Entrepreneurial Orientation in Family Firms: Looking at a European Outermost Region

Abstract

This study addresses a current debate in the family business literature involving the extent to which the family business context hinders or promotes entrepreneurial behavior. The empirical evidence is provided by 155 small-sized firms, 82 family-controlled and 73 nonfamily-controlled, operating in an outermost region, the Autonomous Region of the Azores. This study analyzes the differences between family and nonfamily firms in regard to entrepreneurial orientation and how it is influenced by family participation. Results show that there are differences in entrepreneurship orientation and in two of its three dimensions, while revealing that family participation is negatively associated with entrepreneurial orientation and its three dimensions.

Entrepreneurial Orientation and the Family Firm: Mapping the Field and Tracing a Path for Future Research

“…This result is confirmed when the different EO dimensions are individually examined, which mostly point to the existence of lower levels of risk-taking, innovativeness, and competitive aggressiveness among family businesses, while mixed results are reported for proactiveness and autonomy. In the case of proactiveness, Pimentel et al (2017) do not find differences between family and non-family firms, but other authors report lower levels of proactivenness in family firms (e.g., Short et al, 2009). With regard to the autonomy dimension, Short et al (2009) find a lower level of autonomy in family firms, while other scholars (e.g., Zellweger & Sieger, 2012) report higher levels.…”

“…First, we have identified a group of seven papers that explore whether the intensity of EO or its dimensions is different in family firms. While Lee and Chu (2017) do not identify significant differences, the remaining papers report a lower level of EO among family firms (Garcés-Galdeano et al, 2016; Pimentel, Couto, & Scholten, 2017). This result is confirmed when the different EO dimensions are individually examined, which mostly point to the existence of lower levels of risk-taking, innovativeness, and competitive aggressiveness among family businesses, while mixed results are reported for proactiveness and autonomy.…”

“…First, we have identified a group of seven papers that explore whether the intensity of EO or its dimensions is different in family firms. While Lu and Chu (2017) do not identify significant differences, the remaining papers report a lower level of EO among family firms (Garcés-Galdeano et al, 2016;Pimentel, Couto, & Scholten, 2017).…”

“…Such an analysis will be crucial to confirming whether the evidence pointing to a specific way in which family firms are entrepreneurially oriented (e.g., Garcés-Galdeano et al, 2016;Pimentel et al, 2017;Short et al, 2016;Zellweger & Sieger, 2012) may be equally successful (Campbell & Park, 2016;Miller & Le Breton-Miller, 2011;Miller et al, 2016) when applied to explain other particularities of family businesses, as suggested by the strategic equifinality idea (Carney et al, 2015). In performing this empirical exploration, the recent validation of a multidimensional construct of long-term orientation (Brigham et al, 2014) can be very helpful.…”

“…One of the main questions addressed in EO in family firms research is whether family firms are as equally entrepreneurially oriented as nonfamily firms (e.g., Pimentel et al, 2017; Short et al, 2009), and if not, why different levels of EO exist (e.g., Bauweraerts & Colot, 2017; Zahra et al, 2004). The systematic analysis performed in the previous section reveals that family involvement (in ownership, management, governance, or work) in the firm and family business status are the two variables most frequently used to explore the uniqueness of the antecedents of EO in family firms, mainly using RBV (e.g., Zahra et al, 2004) and agency theory (e.g., Naldi et al, 2007), either individually or in combination with other theories (e.g., Bauweraerts & Colot, 2017).…”