This paper builds on existng theoretcal and empirical studies in the areas of family business and entrepreneurship. It uses Dubin´s theory building framework to propose a model for conductng research of family businesses and its linkage to entrepreneurial actvites in Mexico. This works starts by describing the concepts of family business and explains the importance that these defnitons can have on the variables to be included in the research. Afer that, the paper explains how the concept of “familiness” relates to the essence defniton of family business. Using the resource-based view (RBV), agency theory, and social capital theories we describe how social capital resources are the basis for building frm capabilites and compettve advantages that inﬂuence frm’s performances. Based on this perspectve, a theoretcal model, laws of interacton, a set of propositons and suggestons for further research are provided.
Keywords: entrepreneurship, family business, familiness, business performance.
This work seeks to explore diﬀerent approaches to entrepreneurship in family businesses. In this way, it contributes to a research program on family business that is underway at the Family Business Research Center in the Universidad de las Américas Puebla. This program has the purpose of fnding out the specifc characteristcs of factors associated to entrepreneurship in the context of family businesses in Mexico. This paper utlizes Dubin´s (1978) theory building framework to propose a model to examine entrepreneurship in family business. We include a revision of some theoretcal constructs that have been directed at examining the relatonship between factors associated to family businesses and actons related to entrepreneurship in these same frms. In order to do so, we can see initally that according to the way that a family business is conceptualized, this will defne those business family factors that will become relevant in the model (units of the theory).
Also, from a theoretcal standpoint, those factors play a distnctve role in defning the strategic path that the family business follows and the process that takes place to arrive at strategies, namely, the strategic planning process. Therefore, we review some works that include the strategic planning as a mediatng process between the family business factors and entrepreneurial actons. Based on these works, we made a theoretcal model proposal to classify business family atributes and factors and how these relate to entrepreneurial actvites that are undertaken by the frms (laws of interacton). Afer that, it is necessary to defne the boundaries of the model and explain the conditons under which the theory is operatve. Finally, based on this proposal, we present some empirical results that provide elements to build research propositons. These theoretcal propositons will allow us to conduct further research on entrepreneurship in family business in Mexico.
The objectve of this paper is, therefore, to build a model for conductng research of family businesses and its linkage to entrepreneurial actvites in Mexico. Regarding the organizaton of the paper, it proceeds as follows. Afer introducton, we describe brieﬂy Dubin´s methodology for building theory. In the next secton, we develop the structural components of Dubin´s model- We shall conclude our paper by discussing the results and the conclusions conducted in this research.
Dubin´s methodology for theory building
In this research we use the Dubin´s (1978) methodological approach. Dubin provides a comprehensive methodology for theory building from a literature review perspectve. It is partcularly relevant for applied felds such as management, marketng, and organizaton theory. Dubin´s methodology has eight phases for building theory, and these are: (1) units (i.e., the main concepts) of the theory, (2) laws of interacton (among the concepts), (3) boundaries of the theory (the boundaries within which the theory is expected to apply), (4) system states of the theory (conditons under which the theory is operatve), (5) propositons of the theory (logical deductons about the theory in operaton), (6) empirical indicators (empirical measures used to make the propositons testable), (7) Hypotheses (statements about the predicted values and relatonships among the units), and (8) research (the empirical test of the predicted values and relatonships).
In order to reach the objectve of this research, we use the frst fve phases of the methodology because these represent the structural components of Dubin´s model. The last three phases represent the process of empirical validaton. Some theorists consider the eight phases of Dubin´s model for eﬀectve theory building; however, theory building and empirical research are ofen separated, and each of these in conducted as a distnct research eﬀort.
Elements of a model to examine entrepreneurship in family business
We describe in this secton the development of the model to examine entrepreneurship in family business using the frst fve phases of Dubin´s methodology for theory building.
Units of the model
The units of the model are the ideas, concepts and previous research, from which the model is constructed. To determine the concepts in our model, we reviewed academic papers on family business and entrepreneurship in leading academic journals and annual conference proceedings. Our review indicates that the literature includes several related concepts.
