Michael H. Morris

Correlates of success in family business transitions

Abstract Fundamental differences are identified between the nature and functioning of family-owned and -managed businesses and those that are not familu-controlled. These differences include the time horizons of management, the implications of business failure, the degree of job security, the centralization of decision-making, accountability for decision-making, and the impact of the family system on the business system, among others. It is argued that the most significant of these differences concerns the way in which executive succession occurs, and specifically, unique aspects of the process of intergenerational transfer within family-owned businesses. Based on an initial round of interviews with second- and third-generation family business owners, and a detailed review of the extant literature, a model is proposed consisting of three sets of determinants of successful family business transitions: the preparation level of the heirs, the nature of relationships among family members, and the types of planning and control activities engaged in by the management of the family business. Successful transitions are further hypothesized to influence subsequent company performance. Much of the research to date on family business transitions has tended to be qualitative, case-oriented, and/or anecdotal in nature. The result has been a number of rich insights into the complexities and dynamics of the family enterprise, but limited in terms of the generalizability of the findings. Considerably less attention has been devoted to quantitative studies that employ larger samples and provide empirical tests of relationships between key variables. This lack of attention is traced to inherent measurement difficulties in the family business field, and to the relatively young status of the field itself as a distinct area receiving academic attention. The current study attempts to bridge this gap. The study provides a quantitative assessment of the proposed model using two cross-sectional sub-samples consisting of 209 second- and third-generation family-owned businesses. Both regression and structural equations (LISREL) analyses are employed. The results indicate support for the proposed model. Family business transitions do occur more smoothly when heirs are better prepared, when relationships among family members are more trust-based and affable, and when family businesses engage in more planning for taxation and wealth-transfer purposes. Of these factors, relationships within the family has the single greatest impact on successful transitions. At the same time, smoother transitions do not necessarily result in better post-transition performance by the enterprise. This linkage to performance appears to be more complex. One possibility is that some level of conflict or strife is a prerequisite for the transition to have a significant impact on subsequent performance. Based on these results, family business owners are encouraged to devote relatively more attention to relationship issues, and relatively less to estate and tax planning. It is suggested that a “relationship charter” be developed as a vehicle for strategically managing relationships within the family, much as relationships must be managed with suppliers or customers. Suggestions are also made for further research, and the studys limitations are denoted. Researchers are encouraged to devote efforts to exploring relationships among the exogenous variables in the research model, such as that between preparation levels of heirs and family relationships. Further, the issue of success and failure in second- and third-generation businesses warrants greater attention, including identification of key failure and success factors as well as determination of differences in failure rates for family— versus non-family—owned businesses and isolation of the reasons for such differences.

The relationship between entrepreneurship and marketing in established firms

Abstract This article examines the relationship between entrepreneurial and marketing orientations of a firm. It is hypothesized that more entrepreneurial firms will also be more marketing oriented. Both orientations represent strategic responses to the turbulent environments faced by firms today. Further, marketing provides an effective vehicle for achieving entrepreneurship within the corporation. As some have argued, marketing is the home for the entrepreneurial process. As a process, a firms entrepreneurial orientation has three key dimensions: innovativeness, risk taking, and proactiveness. As such, it does not just apply to start-up ventures, but is an orientation that is applicable to organizations of any size. A firms marketing orientation, on the other hand, refers to the size and consistency of its investment in marketing activities and people, and includes the firms adoption of the marketing concept (i.e., a customer orientation). An exploratory survey was developed in order to test the research hypothesis. A mail questionnaire was used to elicit responses from the chief operating officers in a random sample of 116 companies in Central Florida. The questionnaire consisted primarily of a 13-item summated scale to measure a firms entrepreneurial orientation, and 22 separate items concerned with the firms structure and policies in the marketing area, the sources of customer feedback it relies upon, and attitudes/perceptions regarding the impact of the marketing department. The results provide support for the research hypothesis. Entrepreneurial scores for firms, determined by summing the 13-item scale, were higher for firms in which there was a formal marketing department, in which marketing professionals were in senior executive positions, in which marketing research is a regular activity, and where marketing is felt to play a major role in innovation and the strategic direction of the firm. Based on these results, managers concerned about rekindling or maintaining the entrepreneurial spirit within the corporation may find it appropriate to begin by examining the firms marketing orientation and operations. To what extent is the company structure, its reward systems, and the way in which its resources are allocated, reflective of an emphasis on marketing activities and customer satisfaction? Is the marketing function held accountable for the creation and management of innovative product/market opportunities? Suggestions are also made for further research, and the studys limitations are denoted. Researchers are encouraged to devote efforts towards identifying whether the relationship between marketing and entrepreneurial orientations is causal, and in which direction. What variables may modify the nature of this relationship? Also, it is important to determine how a companys marketing and entrepreneurial orientations jointly and separately impact on bottom-line performance.

Entrepreneurial Marketing: A Construct for Integrating Emerging Entrepreneurship and Marketing Perspectives

The purpose of this paper is to critically explore the construct of entrepreneurial marketing (EM). This term is used as an integrative conceptualization that reflects such alternative perspectives as guerrilla marketing, radical marketing, expeditionary marketing, disruptive marketing and others. Seven core dimensions of EM are identified, and an underlying theoretical foundation based on resource advantage theory is proposed. A conceptual model is introduced of key factors surrounding the phenomenon of entrepreneurial marketing. Conclusions and implications are drawn for theory and practice, and priorities are proposed for continuing research.

