IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i13p5334-d379077.html
   My bibliography  Save this article

Long-Term Orientation as a Resource for Entrepreneurial Orientation in Private Family Firms: The Need for Participative Decision Making

Author

Listed:
  • Jelle Schepers

    (Research Center for Entrepreneurship and Family Firms (RCEF), Hasselt University, Agoralaan, Building D, 3590 Diepenbeek, Belgium)

  • Wim Voordeckers

    (Research Center for Entrepreneurship and Family Firms (RCEF), Hasselt University, Agoralaan, Building D, 3590 Diepenbeek, Belgium)

  • Tensie Steijvers

    (Research Center for Entrepreneurship and Family Firms (RCEF), Hasselt University, Agoralaan, Building D, 3590 Diepenbeek, Belgium)

  • Eddy Laveren

    (Department of Accountancy and Finance, University of Antwerp, Prinsstraat 13, 2000 Antwerpen, Belgium)

Abstract

Building on the resource-based view (RBV) of the firm, this paper suggests that a family firm’s long-term orientation (LTO) can be an important resource that increases firm-level entrepreneurial orientation (EO). Nevertheless, resource orchestration suggests that managers need to orchestrate their resources in order to realize any potential advantage. Therefore, we hypothesize that a family firm’s LTO entails potential resources to engage in entrepreneurial activities, while a participative decision making (PDM) style serves as coordinating mechanism that helps the firm to manage these resources. Using data from 209 private family firms, the results show a positive association between LTO and EO. Also, PDM was found to positively moderate the LTO-EO relationship, providing empirical support for our central hypothesis.

