Facts
What kind of costs are family firms less likely to bare ? Why
Agency cost : there is a lesser need for formal monitoring and control system
What pushes family firms to handle risk differently than other types of firms ?
The management and ownership are not separated !
What are the three dimensions contained in Miller's original operationalization ?
innovativness, proactiveness and risk taking
Risk Taking is ..... associated with the other dimensions of EO in family firms
Taking in account the results of the tested hypothesis(H1b), complete this sentence
Risk taking is positively associated with the other dimensions of EO in family firms
H1b is valid
What are three characteristics that are often given to family firms ?
conservative,resistant to change and introvert
Given the results of the study(H2), we now know that:
family firms take statistically significantly .... risk than do nonfamily firms
family firms take statistically significantly less risk than do nonfamily firms
H2 is valid
What can family firm be viewed as ? explain
contextual hybrid : A unique combination of two sets of rules, values, and expectations: the family's and the business's
What are the consequences that push managers in family firms to be risk averse ?
1) the pressure of bearing the full financial burden of failed investments
2)jeopardize the financial ans social well being of future generations
3)compromise the family's name and reputation
Family firms "have greater latitude to allocate resources on the basis of animal spirit or gut feel and to pursue opportunities that can only be rationalised by particularistic or intuitive criteria." (Carney,2005)
To what aspects of running a family firm does this sentence refer to ?
- Family firms make decisions that are less based on closely calculated risks; less grounded in a systematic, unbiased way and with less incorporation of outsiders perspectives and opinion
- less formal monitoring and control
- less pressure to analyze and motivate different alternatives
What perspective does the paper introduce to explain the lack of risk initiatives in family firms ?
they may make decisions, invest in projects and pursue new ventures in an informal, intuitive and less calculated way. It is not systematically formal, and does not include outsider's perspectives and opinions.
Risk taking in entrepreneurial activities in family firms might be less understood and possible outcomes more difficult to predict