Family business concept
In order to examine the literature related to entrepreneurship in family business, we take as a basis the philosophical diﬀerence made by two approaches to defne a family frm: the components of involvement and the essence approach (Chua, Chrisman and Sharma, 1999; Habbershon, Williams and MacMillan, 2003). The components of involvement approach has been the most inﬂuental approach in conductng research in the family business feld, including those aspects related to strategic planning and entrepreneurship. It focuses on combinaton of variables related to the type and degree of ownership, type of governance and management, and trans-generatonal succession issues as distnctve atributes that identfy a family business (Chua et al., 1999). The essence approach, on the other hand, considers that those variables, even though necessary, are not sufcient for identfying it as a family business. Therefore, it should also take into account maters related to intenton, vision, behavioral aspects, and “familiness”, which are intrinsic to its nature to qualify as such (Davis and Tagiuri, 1989; Litz, 1995; Chua et al., 1999).
Familiness is a concept that was frst proposed by Habbershon and Williams (1999), who defned it as the unique bundle of resources and capabilites a partcular organizaton possesses because of the family system’s interacton among the family, its individual members, and the business. It is clear from these concepts that the components of involvement approach has created more opportunites for conductng research as the variables associated with the concept implicit in the approach are more amenable to become operatonal. However, for the case of the essence approach to be used as a basis for research, some theoretcal underpinnings must be explained before that is atempted.
Theories associated with the essence approach
Various works have indicated that family business features can be examined under the lens of the resource-based view (RBV) and agency theories. The RBV of the frm suggests that returns achieved by frms are largely atributable to their resources (Penrose, 1959; Hit and Ireland, 1985; Wernerfelt, 1984; Grant, 1996). RBV lends support for associatng some features with family frms which allows them to display more valuable resources and capabilites that are the basis of a solid compettve advantage through an appropriate strategy in comparison to non-family businesses (Haynes, Walker, Rowe and Hong, 1999; Cabrera, De Saa and Garcia, 2001; Habbershon and Williams, 1999; Aldrich and Cliﬀ, 2003). As part of these features, we have the high degree of family members’ commitment and dedicaton, as well as customers’ trust and percepton as characteristcs of family business (Ward, 1987; Leach, 1993; Gallo, 1995). These resources and capabilites are sustained by the unique resources atributes that family frms possess: human capital, social capital, patent capital, survivability capital and governance structures (Sirmon and Hit, 2003).
Agency theory adds to the RBV by reducing or eliminatng the agency costs that are normally present when the property and the administraton of a business are in the hands of people who are not related by kinship (Jensen and Meckling, 1976; Myers, 1977; Becker, 1981; Shleifer and Vishny, 1997). In family business, as these roles are exercised by the same family members, there is a large identfcaton between the economic and non-economic objectves of owners and the business administraton (Fama and Jensen, 1983; Pollack, 1985; Schulze, Lubatkin and Dino, 2001, 2003). Pearson, Carr and Shaw (2008) complement the RBV and agency theories with the social capital theory in order to explain the content of familiness. They take the defniton of social capital as “the sum of actual and potental resources embedded within, available through, and derived from the network of relatonships possessed by and individual or social unit (Nahapiet and Ghoshal, 1998, p.243).” As a result, Pearson et al. (2008), based on other works (Arregle, Hit, Sirmon and Very, 2007; Leana and Van Buren, 1999; Nahapiet and Ghoshal, 1998; Oh, Labianca and Chung, 2006) provide a social capital model of familiness and the parameters to implement this construct.
This model explains the structural, cognitve, and relatonal dimensions of social capital that serve as the behavioral and social resources that consttute familiness. The structural dimension comprises the social interactons, including the paterns and strength of tes, among the members of a collectve integrated by the family. The cognitve dimension includes resources providing shared representatons, interpretatons, and systems of meaning among the family partes. The relatonal dimension that integrates the prior two dimensions consists of resources created through personal relatonships, including trust, norms, obligatons, and identty. These resources lead to a capability that consists in access to broader sources of informaton and improved informaton quality, relevance, and tmeliness, on the one hand, and encourages willingness and ability of partcipants to subordinate individual goals and associated actons to collectve goals and actons, on the other. In additon to addressing these dimensions, Pearson et al. (2008) indicate the antecedent conditons that help to create familiness. These comprise: (1) the family’s existng structure and long-standing internal relatonships that help to build the stability necessary to generate social capital; (2) interdependence that is largely a functon of the joint and shared interests and the agreement toward shared goals that members of a collectve have; (3) frequent and close social interactons that permit actors to know one another, to share important informaton and to create a common point of view; and (4) closure that can be interpreted as the degree to which boundaries exist, which prevent external inﬂuences and enhance internal focus on such management actvites as informaton sharing and decision making.
