Now showing 1 - 10 of 13
  • Publication
    Entrepreneurs as scientists: A pragmatist approach to producing value out of uncertainty
    (Academy of Management, 2023-07-31) ;
    Zenger, Todd
    Building on pragmatism, we advance an entrepreneur-as-scientist perspective and depict entrepreneurs as engaging in causally inferential action by forming beliefs, testing these beliefs, and responding to the feedback received. However, this sequence of entrepreneurial actions arrives with a set of companion doubts: namely, doubt about productmarket fit, because the entrepreneurs' beliefs are self-chosen; doubt about feedback validity from false positives or false negatives; and doubt about over-and under-fitting in responses to feedback. We discuss the rationality of heuristics deployed by the entrepreneur to overcome these doubts. Our insights contribute to the microfoundations of entrepreneurial action and strategy by explaining how entrepreneurs generate the information to produce value out of uncertainty.
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    Scopus© Citations 35
  • Publication
    Property Rights, Owner-Management, and Value Creation
    (Academy of Management, 2021)
    Schulze, William S.
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    Scopus© Citations 15
  • Publication
    Ownership competence
    (Wiley, 2020-07-16)
    Foss, Nicolai
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    Klein, Peter
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    Lien, Lasse
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    Zenger, Todd
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    Scopus© Citations 75
  • Publication
    Relational embeddedness and firm growth: Comparing spousal and sibling entrepreneurs
    Integrating relational embeddedness arguments with Penrosean growth theory, we compare the growth of firms run by spousal entrepreneurs with firms run by sibling entrepreneurs. We theorize that trust, identification, and mutual obligations—the three facets of relational embeddedness—are more pronounced in spousal teams than in sibling teams, which provides spousal teams with advantages over sibling teams in generating firm growth. Probing a sample of all private firms in Sweden over a three-year period, we find support for this conjecture. Exploring boundary conditions to this baseline relationship, we also find that firm age weakens the growth advantages of spousal teams over sibling teams and that industry experience heterogeneity within the entrepreneurial team reinforces these growth advantages. These results provide important contributions for research on firm growth, the social embeddedness of firms, entrepreneurship, and family business.
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    Scopus© Citations 77
  • Publication
    In the horns of the dilemma: socioemotional wealth, financial wealth and acquisitions in family firms
    (Sage Publ., 2018)
    Gomez-Mejia, Luis
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    Patel, Pankaj
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    We posit that family firms often face a dilemma in their strategic decision making: whether to maintain current socioemotional wealth (SEW) or pursue prospective financial wealth. Applying such a mixed gamble perspective to acquisitions, family owners assess potential acquisitions with regard to their impact on both wealth dimensions. In line with this reasoning, we find that family control implies a general reluctance to acquire, and, when an acquisition happens, a preference for related targets. Because financial and socioemotional viewpoints lead to largely incompatible predictions about the occurrence and relatedness of acquisitions, family firm owners use their firm's vulnerability as a signal. Increased vulnerability leads to a heightened propensity to prioritize financial over SEW problem framing, which is reflected in the acquisition of unrelated targets. Empirical results are supportive of these predictions.
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    Scopus© Citations 288
  • Publication
    Are family firms good employers?
    (Academy of Management, 2018-04-20)
    Neckebrouck, Jeroen
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    Schulze, Bill
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    Family firms employ about 60 percent of the global workforce. While it is widely assumed that they are good employers, data about their conduct is mixed. In this study, we extend stewardship and agency theories to test competing propositions about the impact of family on employment practices using data from 14,961 private Belgian firms over a 19-year period. Higher investments, lower dividend payout, and higher risk tolerance indicate that family firms are better financial stewards of their companies than nonfamily firms. However, family firms are worse organizational stewards than nonfamily firms: They offer lower compensation, invest less in employee training, and exhibit higher voluntary turnover and lower labor productivity. Further, and contrary to earlier research, we find that financial practices in private family firms do not change over time, and that the deleterious influence of family on employment practices rises with both firm age and with heightened family involvement. Together, our findings suggest that a more nuanced understanding of stewardship and agency theory is needed to understand the impact of family on the governance of private firms.
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    Scopus© Citations 157
  • Publication
    Doing more with less: Innovation input and output in family firms
    (Academy of Management, 2016-08)
    Duran, Patricio
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    Family firms are often portrayed as an important yet conservative form of organization that is reluctant to invest in innovation; however, at the same time, evidence shows that family firms are still flourishing and that many of the world's most innovative firms are indeed family firms. Our study contributes to disentangling this puzzling effect. We argue that family firms-owing to the family's high level of control over the firm, wealth concentration, and importance of non-financial goals-invest less in innovation but have an increased conversion rate of innovation input into output and, ultimately, a higher innovation output than non-family firms. Empirical evidence from a meta-analysis based on 108 primary studies from 42 countries supports our hypotheses. We further argue and empirically show that the observed effects are even stronger when the CEO of the family firm is a later-generation family member. However, when the CEO of the family firm is the firm's founder, innovation input is higher and, contrary to our initial expectations, innovation output is lower than that in other firms. We further show that the family firm-innovation input/output relationships depend on country-level factors, namely, the level of minority shareholder protection and the education level of the workforce in the country.
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    Scopus© Citations 582
  • Publication
    When do family firms have an advantage in transitioning economies? Toward a dynamic institution-based view
    (Wiley, 2014-07-09)
    Banalieva, Elitsa
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    Eddleston, Kimberley H.
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    We advance a dynamic institution-based view of the firm that extends the theory's current focus on scope of pro-market reforms (degree of market liberalization in a given year) to consider how speed of reforms (rate of market liberalization achieved over time) affects the performance of firms from transitioning economies. Utilizing a sample of public firms from Chinese provinces with varying reform speeds, we find that while scope of reforms positively impacts firm performance, speed of reforms detracts from firm performance. We further find that while family firms have an advantage in gradually reforming provinces, non-family firms have an advantage in rapidly reforming provinces. Thus, we extend the institution-based view across time (speed of reforms) and firms (family vs. non-family firms).
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    Scopus© Citations 164
  • Publication
    Turning Agents into Psychological Principals: Aligning Interests of Non-Owners Through Psychological Ownership
    (Wiley-Blackwell, 2013-05) ; ;
    Aquino, Karl
    Principals who delegate tasks to agents face the perennial challenge of overcoming agency problems. We investigate whether feelings of ownership among senior managers in the absence of formal ownership can align agents' interests with those of principals, thus turning agents into psychological principals. Using a moderated mediation model, we find that psychological ownership is positively related to company performance through the mediating effect of individual-level entrepreneurial behaviour. We also find that the effect of psychological ownership on individual-level entrepreneurial behaviour and, ultimately, company performance is weaker for high levels of monitoring compared to low levels. These findings offer important contributions to agency, psychological ownership, and entrepreneurship literatures.
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    Scopus© Citations 101
  • Publication
    Why Do Family Firms Strive for Nonfinancial Goals? An Organizational Identity Perspective
    (Wiley-Blackwell, 2013-03) ;
    Nason, Robert S.
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    Nordqvist, M.
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    Brush, Candida
    This paper develops an organizational identity based rationale for why family firms strive for nonfinancial goals. We show that the visibility of the family in the firm, the transgenerational sustainability intentions of the family, and the capability of the firm for self-enhancement of the family positively influence the importance of identity fit between family and firm as well as the family's concern for corporate reputation. We suggest that the concern for corporate reputation leads the family to pursue nonfinancial goals to the benefit of nonfamily stakeholders. We also discuss reinforcing feedback loops in these processes
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    Scopus© Citations 503