Family Firm Configurations for High Performance: The Role of Entrepreneurship and Ambidexterity

Abstract

The performance drivers of family firms have spawned considerable research interest. Almost exclusively this research has relied on independent sets of explanatory variables in linear analyses. These analyses mask the complex interdependencies that are likely to exist among key success factors, leading to faulty theory and misspecified implications for practice. As treatment, the authors propose a configuration approach to family firm performance that accounts for complex interdependencies among entrepreneurial, innovation and family influence conditions. Using a fuzzy set qualitative comparative analysis of a sample of 129 Finnish family firms, the authors identify sufficient conditions with regard to the existence or absence of antecedent conditions to family firm performance. These conditions include entrepreneurial orientation, exploration and exploitation activities that form causal paths towards family firm performance. To enrich the analysis, the authors theorize and empirically analyse how these conditions might differ in family firms with high and low levels of family influence. They deepen the current understanding of configurations that promote the performance of family firms, offer important implications for theory and practice, and set new directions for future research on the strategic management of family firms. The results are also virtually identical and insensitive to change across subjective and objective performance measures.

When family social capital is too much of a good thing

“…There is a dearth of empirical evidence on FSC, its antecedents, and its consequences, due in no small part to the difficulty of obtaining data. This calls for thought to be given to innovative ways of collecting data, for example through studying configurations (Hughes et al, 2018) and latent profiles (Stanley et al, 2017). Third, measuring family social capital in larger firms would support the generalization of our hypotheses and findings.…”

Family Firms, Alliance Governance and Mutual Knowledge Creation

“…Partners may not find it necessary to do more or to contribute more, even if they would or could do due to increased trust. While the non‐family firm will more likely discern such behaviour as rational and economic (Carney, 2005), the socio‐economic mindset of family owners and managers and family involvement (Hughes et al ., 2018) and ownership (Carney, 2005) suggests inwardly oriented behaviour to protect and preserve family wealth and control rights.…”

Organisational ambidexterity and firm performance: burning research questions for marketing scholars

“…Concurrently, scholars are advised to innovate or consider new, different ways to measure, calculate or determine ambidexterity. This may call for efficiency frontier calculations (e.g., stochastic frontier estimation to determine the quality of one firm's ambidexterity in input-output terms versus its peers) used to good effect in the capabilities literature (e.g., Dutta, Narasimhan and Rajiv, 2005) or consider the configuration of exploration and exploitation (e.g., Hughes et al, 2017).…”