Understanding Entrepreneurial Family Businesses in Uncertain Environments

Understanding Entrepreneurial Family Businesses in Uncertain Environments

Opportunities and Resources in Latin America

Edited by Mattias Nordqvist, Giuseppe Marzano, Esteban R. Brenes, Gonzalo Jiménez and Maria Fonseca-Paredes

Understanding Entrepreneurial Family Businesses in Uncertain Environments, the third volume in the STEP series, is uniquely centered on familial entrepreneurial activity in Latin America. The contributions, based on empirical evidence and an overall theoretical framework, focus on practical learning in addition to the advancement of scholarly knowledge.

Chapter 6: Entrepreneurship in Transgenerational Processes by Means of Social Capital

Marcela Ramírez-Pasillas, Fernando Sandoval-Arzaga and María Fonseca-Paredes

Subjects: business and management, entrepreneurship, family business

Extract

Marcela Ramírez-Pasillas, Fernando Sandoval-Arzaga and María Fonseca-Paredes INTRODUCTION This chapter examines how entrepreneurship in family businesses occurs in transgenerational processes by means of social capital. Based on an in-depth Latin American case study and a theoretical framework that combines the literature of entrepreneurship, family firms and social capital, our aim is to explore the role of social capital in family businesses in realizing potential venture creation during transgenerational processes (that is, across generations). To investigate how entrepreneurship in family businesses occurs, we specifically explore the intersections between the relational and structural dimensions of social capital (Granovetter, 1992) and the autonomy and proactiveness dimensions of the entrepreneurial orientation (EO) (Lumpkin and Dess, 1996). The  relational and structural dimensions of social capital are relevant concepts for addressing relationships and networks when studying entrepreneurship (Johannisson et al., 2002). Autonomy and proactiveness are two dimensions of EO that are of particular relevance to understanding entrepreneurship when studying culture (Hall et al., 2001; Zahra et al., 2004). Although we do not explicitly address uncertain environments, our research case has such a component as it occurs in a Latin American business context. We show that the development of the relational and structural dimensions triggers new businesses when the older generation supports the autonomy and proactiveness of the younger generation. This in turn permits family members of the younger generation to launch improved initiatives. These initiatives range from new and/or improved products to processes and businesses. Failure of 149 M2787 - NORDQVIST TEXT.indd 149 16/11/2011...

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