Entrepreneurial orientation and innovation in family SMEs: Unveiling the (actual) impact of the Board of Directors

Journal of Business Venturing

Volumn 33, Issue 4, 2018, Pages 455-469

  Arzubiaga, Unai ^a   Kotlar, Josip ^b   De Massis, Alfredo ^b,c   Maseda, Amaia ^a   Iturralde, Txomin ^a  

^a UNIVERSITY OF THE BASQUE COUNTRY UPV EHU   (Spain)

^b LANCASTER UNIVERSITY MANAGEMENT SCHOOL   (United Kingdom)

^c FREE UNIVERSITY OF BOZEN BOLZANO   (Italy)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 85044296400     PISSN: 08839026     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jbusvent.2018.03.002     Document Type: Article

References (116)

1. Anderson, R.C., Reeb, D.M., Board composition: Balancing family influence in S&P 500 firms. Adm. Sci. Q. 49:2 (2004), 209–237.
2. Arregle, J.L., Hitt, M.A., Sirmon, D.G., Very, P., The development of organizational social capital: attributes of family firms. J. Manag. Stud. 44:1 (2007), 73–95.
3. Bammens, Y., Voordeckers, W., Van Gils, A., Boards of directors in family firms: a generational perspective. Small Bus. Econ. 31:2 (2008), 163–180.
4. Bammens, Y., Voordeckers, W., Van Gils, A., Boards of directors in family businesses: a literature review and research agenda. Int. J. Manag. Rev. 13:2 (2011), 134–152.
5. Baysinger, B.D., Kosnik, R.D., Turk, T.A., Effects of board and ownership structure on corporate R&D strategy. Acad. Manag. J. 34 (1991), 205–214.
6. Block, J.H., R&D investments in family and founder firms: An agency perspective. J. Bus. Ventur. 27:2 (2012), 248–265.
7. Boivie, S., Bednar, M.K., Aguilera, R.V., Andrus, J.L., Are boards designed to fail? The implausibility of effective board monitoring. Acad. Manag. Ann. 10:1 (2016), 319–407.
8. Bryman, A., Cramer, D., Quantitative Data Analysis with SPSS Release 10 for Windows. New York. 2001.
9. Calantone, R.J., Schmidt, J.B., Benedetto, C.A., New product activities and performance: the moderating role of environmental hostility. J. Prod. Innov. Manag. 14:3 (1997), 179–189.
10. Campbell, D.T., Fiske, D.W., Convergent and discriminant validation by the multitrait-multimethod matrix. Psychol. Bull., 56(2), 1959, 81.
11. Chin, W.W., The Partial Least Squares Approach to Structural Equation Modeling. Marcoulides, G., (eds.) Modern Methods for Business Research, 1998, Lawrence Erlbaum, Hillsdale, NJ.
12. Chou, H.I., Chung, H., Yin, X., Attendance of board meetings and company performance: evidence from Taiwan. J. Bank. Financ. 37:11 (2013), 4157–4171.
13. Chrisman, J.J., Chua, J., De Massis, A., Frattini, F., Wright, M., The ability and willingness paradox in family firm innovation. J. Prod. Innov. Manag. 32:3 (2015), 310–318.
14. Claessens, S., Djankov, S., Fan, J.P., Lang, L.H., Disentangling the incentive and entrenchment effects of large shareholdings. J. Financ. 57:6 (2002), 2741–2771.
15. Conger, J.A., Finegold, D., Lawler, E.E., Appraising boardroom performance. Harv. Bus. Rev. 76 (1998), 136–148.
16. Corbetta, G., Salvato, C.A., The board of directors in family firms: one size fits all?. Fam. Bus. Rev. 17 (2004), 119–131.
17. Covin, J.G., Slevin, D.P., Strategic management of small firms in hostile and benign environments. Strateg. Manag. J. 10:1 (1989), 75–87.
18. Covin, J.G., Wales, W.J., The measurement of entrepreneurial orientation. Enterp. Theory Pract. 36:4 (2012), 677–702.
19. Craig, J.B., Moores, K., A 10-year longitudinal investigation of strategy, systems, and environment on innovation in family firms. Fam. Bus. Rev. 19:1 (2006), 1–10.
20. Cruz, C., Nordqvist, M., Entrepreneurial orientation in family firms: a generational perspective. Small Bus. Econ. 38:1 (2012), 33–49.
21. Daily, C.M., Dalton, D.R., Cannella, A.A., Corporate governance: decades of dialogue and data. Acad. Manag. Rev. 28:3 (2003), 371–382.
