Entrepreneurial Orientation, Risk Taking, and Performance in Family Firms

Authors


  • The authors thank the FBR editor and two anonymous reviewers for their helpful comments, which improved the article. An earlier version of this article was presented at the Babson Kauffman Entrepreneurship Research Conference, June 2005, at Babson College, Babson Park, MA, USA. The authors are listed in alphabetical order and contributed equally to the article.

Lucia Naldi is a Ph.D candidate and Lecturer at Jönköping International Business School, PO Box 1026, SE-551 11, Jönköping, Sweden; fax: +46-36-16 10 69; lucia.naldi@ihh.hj.se.

Mattias Nordqvist is Research Fellow and Co-Director, Center for Family Enterprise and Ownership (CeFEO) at Jönköping International Business School, and Research Associate and Visiting Scholar at the Arthur M. Blank Center for Entrepreneurship, Babson Park, MA, USA; PO Box 1026, SE-551 11, Jönköping, Sweden; fax: +46-36-16 10 69; mattias.nordqvist@ihh.hj.se.

Karin Sjöberg (now Hellerstedt) is a Ph.D candidate and Lecturer at Jönköping International Business School; PO Box 1026, SE-551 11, Jönköping, Sweden; fax: +46-36-16 10 69; karin.hellerstedt@ihh.hj.se.

Johan Wiklund is a Professor at Jönköping International Business School; PO Box 1026, SE-551 11, Jönköping, Sweden; fax: +46-36-16 10 69; johan.wiklund@ihh.hj.se.

Abstract

This article focuses on risk taking as one important dimension of entrepreneurial orientation and its impact in family firms. Drawing on a sample of Swedish SMEs, we find that risk taking is a distinct dimension of entrepreneurial orientation in family firms and that it is positively associated with proactiveness and innovation. We also find that even if family firms do take risks while engaged in entrepreneurial activities, they take risk to a lesser extent than nonfamily firms. Moreover, and most importantly for our understanding of entrepreneurial orientation in family firms, we find that risk taking in family firms is negatively related to performance. Both theoretical and practical implications of our findings are provided.

Ancillary