Paternalistic Relationships between Senior and Junior Generation: Effect on Family Firms’ Entrepreneurial Activities

Abstract

Entrepreneurship in family firms is critical to their long-term survival. Questions on whether and to what extent entrepreneurial behaviors are transferred through generations are dominating the family business research field. However, prior research shows inconclusive and ambiguous findings. On one hand, some scholars highlight how a strong family business culture fosters family firms’ entrepreneurial behavior, while on the other hand it has been argued that family firms’ risk-adverse orientation may prevent the exploitation of entrepreneurial activities. Stemming from resource-based theory, the aim of this paper is to develop a contingency framework which sheds a new light on this issue by discussing the dimensions and interrelations between three typologies of paternalistic relationships. Our overall contribution suggests that the existence of authoritarian paternalistic relationships between the senior and the incoming generation could negatively influence family firms’ entrepreneurial activities, while benevolent and moral paternalistic relationships might have a positive effect.

Keywords: Paternalism, Family Business, Generations