The Dilemma of Growth: Understanding Venture Size Choices of Women Entrepreneurs

In recent years the number of women‐owned firms with employees has expanded at three times the rate of all employer firms. Yet women remain underrepresented in their proportion of high‐growth firms. A number of plausible explanations exist. To develop richer insights, a two‐stage research project was undertaken. A mail survey was sent to a sample of female entrepreneurs to assess motives, obstacles, goals and aspirations, needs, and business identity. Based on the survey results, follow‐up, in‐depth interviews were conducted with entrepreneurs, selecting equally from modest‐growth and high‐growth ventures. In terms of quantitative findings, growth orientation was associated with whether a woman was “pushed” or “pulled” into entrepreneurship, was motivated by wealth or achievement factors, had a strong womens identity in the venture, had equity partners, and believed women faced unique selling obstacles. The qualitative research made clear that modest‐ and high‐growth entrepreneurs differ in how they view themselves, their families, their ventures, and the larger environment. The results of both stages suggest that growth is a deliberate choice and that women have a clear sense of the costs and benefits of growth and make careful trade‐off decisions.

Entrepreneurship in Established Organizations: The Case of the Public Sector

The potential role of entrepreneurship in public sector organizations is explored. Entrepreneurship is conceptualized as a manageable process with underlying dimensions of innovativeness, risk-taking, and proactiveness. Unique characteristics of the public sector environment are examined, and a number of core principles and concepts from entrepreneurship are applied. Arguments against the application of these concepts are addressed. Results are reported of a survey of 152 public sector managers in South Africa. The findings suggest that these managers find entrepreneurship to be a salient concept for their organizations, and that the key obstacles to its implementation are very similar to those reported by corporate managers. Implications are drawn for theory and practice, and a number of suggestions are made for further research.

Perceived environmental turbulence and its effect on selected entrepreneurship, marketing, and organizational characteristics in industrial firms

Entrepreneurship and marketing are approached as proactive corporate responses to an increasingly dynamic, threatening, and complex external environment. Both represent organizational orientations built around creativity, innovativeness, flexibility, and risk-taking. A conceptual model is proposed relating the levels of entrepreneurship, marketing activity, and marketing-related structure of a firm to the degree of perceived environmental turbulence confronting the firm. Results of a survey involving personal interviews with managers in 93 firms representing six industries are reported. Turbulence is found to have a significant causal impact on both the levels of entrepreneurship and the marketing orientation of the firm, but not on structural variables.

The concept of entrepreneurial intensity: Implications for company performance

Abstract Entrepreneurial orientation is explored as an organization-level variable. The concept of entrepreneurial intensity (EI) is introduced to capture both the degree and amount of entreneurship evidenced within a given organization. It is hypothesized that levels of EI are significantly associated with measures of company performance. Results are reported of a survey directed at a cross-section of industrial firms. The findings indicate significant relationships among EI and five of six performance measures. The relationships are strongest when more weight is placed on the degree versus the amount of entrepreneurship demonstrated by a firm.

The determinants of entrepreneurial activity

Examines the interface of entrepreneurship and marketing. Defines entrepreneurship as a variable phenomenon that can be applied at the societal, organizational and individual levels. Marketing is conceptualized as a fundamentally entrepreneurial activity. Argues that entrepreneurship is an environmentally‐driven phenomenon and that the environmental determinants of entrepreneurship can be categorized into three groups: infrastructure; turbulence and personal life experiences. Draws out the implications of these determinants, and the corresponding level of entrepreneurship that they produce, for the nature and role of marketing at the macro and micro levels.

Understanding Market-Driving Behavior: The Role of Entrepreneurship

In recent years, the marketing literature has placed significant emphasis on market‐driving and proactive market‐driven behavior within firms in attempts to reconceptualize the meaning of “market orientation.” For their part, market‐driving firms such as Starbucks, Amazon.com, Dell, and Southwest Airlines are demonstrating how business model innovation results in sustainable advantage and superior long‐term performance in a wide range of industries. In this paper, we contend that market‐driving behavior is distinct from a firms market orientation, and instead is the essence of entrepreneurial action in the Schumpeterian “creative destruction” sense. It is further argued that the firms entrepreneurial orientation interacts with other strategic orientations, in the process determining how they are manifested and, in some cases, whether they are manifested. Furthermore, entrepreneurial orientation plays a critical role in determining transitions among various strategic orientations over time. An integrative model illustrates the dynamics of the interface between marketing and entrepreneurship from both a content and process perspective. Two case studies illustrate how trajectories can be identified in the dominant strategic orientations within companies as they evolve.

Individualism and the Modern Corporation: Implications for Innovation and Entrepreneurship

The extent to which entrepreneurship in established firms is the result of a more individualistic versus collectivistic culture is explored. Hypotheses are tested in which it is proposed that a curvilinear relationship exists between individualism-collectivism and corporate entrepreneurship. Findings are reported from a survey completed separately by three functional area managers in each of eighty-four industrial firms. The results support the hypotheses, such that entrepreneurship is highest under conditions of balanced individualism-collectivism, and declines in highly individualistic and more collectivistic environments.