Effect of Entrepreneurial Networks on Family Business Development: A Conceptual Consideration

  • Kenneth Chukwujioke Agbim Business Administration Department, University of Agriculture, Makurdi, Nigeria
Keywords: Entrepreneurship, Entrepreneurial networks, Family business, Family business development, Tipping points.

Abstract

Family businesses are generally affected by resource constraints. These resource constraints are occasioned by the vagaries in the business environment. Consequently, budding and established family business entrepreneurs are now resorting to the acquisition and sharing of intangible resources as a strategy for achieving family business development. One type of resource that is increasingly being employed is entrepreneurial networks. In spite of the known supports entrepreneurial networks give to entrepreneurs at the different states of family business development, empirical evidences are still rear. Based on the foregoing, this study undertook a literature review and thereafter proposes that: the effect of family network on family business start-up is significant; the effect of intra-industry network on family business formalization is significant; the effect of professional network on family business professionalization is significant; the effect of extra-industry network on family business diversification is significant; the effect of social network on family business internationalization is significant; and the effect of intra-firm network on family business succession is significant. For family business development to be influenced by entrepreneurial networks, budding entrepreneurs, founder and/or descendant CEOs and employees of family businesses need to be actively involved in network relationships that encourage and facilitates resource acquisition and sharing. Moreover, an empirical study is recommended based on these propositions. This is to validate the propositions and to further add to the family business development and entrepreneurial networks literature.

Downloads

Download data is not yet available.