Suggested Citation

  • Jelle Schepers & Wim Voordeckers & Tensie Steijvers & Eddy Laveren, 2020. "Long-Term Orientation as a Resource for Entrepreneurial Orientation in Private Family Firms: The Need for Participative Decision Making," Sustainability, MDPI, vol. 12(13), pages 1-22, July.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:13:p:5334-:d:379077
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/13/5334/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/13/5334/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Xavier, CASTANER & Mikko, KETOKIVI, 2003. "Planning as an integrative device," HEC Research Papers Series 775, HEC Paris.
    2. Justin L. Davis & R. Greg Bell & G. Tyge Payne & Patrick M. Kreiser, 2010. "Entrepreneurial Orientation and Firm Performance: The Moderating Role of Managerial Power," American Journal of Business, Emerald Group Publishing Limited, vol. 25(2), pages 41-54, October.
    3. Jelle Schepers & Wim Voordeckers & Tensie Steijvers & Eddy Laveren, 2014. "The entrepreneurial orientation–performance relationship in private family firms: the moderating role of socioemotional wealth," Small Business Economics, Springer, vol. 43(1), pages 39-55, June.
    4. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1994. "Entrepreneurial Decisions and Liquidity Constraints," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 334-347, Summer.
    5. Wen-Lan Liao & Chin-Yi Fang, 2019. "Applying an Extended Theory of Planned Behavior for Sustaining a Landscape Restaurant," Sustainability, MDPI, vol. 11(18), pages 1-13, September.
    6. MacKenzie, Scott B. & Podsakoff, Philip M., 2012. "Common Method Bias in Marketing: Causes, Mechanisms, and Procedural Remedies," Journal of Retailing, Elsevier, vol. 88(4), pages 542-555.
    7. Jeffrey G. Covin & G.T. Lumpkin, 2011. "Entrepreneurial Orientation Theory and Research: Reflections on a Needed Construct," Entrepreneurship Theory and Practice, , vol. 35(5), pages 855-872, September.
    8. Brambor, Thomas & Clark, William Roberts & Golder, Matt, 2006. "Understanding Interaction Models: Improving Empirical Analyses," Political Analysis, Cambridge University Press, vol. 14(1), pages 63-82, January.
    9. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    10. Zellweger, Thomas M. & Eddleston, Kimberly A. & Kellermanns, Franz W., 2010. "Exploring the concept of familiness: Introducing family firm identity," Journal of Family Business Strategy, Elsevier, vol. 1(1), pages 54-63, March.
    11. Ikujiro Nonaka, 1994. "A Dynamic Theory of Organizational Knowledge Creation," Organization Science, INFORMS, vol. 5(1), pages 14-37, February.
    12. G.T. Lumpkin & Keith H. Brigham & Todd W. Moss, 2010. "Long-term orientation: Implications for the entrepreneurial orientation and performance of family businesses," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 22(3-4), pages 241-264, May.
    13. David J. Ketchen & G. Tomas M. Hult & Stanley F. Slater, 2007. "Toward greater understanding of market orientation and the resource‐based view," Strategic Management Journal, Wiley Blackwell, vol. 28(9), pages 961-964, September.
    14. Vangelis Souitaris & B. M. Marcello Maestro, 2010. "Polychronicity in top management teams: The impact on strategic decision processes and performance of new technology ventures," Strategic Management Journal, Wiley Blackwell, vol. 31(6), pages 652-678, June.
    15. Basco, Rodrigo & Calabrò, Andrea & Campopiano, Giovanna, 2019. "Transgenerational entrepreneurship around the world: Implications for family business research and practice," Journal of Family Business Strategy, Elsevier, vol. 10(4).
    16. Jess H. Chua & James J. Chrisman & Pramodita Sharma, 1999. "Defining the Family Business by Behavior," Entrepreneurship Theory and Practice, , vol. 23(4), pages 19-39, July.
    17. Hermann Frank & Alexander Kessler & Thomas Rusch & Julia Suess–Reyes & Daniela Weismeier–Sammer, 2017. "Capturing the Familiness of Family Businesses: Development of the Family Influence Familiness Scale (FIFS)," Entrepreneurship Theory and Practice, , vol. 41(5), pages 709-742, September.
    18. Jeffrey G. Covin & Kimberly M. Green & Dennis P. Slevin, 2006. "Strategic Process Effects on the Entrepreneurial Orientation–Sales Growth Rate Relationship," Entrepreneurship Theory and Practice, , vol. 30(1), pages 57-81, January.
