ENTREPRENEURIAL, MARKET, AND LEARNING ORIENTATIONS AS DETERMINANTS OF FAMILY AND NON-FAMILY FIRM PERFORMANCE
Fredric
Kropp, Fisher Graduate School of International Business, Monterey Institute
of International Studies
Noel J. Lindsay, School of Business, Bond University, Australia
Aviv Shoham, Graduate School of Business, University of Haifa, Israel
Principal Topic
The fields of family business and entrepreneurship consist of distinct yet overlapping domains. The interaction of these domains provides a unique perspective to examine the dynamics of how the family interacts with and/or influences the entrepreneurship process. There is a lack of integrated theory, however, that helps us to understand the complex relationships between entrepreneurs and their families.
A family business differs from a non-family business in that it is owned, managed, and/or controlled by family. In a family business, family values permeate the business. Family values and emotional attachment to family assets can influence business decisions. What may be a good decision for the business may not necessarily fit with a family’s values. As such, business decisions may be modified. This may affect firm performance. Family business entrepreneurs, therefore, have an additional layer of complexity to deal with: the family. For this reason, family firms are considered to be the most complex forms of business.
To date, there has been little empirical research undertaken that examines the complexity of family issues as they influence family business performance. This research examines these issues. It examines the entrepreneurial, marketing, and learning orientations, and value issues, of family and non-family businesses as determinants of firm performance.
Method
The research method involved administering a questionnaire to 159 family business and 174 non-family business entrepreneurs that addressed the abovementioned constructs. The family business entrepreneurs were predominantly from first generation businesses.
Results and Implications
Surprisingly, there were no significant differences between the two groups. This conflicts with current family business theory that supports the notion that family businesses are more complex than non-family businesses. One possible explanation for the results is that complexity due to the family dynamic is not as strong in first generation family businesses as it is in subsequent generational family businesses. Family values and the family way of doing things may not have had time to develop in first generation family businesses to the extent that they exist in subsequent generation family businesses. As such, first generational family businesses may be no more complex than non-family businesses.
CONTACT: Noel Lindsay; Australian Center for Family Business, School of Business, Bond University, Gold Coast 4226 Australia; (T) +61-7-5595 2200; (F) +61-7-5595 1160; nlindsay@staff.bond.edu.au
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