References

Abou-Moghli, A. & Al Muala, A. (2012). Impact of entrepreneurial networks in the success of business on-going stage in Jordanian manufacturing companies. American Academic & Scholarly Research Journal, 4(2), 1-9.
Abouzaid, S. (2008). IFC family business governance handbook. Retrieved formfhttp://www.ifc.org/wps/wcm/connect/15c9c0048582f6883f9ebfco46daa89/FB_English_final_2008.pdf?Mod=AJPERES on October 21, 2016.
Agbim, K. C. & Eluka, J. (2018). Social network and family business internationalization in South Eastern Nigeria. Journal of Accounting, Business and Finance Research, 3(2), 64-74. doi: 10.20448/2002.32.64.74
Agbim, K. C. (2018a). Business network effect on the institutionalization of family businesses in South Eastern Nigeria. Open Journal of Economics and Commerce, 1(1), 1-10.
Agbim, K. C. (2018b). Facilitating family business diversification through extra-industry network: Evidence from South Eastern Nigeria. Archives of Business Research, 6(7), 54-65. doi: 10.14738/abr.67.4844
Amran, N. A. & Ahmad, A. C. (2010). Family succession and firm performance among Malaysian companies. International Journal of Business and Social Science, 1(2), 193-203.
Andrade, D. M., de Lima, J. B., Antonialli, L. M. & de Muylder, C. F. (2011). The family social capital impact in practices of learning, change and innovation in entrepreneurial family businesses. African Journal of Business Management, 5(33), 12819-12828. doi: 10.5897/AJBM 11.1486
Anis, O. & Mohamed, F. (2012). How entrepreneurs identify opportunities and access to external financing in Tunisian’s microenterprises? African Journal of Business Management, 6(12), 4635-4647.
Ayranci, E. (2010). Family involvement in and institutionalization of family business: A research. Business and Economic Horizons, 3(3), 83-104.
Bagwell, S. (2007). Transnational family networks and ethnic minority business development: The case of Vietnamese nail-shops in the UK. International Entrepreneurial Behaviour & Research, 14(6), 377-394. doi:10.1108/1355255081 0910960
Barach, J. A. & Ganitsky, J. B. (1995). Successful succession in family business. Family Business Review, 8(2), 131-155.
Bchini, B. (2014). Entrepreneurship: A key to minimizing the risks of Tunisian family businesses. Journal of Business Studies Quarterly, 5(4), 68-80.
Bellavitis, C., Filatotchev, I. & Kamuriwo, D. S. (2014). The effects of intra-industry and extra-industry networks on performance: A case of venture capital portfolio firms. Managerial and Decision Economics, 35(2), 129-144. doi: 10.1002/mde.2647
Bello, P. (2009). Internationalization of Cameroonian small and middle enterprises (SMEs): Myth or reality? African Journal of Business Management, 3(2), 052-069.
Bjornberg, A. & Nicholson, N. (2012). Emotional ownership: The next generation’s relationship with family firm. Family Business Review, 25(4), 374-390.
Bratkovic, T., Antoncic, B. & Ruzzier, M. (2009). The personal network of the owner-manager of a small family firm: The crucial role of the spouse. Managing Global Transition, 7(2), 171-190.
Bru, L. & Crespi-Cladera, R. (n.d.). Diversification of family business groups (FGG) and board control. Universita de les Balears, Campus Crade Valldemossa, Palma de Mallorca.
Cao, Q., Maruping, L.M. & Takeuchi, R. (2006). Disentangling the effects of CEO turnover and succession on organizational capabilities: A social network perspective. Organization Science, 17, 563-576.
Casson, M. (1999). The economics of the family firm. Scandinavian Economic History Review, 47(1), 10-23.
Chandler, A. D. (1990). Scale and scope. Cambridge, Mass.: Harvard University Press.
Charmes, J. (2009). Concepts, measurement and trends, In J. P. Jutting & J. R. Laiglessia (Eds.), Is informal normal? Towards more and better jobs in developing countries (Pp19-35). Paris: OECD.
Chelliah, S., Pandian, S., Sulaiman, M. & Munusamy, J. (2010). The moderating effect of firm size: Internationalization of small and medium enterprises (SMEs) in the manufacturing sector. African Journal of business Management, 4(14), 3096-3109.
Chua, J. H., Chrisman, J. J., & Sharma, P. (2003). Succession and non-succession concerns of family firms and agency relationship with non-family managers. Family Business Review, 16(2), 89-108.
Colli, A. (1998). Networking the market: Evidence and conjectures from the history of the Italian industrial districts. European Year Book of History, 1, 75-92.
Colli, A. (2003). The history of family business, 1850-2000. Cambridge: Cambridge University Press.
Collins, C. J. & Clark, K. (2003). Strategic human resource practices, Top management team social networks, and firm performance: The role of human resource practices in creating organizational competitive advantage. Academy of Management Journal, 46, 740-751.
Conner, T. (2007). Research notes and commentaries, market orientation and performance. Strategic Management Journal, 28, 957-959.
Coutinho, R. J. F. & Moutinho, R. M. (2012). Generational succession as a trigger for family business internationalization. Economics and Management Research Projects, 2(1), 1-17.
da Silva, G. F. & de Macedo-Soares, T. D. (2013). The role of international alliance networks and their impact on firms’ internationalization process. Bento Gonzalves, 19(21), 1-16.
Dries, L., Pascucci, S & Gardebroek, C. (2012). Diversification in Italian farm systems: Are farmers using interlinked strategies? New Medit N, 4, 7-15.
