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Entrepreneurial orientation in family firms: a generational perspective

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Abstract

We adopt a generational perspective to investigate entrepreneurial orientation (EO) in family firms. We test a model that determines how the influence on EO of external factors and internal factors differs in first-, second- and third-and-beyond-generation family firms. We argue that while the founder is vital in the first generation, EO is more subject to interpretations of the competitive environment in the second generation and that in the third generation and beyond, access to non-family resources drives EO to a greater extent. Our findings show that perceptions of the competitive environment and EO correlate differently in family firms, depending on the generation in charge, and it is generally stronger in second-generation family firms. Further, we find that non-family managers on the top management team makes a positive difference for EO only in the third-generation and beyond family firms. The significance of non-family investors’ on EO is particularly strong in third-generation-and-beyond firms.

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Notes

  1. There is no agreed-upon convention among scholars as to the appropriate definition of a family firm. Our definition follows Astrachan and Kolenko (1994) who suggest that a family has to own at least 50% of the business in a private company in order to qualify as a family firm.

  2. Following previous studies (Harrison and Mason 1992), regarding private investors, we distinguished “professional business angels” from other informal investors, the so-called 3Fs, family, friends and fools.

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Acknowledgments

The authors thank the four guest editors and two reviewers for their constructive and helpful feedback on previous versions of this article. Mattias Nordqvist thanks The Bank of Sweden Tercentenary Foundation and Center for Family Enterprise and Ownership (CeFEO) for generous financial support.

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Authors and Affiliations

  1. Instituto de Empresa, Calle Maria de Molina 11, 13, 15, 28006, Madrid, Spain

    Cristina Cruz

  2. Jönköping International Business School, P.O. Box 1026, SE-551 11, Jönköping, Sweden

    Mattias Nordqvist

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  1. Cristina Cruz
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  2. Mattias Nordqvist
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Correspondence to Mattias Nordqvist.

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Cruz, C., Nordqvist, M. Entrepreneurial orientation in family firms: a generational perspective. Small Bus Econ 38, 33–49 (2012). https://doi.org/10.1007/s11187-010-9265-8

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