22. Dalton, D.R., Dalton, C.M., Integration of micro and macro studies in governance research: CEO duality, board composition, and financial performance. J. Manag. 37:2 (2011), 404–411.
23. Davis, J.H., Schoorman, F.D., Donaldson, L., Toward a stewardship theory of management. Acad. Manag. Rev. 22:1 (1997), 20–47.
24. Dawes, J., Do data characteristics change according to the number of scale points used?. Int. J. Mark. Res. 50:1 (2008), 61–104.
25. De Massis, A., Audretsch, D., Uhlaner, L., Kammerlander, N., Innovation with limited resources: management lessons from the German Mittelstand. J. Prod. Innov. Manag. 35:1 (2018), 125–146.
26. De Massis, A., Kotlar, J., Mazzola, P., Minola, T., Sciascia, S., Conflicting selves: Family owners’ multiple goals and self-control agency problems in private firms. Enterp. Theory Pract., 42(4), 2018, 10.1111/etap.12257 (in press).
27. De Massis, A., Kotlar, J., Wright, M., Kellermanns, F.W., Sector-based entrepreneurial capabilities and the promise of sector studies in entrepreneurship. Enterp. Theory Pract. 42:1 (2018), 3–23.
28. Dess, G.G., Lumpkin, G.T., The role of entrepreneurial orientation in stimulating effective corporate entrepreneurship. Acad. Manag. Exec. 19:1 (2005), 147–156.
29. Duran, P., Kammerlander, N., Van Essen, M., Zellweger, T., Doing more with less: innovation input and output in family firms. Acad. Manag. J. 59:4 (2016), 1224–1264.
30. Eddleston, K.A., Kellermanns, F.W., Destructive and productive family relationships: a stewardship theory perspective. J. Bus. Ventur. 22:4 (2007), 545–565.
31. Eddleston, K.A., Kellermanns, F.W., Sarathy, R., Resource configuration in family firms: linking resources, strategic planning and technological opportunities to performance. J. Manag. Stud. 45:1 (2008), 26–50.
32. Eddleston, K.A., Chrisman, J.J., Steier, L.P., Chua, J.H., Governance and trust in family firms: an introduction. Enterp. Theory Pract. 34:6 (2010), 1043–1056.
33. Eddleston, K.A., Kellermanns, F.W., Zellweger, T.M., Exploring the entrepreneurial behavior of family firms: does the stewardship perspective explain differences?. Enterp. Theory Pract. 36:2 (2012), 347–367.
34. Filatotchev, I., Strange, R., Piesse, J., Lien, Y.C., FDI by firms from newly industrialised economies in emerging markets: corporate governance, entry mode and location. J. Int. Bus. Stud. 38:4 (2007), 556–572.
35. Forbes, D.P., Milliken, F.J., Cognition and corporate governance: understanding boards of directors as strategic decision-making groups. Acad. Manag. Rev. 24:3 (1999), 489–505.
36. Fornell, C., Bookstein, F.L., Two structural equation models: LISREL and PLS applied to consumer exit-voice theory. J. Mark. Res. 19 (1982), 440–520.
37. Fornell, C., Larcker, D.F., Evaluating structural equation models with unobservable variables and measurement error. J. Mark. Res., 1981, 39–50.
38. Gabrielsson, J., Winlund, H., Boards of directors in small and medium-sized industrial firms: examining the effects of the board's working style on board task performance. Entrep. Reg. Dev. 12:4 (2000), 311–330.
39. Gabrielsson, J., Calabrò A., Huse, M., Boards and value creation in family firms: an extended team production approach. The Handbook of Board Governance: A Comprehensive Guide for Public, Private and Not-for-Profit Board Members (Ed. R. Leblanc), 2016, John Wiley & Sons Inc., Hoboken, NJ, USA, 748–763.
40. George, G., Robley Wood, D. Jr., Khan, R., Networking strategy of boards: implications for small and medium-sized enterprises. Entrep. Reg. Dev. 13:3 (2001), 269–285.
41. Gnan, L., Montemerlo, D., Huse, M., Governance systems in family SMEs: the substitution effects between family councils and corporate governance mechanisms. J. Small Bus. Manag. 53:2 (2015), 355–381.
42. Green, K.M., Covin, J.G., Slevin, D.P., Exploring the relationship between strategic reactiveness and entrepreneurial orientation: the role of structure-style-fit. J. Bus. Ventur. 23:3 (2008), 356–383.
43. Gruber, M., Heinemann, F., Brettel, M., Hungeling, S., Configurations of resources and capabilities and their performance implications: an exploratory study on technology ventures. Strateg. Manag. J. 31:12 (2010), 1337–1356.
