Entrepreneurial Orientation of Family Business

2019 ◽  
pp. 133-156
Author(s):  
Emel Faiz ◽  
Gamze Uludag
Keyword(s):  
Family Business ◽  
Entrepreneurial Orientation ◽  
Global Economy ◽  
Family Businesses ◽  
Rate Of Change ◽  
Point Of View ◽  
Added Value ◽  
Third Generation ◽  
Economic Development And Growth ◽  
New Generation

Family businesses are considered as an important source of economic development and growth in that they create added value by providing new products, processes and technologies. Family businesses, where family values and perspectives dominate, have begun to experience problems in adapting to such a structure in the global economy, where the rate of change has increased, and the competition is intense. In the process of restructuring, entrepreneurial orientation is vital for these businesses. From this point of view, the aim of this chapter is to define family business, to explain their characteristics and to show the two perspectives on the entrepreneurial orientation of family businesses. The concept of “family entrepreneurship” and “transgenerational entrepreneurship” is also mentioned in the chapter. In relation to what is told in the chapter, how a conservative structure has been opened to the market by its third generation, a family business in Turkey that is going through its third generation and the innovations brought about by the new generation compose the case study.

scholarly journals Unsustainable Family Business in Saudi Arabia - The Roadmap Ahead

2021 ◽  
Vol 9 (2) ◽  
pp. 233-243
Author(s):  
Anas AlRebdi ◽  
Khaliq Ahmad Mohamad
Keyword(s):  
Saudi Arabia ◽  
Family Business ◽  
Global Economy ◽  
Success Factors ◽  
Family Businesses ◽  
Next Of Kin ◽  
Future Success ◽  
The Government ◽  
Sound Management ◽  
New Generation

Family businesses play a crucial role in the global economy. The GCC especially the Kingdom of Saudi Arabia occupies a significant place in the global economic pie. It offers many employment opportunities to the Saudi and non-Saudi nationals and contributes a significantly to the GDP. According to the government sources there are an estimated 538,000 family businesses in the Kingdom and together this family business cluster contributes approximately 216 billion dollars to the national GDP and provides employments to approximately 7.2 million workers that constitute about 52 percent of the total workforce. Beside such a great potential there are only a few of them can thrive and survive in the present circumstances in the market. Just a third of family businesses are successful thanks to a new generation of entrepreneurs in command. Future success depends to a large extent on the successive achievements of these newly minted entrepreneurs and sustainability of family businesses of such companies in the past affects the success of future generations of these family businesses. There are many challenges these family businesses are facing once left them unattended may cause them to fail is the focus of this study. Hence there is a need to focus on several attributes of sound management in order to be able to continue and grow to remain sustainable would be contribution of this study. The purpose of this study therefore is to identify the various success factors associated to the question of unsustainability of these family businesses (FB) in Saudi Arabia (KSA). Our understanding indicated that Family Businesses (FB) is short-term oriented. For sustainability these FBs need to create and give more importance to factors such as strategic thinking, to train next of kin to ensure succession planning and sound corporate governance for business longevity. As recommendation the immediate family members and potential business leaders emerging from the younger generations need to be trained for their business continuity and survival.

scholarly journals Analysis of Innovation, Proactive, and Risk Taking as Presentations of Entrepreneurial Orientation towards Business Success of Second and Third Generation Family Business in Indonesia

2021 ◽  
Vol 10 (1) ◽  
Author(s):  
Christina Whidya Utami ◽  
Damelina Tambunan ◽  
Metta Padmalia
Keyword(s):  
Family Business ◽  
Risk Taking ◽  
Entrepreneurial Orientation ◽  
Family Members ◽  
Family Businesses ◽  
Business Success ◽  
Third Generation ◽  
Scale Family ◽  
The Family ◽  
Generation Family

Research Objective: To analyze the effect of entrepreneurial orientation towards the business success of second and third generation family businesses in Indonesia. Methodology/ Research Approach: This study used a cross-sectional, correlation research design. The survey was conducted to 153 medium-scale family businesses that have run for 5-50 years and categorized as middle-scale business ran by the second and/ or third generation family. Hypothesis testing was done via a multiple regression using SPSS. Findings: there is a significant effect between entrepreneurship orientation, which is the independent variable of this study, that covers three indicators namely innovation, proactive, and risk-taking abilities. Innovative and proactive have a significant and positive effect, while risk-taking ability has a significant and negative effect on the success of family businesses in Indonesia. Research limitation/ implication: This study investigates strategies that family businesses use, in terms of entrepreneurial orientation. The limitations of this study are: Bias in assessment perspective of fellow families and the scale of the family business only focus on second and third-generation middle-scale family business. The implication of this research is to create an entrepreneurial orientation culture in family businesses that tend to be lacking innovative, proactive, and risk-taking behaviors, considering the amount of interference and involvement of family members in the management of their family businesses. Practical implication: It is hoped that the second and the third-generation family members show a better perspective exploration in seeing whether entrepreneurial orientation has been implemented and has an impact in creating business success. Thus, family businesses are expected to scale-up their businesses into large-scale companies, and at the same time, survive the succession phase of the next generation. Originality/ value: This study offers an analysis of a unique entrepreneurial orientation, given the personality, family, ownership, and management system in family businesses in Indonesia are different from other countries. Besides, there are influences of technological advances that may interfere family businesses, particularly the family system, in Indonesia

