The family-level of generational involvement: impact on the nexus between entrepreneurial orientation and business performance among small family businesses

Abstract

Purpose The aim of this study was to obtain evidence of the practical significance of the generational involvement (GI) of top management teams (TMT) on the nexus between entrepreneurial orientation (EO) and business performance (BP) in small family businesses (SFBs). Design/methodology/approach This study employed a questionnaire survey of 112 Malaysian SFBs. The data was analyzed using descriptive analysis, hierarchical multiple regression analysis and a two-way interaction model. Findings The results indicate that SFBs have a positive EO–BP nexus. However, the study found that TMT-GI has a negative effect on EO and reduces the positive nexus between EO and BP. Specifically, higher levels of GI were associated with lower levels of EO and weaker BP. Research limitations/implications The study raises the necessity for SFBs to seek out a management mechanism and structure to balance the entrepreneurial boundary between the family-level and the business-level when there is increased GI. Additionally to the current, incorporating family TMT-related human ecology aspect of GI with the family business field could lead to a new research value stream. Practical implications The results of this study will enable family business decision makers and TMT to better understand the importance of considering family factors in their management strategies. Originality/value This analysis highlights the spatial relation of family-level logic in dominating EO–BP nexus at intervals in SFBs, where family factor of TMT-GI will be a key moderator.