44. Gupta, A.K., Smith, K.G., Shalley, C.E., The interplay between exploration and exploitation. Acad. Manag. J. 49:4 (2006), 693–706.
45. Hair, J.F., Sarstedt, M., Ringle, C.M., Mena, J.A., An assessment of the use of partial least squares structural equation modeling in marketing research. J. Acad. Mark. Sci. 40 (2012), 414–433.
46. Harman, H.H., Modern Factor Analysis. 1967, University of Chicago, Chicago.
47. He, Z., Wong, P., Exploration vs. exploitation: an empirical test of the ambidexterity hypothesis. Organ. Sci. 15:4 (2004), 481–494.
48. Henseler, J., Fassott, G., Testing moderating effects in PLS path models: an illustration of available procedures. Vinzi, V.E., Chin, W.W., Henseler, J., Wang, H., (eds.) Handbook of Partial Least Squares: Concepts, Methods and Applications, 2010, Springer, Berlin, 713–736.
49. Hillman, A.J., Dalziel, T., Boards of directors and firm performance: integrating agency and resource dependence perspectives. Acad. Manag. Rev. 28:3 (2003), 383–396.
50. Hinds, P.J., Bailey, D.E., Out of sight, out of sync: understanding conflict in distributed teams. Organ. Sci. 14:6 (2003), 615–632.
51. Huse, M., Boards of directors in Europe: Scandinavian experiences. Proceedings of the International Association for Business and Society, 6, 1995, 785–796.
52. Huse, M., Accountability and creating accountability: a framework for exploring behavioural perspectives of corporate governance. Br. J. Manag. 16:1 (2005), 565–579.
53. Huse, M., Boards, Governance and Value Creation: The Human Side of Corporate Governance. 2007, Cambridge University Press.
54. Jaskiewicz, P., Klein, S., The impact of goal alignment on board composition and board size in family businesses. J. Bus. Res. 60:10 (2007), 1080–1089.
55. Jensen, M.C., Meckling, W.H., Theory of the firm: managerial behavior, agency costs and ownership structure. J. Financ. Econ. 3:4 (1976), 305–360.
56. Johannisson, B., Huse, M., Recruiting outside board members in the small family business: an ideological challenge. Entrep. Reg. Dev. 12:4 (2000), 353–378.
57. Kammerlander, N., Burger, D., Fust, A., Fueglistaller, U., Exploration and exploitation in established small and medium-sized enterprises: the effect of CEOs’ regulatory focus. J. Bus. Ventur. 30:4 (2015), 582–602.
58. Kearney, E., Gebert, D., Voelpel, S., When and how diversity benefits teams: the importance of team members’ need for cognition. Acad. Manag. J. 52:3 (2009), 581–598.
59. Kellermanns, F.W., Eddleston, K.A., Corporate entrepreneurship in family firms: a family perspective. Enterp. Theory Pract. 30:6 (2006), 809–830.
60. Kellermanns, F.W., Eddleston, K.A., Barnett, T., Pearson, A., An exploratory study of family member characteristics and involvement: effects on entrepreneurial behavior in the family firm. Fam. Bus. Rev. 1:1 (2008), 1–14.
61. Kollmann, T., Stöckmann, C., Filling the entrepreneurial orientation-performance gap: the mediating effects of exploratory and exploitative innovations. Enterp. Theory Pract. 38:5 (2014), 1001–1026.
62. Kortmann, S., The mediating role of strategic orientations on the relationship between ambidexterity-oriented decisions and innovative ambidexterity. J. Prod. Innov. Manag. 32:5 (2014), 666–684.
63. Kotlar, J., De Massis, A., Goal setting in family firms: goal diversity, social interactions, and collective commitment to family-centered goals. Enterp. Theory Pract. 37:6 (2013), 1263–1288.
64. Kotlar, J., Signori, A., De Massis, A., Vismara, S., Financial wealth, socioemotional wealth and IPO underpricing in family firms: a two-stage gamble model. Acad. Manag. J., 2018 in press https://doi.org/10.5465/amj.2016.0256.
65. Lubatkin, M.H., Simsek, Z., Ling, Y., Veiga, J.F., Ambidexterity and performance in small-to medium-sized firms: the pivotal role of top management team behavioral integration. J. Manag. 32:5 (2006), 646–672.
66. Lumpkin, G.T., Dess, G.G., Clarifying the entrepreneurial orientation construct and linking it to performance. Acad. Manag. Rev. 21:1 (1996), 135–172.