In this work we take the social capital resources represented by the dimensions included in the social capital model of familiness to relate them to the building of entrepreneurial capabilites. In fact, as we will see later, informaton access and associability capacites, identfed by Pearson et al. (2008) as the building blocks of capabilites, are important for conductng entrepreneurial type of actvites in the family firm.
The demographic factors represent the structural dimension of social capital resources, and these include age, tme of tenure, founder-manager role, educatonal level of owner-manager, the number of generatons involved, and the degree of ownership by the family owner. In general, there was not a signifcant relatonship of ownermanager’s age with entrepreneurial behavior (Kellermanns, Eddleston, Barnet and Pearson, 2008), even though in a study (Wang and Poutziouris, 2010) age was found to be negatvely related to entrepreneurship. In this later case, it was argued that risk taking behavior for young entrepreneurs may enhance their reputaton and prestge within the frm and give further security to their leadership positon. CEO tenure in the organizaton was negatvely associated to entrepreneurship, as the behavior of longer tenured CEOs may be reﬂectng greater cauton as they focus on succession issues, which in turn would lead to lower growth (Kellermanns et al., 2008; Zahra, 2005). However, Wang and Poutziouris (2010) found a positve relatonship, as long tenure creates opportunites for owner-managers to identfy externally generated valuable knowledge that is critcal to the business operatons and then absorb, assimilate and integrate it to the business processes.
The duality of being a founder and CEO did not appear to have any bearing on entrepreneurial risk. This may be due, on the one hand, to the fact that even though it preserves the experiences and values of the founder necessary for undertaking new initatves, it also centralizes authority in the hands of the CEO and prevents others from contributng to entrepreneurial actvites (Zahra, 2005). The number of generatons involved in the frm’s management positons was positvely associated to entrepreneurship (Kellermanns et al., 2008), and to higher risk taking (Wang and Poutziouris, 2010). The higher the number of generatons from the owner family in control or operatng within the company, the higher the frm’s focus on entrepreneurship (Zahra, 2005; Wang and Poutziouris, 2010). One interpretaton of this fnding is that diﬀerent and multple generatons bring fresh insights and experiences and, therefore, new knowledge into the family frm. Finally, entrepreneurs’ educatonal level and owner family’s degree of ownership were neutrally related to entrepreneurship (Wang and Poutziouris, 2010).
The variables included as insttutonal refer to ownership and governance systems and are considered as part of the structural dimension of social capital resources. We present the results of an inﬂuental research carried out by Zahra, Neubaum and Huse (2000). Stock ownership appeared to motvate executves to promote value-creatng actvites such as corporate entrepreneurship, which can enhance the wealth of the frm and its executves. Stock ownership by “pressure-sensitve” insttutons (insurance companies, banks and non-bank trusts) was negatvely associated with entrepreneurship. The business relatonship they have with the companies in their portolios might compromise their willingness to challenge and inﬂuence management to support long-term corporate enterprise initatves. However, “pressure-resistant” insttutonal owners (public pension funds, mutual funds, endowments and foundatons) encouraged and challenged senior executves to pursue corporate entrepreneurship. There was a positve relatonship of board size and corporate entrepreneurship untl a certain threshold (11 members) was reached in which case the relatonship became negatve. The negatve associaton may reﬂect the difcultes that directors in large boards encounter in communicatng and partcipatng in the board’s deliberatons. The higher partcipaton of outside directors in the boards was negatvely associated to entrepreneurship. Their detachment from managerial decisions might prevent them from exercising inﬂuence and increase their dependence on the company executves’ conservatve-laden decisions. Increasing the outside directors’ stock ownership acted as an incentve to understand the company’s operatons and strategic moves, especially in the realm of corporate entrepreneurship. Finally, separaton of the company CEO and board chair positon was associated positvely with entrepreneurship. This situaton may increase diversity of opinions, empower the board and increase its independence from the CEO.
