This study investigates how some Family Controlled Firms (FCBs) attain this difficult balance between the positive features of idiosyncratic resources cumulated over generations, and their inertial potential. An integrated model is proposed, based on the contrasting theoretical approaches offered by the Resource based view of the firm and the Population ecology theory. We do so by means of an in-depth study of the Veronesi Group, a multi-generational Italian family firm, and of its entrepreneurial initiatives over a long time span. As our data reveal, generational family controlled firms can actively manage the difficult balancing between the value-creating and the inertial potential inherent in the pools of resources they develop over generations. There are three emerging contributions. First, the family has a strong and systematic influence on the firm’s Entrepreneurial Orientation throughout the entire company history. Second, the interaction of the family and the business has both a positive and a negative influence on Entrepreneurial Orientation, reflecting what have been respectively termed distinctive vs. constrictive familiness. Third, organizational “balancing mechanisms” allow the family business to mitigate constrictive familiness while emphasizing the role of distinctive familiness in sustaining entrepreneurial performance over time. The chapter is structured as follows. We first develop a conceptual argument about the need to balance the innovative and the inertial potential inherent in family-specific resource pools by contrasting the conflicting prescriptions deriving from the Resourced Based View and from Population Ecology theories on the relationship between an organization’s age and its vitality in terms of ability to achieve good financial, entrepreneurial and social performance. Next, we present the empirical setting, the Veronesi Group, and our data collection and data analysis process. We then illustrate our analysis of the relationship between the familiness resource pools and entrepreneurial performance and discuss emerging results. We conclude with an illustration of implications for future research and entrepreneurial practice.
Balancing familiness resource pools for entrepreneurial performance
LASSINI, UGO;SALVATO, CARLO
2010
Abstract
This study investigates how some Family Controlled Firms (FCBs) attain this difficult balance between the positive features of idiosyncratic resources cumulated over generations, and their inertial potential. An integrated model is proposed, based on the contrasting theoretical approaches offered by the Resource based view of the firm and the Population ecology theory. We do so by means of an in-depth study of the Veronesi Group, a multi-generational Italian family firm, and of its entrepreneurial initiatives over a long time span. As our data reveal, generational family controlled firms can actively manage the difficult balancing between the value-creating and the inertial potential inherent in the pools of resources they develop over generations. There are three emerging contributions. First, the family has a strong and systematic influence on the firm’s Entrepreneurial Orientation throughout the entire company history. Second, the interaction of the family and the business has both a positive and a negative influence on Entrepreneurial Orientation, reflecting what have been respectively termed distinctive vs. constrictive familiness. Third, organizational “balancing mechanisms” allow the family business to mitigate constrictive familiness while emphasizing the role of distinctive familiness in sustaining entrepreneurial performance over time. The chapter is structured as follows. We first develop a conceptual argument about the need to balance the innovative and the inertial potential inherent in family-specific resource pools by contrasting the conflicting prescriptions deriving from the Resourced Based View and from Population Ecology theories on the relationship between an organization’s age and its vitality in terms of ability to achieve good financial, entrepreneurial and social performance. Next, we present the empirical setting, the Veronesi Group, and our data collection and data analysis process. We then illustrate our analysis of the relationship between the familiness resource pools and entrepreneurial performance and discuss emerging results. We conclude with an illustration of implications for future research and entrepreneurial practice.
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