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

Ng P Yen, Mumin Dayan, Marianna Makri

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

Purpose: 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. Design/methodology/approach: 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. Findings: 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. Originality/value: 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.

Original languageEnglish
Pages (from-to)297-319
Number of pages23
JournalCross Cultural and Strategic Management
Volume29
Issue number2
DOIs
Publication statusPublished - Mar 22 2022
Externally publishedYes

Keywords

  • Managerial risk-taking
  • Middle East
  • Non-family manager
  • Product innovation
  • Socioemotional wealth

ASJC Scopus subject areas

  • Business and International Management
  • Cultural Studies
  • Sociology and Political Science
  • Strategy and Management
  • Organizational Behavior and Human Resource Management

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