In order to complement the structural dimension of social capital resources, we will examine studies that have taken into account factors related to organizatonal structure characteristcs and how these relate to entrepreneurship. Organizatonal characteristcs and their associaton with entrepreneurship vary according to whether frms were classifed as “founder-centered” (FC), “sibling/cousin consortum based” (CB) or “open family” (OF) (Salvato, 2004). In relaton to organizatonal and governance issues the FC frms needed support from both family and non-family members of the organizaton to proactvely devise innovatve business ideas, and to take risks of pursuing them. In the CB case, frms were characterized as being in the path towards managerializaton, yet stll characterized by considerable levels of informality. Such an organizatonal hybrid proved benefcial for the levels of entrepreneurship. In the OF frms, there was a tendency towards compensatng employees according to the value they add to the frm that was positvely related to entrepreneurship.
Another organizatonal study was carried on by Miller (1983) who examined how the organizaton structure and type of environment modify the nature of entrepreneurship in diﬀerent types of frms classifed, according to Mintzberg (1973, 1979), as “simple”, “planning” and “organic”. In simple frms the locus of control, centralizaton and individual-scanning were very signifcantly correlated with entrepreneurial actvity. Also entrepreneurship was so very ted up with the leader’s personality power and informaton that almost nothing else seemed to count. Issues of technocratzaton were linked to entrepreneurship by the role played by external consultants, such as scientsts, engineers or market experts. In the planning frms, there was a high correlaton of entrepreneurship with the explicitness of strategy, even though the stable environment in which these frms operated did not serve as a stmulus to entrepreneurship. In organic frms, the level of entrepreneurial actvity was tailored to the demands of the environment. Organizatonal structural variables (communicaton, diﬀerentaton, delegaton of authority, technocratzaton and decentralizaton) correlated highly with entrepreneurship. Decision making power was so diﬀuse in these frms that the personality of the leader did not have a signifcant impact upon entrepreneurship which was performed by many individuals at many levels.
Behavioral and cultural factors
Now, we examine the cognitve dimension of the social capital resources considering the research that has focused on the relatonship of behavioral and cultural factors with entrepreneurship. The ability to recognize technological opportunites, pursue organizatonal change, and exploit opportunites through strategic planning increased corporate entrepreneurship in family frms (Kellermanns and Eddleston, 2006). Family frms’ willingness to change was an additonal factor that increased corporate entrepreneurship (Kellermanns and Eddleston, 2006), and considered a characteristc that frms are ofen critcized for lacking. In relaton to this issue, Shepherd and Haynie (2009) argued that many tmes frms face an identty conﬂict that opposes “who we are as a family“ with “who we are as a business”. In order to help solve this conﬂict, they proposed a model of a meta-level identty that deals gradually with the source of identty conﬂict and ultmately eliminates it. However, they also recognized that its applicaton would likely result in a decline in the frequency of conﬂict-triggering opportunites discovered by the family business, suggestng that the nature of opportunites discovered by the business may represent more incremental (less novel) opportunites for growth. Results showed that family frms’ individual –versus- group orientaton had an inverted U-shaped relatonship with entrepreneurship (Zahra, Hayton and Salvato, 2004).
Family frms whose cultures strongly favored an individual orientaton might have found it easy to spur the entrepreneurial initatves deriving from the autonomous acton of the managers and employees. But these frms might have found it difcult to build the cooperaton necessary to implement these actvites. Therefore entrepreneurship ﬂourishes at moderate levels of individualism and family businesses may beneft from balancing these opposite cultural orientatons. High external cultural orientaton was positvely associated with entrepreneurship in family frms (Zahra et al., 2004). This culture values new knowledge acquired from customers, suppliers and compettors (Morris, 1998). Financial controls, a proxy for short-term orientaton, lowered entrepreneurship, whereas there was a positve associaton between strategic control and entrepreneurship, indicatng the importance of a long-term cultural orientaton (Zahra et al., 2004).
