Resource Orchestration in Family Firms

Strategic Entrepreneurship Journal

Strat. Entrepreneurship J., 5: 307–326 (2011) Published online in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/sej.121

RESOURCE ORCHESTRATION IN FAMILY FIRMS: INVESTIGATING HOW ENTREPRENEURIAL ORIENTATION, GENERATIONAL INVOLVEMENT, AND PARTICIPATIVE STRATEGY AFFECT PERFORMANCE

FRANCESCO CHIRICO,1 DAVID G. SIRMON,2* SALVATORE SCIASCIA,3 and PIETRO MAZZOLA3

Center for Family Enterprise and Ownership, Jönköping International Business School, Jönköping, Sweden 2 Mays Business School, Texas A&M University, College Station, Texas, U.S.A. 3 Marketing and Economics Department, IULM University, Milan, Italy

1

Drawing on the process of resource orchestration, we argue a co-alignment of multiple factors is needed for family firms to increase performance through entrepreneurship. Specifically, we posit that entrepreneurial orientation provides the mobilizing vision to use the heterogeneous yet complementary knowledge and experiences offered by increased generational involvement toward entrepreneurship. However, without a coordinating mechanism, generational involvement leads to conflict and negative outcomes. When, instead, it is also coordinated via a participative strategy, performance gains are achieved. In sum, results suggest that realizing the benefits from entrepreneurship in family firms is a complicated matter affected by the synchronization of entrepreneurial orientation, generational involvement, and participative strategy. Copyright © 2011 Strategic Management Society.

INTRODUCTION

Research on family firms has increased significantly over the past two decades (Chrisman et al., 2010), owing in part to the realization of family firms’ massive economic impact: Estimates suggest these firms account for 85 percent of all companies worldwide (La Porta, Lopez-de-Silanes, and Shleifer, 1999); employ more than 80 percent of the U.S. workforce, producing more than half of its GNP (Neubauer and Lank, 1998); and account...