Corporate Venturing in Family Business: A Developmental Approach of the Enterprising Family

Abstract

Research summary This conceptual article discusses when and why family firms are motivated to engage in entrepreneurial activities. Drawing on family development theory, we offer midrange reasoning about the impact of enterprising family dynamics—such as the birth of a child or children leaving home—on the motivation for corporate venturing and its changes over time. Moreover, our model also accounts for the contingent effect of ownership and business developmental dimensions. Finally, we predict that motivation for corporate venturing can, in turn, spur the development of the enterprising family. Managerial summary Overcoming the idea that family firms are either very or minimally entrepreneurial, we focus on the enterprising family and consider its development to explain the motivation toward corporate venturing. We look at the evolution of the roles and norms of family members over time and predict that motivation for venturing increases with family growth until the moment in which a succession takes place and the younger generation receives the baton. We also consider how changes in the ownership structure and business growth influence the relationship between family development and motivation for venturing. The latter, in turn, can trigger the development of the enterprising family itself, with its structure and norms. Our work, in sum, depicts the enterprising family as a springboard for repeated acts of entrepreneurship across generations. Copyright © 2016 Strategic Management Society.

How Do Family Firms Launch New Businesses? A Developmental Perspective on Internal Corporate Venturing in Family Business

“…Second, by looking at ownership development and its impact on the CV process, we go over a static view of family firms and offer a developmental perspective to family entrepreneurship (Sciascia, and Bettinelli ). In so doing, we also complement recent works, which examine family entrepreneurship along the business (Wales, Monsen, and McKelvie ) and the family developmental dimensions (Minola et al ). Third, by examining ownership development, together with family firms’ governance characteristics (family‐CEO tenure, and external board members) and the typology of the legal system under which the firm operates, we support the need to take into account the heterogeneity of family firms beyond just comparing family and nonfamily firms (McKelvie et al ; Sciascia and Bettinelli ; Sharma, Chrisman, and Gersick ).…”

“…Besides, they are responsible for employment, innovation, and technological advancement (Astrachan ) and contribute to economic development, in particular by “incubating and financing new businesses” (Au et al ; Zahra , p. 23). Given family firms worldwide diffusion, their idiosyncratic organizational features, as well as their inherent interest toward entrepreneurship as a mean for transgenerational wealth creation, CV scholars are increasingly interested in family firms as a research domain (Greidanus ; Marchisio et al ; Minola et al ).…”

“…Family firms—businesses “governed and/or managed with the intention to shape and pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families” (Chua, Chrisman, and Sharma , p. 25)—represent an interesting domain for corporate entrepreneurship scholars (Nordqvist and Melin ; Randerson et al ) and CV scholars in particular (Greidanus ; Marchisio et al ; Minola et al ). Entrepreneurial activities are fundamental to revitalize family firms in changing competitive environments (Cruz and Nordqvist ).…”

“…Entrepreneurial activities are fundamental to revitalize family firms in changing competitive environments (Cruz and Nordqvist ). At the same time, given their paramount concern for transgenerational succession, entrepreneurship, and venturing are of particular interest to family firms (Minola et al ; Nordqvist and Melin ; Zellweger, Nason, and Nordqvist ).…”

“…Considering the development over time of the dimensions characterizing a family business system—ownership, family, and business—is a way to understand the complexity of and emphasize the heterogeneity among family businesses (Chua et al ) and their effect on the strategic choices taken. The evolution of each of these dimensions may, indeed, have an influence on family firms’ norms, motivation, and capabilities and hence on their entrepreneurial conduct and performance (e.g., De Massis et al ; Le Breton‐Miller, Miller, and Bares ; Minola et al ).…”