Entrepreneurship and Family Business Vitality

Financial and non-financial wealth in the family company has been a subject of discussion by several authors, placing family and profitability as the focus of their leaders’ decisions. In this study, we explain how the relevant variables work together to defend this wealth while considering the management of emotional and social intelligence and considering innovation and risk factors as elements of the decisions taken by the leading members of the family business. Through theoretical review, the authors present the wealth of socioemotional intelligence matrix or SEIW matrix, and according to the use of this socioemotional intelligence, four types of enterprises can be defined, which in turn takes us to pose the three-dimensional model Dual-SEIW as a solution. This model establishes, for the stakeholders, a performance profile of the business where the priorities are money and family.

In this chapter, the socio-emotional wealth perspective is used to understand how, during phases of economic recession, a company’s family nature can influence its decision-making processes and the implementation of an ambidextrous strategy, as well as its effectiveness. A qualitative analysis based on a case study is presented in this chapter. The analyzed case involves an Italian family-owned small business that faced the recent economic crisis adopting a mix of defensive and offensive strategies. Thanks to this balanced—ambidextrous—strategy, the company was able to limit the impact of the crisis and then to recover positive profit margins. This study contributes to the extant literature by shedding light on how the aim of preserving the socio-emotional wealth can influence small family firms’ ability to adopt ambidextrous strategies in order to face an economic recession.

This chapter sheds light on family business employees’ change-oriented and proactive behaviors and the structural conditions they find to support or hinder these behaviors. A study consisting of 20 semi-structured interviews with family business owners and employees is reported. The results give the first idea for linkages to existing theory in family business research and can be seen as a basis for additional theoretical considerations as well as empirical studies.

This chapter examines the influence of informal institutions on the probability of becoming an entrepreneurial leader. In this regard, institutional economics is used to frame the hypotheses that relate to environmental factors and entrepreneurial leadership. These hypotheses are tested through logistic regression analysis, using a sample of 67,268 individuals from the World Values Survey (WVS) for 50 countries. The main findings show that informal institutions such as independence, risk-taking, and networking increase the probability of becoming an entrepreneurial leader. Also, networking and religious faith moderate the relationship between independence and entrepreneurial leadership. The contributions of this chapter are both conceptual, regarding development in the field of leadership and entrepreneurship and practices concerning business and education.

The objective of this research study involves analyzing the capacities of family firms to absorb relevant information about the external environment and to incorporate this into their innovation-focused activities before then consequently analyzing the repercussions for innovation performance. This furthermore seeks to grasp whether, and to what extent, the generational diversity in the firm’s management represents a valuable resource. In order to obtain these objectives, we opted for a quantitative study with the data collected by a questionnaire sent out by email to the managers of Brazilian firms, specifically those with their headquarters in the state of Rio Grande do Sul and registered with the Rio Grande do Sul Industrial Federation. The results of this study provide recognition of ACAP as an important predictor of FF innovation performance. In particular, the findings suggest that the potential absorptive capacity (PACAP) generates a positive and significant effect on the realized absorptive capacity (RACAP). We may also report the positive and significant effect of PACAP on the incremental innovation performance and, similarly, for the RACAP influence on the radical innovation performance. Contrary to that expected, however, the results point to generational diversity in the management of the FF which is not a significant moderator between ACAP and innovation performance.

Using APS GEM (Global Entrepreneurship Monitor) data, the authors use a multidimensional analysis based on a regression analysis of a nonlinear (cubic) polynomial equation between senior entrepreneurship and the United Nations’ human development index to define territorial maps of senior entrepreneurship (SE). The objective of analyzing these maps is to know (a) which are the strongest nations of the world concerning SE, (b) if SE differs among countries, and (c) which are the main factors affecting SE. Our results suggest that SE will increase in the coming years due to the aging of the population (“Papy boom”), especially in Europe and to a lesser extent in some regions of the United States and Japan. Finally, and related to SE, four groups of countries can be formed.

Relationship conflicts between family members can have disastrous consequences on the performance of the family firm (FF) and even endanger its continuity. This study examines the relationship between family influence, relationship conflicts, and the organizational effectiveness of FF. Using a sample of 102 Spanish FFs, the authors analyzed the data using a partial least squares structural equation model. The results show that the involvement of family members in the ownership and on the boards of governance and management enhance the incorporation of the family values and culture into the firm and thus reduce relationship conflicts. More importantly, we find a negative relation between relationship conflicts and the effectiveness of FF.

Nowadays, knowledge is considered a critical resource through which organizations can develop sustainable competitive advantages and obtain superior results by allowing to transform themselves and to adapt to their environment. Hence, this research has a double purpose: first, to explore how commitment to learning determines the development of knowledge management practices (mainly, generation, flow, and storage) and how such practices impact small-sized and midsized firms’ strategic renewal and, second, to explore if previous relationships are different for family and nonfamily firms. To test our model, we conducted an empirical study based on a sample of 238 Spanish small- and medium-sized enterprises. Structural equation modeling in the form of partial least squares was used to test the measurement model and hypotheses. In order to assess the moderating effects of organizational context (differences among family and nonfamily firms), we adopted a multi-group approach using two subsamples. Results show that commitment to learning and knowledge management practices are the main undercurrent of strategic renewal. Furthermore, family and nonfamily firms are less heterogeneous than we expected at first sight.

