Socioemotional Wealth View of Entrepreneurial Orientation in Family Firms

We research how the family ownership increases the entrepreneurial orientation in companies through transformational leadership. We claim is that this is because the family firms’ mission to pursue the socioemotional wealth (SEW) of the family. We also hypothesize that the family firms have less formalized policies for corporate entrepreneurship, which have discouraging effect on the entrepreneurial orientation in family firms. We also recognize three items moderating the connection between family ownership and transformational leadership: rank involvement in strategy implementation, business risks, and family CEO. We build structural equation model to test the model. We conducted the analysis by means of survey data collected from 62,585 workers from 205 large Brazilian firms. Our analyses establish the suggested positive connection from family ownership to entrepreneurial orientation through transformational leadership. The results support our other hypotheses as well. By especially focusing on family firms, we contribute to the literature by assessing why some firms are more entrepreneurially orientated than others. In the paper we discuss the theory and practice.