Social network factors
We examine now the relatonship between social network factors and entrepreneurship. The variables associated with social network represent the relatonal dimension of the social capital resources. Toledano, Urbano and Bernadich (2010) suggested that the promoton of trust of owner-managers in the organizatonal context may assume the role of intrapreneurs as network or human interacton builders within business, in order to promote corporate entrepreneurship through collectve actvites. In relaton to social networks, Klyver (2007) considered the changes in the involvement of family members in an entrepreneur’s social network during the entrepreneurial process. He used a “life cycle” approach represented by four phases for explaining behavior in the entrepreneurial process: “discovery”, “frm emergence”, “baby-business” and “operatng”. His research showed that family members counted as the most frequent role-relaton in social networks during the entrepreneurial process, and their involvement tended to be more common in the frm emergence phase than in the others. They tended to be more critcal than other players in their role-relatonships. Family involvement was most common when entrepreneurs were young and had higher educaton of three years or above. As the discovery phase is more a cognitve and individual process, weak bridging tes and not strong family-based tes are needed (Evald, Klyver and Svendsen, 2006).
The emergence phase demand, on the other hand, is characterized by strong and emotonal supportve tes typically provided by family members, where human, fnancial and physical resources have to be obtained. Further on, the baby-business and operatng phases are driven by commercial type of tes. According to Anderson, Jack and Dodd (2005), the level of involvement in these networks is not limited only to family business members, whether we consider a narrow, middle, and broad family defniton (Astrachan and Shanker, 2003). Involvement should consider also those family members who are beyond the family business boundaries, that he called the “family jugglers” group. These are in an intermediate positon located between familyinside and family-out (Birley, Ng and Godfrey, 1999). Anderson et al. (2005) results showed that well over two-thirds of the family members to whom entrepreneurs turned for help with their business work outside the formal boundaries of the family frms. Indeed, for some topics, they were more likely to seek discussions with family than with business tes.
These subjects were found to be tax issues, producton and operatons, and managing staﬀ. Family help was more likely to be emotonal support than help from business contacts, and this was provided ofen in the form of advice, problem solving, and informaton. With the inside-family, strong, high-quality, opportune, non-cost, and professional links were set up, but these contributons were limited in scope and were of a homogeneous nature. With the jugglers, even though links were weaker, their advice included the heterogeneity of resources and viewpoints. Additonally, these maintained the high quality of advice, the rapidity of the service provided, and low or nonexistent costs. Issues related to taxes, promoton and advertsing, operatons management, managerial personnel, were included in these interactons. Although there was mainly a strong emotonal content in these contacts, these did not suppress others related to consultng, problem resoluton, and informaton.
Entrepreneurship and performance
Most studies that have focused on examining the linkage between family frms and entrepreneurship have taken the concept developed by Miller (1983). According to Miller (1983), entrepreneurship is a multdimensional concept that encompassing the frm’s actons relatng to product-market and technological innovaton, risk taking and proactveness (Miller, 1983). Lumpkin and Dess (1996) defned these concepts as follows. Innovatveness indicates the frm trend to support new ideas and foster creatve processes that aim to develop new products and services. Risk taking is the frm tendency to support projects in which profts are uncertain. Proactveness means taking initatve and pursuing new business opportunites in emerging markets. Actually, with similar connotatons, the term entrepreneurship in the context of family frms has been referred to as corporate entrepreneurship (Zahra et al., 2000; Kellermanns and Eddleston, 2006), entrepreneurial behavior (Kellermanns et al., 2008), entrepreneurial orientaton (Naldi, Nordqvist, Sjöberg and Wiklund, 2007), or entrepreneurial spirit (García-Tenorio and Sánchez, 2009).
Most recently, and based on a concept that implies social capital and familiness connotatons, the term collaboratve entrepreneurship or collectve entrepreneurship has been used to refer to entrepreneurship (Johannisson, 2003; Ribeiro-Soriano and Urbano, 2009; Toledano et al., 2010). Concomitantly, scholars have begun paying more atenton to entrepreneurial actvites that take place within an established organizaton, using the term of intrapreneurship in these cases. As such, collaboratve entrepreneurship “encompasses the relatonships established among individuals in order to create new business within established frms, introduce signifcant innovatons and enhance a company’s compettve positon” (Toledano, et al., 2010, p. 398). This concept emphasizes the role of human interactons or networks that are built around the family business and contains elements more closely related to the essence approach of family frms. In additon to the factors related to innovaton, risk taking and proactveness, mentoned above, collaboratve entrepreneurship considers frequency and type of interactons, network access and openness, nature, occupaton, and content of te contact, among other relevant variables.
