Habitual Entrepreneurship And The Family Business: A Transgenerational Perspective

Peter Rosa, D. Iacobucci, Waswa Balunywa

Research output: Contribution to conferencePaper

Abstract / Description of output

Principal Topic

The literature on serial, habitual and portfolio entrepreneurs has grown substantially since the late 1980s. In this literature the unit of analysis has tended to focus on the individual “habitual” entrepreneur, the driving force whose entrepreneurial energy, opportunism and competency leads to the development of a portfolio of businesses. Less studied are habitual entrepreneurial teams, particularly entrepreneurial families. In this context the issue of transgenerational habitual entrepreneurship is especially under-researched.

Further understanding of this phenomenon requires integrating insights from several strands of -literature (family business, habitual entrepreneurship human capital economics). We would expect from these theoretical perspectives for family businesses to grow substantially, as financial and human capital is accumulated over the generations. The habitual entrepreneurship literature also predicts that much of this growth will be in the form of entrepreneurial diversification by establishing new firms, rather than through a single firm.

Method

There is some evidence to suggest, however, that second or even third generation family business members are variable in their response to entrepreneurial renewal. Some waste their inheritance, and leave it to others; others become competent managers of the existing businesses, but start few ventures; others are enthusiastic at launching new ventures, but not very successfully. Finally there are those that do succeed, and even surpass the founders in entrepreneurial drive and competence. There is also evidence that many family members in control of the core businesses in a group prefer to delegate control to professional managers rather than family members. This in turn can free up other family members to experiment with new ventures, but also can increase inertia as lack of day to day involvement reduces opportunities and challenges.

Results and Implications

The paper uses qualitative case data from three countries (Italy, Uganda and the UK) to explore these issues. Results reveal diverse responses to entrepreneurial renewal by second and third generation family members. Overall entrepreneurial performance is less impressive than might be predicted given the financial and human capital heritage passed down by the first generation.
Original languageEnglish
Publication statusPublished - 2006
EventFrontiers of Entrepreneurship Research 2005 - , United Kingdom
Duration: 1 Jan 2005 → …

Conference

ConferenceFrontiers of Entrepreneurship Research 2005
Country/TerritoryUnited Kingdom
Period1/01/05 → …

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