Influence of socioemotional wealth on non-family managers' risk taking and product innovation in family businesses.

Ng, Poh Yen; Dayan, Mumin; Makri, Marianna

Abstract

There is a growing interest in understanding family firms' strategic behavior using the socioemotional wealth (SEW) perspective. This study explores how family SEW dimensions influence non-family managers' attitudes toward risk in the context of product innovation. This study also examines whether managerial risk-taking mediates the relationship between SEW and product innovation. The study uses a sample of 150 family firms in the United Arab Emirates and collects data from family owners and non-family managers via self-administered questionnaires. The study uses SmartPLS structural equation modeling to test the conceptual model and the proposed hypotheses. The results indicate that multidimensional SEW influences non-family managers' risk-taking behavior in different magnitudes and directions, thus impacting firms' product innovation. Moreover, risk-taking partially mediates the relationship between SEW dimensions and product innovation. While product innovation could be seen as a loss scenario for family firms due to the potential loss of SEW, growth, continuity and reputation outweighed the desire to maintain control for the firms in this sample. Thus, these firms encourage non-family managers to take risks in product innovation.

Citation

NG, P.Y., DAYAN, M. and MAKRI, M. 2022. Influence of socioemotional wealth of non-family managers' risk taking and product innovation in family business. Cross cultural and strategic management [online], 29(2), pages 297-319. Available from: https://doi.org/10.1108/CCSM-03-2021-0058

• Journal Article Type: Article
• Acceptance Date: Dec 9, 2021
• Online Publication Date: Dec 24, 2021
• Publication Date: Mar 22, 2022
• Deposit Date: Feb 20, 2023
• Publicly Available Date: Feb 20, 2023
• Journal: Cross cultural and strategic management
• Print ISSN: 2059-5794
• Electronic ISSN: 2059-5794
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Volume: 29
• Issue: 2
• Pages: 297-319
• DOI: https://doi.org/10.1108/CCSM-03-2021-0058
• Keywords: Socioemotional wealth; Managerial risk-taking; Product innovation; Non-family manager; Middle East
• Public URL: https://rgu-repository.worktribe.com/output/1887793