Long–Term Orientation and Intertemporal Choice in Family Firms

Abstract

A long-term orientation (LTO) is often associated with family firms, but the LTO construct is underdeveloped. This paper sets forth a framework for studying LTO in family firms including developing three dimensions-futurity, continuity, and perseverance. It identifies LTO as a higher-order heuristic that, in matters of intertemporal choice, provides a dominant logic for decisions and actions. Intertemporal choice refers to decisions with payoffs or outcomes that play out over time. Three mechanisms affecting intertemporal choices are identifiedrepresentation, self-control, and anticipation. LTO and intertemporal choice are further examined and discussed in the context of family firms.

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