Entrepreneurial risk taking: empirical evidence from UK family firms

Abstract

Purpose – The theme of this paper is entrepreneurial risk taking. Specifically, the paper has twofold objectives: to develop insights into individual and familial correlates of risk-taking propensity in family firms; to explore impacts of risk taking on business performance.

Design/methodology/approach – A quantitative survey was conducted with the sampling frame outlined based on the FAME database. A total of 236 companies participated in this survey.

Findings – The results suggest that individual and familial variables will determine the risk-taking propensity, specifically entrepreneur's industrial tenure, age, and the controlling generation in family businesses. Furthermore, risk-taking intensity correlates with business performance.

Research limitations/implications – The cross-sectional rather than longitudinal design of the study determines that it can only proffer a snapshot of the scenario. Further, the current study excludes non-incorporated firms. Future explorative studies in a similar vein may be executed through channels of national and local development agencies to capture non-incorporated firms.

Originality/value – Recent recognition of the intertwinement of family and business in family firms has led to the assumption that risk-taking propensity in family firms is influenced by family ownership and family associated concerns. Nonetheless, rarely has the influence of family on risk-taking propensity and the ensuing performance been addressed in the literature. The insights developed by this original exploration will broaden the knowledge landscape of family firms and entrepreneurial venturing allowing us to better understand how family firms can survive and prosper in the increasingly competitive market.