This work addresses how information systems and training-learning affect the innovation of productive processes and in turn how they influence the performance of the agricultural banana companies (AC). Particularly, it analyzes the moderation effect that being a family farm exerts on these relationships. To do that we apply partial least square technique to 416 AC in the province of El Oro—Republic of Ecuador. Data were obtained by an in hand self-administered questionnaire addressed in 2017 to the owners and managers of these businesses. The results show that (1) information systems contribute significantly to the innovation of productive processes of AC. It also contributes directly and significantly to the performance of the AC as well as through the innovation of productive processes mediation; (2) training directly and significantly influences the innovation of productive processes, but not on performance, which it influences only through the mediation effect of the innovation of productive processes; (3) innovation of productive processes significantly affects the performance of the AC Further, we demonstrate the moderating effect that the family farms have on the information systems—the innovation of productive processes—performance relationship.

This chapter explores the influence of CEO attributes on the internationalization-performance relationships of private family firms. Drawing on the upper echelon theory and the socioemotional wealth perspective, this research posits that CEOs play a crucial role in the internationalization of private family firms and that some of their attributes have moderating effects on the internationalization-performance relationship. Using cross-sectional data of 319 private family firms that expanded abroad, we find that both the family and the generational status of the CEO moderate the relationship between internationalization and firm performance.

Family firms’ (FFs) importance for industrialized and developing countries and the growing competition has led to an increased interest in knowing how FFs develop their competitive strategies. Since FFs usually have a long-term vision when deciding how to compete, analyzing competitive strategies—usually linked with the long-term—makes even more sense. Furthermore, FFs’ behavior is especially interesting when they have been internationalized. Thus, the purpose of our study is to improve the understanding of the competitive strategies of FFs’ internationalizing to Mexico, namely, exploitation (at a national level) and exploration (at international level). Briefly, a firm’s exploitation strategy is characterized by better-using firms’ existing resources and knowledge, whereas a firm’s exploration strategy involves exploring new ways of doing. Based on data collected from 81 CEOs of Spanish firms that have been internationalized to Mexico, we use partial least squares structural equation modeling (PLS-SEM) technique. We conclude that FFs’ exploitation strategy (at a national level) has a positive impact on firms’ exploration strategy (at international level). In other words, being more efficient and leveraging current knowledge at a national level help to pursue opportunities internationally actively.

The objective of this study is to explore whether factors related to the focus of both the ability of the CEO to interpret the environmental signals and identify business opportunities and the characteristics of the firm in terms of previous innovation experience and ability to learn from that experience can determine the decision to enter into corporate venturing (CV) in Mexican family firms. Besides, we will consider the moderating effect of family members’ willingness to change on these relationships. In order to explore the proposed relationships, a theoretical framework that encompasses arguments from the resource-based view, the knowledge-based view, and the upper-echelons theory are used. To test our hypotheses, we conducted a study among CEOs in Mexican family firms of all sizes and performed a binomial logistic regression analysis based on a sample of 136 family companies across all sectors. The results obtained indicate that individual and firm variables are highly significant. All the variables except organizational learning, the effect of which is adverse, demonstrated positive effects, and this variable, also, is the only one moderated by the willingness to change.

Family firms contribute substantially to the economy of a country. Thus, it is surprising that few studies have considered these firms as an object of analysis, especially regarding the importance of innovation to their economic performance. In an attempt to fill this gap, this paper assesses the importance of innovation and technological capabilities in the performance of family firms in Portugal. Based on a sample comprising 230 firms, 110 of which are family-owned, and on econometric estimation methods, we show that internal factors are more relevant in explaining family firms’ economic performance than contextual factors. Family firms run by CEOs with a degree in engineering or with CEOs and management teams with more international experience tend, on average, to present higher levels of productivity. Additionally, the firms that are more experienced in business and more internationalized are also more productive generally. Notwithstanding family firms being less intensive in R&D than nonfamily ones, innovation is one of the most critical determinants for the performance of the former. Besides the relevance of technological- and innovation-related skills mirrored by investment in R&D, the result of innovation, reflected in the successful introduction of innovations (in marketing and combined), emerges as highly relevant statistically, playing a decisive role in the economic performance of family firms. Family firms that are located in economically less developed regions tend, on average, to present higher productivity levels. This seems to indicate that family firms may constitute a driver of regional convergence regarding dynamics and development.

This research aimed to identify the level of fulfillment of the four sustainability dimensions included in the RISE model, in three diving enterprises located in the Archipelago of San Andres. This model was developed at EAN University by the G3Pymes Research Group, which is rated A1 by Colciencias (Administrative Department of Science Technology and Innovation in Colombia). The model is composed of a diagnosis matrix that includes the following factors: innovation, sustainable production, leadership, strategic direction, organizational culture, collaborative processes, recognition, governance, new markets, technology, and financial indicators. Each factor is analyzed under the following four dimensions: (1) environmental, (2) economic, (3) social, and (4) managerial. The matrix measures the maturity level of each enterprise related to each dimension and factor. The results provided by the matrix, along with interviews performed in each enterprise, lead to a path for innovation and corporate sustainability. This path contains specific activities tailored to make improvements in each factor and dimension for which results were low. The expectation of performing this study is to motivate academic, industrial, and government institutions to use this model in order to boost best social, environmental, managerial, and economic practices.