We use transaction cost economics to explain the individual-level entrepreneurial behavior of family and nonfamily managers in family firms. We argue that nonfamily managers exhibit lower ...entrepreneurial behavior than family managers, particularly after the founder’s departure from the business. Moreover, we identify an expanded set of factors through which family firms can facilitate nonfamily managers’ entrepreneurial behavior, including monitoring, incentives, distributive justice, access to the top management, and job control perceptions. We test these hypotheses in a sample of 296 family firm managers, contributing new insights on nonfamily managers and corporate entrepreneurship in family firms.
We theorize and empirically confirm the positive influence of an advisor’s tertius iungens behavior on individual- and firm-level succession-related factors. Furthermore, we explore the moderating ...influence of two central advisor characteristics, namely, their type and process involvement. We find that the relationship between an advisor’s tertius iungens behavior and an incumbent’s and a successor’s satisfaction with the advisor tends to be stronger when the advisor is of formal (versus informal) nature. Furthermore, the relationship between an advisor’s tertius iungens behavior and firm performance is stronger when the advisor is involved in the full succession process, compared to being only involved in parts of it. Our study thus contributes to the literature on advising and family-owned SME succession by introducing the tertius iungens concept as a crucial advisor behavior and by highlighting how important advisor characteristics support the satisfaction with the advisor and post-succession firm performance.
A critical yet unanswered question for family-owned firms in a survival-threatening crisis is which turnaround moves to employ and for what reasons. Building on noneconomic goals associated with ...family ownership and related socioemotional wealth (SEW) considerations, we theorize that the higher the degree of family ownership, the more likely family owners are to sacrifice normative SEW dimensions and to protect instrumental SEW dimensions. This then affects which operational, portfolio, financial, and managerial turnaround moves are likely to be employed, and ultimately, the odds of insolvency. Analyzing a unique sample of responses from 209 bank turnaround managers generally confirms our theorizing.
We investigate what leads failed entrepreneurs to reenter entrepreneurship by taking a developmental career perspective. Specifically, we hypothesize that the age of failed entrepreneurs has a ...nonlinear relationship with the likelihood of reentering entrepreneurship that follows different career stages (early, middle, and late). The gender of failed entrepreneurs and multiple–owner experience in the failed firm are hypothesized to be moderators of this relationship. We test our hypotheses using a database consisting of the Swedish population, including 4,761 entrepreneurs who failed between 2000 and 2004. Analyzing their career paths over the years following their failure offers support for our theoretical expectations.
We apply a key construct from the entrepreneurship field, entrepreneurial orientation (EO), in the context of long-lived family firms. Our qualitative in-depth case studies show that a permanently ...high level of the five EO dimensions is not a necessary condition for long-term success, as traditional entrepreneurship and EO literature implicitly suggest. Rather, we claim that the level of EO is dynamically adapted over time and that the original EO scales (autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness) do not sufficiently capture the full extent of entrepreneurial behaviors in long-lived family firms. Based on these considerations we suggest extending the existing EO scales to provide a more fine-grained depiction of firm-level corporate entrepreneurship in long-lived family firms.
Personal and motivational patterns of intentional founders have been researched in great depth; however, antecedents to career choices of intentional successors have been conspicuously missing in ...entrepreneurship research. By drawing on theory of planned behavior, we investigate how intentional founders, successors, and employees differ in terms of locus of control and entrepreneurial self-efficacy as well as independence and innovation motives. We find that transitive likelihood of career intent depends on degree of entrepreneurial self-efficacy and the independence motive. Unexpectedly, we see that high levels of internal locus of control lead to a preference of employment, which challenges traditional entrepreneurship research and suggests that the feasibility of an entrepreneurial career path does not automatically make it desirable. Our findings suggest that students with family business background are pessimistic about being in control in an entrepreneurial career, but optimistic about their efficacy to pursue an entrepreneurial career.
We add novel insights to the debate about why individuals choose to start their own firm by comparing entrepreneurial intentions to the intentions to work at a university as an academic and to be ...employed in a private firm. To model this more complex set of career choices, we examine novel multiplicative aspects of the theory of planned behavior () and test our hypotheses on survey data of 15,866 students from 13 European countries. Multinomial logistic regression analyses reveal how the different elements influence career preferences and demonstrate the moderating effects of perceived controllability and desirability.
Research Summary
Using causal and effectual decision‐making logics ambidextrously leads to positive firm‐level outcomes, such as enhanced new venture performance. However, what makes an entrepreneur ...more or less likely to apply this ambidextrous use? We address this unanswered question by introducing family financial support as a corresponding antecedent. Taking a family embeddedness perspective, we further theorize that our proposed relationships are weaker when the entrepreneur exhibits a strong internal locus of control. Analyzing a sample of 1,460 student entrepreneurs from 19 countries confirms our general reasoning and offers valuable contributions to different streams of literature.
Managerial Summary
Using both causal and effectual decision‐making logics simultaneously in the founding process has been shown to enhance new venture performance. It is unknown, however, what makes an entrepreneur more likely to apply this “ambidextrous” use of causation and effectuation. In the present paper, we suggest that the more entrepreneurs rely on family financial support for creating their new venture, the more likely is their engagement in the ambidextrous use. Moreover, we believe that this relationship depends on whether entrepreneurs have a strong internal locus of control or not. We generally confirm our expectations by analyzing a global sample of student entrepreneurs. Thus, we encourage entrepreneurs to be aware of the important underlying dynamics that arise when creating a business with “family money.”
We argue that greater availability of financial support by the family for creating a new venture entails stronger financial and non-financial obligations. Cognizant of these obligations, potential ...founders anticipate negative performance implications for the planned firm and threats to the family system in the case of their non-fulfillment. We thus postulate that the formation of actual entrepreneurial intentions is less likely the greater the available financial support. We confirm this by studying a sample of 23,304 respondents from 19 countries and find the negative relationship to be dependent on family cohesion and on individual entrepreneurial self-efficacy.
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