In relaton to family frm performance associated with entrepreneurship, indicators as proftability (return on assets –ROA-, return on equity –ROE-, return on sales – ROS-, and earnings per share –EPS-), growth (employment, sales, profts, value), and others, such as cash-ﬂow and the Tobin’s q, have been used in those studies. A closer examinaton shows that the eﬀects of entrepreneurship on diﬀerent performance metrics vary according to the length of tme considered for analyzing these impacts; growth normally precedes proftability. Also, some types of entrepreneurial initatves may favor more clearly some performance measures instead of others (Wiklund and Shepherd, 2003). For example, family business venturing into internatonal markets was associated negatvely with ROA and ROS, as well as domestc venturing with EPS, while other innovatons initatves showed a positve associaton with those and other performance indicators (Zahra, et al., 2000).
Laws of interacton
The relatonships among the units (concepts) of a theory are described in the theory´s laws of interacton (Dubin, 1978). The laws of interacton show how changes in one or more units of the theory inﬂuence the remaining units. We show the relatonships outlined in Figure 1. The work developed by Pearson et al. (2008) on familiness serves well to build a model that connects the social capital resources to entrepreneurship, and then to compettve advantage and performance.
First, the social conditons that help create familiness (tme and stability, interdependence, interacton, and closure) are presented, followed by the social capital resources, which comprise the structural dimension that accompanies entrepreneurship in the family business. Following Pearson et al. (2008), strength of tes is represented by demographic factors and generatons involved in the business, while social interactons comprise insttutonal and organizatonal confguratons, such as governance and ownership systems, communicatons, or delegaton of authority paterns, among other organizatonal structural variables. These variables are circumscribed to a large extent to the components of involvement approach of family business.
The cognitve dimension comprises behavioral and cultural factors. These factors contribute to build shared representatons and interpretatons that provide meaning to family initatves, according to Pearson et al. (2008), and are more related to the essence approach of family business. Within this same approach, the relatonal dimensions complement the social capital resources, including variables connected to social networks. These networks lead to personal interrelatonships which are not limited to the context of the immediate family business members and help to build trust, norms, obligatons and identty. Therefore, the interacton of the structural, cognitve, and relatonal dimensions conducts to the building of frm capabilites that, in case of our model, consist of the diﬀerent actvites related to entrepreneurship. By combining these dimensions, we are able to relate the components of involvement and the essence approaches to family business, as the basis for reaching family frm capabilites represented by entrepreneurship capacites.
However, even though there are various advantages that are related to family business, to reduce informality and non-systematc examinaton in defning and reaching entrepreneurial actvites some mechanisms are needed. Therefore, we introduce the strategic planning process in the model as an appropriate mechanism between setng up entrepreneurial priorites and exploitng these initatves in order to achieve compettve advantages in the market (Naldi et al., 2007). The strategic planning allows the frm’s management to identfy new opportunites that match business’s resources and capabilites (Randel and Ward, 2001). These will form the basis on which compettve advantage is sustained that leads to enhanced frm performance, according to our proposed model.
Boundaries of the model
The boundaries of a theory distnguish its theoretcal domain from aspects of the world that have not been considered by any other theory. The boundaries of a theory distnguish its theoretcal domain from aspects of the world not addressed by the theory (Dubin, 1978). The entrepreneurship research has demonstrated that there are important commonaltes with family business research (Chua, Chrisman, and Steier, 2003). Therefore, the domain of the model that we propose is the domain of family business, and it can be small, medium or big.
Dubin (1978) mentons that a system state that accurately represents a conditon of the system being modeled has three characteristcs: (a) all the units of the system are included in the system state (i.e., inclusiveness), (b) the relatonship between units persists long enough to allow the goodness of ft between them to be determined (i.e., persistence), and (c) all units take on unique values for that system state (i.e., distnctveness). We believe that our model has the three characteristcs because: (a) it includes all the important units that have been identfed as important in previous research on family business and entrepreneurship, (b) the relatonships between all the units describe in Figure 1 are long-lastng relatonships, and (c) there is no overlap in values between any of the units (i.e., each unit can be assigned a unique value)
Yin (2002) argues that propositons are logical deductons about the theory in operaton. Propositons are statements that are logically derived from theory; propositons can be subjected to empirical testng (Dubin, 1978). Derived from the literature review we can make the following research propositons. Although these propositons focus mainly on one of the capital social dimensions of the model, an interacton with the others is suggested, mainly the relatonal dimension and the planning strategic process.
