Ramona K. Zachary

The importance of the family system in family business

Purpose – Most researchers overlook the family system in the pursuit of family business studies and research. They mistakenly have assumed that the study of only the family business is sufficient to understand the influence and effect of the family itself. The importance the family system is documented as well as the evolution of family business as a field of study and various family business definitions. Conceptualizations of the family business are critiqued and the Sustainable Family Business Theory (SFBT) is presented relative to its board and detailed emphasis on the family system. This paper aims to address these issues.Design/methodology/approach – This article is a review of previous family business research including specific conceptual models developed in the literature, particularly relevant to the inclusion of the family system.Findings – Few researchers examine the family system in detail but those that do are reviewed and discussed.Research limitations/implications – Research, teaching and p...

Toward the Cluster Model The Family Firm’s Entrepreneurial Behavior Over Generations

Building on a longitudinal case study, this article describes the entrepreneurial behavior of a multinational family firm over generations. The study inductively raises the theoretic level to fill gaps in the literature about the family role in entrepreneurial behavior and addresses the singular count of the two- and three-circle models. The data analysis shows that entrepreneurial behavior emerges not only in response to business challenges but also and predominantly to family challenges. The cluster model is suggested as a necessary extension of the circle models, positing the family as the relevant level of analysis when considering entrepreneurial behavior and introducing the distinction between organic and portfolio, core and peripheral firms.

Entrepreneurship Research Today and Beyond: Hidden in Plain Sight!

The field of entrepreneurship and its research has reached an critical and invigorating juncture. Researchers are challenged to be comprehensive, varied, and innovative in their approaches to the study of entrepreneurship. New and emerging future research must met this challenge to impact and sustain our complex world in which entrepreneurship plays such a vital role. The Entrepreneurship Research Journal provides a new and exciting venue for researchers to share and interact among their respective disciplines in new and different ways and to meet the research challenges now and in the future.

The Theory of Entrepreneurship

Abstract The theory of entrepreneurship, namely the entrepreneurial value creation theory, explains the entrepreneurial experience in its fullest form, from the entrepreneurial intention and the discovery of an entrepreneurial opportunity, to the development of the entrepreneurial competence, and the appropriation of the entrepreneurial reward (Mishra and Zachary 2014). The theory of entrepreneurship provides in sufficient detail the interiors of the entrepreneurial process using a two-stage value creation framework. In the first stage of venture formulation, the entrepreneur driven by a desire for entrepreneurial reward (i.e., entrepreneurial intention) leverages the entrepreneurial resources at hand to sense an external opportunity (cue stimulus) and effectuate the entrepreneurial competence that is sufficient to move to the second stage. Several ventures fail at this stage. In the second stage of venture monetization, the entrepreneur may acquire external resources such as venture capital or strategic alliance to effect growth. Investors face an adverse selection problem when entrepreneurial ability and venture quality are difficult to ascertain. Entrepreneurs may use incentive signals to secure a higher valuation offer from the investors. A business model design with embedded dynamic capabilities can reconfigure the entrepreneurial competence to create sustained value and appropriate the entrepreneurial reward.

Research on Angel Investments: The Intersection of Equity Investments and Entrepreneurship

Research on angel investment strategies and performance is scarce, but with the availability of data from the Angel Investor Performance Project (AIPP) sponsored by the Kauffman Foundation and from other focus groups organized through the Angel Capital Association (ACA), the research on angel investors is an emerging field in finance and entrepreneurship. We group these research questions from three perspectives, the entrepreneur’s perspective, the investor’s perspective, and the public policy and capital market perspective. We summarize some of the studies published and suggest potential areas for future research.