    19. Bauweraerts, Jonathan & Colot, Olivier, 2017. "Exploring nonlinear effects of family involvement in the board on entrepreneurial orientation," Journal of Business Research, Elsevier, vol. 70(C), pages 185-192.
    20. Salvatore Sciascia & Pietro Mazzola & Francesco Chirico, 2013. "Generational Involvement in the Top Management Team of Family Firms: Exploring Nonlinear Effects on Entrepreneurial Orientation," Entrepreneurship Theory and Practice, , vol. 37(1), pages 69-85, January.
    21. Kraaijenbrink, Jeroen & Spender, JC & Groen, Aard, 2009. "The resource-based view: A review and assessment of its critiques," MPRA Paper 21442, University Library of Munich, Germany.
    22. Franz W. Kellermanns & Kimberly A. Eddleston, 2006. "Corporate Entrepreneurship in Family Firms: A Family Perspective," Entrepreneurship Theory and Practice, , vol. 30(6), pages 809-830, November.
    23. Jeffrey G. Covin & Dennis P. Slevin, 1989. "Strategic management of small firms in hostile and benign environments," Strategic Management Journal, Wiley Blackwell, vol. 10(1), pages 75-87, January.
    24. Nick Wilson & Mike Wright & Louise Scholes, 2013. "Family Business Survival and the Role of Boards," Entrepreneurship Theory and Practice, , vol. 37(6), pages 1369-1389, November.
    25. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    26. David G. Sirmon & Michael A. Hitt, 2003. "Managing Resources: Linking Unique Resources, Management, and Wealth Creation in Family Firms," Entrepreneurship Theory and Practice, , vol. 27(4), pages 339-358, October.
    27. Marianne Bertrand & Antoinette Schoar, 2006. "The Role of Family in Family Firms," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 73-96, Spring.
    28. Danny Miller, 1983. "The Correlates of Entrepreneurship in Three Types of Firms," Management Science, INFORMS, vol. 29(7), pages 770-791, July.
    29. Mary Crossan & Joao Vieira da Cunha & Miguel Pina e Cunha & Dusya Vera, 2002. "Time and organizational improvisation," Nova SBE Working Paper Series wp410, Universidade Nova de Lisboa, Nova School of Business and Economics.
    30. Paul Westhead & Marc Cowling, 1998. "Family Firm Research: The Need for a Methodological Rethink," Entrepreneurship Theory and Practice, , vol. 23(1), pages 31-56, October.
    31. repec:bla:jfinan:v:58:y:2003:i:3:p:1301-1327 is not listed on IDEAS
    32. Franz W. Kellermanns & Kimberly A. Eddleston, 2004. "Feuding Families: When Conflict Does a Family Firm Good," Entrepreneurship Theory and Practice, , vol. 28(3), pages 209-228, May.
    33. Alessandro Cirillo & Luca Pennacchio & Maria Rosaria Carillo & Mauro Romano, 2021. "The antecedents of entrepreneurial risk-taking in private family firms: CEO seasons and contingency factors," Small Business Economics, Springer, vol. 56(4), pages 1571-1590, April.
    34. Shaker A. Zahra & James C. Hayton & Donald O. Neubaum & Clay Dibrell & Justin Craig, 2008. "Culture of Family Commitment and Strategic Flexibility: The Moderating Effect of Stewardship," Entrepreneurship Theory and Practice, , vol. 32(6), pages 1035-1054, November.
    35. Richard Gentry & Clay Dibrell & Jaemin Kim, 2016. "Long–Term Orientation in Publicly Traded Family Businesses: Evidence of a Dominant Logic," Entrepreneurship Theory and Practice, , vol. 40(4), pages 733-757, July.
    36. Wiklund, Johan & Shepherd, Dean, 2005. "Entrepreneurial orientation and small business performance: a configurational approach," Journal of Business Venturing, Elsevier, vol. 20(1), pages 71-91, January.
    37. Eddleston, Kimberly A. & Kellermanns, Franz W., 2007. "Destructive and productive family relationships: A stewardship theory perspective," Journal of Business Venturing, Elsevier, vol. 22(4), pages 545-565, July.
    38. Cristina Cruz & Mattias Nordqvist, 2012. "Entrepreneurial orientation in family firms: a generational perspective," Small Business Economics, Springer, vol. 38(1), pages 33-49, January.
    39. José C. Casillas & Ana M. Moreno, 2010. "The relationship between entrepreneurial orientation and growth: The moderating role of family involvement," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 22(3-4), pages 265-291, May.