Direct and indirect effect of entrepreneurial orientation, family involvement and gender on family business performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Erny Rachmawati ◽  
Suliyanto ◽  
Agus Suroso
Keyword(s):  
Family Involvement ◽  
Family Business ◽  
Entrepreneurial Orientation ◽  
Business Performance ◽  
Family Businesses ◽  
Future Research ◽  
Content Type ◽  
The Family ◽  
The Relationship

PurposeThis study aims to determine the direct effect of entrepreneurial orientation on family business performance. This study also discusses the role of family involvement as a mediating variable and the role of gender as a moderating variable in the relationship between entrepreneurial orientation and family business performance.Design/methodology/approachA total of 328 hotels in Yogyakarta, Indonesia, were selected as samples by the convenience sampling method. Primary data is collected through structured questionnaires that are delivered by themselves to key people in the hotel such as owners, directors and key staff (HRD, financial, relationship). Hypotheses are tested by structural equation modeling procedures using AMOS 22.0. Sobel test is used to determine the indirect effect of the mediation variable.FindingsThe results showed that entrepreneurial orientation had no significant effect on family business performance. Family involvement acts as a full mediation in the relationship between entrepreneurial orientation and family business performance. Gender acts as a moderating variable that can strengthen the relationship between entrepreneurial orientation and family business performance. The results showed support for previous research.Research limitations/implicationsThe results of the study cannot conclude the national family business because it adopts convenience sampling and the sampling area is limited in Yogyakarta. Future research can use a larger sample. This study only researches hotels managed by family businesses, so it is not feasible to conclude for family businesses in general. Future research may choose to use several types of family businesses so that more varied results can be obtained. Future research could also compare hotels managed by family businesses with non-family businesses. The results also found that in addition to gender roles, respondent heterogeneity was an important component in the study of social identity. Therefore, research examining the influence of different cultures on the relationship between entrepreneurial orientation and family business performance should be an extraordinary topic for future study. Other results from this study also indicate that there is a role for religion in improving hotel performance. Future research is needed to further explore Islamic business modeling for family businesses.Practical implicationsThis finding has significant implications that can help family businesses in developing strategies that are suitable for business management. Entrepreneurial orientation occupies a strategic position in developing sustainable competitive advantage in the family business of the tourism sector especially the hotel business in Yogyakarta for the better. Besides, the results of the study also showed that entrepreneurial orientation had no significant effect on performance. This relationship becomes significant when combined with active family involvement. This finding also shows that entrepreneurial orientation has the potential to have a more beneficial effect because of the active involvement of the family in helping with business management, alleviating business-related problems, and having a significant influence when the family also acts as management.Social implicationsResearch findings indicate the role of gender in strengthening the relationship between entrepreneurial orientation and family business performance. This provides a good position for women in the social environment to show achievement. To place women on the side of gender equality and justice in the family business in Indonesia. By opening wider access for Indonesian women in the realm of business management, expanding women's participation in a family business, increasing the role of control for women, and increasing women's knowledge and skills to increase the benefits in managing family businesses so that they have sustainable resilience in the face of global competition.Originality/valueThe results of this study provide a new model in providing an overview of the direct and indirect roles (mediating and moderating) in the assessment of family business performance. This study uses three variables which are important in performance appraisal, namely entrepreneurial orientation (independent variable), family involvement (mediating variable) and gender (moderating variable). Where research that combines these four variables, directly and indirectly, has never been done before.

