Family firm entrepreneurial orientation: the effects of socio-emotional wealth, professionalization and bifurcation bias

Abstract

Purpose: This paper aims to examine the effects of socio-emotional wealth importance (SEWi) in family firms and family firm-specific HR practices, namely professionalization and bifurcation bias, on their entrepreneurial orientation (EO). Design/methodology/approach: The paper surveyed 133 small and medium-sized family firms in the USA. The respondents were recruited through Prolific Academic. Findings: When SEWi is low, a family firm becomes more similar to a non-family firm, thereby enjoying the benefits associated with EO. When SEWi is high, a family firm leverages the unique resources and capabilities specific to family firms. Moderate SEWi levels are associated with lower EO levels. Additionally, the results support the argument that professionalization (involving non-family managers, formalization and decentralization) fosters EO, while bifurcation bias hinders its development. Originality/value: Unlike previous studies, this paper posits a non-linear, U-shaped relationship between SEWi and EO. It contributes to the field by empirically investigating the effects of professionalization and bifurcation bias on EO in family firms.