We saw that partcipaton of diﬀerent family generatons in the control or operatons of the owner family tend to promote entrepreneurial actvites. However we add that in order to ﬂourish these initatves, it is necessary that the company has established communicaton channels where partcipants can expose and discuss these ideas, as indicated by the factors included in the relatonal dimension. Based on these fndings we can propose the following propositon:
P1: The higher the number of family owner’s generatons involved in the company, the higher the level of entrepreneurial actvites, as mediated by social networks where owners and employees can interact.
It was seen that the involvement of the founders or owners in preparing and exposing successors to risk taking actvites strengthen future leaders’ capacites and skills to undertake entrepreneurial actvites. Additonally the family support during the emergence phase of the idea is a key factor that aﬀects the initatve success. Derived from these fndings we can frame the following propositon:
P2: A more planned process for grooming and nurturing younger generaton’s risk-taking capability and capacity, and the family members support during the emergence phase of the entrepreneurial process, are associated with the successful contnuance of the entrepreneurial initatve.
As seen there were certain conditons that promote a more entrepreneurial type of governance structure in the family business, mainly related to the board of directors. A greater size up to a certain number (11 members), a broader partcipaton in the stock ownership, and a separaton of the role CEO and the president of the board, create beter opportunites for supportng entrepreneurial actvites. However, as argued, the role of strategic planning structures and processes may capitalize that partcipaton, introducing a more objectve and analytcal assessment of those initatves. Based on this informaton the following propositon can be advanced:
P3: The set-up of ownership and governance structures and systems that promote broad partcipaton and discussion in the family frms leads to higher levels of corporate entrepreneurship. In these processes, strategic planning can enhance the exploitaton and success of entrepreneurship opportunites a family frm recognizes.
We reported an associaton between entrepreneurial actvites and the way that family members in charge of the business evolve, from founder base to open family type. Also, organizatonal structural variables and the complexity of the environment aﬀect the level of entrepreneurial actvites in the family business. Based on these fndings and according to the contributon that family members beyond those related directly with the business can make, we proposed the following propositon:
P4: The set-up of organizatonal structures that considers the type of frm in terms of family involvement (FC, CB or OF) and environmental complexity in which these frms operate is linked to the presence of entrepreneurial actvites. A higher instability of the environment may suggest a family partcipaton in social networks beyond the boundaries of business family members.
Those studies that have focused on the behavioral aspects of family frms have emphasized the external and long term orientaton of the family and its members as a conditon for displaying higher levels of entrepreneurship. But in order to have the opportunity to build a shared understatng and collectve purpose, spaces must be created where human interacton takes place and networks are built, including the partcipaton of non-family members working in the business. Thus, we can suggest the following propositon:
P5: A higher partcipaton in social networks where owners and employees can interact leads to innovaton and new ventures initatves. Towards this purpose, the establishment of system and structures that give employees the opportunity to make contributons, while providing the mechanisms to integrate and coordinate these eﬀorts, contribute to raise entrepreneurship.
Previous research about entrepreneurial orientaton has found evidence that leads to the assumpton that companies with entrepreneurial orientaton has a beter performance (Rauch, Wiklund, Lumpkin and Frese, 2009). However, Hart (1992) mentons that the results are not conclusive and although diﬀerences in results can be atributed to various research designs, the diﬀerences reﬂect the fact that the entrepreneurial orientaton sometmes does not contribute for a beter performance. Lumpkin and Dess (1996) argue that the strength of this relatonship depends on internal characteristcs and external to the organizaton, so the entrepreneurial orientaton-frm performance relatonship is more complex than a simple relatonship. Therefore, we suggest the following propositon:
P6: The relatonship between entrepreneurial orientaton of a family business and its performance is moderated by the strategic planning. The current compettve environment is complex, and complexity is derived from diﬀerent dimensions, which makes short-term or long term decisions crucial to maintaining the compettveness of family businesses.