Family Business Tourism Risk in the Context of Coronavirus Pandemic

2021 ◽  
pp. 1-31
Author(s):  
Martina Harc ◽  
Martina Basarac Sertić
Keyword(s):  
European Union ◽  
Family Business ◽  
Global Economy ◽  
Theoretical Background ◽  
Family Businesses ◽  
Tourism Industry ◽  
Leadership Succession ◽  
The European Union ◽  
Business Resilience

The coronavirus is crippling the global economy. However, the economic impacts of the pandemic vary significantly across sectors of the economy. This outbreak and related lockdowns are putting the tourism industry under unprecedented pressure. Within months, world tourism went from over-tourism to non-tourism. Therefore, the overall objective of this chapter is to introduce the latest trends in tourism, with emphasis on family businesses. More precisely, the chapter encompasses (1) the theoretical background, which defines family business, highlights their characteristics, and summarizes the importance of leadership succession; (2) the role of family business resilience and their behaviour in times of crisis; (3) a review of relevant European Commission policy publications regarding EU tourism and statistical analyses of selected key tourism indicators; and (4) an analysis of family businesses environment in time of crisis. Hence, this chapter has documented the crucial role that family businesses tourism has within the European Union and on the front line of the current crises.

scholarly journals The Importance of the Governance Role in Achieving Stability and Sustainability in Family Business Companies Through Generations

2021 ◽  
Vol 7 (3) ◽  
pp. 16
Author(s):  
Samir A. Abdelaziz
Keyword(s):  
Corporate Governance ◽  
Family Business ◽  
Global Economy ◽  
Business Models ◽  
Good Governance ◽  
Business Owners ◽  
Family Businesses ◽  
Governance Risk ◽  
The Relationship

Family businesses have continued to draw researchers' attention due to their strategies while making sustainable decisions. Notably, these business models deserve more recognition in this discourse, considering that they contribute up to 70% of the global Domestic Product. This article focuses on some drivers to sustainable decisions revolving around three pillars: environmental, social, and economic. The author's aim in this context is to provide a statistical model that could be used to forecast revenue trends to establish if family businesses are poised for sustainability or not. The models essentially allow for an analysis of the relationship between family businesses' internal drivers with corresponding financial objectives.However, these business models may fail to achieve their objectives if they do not embrace good governance, allowing them to react to challenges. Corporate governance is an essential framework that companies use to reconcile individual, community, business owners, and shareholders' interests in a dynamic global economy. Companies that align with the principles of good governance are more likely to remain sustainable, stable, and profitable. In retrospect, business enterprises that ignore the provisions of corporate governance risk facing uncertainties, most notably, dissolution and bankruptcy. The second, third, and subsequent generations fail to internalize and advance the founder's long-term organizational goals.This study adds to the existing literature on economic sustainability of family businesses characterized by market value and higher revenue generation.

Families, Fortunes, and Footwear: Reaching Out to the Fourth Generation of Brazil's Lupo S.A.

2017 ◽  
pp. 1-11
Author(s):  
John Ward ◽  
Sachin Waikar ◽  
Carol Adler Zsolnay
Keyword(s):  
Family Business ◽  
Family Members ◽  
Family Businesses ◽  
Fourth Generation ◽  
Third Generation ◽  
Generation Family

A successful third-generation family business explores whether or not to continue in business as a family into the fourth generation. If they do decide to move forward as a family business, how can they cultivate knowledge and interest among the forty-plus fourth-generation family members? The reasons behind perpetuating a family business are as important to consider as how to accomplish this goal. This case is designed to provoke students to reflect on their own intentions and motivations for their own family businesses.

scholarly journals Revealing the Third Generation Myth in Family Businesses

2020 ◽  
Vol 9 (1) ◽  
pp. 17-22
Author(s):  
Sabitha Rani Saraswati
Keyword(s):  
Data Collection ◽  
Knowledge Transfer ◽  
Family Business ◽  
Structured Interview ◽  
Family Businesses ◽  
Third Generation ◽  
Collection Method ◽  
The Third ◽  
The Family ◽  
A Company

A family Business is a company or business which is run and managed by a family. Hence, the purpose of this study is to find out the truth of the Third Generation myth in family businesses. This study uses a data collection method using a semi-structured interview. This research uses source triangulation method which aims to test the credibility of the data which is carried out by checking the data that has been obtained from several sources. In this study, samples will be taken from several sources. The resource person himself will be taken from the senior generation as the owner of the family businesses and the next generation. The results of this study states that the decline of family businesses did not occur solely because of the mistakes of the third generation. Therefore, the third generation myth is not true. Keywords: family business, trust, knowledge transfer, delegation, third generation

scholarly journals CHANGES IN THE STRUCTURE IN EU COUNTRIES

2019 ◽  
Vol 2 (1) ◽  
pp. 73-79
Author(s):  
Manuela Raisova
Keyword(s):  
Global Economy ◽  
Recovery Period ◽  
German Economy ◽  
Economic Structure ◽  
Point Of View ◽  
European Countries ◽  
Added Value ◽  
European Politics ◽  
Eu Countries ◽  
The Past

