Transgenerational Entrepreneurship

Transgenerational Entrepreneurship

Exploring Growth and Performance in Family Firms Across Generations

Edited by Mattias Nordqvist and Thomas M. Zellweger

Introducing a new concept in family businesses Transgenerational Entrepreneurship addresses how these businesses achieve growth and longevity through entrepreneurial activities. It focuses on the resources, capabilities and mindsets that families develop and draw upon in order to be entrepreneurial across generations, and presents findings from an international research collaboration between family business researchers and practitioners.

Chapter 3: Balancing Familiness Resource Pools for Entrepreneurial Performance

Ugo Lassini and Carlo Salvato

Subjects: business and management, entrepreneurship, family business

Extract

Ugo Lassini1 and Carlo Salvato2 INTRODUCTION 3.1 Maintaining an entrepreneurial orientation (EO) over generations is a primary concern for many family firms. Family controlled businesses (FCBs) may face several challenges to their entrepreneurial potential and, ultimately, to their survival. Factors such as nepotism, altruism, adverse selection and family conflicts harm the FCBs’ potential for entrepreneurial renewal and longevity (Anderson and Reeb, 2003; Carney, 2005; Kets de Vries et al., 2007; Miller and Le Breton-Miller, 2004). It is not surprising that recent family business research is increasingly focused on the antecedents of the family firm’s long-term entrepreneurial potential. Building on the resource-based view (RBV) of the firm (for example, Barney, 1991), recent efforts describe the resources appropriate for achieving competitive advantage. Valuable, rare, inimitable and nonsubstitutable resources are central to these explanations. Possessing unique resources and leveraging them in line with the firm’s business model, FCBs attain competitive advantage and subsequent value creation (CabreraSuàrez et al., 2001; Habbershon and Williams, 1999; Sirmon and Hitt, 2003). Focusing on specific resources is attractive, however, as it offers a parsimonious explanation of what determines FCBs’ value creation. There is widespread agreement among scholars that the gradual development of firm-specific resource stocks over generations may also be the source of inertial forces blocking the FCBs’ entrepreneurial potential (Collins and Porras, 1994; Gersick et al., 1997). In general, the development of distinctive resources and capabilities increases the firm’s likelihood to survive and flourish. However gaps between current environmental requirements and a firm’s core resources and...

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