Entrepreneurial Orientation and Family Firm Performance: The Moderating Role of TMT Identity-Based and Knowledge-Based Faultlines

Abstract

Research has shown that entrepreneurial orientation (EO) is positively associated with performance, but several context-specific features and contingencies affect this relationship. Accordingly, this article focuses on the specific context of family firms (FFs) and introduces top management team (TMT) faultlines as moderators. The main findings, obtained on a sample of 111 medium- and large-sized FFs, suggest that strong identity-based faultlines (IBFs) negatively moderate the EO–FF performance relationship, even within TMTs that are comprised only of family members, which are often viewed as homogeneous teams. Conversely, strong knowledge-based faultlines (KBFs) amplify the positive effect of EO on FF performance.

Entrepreneurial orientation, competitive advantage and strategic knowledge management capability in Malaysian family firms

“…For example, some studies report mixed effects from autonomy on firm performance (Casillas and Moreno, 2010) and non-significant effects from innovativeness, proactiveness and risk-taking (Garce ´s- Galdeano et al, 2016;Madison et al, 2014). Other studies, however, report some positive effects from EO or its dimensions on family firm performance (Arzubiaga et al, 2019;Calabro `et al, 2020;Campbell and Park, 2016). The performance benefits of manifesting EO and its dimensions among family firms are inconclusive.…”

“…Firstly, we contribute to the theoretical advancement of EO among family firms (Calabro èt al., 2020;Hern andez-Linares and L opez-Fern andez, 2018;Hughes et al, 2018b) and knowledge management capability (Martinez-Conesa et al, 2017;Cabrilo and Dahms, 2018). Hern andez-Linares and L opez-Fern andez (2018), McKenny et al (2018), Covin and Wales (2019), Wales et al (2020) and Yin et al (2020) call for a nuanced examination of EO dimensions in different contexts, and specifically with strategic capabilities as contingencies (Calabro `et al, 2020). We relax the conceptualization of EO to configure its dimensions with SKM capability.…”

“…Nevertheless, differences in knowledge management capability have so far escaped study. As Calabro `et al (2020) argue, heterogeneities between EO and family firm performance arise from the omission of contingency variables. The majority of prior research consider only family-oriented variables as contingencies (see Table 4 The family firm possesses a low-level of proactiveness and autonomy Casillas and Moreno (2010) Spain: agriculture, real estate and service sector…”

“…We provide three main contributions to family business literature. First, our study responds to several calls to investigate EO in conjunction with strategic capability among family firms (Calabro `et al, 2020;Hern andez-Linares and L opez-Fern andez, 2018;Hughes et al, 2018b). We unpack the composition of EO and allow its dimensions to interact with SKM capability.…”

Psychological Distance Impacts Subgroup Reciprocity in Technological Innovation Networks: The Mediating Role of Divisive Faultlines

“…Traditional partner selection theory argues that firms within a technological innovation network usually follow convention when selecting reciprocal business partners, i.e., they will prefer firms that are more familiar ( Acedo-Carmona and Gomila, 2015 ) or with whom they have previously cooperated ( Wei et al, 2020 ). This is because greater psychological distance between reciprocal partners is more likely to impede the flow of information between them ( Calabrò et al, 2021 ). This is not conducive to establishing and maintaining stable reciprocal relationships between innovators, since it leads to communication barriers and decreases cohesion among network members ( Doucerain et al, 2015 ; Straube et al, 2018 ).…”