Entrepreneurial Orientation in Family Firms: New Drivers and the Moderating Role of the Strategic Involvement of the Board

Abstract

In this study, we examine new drivers that generate a disposition toward entrepreneurial activity in family firms and how the strategic involvement of the board of directors (SIBD) moderates the relationships between these drivers (image of the firm, willingness to change, and access to financial resources) and entrepreneurial orientation (EO). Using a sample of 230 family small and medium-sized enterprises (SMEs), our results confirm that a good family firm image and willingness to change may be powerful tools that stimulate a firm to develop entrepreneurial activities. The negative relationship between access to financial resources and EO may relate to the false belief that financial resources help firms be more creative and to maintaining family control of the firm and the socioemotional endowment. Contrary to our expectations, we also find that the SIBD negatively influences the relationship between the above drivers and EO, pointing to the need for more open boards of directors in family SMEs in order to develop and implement entrepreneurial strategies.

Keywords: Board of directors, entrepreneurial orientation, family firm, family firm image, financial resources, willingness to change

JEL Classification: L2, M1