Duman, R. (1992). Family firms are different. Entrepreneurship Theory and Practice, 17, 13-21.
El-Chaarani, H. (2014). The success keys for family firms: Comparison between Lebanese and French systems. Lebanese Science Journal, 15(2), 133-150.
Esuh, O. L., Mohd, S. M. & Adebayo, O. I. (2011). A Conceptual framework of family business succession: Bane of family business continuity. International Journal of Business and Social Science, 2(18), 106-113.
European Family Business (2012, June). Family business. Retrieved from http:/www.europeanfamilybusiness.eu/uploads/modules/publications/family-business-statistics.pdf on March 21, 2016.
Fishman, A. (2009, December 13). When business is kept in the family. Sunday Times Newspaper, p.2.
Gbadegeshin, S. A. (2013). Awareness of “ownership succession” and family business continuity. International Journal of Business and Management Invention, 2(9), 72-87.
Ghingold, M. & Johnson, B. (1997). Value added in business markets: Implications for procurement and marketing. Industrial Marking Management, 26, 271-280.
Granovetter, M. (2005). Business groups and social organization, In N. J. Smelsen & R. Swedberg (Eds.), The hand book of economic sociology. Princeton: Princeton University Press.
Greenwood, R., Suddaby, R., & Hinings, C. R. (2002). Theorizing change: The role of professional associations in the transformation of institutionalized fields. Academy of Management Journal, 45, 58-80.
Guillen, M. F. (2005). The rise of Spanish multinationals. New York: Cambridge University Press.
Hall, A. & Nordqvist, M. (2008). Professional management in family businesses: Toward an extended understanding. Family Business Review, 21(1), 51-69.
Hamid, N. F. B. A. (2013). Family business culture, entrepreneurial orientation and the new economic policy on family business survival: A study between the Malays and Chinese of micro and small-sized family business in Malaysia (Unpublished Ph.d thesis). The University of York, York.
Hansen, B. & Hamilton, R. T. (2011). Factors distinguishing small firm growers and non-growers. International Small Business Journal, 29, 278-294.
Hargadon, A. (2002). Brockering knowledge: Linking learning and innovation, In B. M. Staw & R. M. Kramer (Eds.), Research in organizational behaviour (Vol. 24:41-85). Greenwich, CT: JAI Press.
Heck, R. Z., Hoy, F., Poutziouris, P. Z. & Steier, L. P. (2008). Emerging paths of family entrepreneurship research. Journal of Small Business Management, 25(3), 317-330.
Hernandez-Trasobares, A. & Galve-Gorriz, C. (2016). Diversification and family control as determinants of performance: A study of listed business groups. European Research in Management and Business Economics, 23, 46-54. doi: 10.1016/j.iedeen.2016.04.001
Ichraikie, F. (2013). Intangible resources as key determinants of job network providers’ success: A resource-based study. Australian Journal of Business and Management Research, 2(11), 43-63.
Kekale, T. & Helo, P. (2014). The tipping points of technology development. Quality Innovation Prosperity, XVIII(1), 1-14. doi: 10.12776/QIP. V1811.211
Lamberson, P. J. & Page, S. E. (2012). Tipping points. SFI working paper 2012-02-002. Santa Fe Institute.
Le Breton-Miller, I., Miller, D. & Steier, L. P. (2004). Toward an integrative model of effective FOB succession. Entrepreneurship Theory and Practice, 28(4), 305-328.
Leitch, C., Hill, F. & Neergaard, H. (2010). Entrepreneurial and business growth and the quest for a “compressive theory”: Tilting at windmills? Entrepreneurship Theory & Practice, 34, 249-260.
Levie, J. & Lichtenstein, B. B. (2010). A terminal assessment of stages theory: Introducing a dynamic states approach to entrepreneurship. Entrepreneurship Theory & Practice, 34, 317-350.
Lin, S. & Hu, S. (2007). A family member or professional management? The choice of CEO and its impact on performance. Corporate: An International Review, 15(6), 1348-1362.
Liu, N & Zhang, H (2014). The role of CEOs intra-frim network in innovation orientation of hi-tech entrepreneurial firms. Biotechnology: An Indian Journal, 10(22), 14014-14020.
Luna, G. (2012). Planning for an American higher education leadership crisis: The sucession issue for administrators. International Leadership Journal, 4(1) 56-79.
Lungeanu, R. & Ward, J. L. (2012). A governance-based typology of family foundations: The effect of generation stage and governance structure on family philanthropic activities. Family Business Review, 25(4), 409-424.
Mazzola, P., Machisio, G. & Astrachan, J. (2008). Strategic planning in family business: A powerful developmental tool for the next generation. Family Business Review, 21(3), 239-258.
Mckelvie, A. & Wiklund, J. (2010). Advancing firm growth research: A focus on growth model instead of growth rate. Entrepreneurship Theory & Practice, 34, 261-288.
Memili, E. (2015). Performance and behaviour of family firms. International Journal of Financial Studies, 3, 423-430. doi:10.3390/ijfs3030423
Nelson, E. & De Bruijn, E. (2005). The voluntary formalization of enterprises in a developing economy: The case of Tanzania. Journal of International Development, 17(4), 575-593.
Nelton, S. (1998). Social network analysis as an intervention tool: Examples from the field. Group Organization Studies, 13, 39-59.
Nwadukwe, U. C. (2012). The effect of Igbo inheritance culture on management succession in private indigenous enterprises in south eastern Nigeria (Unpublished Ph.d thesis). University of Nigeria, Enugu Campus, Enugu.