The divergent developments in productivity and employment over the past two decades, as well as the crisis and subsequent recovery of the global economy have led to significant changes in different parts of the economic structure in all EU countries. The aim of our study was to examine changes in the basic segments of the economic structure of European countries. The development of segments is assessed through the indicator of gross added value (in current prices) and employment in the period 1995 to 2017. We compared the situation of the two main groups of European countries - the original and new EU countries. We note that there are significant differences between these groups, especially in the 1990s. Subsequently, there have been changes in the structure of new countries that have narrowed the gap between countries. The structural gap between countries has slowly diminished in average. However, the crisis has significantly delayed the process of convergence and the economic recovery period has not recovered to the pre-crisis situation. On the contrary, after the end of crisis the structural gap has thus re-expanded in a number of cases. In this article we target on the comparison of Estonia and Germany. Estonia represents precisely the group of countries whose structural gap has widened after the end of the crisis. On the other hand, the German economy is seen as a stable backbone of European politics and economics. We considered Germany the most economically strong representative of the old EU countries. From this point of view, our research was based on the assumption that Estonia wants to bring its economy closer to Germany’s economy. We monitored whether the Estonian economy was getting closer or moved away from the German economy. Our results confirmed that Germany’s economy is stable and more or less unchanged for more than 20 years. However, the assumption that Estonia’s economy is moving closer to Germany’s economy has not been confirmed. The opposite is probably true.

scholarly journals Succession as a sustainability factor of family business in Slovakia

Equilibrium ◽  
2019 ◽  
Vol 14 (3) ◽  
pp. 503-520 ◽  
Author(s):  
Zuzana Lušňáková ◽  
Zuzana Juríčková ◽  
Mária Šajbidorová ◽  
Silvia Lenčéšová
Keyword(s):  
Family Business ◽  
Professional Competence ◽  
Value Added ◽  
Family Businesses ◽  
Added Value ◽  
Fourth Generation ◽  
Young Generation ◽  
Generational Change ◽  
Succession Process ◽  
Spearman Test

Research background: The success of family businesses abroad is not measured by profit, but is judged by the number of generations that have successfully mastered the succession process. This is why family businesses in Slovakia should also focus on long-term existence. Succession in a family business must be prepared with sufficient time in advance, as this is one of the most risky moments of its future. Purpose of the article: Successful management of the succession process in family businesses requires several years of preparation in different areas. The aim of this paper is to assess the readiness of Slovak family companies to owner generational change in application of selected factors in ensuring the smooth transmission of family businesses to the younger generation. Methods: The method of research was a questionnaire based on a 5-degree Likert scale, where the respondents expressed the degree of their agreement or disagreement with the particular statement. The questionnaire was filled by sample of 412 respondents — 206 family business owners and their 206 successors (son/ daughter).  The statistical relations and correlations between variables were performed by Cronbach alpha, Spearman test, Kruskal-Walis test using EXCEL and SAS Enterprise Guide 7.1. programs. Findings & Value added: Slovak family companies have already passed or they are in the process of preparing or implementing the first generational change. We cannot be compared yet with family companies in Germany, USA or the Nether-lands because these firms are in the process of the fourth generation change in the ownership. The added value of this paper is the identification of deficiencies and reserves that prolong or expel the process of successful company transfer to a young generation. It is related to human capital — the professional competence of the successor and the willingness of the founder to leave, the absence of important business documents, or the effort to cope with the process itself.

scholarly journals Professionalization of Family Firms: Striking a Balance Between Personal and Non-Personal Factors

2021 ◽  
Author(s):  
Zoltán Kárpáti
Keyword(s):  
Family Business ◽  
Family Firms ◽  
Family Businesses ◽  
Added Value ◽  
Personal Factors ◽  
Multidimensional Model ◽  
Comprehensive Overview ◽  
Formal Control ◽  
Significant Research ◽  
Definition Of

The amount of research on family businesses’ analysis has increased significantly in recent years, thus showing the high importance of the topic. In most countries, family businesses occupy a prominent place in contributing to the economy with the added value they produce. However, less attention has been paid to the professionalization of family businesses and the exploration and presentation of the related literature. The professionalization of family business is a significant research concern in the entrepreneurship and governance literature. In the context of family businesses, professionalization initially meant nothing more than hiring an outside, non-family manager. For today, the content of professionalization has expanded, and a multidimensional model has evolved: a broader, deeper understanding has evolved, which involves other vital aspects such as developing formal control and human resource systems, decentralization of authority, formal strategic planning, or top-level activeness. This study aims to present the essential international literature on professionalization and provide a comprehensive overview of the studies published. The literature review mainly summarizes the results of the last twenty years and closely related articles. The paper follows the next logic; in the first part, the definition of professionalization is introduced along with its benefits and challenges. Then, based on the research methodology presented, the related empirical and theoretical studies are examined. In the end, the review summarizes the key findings in a table.

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