Corporate governance and entrepreneurial orientation of family SMEs: An analysis of the influence of family involvement at different levels

Abstract

The entrepreneurial attitude of companies is key to compete in a globalized and dynamic economic environment. Thus, it is of special interest the analysis of the factors that promote or hinder the entrepreneurial orientation (EO) of organizations. In the case of family businesses, the interaction between the family and the business can directly affect the OE, although this effect may vary depending on whether it occurs in the top management team or in the Board of Directors. In addition, the effect of family involvement in both organs may be affected by their respective sizes. Based on a sample of 91 family SMEs, this paper shows the negative effect on OE of a high proportion of family members in the Board and in the top management team, an effect that is reinforced when the number of decision-makers in each organ is greater. This study also finds that the involvement of different family generations in the top management team has a positive effect on EO, decreasing this influence in larger top management teams In addition to the theoretical implications of these findings, the practical implications for managers and owners of family SMEs that are immersed in a period of professionalization are especially interesting. Thus, this study can be helpful in designing the size and the composition of the top management team and the Board of Directors of this type of organization.