67. Machold, S., Farquhar, S., Board task evolution: a longitudinal field study in the UK. Corp. Gov. 21:2 (2013), 147–164.
68. Machold, S., Huse, M., Minichilli, A., Nordqvist, M., Board leadership and strategy involvement in small firms: a team production approach. Corp. Gov. 19:4 (2011), 368–383.
69. Memili, E., Eddleston, K.A., Kellermanns, F.W., Zellweger, T.M., Barnett, T., The critical path to family firm success through entrepreneurial risk taking and image. J. Fam. Bus. Strat. 1 (2010), 200–209.
70. Miller, D., Breton-Miller, L., Scholnick, B., Stewardship vs. stagnation: an empirical comparison of small family and non-family businesses. J. Manag. Stud. 45:1 (2008), 51–78.
71. Miller, D., Minichilli, A., Corbetta, G., Is family leadership always beneficial?. Strateg. Manag. J. 34:5 (2013), 553–571.
72. Minichilli, A., Zattoni, A., Zona, F., Making boards effective: an empirical examination of board task performance. Br. J. Manag. 20:1 (2009), 55–74.
73. Mitchell, R.K., Morse, E.A., Sharma, P., The transacting cognitions of nonfamily employees in the family businesses setting. J. Bus. Ventur. 18:4 (2003), 533–551.
74. Moreno, A.M., Casillas, J.C., Entrepreneurial orientation and growth of SMEs: a causal model. Entrepreneurship Theory and Practice 32:2 (2008), 507–528.
75. Moss, T.W., Payne, G.T., Moore, C.B., Strategic consistency of exploration and exploitation in family businesses. Fam. Bus. Rev. 27:1 (2014), 51–71.
76. Nadkarni, S., Narayanan, V.K., Strategic schemas, strategic flexibility, and firm performance: the moderating role of industry clockspeed. Strateg. Manag. J. 28:3 (2007), 243–270.
77. Naldi, L., Nordqvist, M., Sjöberg, K., Wiklund, J., Entrepreneurial orientation, risk taking, and performance in family firms. Fam. Bus. Rev. 20:1 (2007), 33–47.
78. Patel, P.C., Chrisman, J.J., Risk abatement as a strategy for R&D investments in family firms. Strateg. Manag. J. 35 (2014), 617–627.
79. Patel, P.C., Cooper, D., Structural power equality between family and non-family TMT members and the performance of family firms. Acad. Manag. J. 57:6 (2014), 1624–1649.
80. Pfeffer, J., Salancik, G., The External Control of Organizations: A Resource Dependence Perspective. 1978, Harper & Row, New York, NY.
81. Phan, P.H., Wright, M., Ucbasaran, D., Tan, W.L., Corporate entrepreneurship: current research and future directions. J. Bus. Ventur. 24:3 (2009), 197–205.
82. Podsakoff, P.M., MacKenzie, S.B., Lee, J.Y., Podsakoff, N.P., Common method biases in behavioral research: a critical review of the literature and recommended remedies. J. Appl. Psychol. 88:5 (2003), 879–891.
83. Pugliese, A., Wenstøp, P.Z., Board members’ contribution to strategic decision-making in small firms. J. Manag. Gov. 11:4 (2007), 383–404.
84. PwC, The ‘missing middle’: bridging the strategy gap in family firms. Family Business Survey, 2016, 2016 downloaded from http://www.pwc.com/gx/en/services/family-business/family-business-survey-2016.html.
85. Qureshi, I., Compeau, D., Assessing between-group differences in information systems research: a comparison of covariance-and component-based SEM. MIS Q. 33:1 (2009), 197–214.
86. Raisch, S., Birkinshaw, J., Organizational ambidexterity: antecedents, outcomes, and moderators. J. Manag. 34:3 (2008), 375–409.
87. Ringle, C.M., Wende, S., Will, A., SmartPLS 2.0. 2005, SmartPLS, Hamburg.
88. Rondi, E., De Massis, A., Kotlar, J., Unlocking innovation potential: A typology of family business innovation postures and the critical role of the family system. J. Fam. Bus. Strat., 2018, 10.1016/j.jfbs.2017.12.001 In press.
89. Rutherford, M.A., Buchholtz, A.K., Investigating the relationship between board characteristics and board information. Corp. Gov. 15:4 (2007), 576–584.
90. Schepers, J., Voordeckers, W., Steijvers, T., Laveren, E., The entrepreneurial orientation–performance relationship in private family firms: the moderating role of socioemotional wealth. Small Bus. Econ. 43:1 (2014), 39–55.