Business Model Theory

Teece (2007) posited that an enterprise’s success is contingent upon how astutely its business model is crafted. Entrepreneurial competence, formulated in Stage 1, will not result in value creation and appropriation without an efficient and sustainable business model design. Business models “reflect management’s hypothesis about what customers want and how an enterprise can best meet those needs, and get paid for doing so” (Teece, 2007, p. 1329). According to Chesbrough and Rosenbloom (2002, pp. 533–534), “The function of a business model is to ‘articulate’ the value proposition, select the appropriate technology and features, identify target market segments, define the structure of the value chain, and estimate the cost structure and profit potential.” Business models provide a rationale as to how value is created and appropriated within a venture.

The Theory of Entrepreneurial Competence

Within the Entrepreneurial Value Creation Theory, the Theory of Entrepreneurial Competence combines resources and opportunities, propelled by entrepreneurial intention, resulting in an entrepreneurial competence as a key source of value creation generated from within Stage 1—Formulation. Specifically, within the Theory of Entrepreneurial Intentionality, entrepreneurial intention and adaptability, via the feasibility modulator, adjusts and adapts entrepreneurial resources. Next, the entrepreneur advances forward to the effectuation multiplier, which deploys entrepreneurial resources to reconfigure the entrepreneurial opportunity into an entrepreneurial competence, which then leads into Stage 2—Monetization (see figure 5.1). This iterative process can also initiate from the intention input and cycle through this internal process between the feasibility modulator and the effectuation multiplier.

The Imperative and Missing Crux of Entrepreneurship Research

The Theory of Entrepreneurship: Creating and Sustaining Entrepreneurial Value posits that entrepreneurship is a crucial yet disorderly and complicated social process of value creation, and challenges researchers to expand and recast our research approaches and empirical tools to fully grasp this unruly and understudied process. We propose to intricately examine the interiors of this entrepreneurial process. At the same time, we offer a new unified and comprehensive entrepreneurship theory to afford empirical investigations as well as delineate a broader view of the entrepreneurial contextual milieu.

The Entrepreneurial Value Creation Theory

The Entrepreneurial Value Creation Theory explains the entrepreneurial value creation and its realization via a venture (see figure 10.1). The entrepreneurial value creation process consists of two iterative stages, the venture formulation (Stage 1) and the venture monetization (Stage 2). In Stage 1, the entrepreneur begins with either the entrepreneurial opportunity or the entrepreneurial intention to found a new venture to realize the entrepreneurial reward. In Stage 1, the entrepreneurial competence is formulated, the process of which is explained by the Theory of Entrepreneurial Competence (see chapter 5). Many ventures fail during Stage 1. If a venture transitions to Stage 2, further investments are required to build dynamic complementary capabilities, which are then embedded in the business model design. If the venture is unable to procure further investments, the venture returns to Stage 1 and the entrepreneurial competence is reformulated, before the venture may return to Stage 2. In Stage 2, the Business Model Theory, within the Entrepreneurial Value Creation Theory, explains the elements of the business model design, the venture value drivers.

Venture Investment and Dynamic Complementary Capabilities

Teece (2007) argued that entrepreneurial ventures are inherently dynamic. Dynamic capabilities help a venture attain and sustain competitiveness in a rapidly changing competitive environment. Dynamic complementary capabilities are different from the entrepreneurial capabilities (Arthurs and Busenitz, 2006). Chapter 4 describes the entrepreneurial capital resources or entrepreneurial capabilities, namely the entrepreneur’s knowledge capital, human capital, family capital, social capital, and emotional capital. Entrepreneurial capabilities are the abilities of an entrepreneur to identify and reconfigure an entrepreneurial opportunity, and thus effectuate the entrepreneurial competence (in Stage 1 or during the venture formulation process). In comparison, in Stage 2, during the venture monetization process, dynamic complementary capabilities are the venture capabilities or the value levers that are employed to modify and reconfigure the entrepreneurial competence, strengthening the venture’s business model value drivers, and thus enhancing the value appropriation and entrepreneurial reward (see chapter 9). The survival and growth of a venture pivots on the timely organization and the speed of deployment of the selected dynamic complementary capabilities.