In making a distncton of the essence and components of involvement defnitons of family business and familiness, we were able to build a conceptual model to group and connect those variables that associate family business to entrepreneurship. Through this theoretcal construct of family business, we atain some important recommendatons that argue for the need of a family embedded perspectve on entrepreneurship (Aldrich and Cliﬀ, 2003; Heck, Hoy, Poutziouris and Steier, 2008). However there are two aspects that we should take into account in relatons to the scope and limitatons of the proposed model and the theoretcal propositons derived from it.
Firstly, one can argue that there are many more propositons that can be built from the reviewed literature that combines factors from those diﬀerent dimensions. What we tried to do in elaboratng these propositons was to base them on those fndings that were more robust and replicated by various studies. We must admit that some of these propositons can be modifed and adapted once the empirical research to be taken in the Mexican context is underway.
Secondly, contrary to the advantages posed by the social capital model of familiness for supportng entrepreneurship, some authors warn about the perils that surround family business that work against those entrepreneurial actvites and their performance. According to these views, family involvement in a business increases agency costs due to challenges such as nepotsm, free riding, family entrenchment, and intergeneratonal conﬂict, thereby negatvely aﬀectng performance (Lansberg, Perrow and Rogolsky, 1988; Gomez-Mejia, Nuñez-Nickel and Guterrez, 2001; Miller, Le Breton-Miller, Lester and Cannella, 2007; Schulze et al., 2003). Moreover, Nordqvist (2005) argues that strategic proximity and persistence in the family frms can also lead to groupthink, alienaton, and strategic simplicity. In trying to disentangle these opposing views, Rutherford, Kuratko and Holt (2008) examined the link between family and performance using the familiness instrument named familiness-power, experience, and culture (F-PEC) scale developed by Klein, Astrachan and Smyrnios (2005). As a result of empirical research, they found that the presence of high levels of familiness possesses some compettve advantages enhancing family frm qualites, and insisted that future studies work further to measure the essence of familiness as a mediator between involvement and performance. In a similar vein, the research undertaken by Sirmon, Arregle, Hit and Webb, (2008) on how family frms take unique strategic actons in response to compettve threat of imitaton to produce performance diﬀerences, also atempted to clarify those opposing views. Their results suggest that family inﬂuence (i.e. family managerial presence and ownership without providing unilateral control) might oﬀer advantages to the frm (e.g. existence of patent capital) while mitgatng weaknesses found in family-controlled frms (e.g. myopic tendencies) (Sirmon and Hit, 2003). Therefore, family inﬂuence can help the frm achieve positve returns, but only when there are other views represented in the governance to balance the family views. In this way, the positve eﬀects of family involvement are realized, but the other stakeholders are able to forestall the actons taken that could beneft the family to the detriment of the frm’s performance. We believe that in the elaboraton of the propositons we have been able to take variables that can provide a broader perspectve that will allow us to prevent neglectng those possible factors that may act against entrepreneurship.
There have been many discussions about the factors associated with entrepreneurship or more properly, intrapreneurship in family business context. Sometmes, recommendatons derived from these studies seem to contradict each other, reﬂectng diﬀerent family business concepts and organizatonal contexts on which research was conducted, not to menton diﬀerent insttutonal and cultural environments. To delve into these issues is not only a mater of academic interest, but also concerns practtoners, consultants, and those agencies that direct their eﬀorts to promote entrepreneurial initatves among small-and -medium sized enterprises, mainly family businesses.
This work allowed us to arrive at important research propositons that will be used for conductng research in entrepreneurship in family businesses in Mexico. However, we should recognize that the large majority of the studies on which the theoretcal propositons were based came from research undertaken in other countries with diﬀerent socioeconomic conditons and cultural paterns to the Mexican ones. However, on the one hand, the same concerns regarding how to promote entrepreneurship in family business and similar factors to the ones dealt with here that could be behind those entrepreneurial actvites have been suggested in some Mexican studies (Cerut, 2000; Hoshino, 2005; Pozas, 2002). On the other hand, we are quite aware that these research propositons are only an inital step towards revealing the nature of entrepreneurship in Mexican family frms. The nature of the research should be ﬂexible enough to consider adaptatons and modifcatons to the propositons framed as the research progresses (Eisenhardt, 1989: Eisenhardt and Graebner, 2007). The type of research to be developed will employ a case study approach as it is important to begin answering questons related to the why and how those family dimensions and variables are associated with entrepreneurship (Yin, 2002).
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