    40. Frank Li & Tao Li & Dylan Minor, 2016. "CEO power, corporate social responsibility, and firm value: a test of agency theory," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 12(5), pages 611-628, October.
    41. Casillas, José C. & Moreno, Ana M. & Barbero, José L., 2011. "Entrepreneurial orientation of family firms: Family and environmental dimensions," Journal of Family Business Strategy, Elsevier, vol. 2(2), pages 90-100, June.
    42. Patrick M. Kreiser & Louis D. Marino & K. Mark Weaver, 2002. "Assessing the Psychometric Properties of the Entrepreneurial Orientation Scale: A Multi-Country Analysis," Entrepreneurship Theory and Practice, , vol. 26(4), pages 71-93, July.
    43. Xiping Pan & Jinghua Sha & Hongliang Zhang & Wenlan Ke, 2014. "Relationship between Corporate Social Responsibility and Financial Performance in the Mineral Industry: Evidence from Chinese Mineral Firms," Sustainability, MDPI, vol. 6(7), pages 1-25, June.
    44. Richard H. Thaler, 2000. "From Homo Economicus to Homo Sapiens," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 133-141, Winter.
    45. Jeffrey G. Covin & Dennis P. Slevin, 1991. "A Conceptual Model of Entrepreneurship as Firm Behavior," Entrepreneurship Theory and Practice, , vol. 16(1), pages 7-26, October.
    46. Felipe Hernández-Perlines & Nina Rung-Hoch, 2017. "Sustainable Entrepreneurial Orientation in Family Firms," Sustainability, MDPI, vol. 9(7), pages 1-16, July.
    47. Ronald C. Anderson & David M. Reeb, 2003. "Founding‐Family Ownership and Firm Performance: Evidence from the S&P 500," Journal of Finance, American Finance Association, vol. 58(3), pages 1301-1328, June.
    48. Daspit, Joshua J. & Long, Rebecca G. & Pearson, Allison W., 2019. "How familiness affects innovation outcomes via absorptive capacity: A dynamic capability perspective of the family firm," Journal of Family Business Strategy, Elsevier, vol. 10(2), pages 133-143.
    49. Matthew W. Rutherford & Donald F. Kuratko & Daniel T. Holt, 2008. "Examining the Link between “Familiness†and Performance: Can the F–PEC Untangle the Family Business Theory Jungle?," Entrepreneurship Theory and Practice, , vol. 32(6), pages 1089-1109, November.
    50. Bradley A. George, 2011. "Entrepreneurial Orientation: A Theoretical and Empirical Examination of the Consequences of Differing Construct Representations," Journal of Management Studies, Wiley Blackwell, vol. 48, pages 1291-1313, September.
    51. Bluedorn, Allen C. & Martin, Gwen, 2008. "The time frames of entrepreneurs," Journal of Business Venturing, Elsevier, vol. 23(1), pages 1-20, January.
    52. Kammerlander, Nadine & Burger, Dominik & Fust, Alexander & Fueglistaller, Urs, 2015. "Exploration and exploitation in established small and medium-sized enterprises: The effect of CEOs' regulatory focus," Journal of Business Venturing, Elsevier, vol. 30(4), pages 582-602.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jelle Schepers & Pieter Vandekerkhof & Yannick Dillen, 2021. "The Impact of the COVID-19 Crisis on Growth-Oriented SMEs: Building Entrepreneurial Resilience," Sustainability, MDPI, vol. 13(16), pages 1-20, August.
    2. Anneleen Michiels & Jelle Schepers & Pieter Vandekerkhof & Alessandro Cirillo, 2021. "Leasing as an Alternative Form of Financing within Family Businesses: The Important Advisory Role of the Accountant," Sustainability, MDPI, vol. 13(12), pages 1-17, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jelle Schepers & Wim Voordeckers & Tensie Steijvers & Eddy Laveren, 2014. "The entrepreneurial orientation–performance relationship in private family firms: the moderating role of socioemotional wealth," Small Business Economics, Springer, vol. 43(1), pages 39-55, June.
    2. Felipe Hernández-Perlines & Juan Moreno-García & Benito Yáñez-Araque, 2019. "The influence of socioemotional wealth in the entrepreneurial orientation of family businesses," International Entrepreneurship and Management Journal, Springer, vol. 15(2), pages 523-544, June.
    3. Cherchem, Naïma, 2017. "The relationship between organizational culture and entrepreneurial orientation in family firms: Does generational involvement matter?," Journal of Family Business Strategy, Elsevier, vol. 8(2), pages 87-98.
