk perceptions among family firm owners. More specifically, we test whether socioemotional biases induced by duration of family ownership and transgenerational sustainability intentions, alter the negative relationship between low profitability and high leverage on the acceptable sale price of the firm. In extension to existing literature on family owners' risk perceptions and organizational risk taking, our study finds increased risk sensitivity for family owners with long ownership traditions, whereas transgenerational sustainability intentions do not bias the negative relationship of low profitability and high leverage on acceptable sale price
