Next Generation External Venturing Practices in Family Owned Businesses

Abstract

Drawing on an Entrepreneurship as Practice (EaP) approach, this article examines how next generation members in family owned businesses (FOBs) engage in external venturing. Our study builds on longitudinal qualitative research in two Mexican FOBs where the next generation launched ten ventures. It reveals five different practices of external venturing used by next generation family members: ‘obtaining family approval’, ‘bypassing family’, ‘family venture mimicking’, ‘jockeying in family’, and ‘jockeying around family’. The five practices are combined into three routes for external venturing: ‘imitating the family business’, ‘splitting the family business’, and ‘surpassing the family business’. Building on notions from Michel de Certeau’s practice theory, this study contributes to theorizing the five practices as ways of operating and the routes as modes of sensing to better understand how next generation family members deal with settings featured by dominant orders within the family and the FOB in their attempts to originate and launch their new ventures.

Narrow‐Framing and Risk Preferences in Family and Non‐Family Firms

“…Corporate entrepreneurship is ‘the process whereby an individual or a group of individuals, in association with an existing organization, create a new organization or instigate renewal or innovation within that organization’ (Sharma and Chrisman, 1999, p. 18). Corporate entrepreneurship is particularly important to family firms, not only because it can help family owners strengthen the vitality of the business, but also because it can be coupled with inter‐generational family business succession when later generation family members who favour new ways of doing business take leadership positions or take the initiative to start their own new ventures externally (Cruz and Nordqvist, 2012; Duran et al, 2016; Ramirez‐Pasillas et al, 2020; Strike et al, 2015; Zahra, 2005; Zellweger et al, 2012).…”

“…or among family firm decision makers (e.g., career motives, training, experience, personal characteristics, etc.) that might influence problem framing (De Massis et al, 2020; Ramirez‐Pasillas et al, 2020; Strike et al, 2015). Future research is needed to compare different types of family firms and to determine how those differences influence risk management strategies.…”

Corporate Entrepreneurship and Family Business: Learning Across Domains

“…One article touches on the early stages of CE, that is, opportunity exploitation (De Massis et al, 2021). Three of the articles focus on specific CE strategies: two articles study ECV and aim to investigate its triggers and approaches in a family firm context (Ramírez‐Pasillas et al, 2021; Prügl and Spitzley, 2021). A third article focuses on the differences between family and non‐family firms in terms of franchising (Chirico et al, 2021).…”

“…The article by Ramírez‐Pasillas et al (2021) focuses on how next‐generation members engage in the process of ECV. The authors combine the phenomenon of next‐generation members of entrepreneurial families having to react to pressures exerted by the senior generation and by the family firm with insights into entrepreneurial behaviour.…”

“…Then, we identify two types of hybrid transformational triggers. On the one hand, factors such as availability of next‐generation family members (Marchisio et al, 2010; Ramírez‐Pasillas et al, 2021), pecuniary needs of in‐laws not involved in the firm, family values and culture (see Raitis et al, 2021) or reputational concerns might reside outside of business domains and concerns but be internal to family ones (third category). On the other hand, some triggers are internal to the business but external to the family, such as the professionalization of managers through the digital transformation process (Prügl and Spitzley, 2021), and are of paramount importance for the initiation and pursuit of CE initiatives; these triggers represent the fourth and last category.…”