91. Schulze, W.S., Lubatkin, M.H., Dino, R.N., Buchholtz, A.K., Agency relationships in family firms: theory and evidence. Organ. Sci. 12:2 (2001), 99–116.
92. Sciascia, S., Mazzola, P., Chirico, F., Generational involvement in the top management team of family firms: exploring nonlinear effects on entrepreneurial orientation. Enterp. Theory Pract. 37:1 (2013), 69–85.
93. Simon, M., Shrader, R.C., Entrepreneurial actions and optimistic overconfidence: the role of motivated reasoning in new product introductions. J. Bus. Ventur. 27:3 (2012), 291–309.
94. Stam, W., Elfring, T., Entrepreneurial orientation and new venture performance: the moderating role of intra- and extra-industry social capital. Acad. Manag. J. 51:1 (2008), 97–111.
95. Stiles, P., The impact of the board on strategy: an empirical examination. J. Manag. Stud. 38:5 (2001), 627–650.
96. Tenenhaus, M., Vinzi, V.E., Chatelin, Y.M., Lauro, C., PLS path modeling. Comput. Stat. Data Anal. 48:1 (2005), 159–205.
97. Terjesen, S., Sealy, R., Singh, V., Women directors on corporate boards: a review and research agenda. Corp. Gov. 17:3 (2009), 320–337.
98. Thai, M.T.T., Turkina, E., Macro-level determinants of formal entrepreneurship versus informal entrepreneurship. J. Bus. Ventur. 29:4 (2014), 490–510.
99. Tushman, M.L., O'Reilly, C.A. III, Managing evolutionary and revolutionary change. Calif. Manag. Rev. 38:4 (1996), 8–28.
100. Uhlaner, L., Wright, M., Huse, M., Private firms and corporate governance: an integrated economic and management perspective. Small Bus. Econ. 29:3 (2007), 225–241.
101. Vafeas, N., Board meeting frequency and firm performance. J. Financ. Econ. 53:1 (1999), 113–142.
102. Van den Heuvel, J., Van Gils, A., Voordeckers, W., Board roles in small and medium-sized family businesses: performance and importance. Corp. Gov. 14:5 (2006), 467–485.
103. Van Ees, H., Gabrielsson, J., Huse, M., Toward a behavioral theory of boards and corporate governance. Corp. Gov. 17:3 (2009), 307–319.
104. Verbeke, A., Kano, L., The transaction cost economics theory of the family firm: family-based human asset specificity and the bifurcation bias. Enterp. Theory Pract. 36:6 (2012), 1183–1205.
105. Voordeckers, W., Van Gils, A., Van den Heuvel, J., Board composition in small and medium-sized family firms. J. Small Bus. Manag. 45:1 (2007), 137–156.
106. Westhead, P., Cowling, M., Family firm research: the need for a methodological rethink. Enterp. Theory Pract. 23:1 (1998), 31–33.
107. Westphal, J.D., Collaboration in the boardroom: behavioral and performance consequences of CEO-board social ties. Acad. Manag. J. 42:1 (1999), 7–24.
108. Westphal, J.D., Zajac, E.J., The symbolic management of stockholders: corporate governance reforms and shareholder reactions. Adm. Sci. Q., 1998, 127–153.
109. Wiklund, J., The sustainability of the entrepreneurial orientation-performance relationship. Enterp. Theory Pract. 24:1 (1999), 37–48.
110. Wiklund, J., Shepherd, D., Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses. Strateg. Manag. J. 24:13 (2003), 1307–1314.
111. Wright, M., De Massis, A., Scholes, L., Hughes, M., Kotlar, J., Family Business Entrepreneurship. Report commissioned by the Institute for Family Business Research Foundation, 2016, IFB, London, 10.13140/RG.2.1.1892.5200.
112. Zahra, S.A., Governance, ownership, and corporate entrepreneurship: the moderating impact of industry technological opportunities. Acad. Manag. J. 39 (1996), 1713–1735.
113. Zahra, S.A., Entrepreneurial risk taking in family firms. Fam. Bus. Rev. 18:1 (2005), 23–40.
114. Zahra, S.A., Filatotchev, I., Governance of the entrepreneurial threshold firm: a knowledge-based perspective. J. Manag. Stud. 41:5 (2004), 885–897.
115. Zahra, S.A., Matherne, B.P., Carleton, J.M., Technological resource leveraging and the internationalisation of new ventures. J. Int. Entrep. 1:2 (2003), 163–186.
116. Zattoni, A., Gnan, L., Huse, M., Does family involvement influence firm performance? Exploring the mediating effects of board processes and tasks. J. Manag. 41:4 (2015), 1214–1243.