Abstract
As a predominant form of business organization, family firms have attracted increasing attention by scholars, and especially by those researching entrepreneurial orientation with the aim of better understanding of entrepreneurial activities pursued by enterprises. However, the literature on the confluence of entrepreneurial orientation and family firms has paid scant attention to the influence of affective and emotional factors. To cover this research gap, the authors analyze the impact of affective commitment and concern for socioemotional wealth preservation on entrepreneurial orientation. To do so, they performed an empirical study using the data collected from 342 small and mid-sized family firms from Portugal, a country where family firms are under-researched even though they make up the backbone of the economy. Results show that both affective commitment and socioemotional wealth positively impact entrepreneurial orientation, pointing to the need to further research the relationships between such factors and strategic behaviors in the family business context.
TopIntroduction
Entrepreneurial orientation (“EO”) is defined as “a construct capturing the degree to which a firm’s posture is entrepreneurial versus conservative, concerns how the firm’s top managers support key entrepreneurial activities” (Morris et al. 2011, p. 956). EO has been the subject of more than 30 years of research (Wales et al. 2011) and is becoming a key construct within the management literature due to its ability to further our understanding of entrepreneurial activities pursued by organizations (Covin & Wales, 2012). As a result of these years of research, we know that organizational context impacts this strategic orientation (Covin & Slevin 1990; Wales et al., 2011).
Among the contexts influencing firm EO, the family business context deserves special attention, since family firms play a significant role in the worldwide economy as a predominant form of business organization (e.g., Astrachan & Shanker, 2003; Chittoor & Das, 2007; Litz, 1995; Sharma et al., 2012). Beyond its economic relevance, EO within family firms is attracting growing interest by literature (Hernández-Linares & Lópe-Fernández, 2018) and merits further research because in family businesses the presence of a family as the dominant coalition of the company (Chrisman et al. 2012) affects their strategic behavior (Carney et al., 2015; Pindado & Requejo, 2015). Specifically, the behavioral theory of the firm (Cyert & March, 1963) supports that stakeholders in a firm usually have many different goals instead of only one. This theory also points out that the dominant coalition in the company, in pursuing their goals, will influence the behavior and decision making of the firm (Argote & Greve, 2007). Family business researchers have used this theory to explore the effects of being a family, as the dominant coalition, in the firms’ behavior (e.g., Chua et al., 1999; Ensley & Pearson 2005; Chrisman et al., 2012). However, the behavioral theory has scarcely been used in the exploration of EO in family firms (Revilla et al., 2016; Zahra, 2012).
Key Terms in this Chapter
Proactiveness: It consists of the high level of opportunity-seeking, ideally ahead of competitors and combined with anticipation of future customer demands.
Normative Commitment: It is the mindset of an obligation to remain in the organization.
Affective Commitment: It is the desire to remain in the organization.
Socioemotional Wealth: It consists of the dominant family’s affective commitment to the firm.
Continuance Commitment: It is generated by the need to remain in the organization.