5/17/10

Less growth without discovery of growth opportunities

Our tentative firm-level results show that the engagement in entrepreneurial orientation (EO) in family firms enhances the changes for achieving growth in turnover and in the number of employees. Thus, it is likely that risk-taking, innovative and proactive behavior is later rewarded by firm growth. Our study examined the relationship between entrepreneurial orientation and the discovery of growth opportunities in a data comprising 223 family firms included in the Innocas data set.

In addition to EO's positive effect on firm growth, our results show that the discovery of growth opportunities is positively associated with firm growth. It also mediates the relationship between entrepreneurial orientation and firm growth. This suggests that EO itself may not be enough, but firms have to be alert and aware of the ongoing changes in the markets. EO in family firms enhances the chances of recognizing suitable opportunites (e.g. new product-market combinations, new niches) for growth which again increase the chances for achieving firm growth. Accordingly, we argue that family firms like any other firm need to renew their strategies and discover new opportunities for the future in order to be able to secure the continuity of their businesses.

Adapted from:
Stenholm P., Pukkinen T. & Heinonen J.: Firm Growth in Family Businesses- The Role of EO and the Discovery of Growth Opportunities. A paper accepted to be presented at the 16th Nordic Conference on Small Business Research, Kolding, Denmark 20.-21.5.2010.