    4. J. Ruben Boling & Torsten M. Pieper & Jeffrey G. Covin, 2016. "CEO Tenure and Entrepreneurial Orientation within Family and Nonfamily Firms," Entrepreneurship Theory and Practice, , vol. 40(4), pages 891-913, July.
    5. Felipe Hernández-Perlines & Manuel Alejandro Ibarra Cisneros, 2018. "The Role of Environment in Sustainable Entrepreneurial Orientation. The Case of Family Firms," Sustainability, MDPI, vol. 10(6), pages 1-16, June.
    6. Unai Arzubiaga & Txomin Iturralde & Amaia Maseda & Josip Kotlar, 2018. "Entrepreneurial orientation and firm performance in family SMEs: the moderating effects of family, women, and strategic involvement in the board of directors," International Entrepreneurship and Management Journal, Springer, vol. 14(1), pages 217-244, March.
    7. Unai Arzubiaga & Amaia Maseda & Txomin Iturralde, 2019. "Entrepreneurial orientation in family firms: New drivers and the moderating role of the strategic involvement of the board," Australian Journal of Management, Australian School of Business, vol. 44(1), pages 128-152, February.
    8. Andreas Kallmuenzer & Andreas Strobl & Mike Peters, 2018. "Tweaking the entrepreneurial orientation–performance relationship in family firms: the effect of control mechanisms and family-related goals," Review of Managerial Science, Springer, vol. 12(4), pages 855-883, October.
    9. Arz, Christopher, 2019. "Bridging the micro-macro gap: A multi-layer culture framework for understanding entrepreneurial orientation in family firms," Journal of Family Business Strategy, Elsevier, vol. 10(3), pages 1-1.
    10. Felipe Hernández-Perlines & Nina Rung-Hoch, 2017. "Sustainable Entrepreneurial Orientation in Family Firms," Sustainability, MDPI, vol. 9(7), pages 1-16, July.
    11. García-Villaverde, Pedro M. & Rodrigo-Alarcón, Job & Parra-Requena, Gloria & Ruiz-Ortega, María José, 2018. "Technological dynamism and entrepreneurial orientation: The heterogeneous effects of social capital," Journal of Business Research, Elsevier, vol. 83(C), pages 51-64.
    12. Andrea Calabrò & Rosalia Santulli & Mariateresa Torchia & Carmen Gallucci, 2021. "Entrepreneurial Orientation and Family Firm Performance: The Moderating Role of TMT Identity-Based and Knowledge-Based Faultlines," Entrepreneurship Theory and Practice, , vol. 45(4), pages 838-866, July.
    13. Hernández-Perlines, Felipe & Covin, Jeffrey G. & Ribeiro-Soriano, Domingo E., 2021. "Entrepreneurial orientation, concern for socioemotional wealth preservation, and family firm performance," Journal of Business Research, Elsevier, vol. 126(C), pages 197-208.
    14. Madison, Kristen & Runyan, Rodney C. & Swinney, Jane L., 2014. "Strategic posture and performance: Revealing differences between family and nonfamily firms," Journal of Family Business Strategy, Elsevier, vol. 5(3), pages 239-251.
    15. Rajan, Bharath & Salunkhe, Uday & Kumar, V., 2023. "Understanding customer engagement in family firms: A conceptual framework," Journal of Business Research, Elsevier, vol. 154(C).
    16. D’Allura, Giorgia Maria, 2019. "The leading role of the top management team in understanding family firms: Past research and future directions," Journal of Family Business Strategy, Elsevier, vol. 10(2), pages 87-104.
    17. Dessì, Cinzia & Dettori, Angela & Floris, Michela, 2023. "Exploring different configurations of entrepreneurial orientation in small artisan family firms: A multi-case study," Journal of Family Business Strategy, Elsevier, vol. 14(3).
    18. Moreno-Menéndez, Ana M. & Casillas, José C., 2021. "How do family businesses grow? Differences in growth patterns between family and non-family firms," Journal of Family Business Strategy, Elsevier, vol. 12(3).
    19. Weismeier-Sammer, Daniela, 2011. "Entrepreneurial behavior in family firms: A replication study," Journal of Family Business Strategy, Elsevier, vol. 2(3), pages 128-138.
    20. Salvatore Sciascia & Pietro Mazzola & Francesco Chirico, 2013. "Generational Involvement in the Top Management Team of Family Firms: Exploring Nonlinear Effects on Entrepreneurial Orientation," Entrepreneurship Theory and Practice, , vol. 37(1), pages 69-85, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:13:p:5334-:d:379077. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.