Ogundele, O. J. K., Idris, A. A. & Ahmed-Ogundipe, K. A (2012). Entrepreneurial succession problems in Nigeria’s family businesses: A threat to sustainability. European Scientific Journal, 8(7), 208-227.
Ogunnaike, O. O. & Kehinde, O. J. (2013). Social networking and business performance: The case of selected entrepreneurs in Ota, Nigeria. Journal of Business and Management Sciences Research, 2(5), 116-122.
Omar, S. S. (2015). The entrepreneurial network of Muslim women entrepreneurs: The study of multiple-cases of small businesses in the southern region of Malaysia. Paper presented at the 2nd AFAP International Conference on Entrepreneurship and Business Management, Universiti Tecknologi Malaysia, Kuala Lumpur, Malaysia, January 10-11.
Onuoha, B. C. (2012). Professionalizing family business in the South-East Region of Nigeria. International Business and Management, 5(1), 153-161. doi:10.3968/j.ibm.1923 842820120501.1075
Ottih, L. O. (2014). Entrepreneurship: Personality, process and enterprise. Port Harcourt: Pearl.
Ottih, L. O. (2016). Strategic management: Text and cases. Port Harcourt: Pearl.
Ozgen, E. & Baron, R. A. (2007). Social sources of information in opportunity recognition: Effects of mentors, industry networks and professional forums. Journal of Business Venturing, 22, 174-192.
Ozkan-Canbolat, E. (2014). Organizational network effect on diversification strategies. Strategic Management Quarterly, 2(2), 27-48.
Parada, M. J., Nordqvist, M. & Gimeno, A. (2010). Institutionalizing the family business: The role of professional associations in fostering a change of values. Family Business Review, 26, 1-18.
Phelps, R., Adams, R. & Bessant, J. (2007). Life cycles of growing organizations: A review with implications for knowledge and learning. International Journal of Management Review, 9(1), 1-30.
Pontent, S., Worsch, C. & Gagne, M. (2007). An exploration of the generational differences in levels of control held among family businesses approaching succession. Family Business Review, 20(4), 337-354.
Pukall, T. J. & Calabro, A. (2014). The internationalization of family firms: Critical review and integrative model. Family Business Review, 27(2), 103-125. doi:10.1177/0894486513491423
Qurashi, A., Hussain, I., Mushtaq, F. & Ullah, A. (2013). The dilemma of success and failure in family business: Overcoming failure and attaining success. International Journal of Academic Research in Economics and Management, 2(4), 161-177. doi:10.6007/IJAREMS/v2-i4/121
Scranton, P. (1997). Endless novelty: Specialty production and American industrialization, 1865-1925. Princeton: Princeton University Press.
Scur, G. & de Queiroz, R. P. (2017). The impact of diversification in the operations of strategy of capital goods companies. Gest. Prod., Sao Carlos, 24(2), 206-220. doi: 10.159010104-530x1048-13
Seerat, F., Ali, M. & Arif, S. (2011). Network classification on the basic of functions they perform and its relationship with internationalization process of SMEs in developing countries - Exploratory research on Pakistan. Australian Journal of Business and Management Research, 1 (8), 35-53.
Sharma, P., Chrisman, J.J. & Chua, J.H. (2003). Predictors of satisfaction with the succession process in family firms. Journal of Business Venturing, 18(5), 667-687.
Sirec, K. & Bradac, B. (2009). How does networking impact the SMEs growth. Organizacija, 42 (2), 59-66. doi: 10.2478/V10051-0051-009-0003-4
Sluyterman, K. E. & Winkelman, H. J. M. (1993). The Dutch family firm confronted with Chandler’s dynamics of industrial capitalism, 1890-1940. Business History, 35(4), 152-183.
Stam, W. & Elfring, T. (2008). Entrepreneurial orientation and new venture performance: The moderating role of intra- and extra industry social capital. Academy of Management Journal, 51(1), 97-111.
Stewart, A. & Hitt, M. (2012). Why can’t a family business be more like a non-family business? Modes of professionalization in family firms. Family Business Review, 25(1), 58-86.
Teece, D. (2007). Explicating dynamic capabilities: The nature and micro foundations of (sustainable) enterprise performance. Strategic Management Journal, 28, 1319-1350.
Trevinyo-Rodriguez, R. N. & Bontis, N. (2010). Family ties and emotions: A missing piece in the knowledge transfer puzzle. Journal of Small Business and Enterprise Development, 17(3), 418-436.
Williams, C. C. & Nadin, S. (2012). Tackling entrepreneurship in the informal economy: Evaluating the policy options. Journal of Entrepreneurship and Public Policy, 1(2), 111-124.
Zachary, R. K., Rogoff, E. G. & Phinisee, I. (2011). Defining and identifying family entrepreneurship: A new view of entrepreneurs, In M. Minnitti (Ed.), The dynamics of entrepreneurship: Evidence from the Global Entrepreneurship Monitor data (pp. 57-76). New York: Oxford University Press.
Zhou, L., Wu, W. & Luo, X. (2007). Internationalization and the performance of born-global SMEs: The mediating role of social networks. Journal of International Business Studies, 38, 673-690. doi: 10.1057/palgrave.jibs.8400282
Published
2018-07-21
How to Cite
Agbim, K. C. (2018). Effect of Entrepreneurial Networks on Family Business Development: A Conceptual Consideration. International Journal of Small and Medium Enterprises, 1(2), 13-25. Retrieved from https://www.cribfb.com/journal/index.php/ijsmes/article/view/67
Section
Articles