The critical path to family firm success through entrepreneurial risk taking and image

Drawing from organizational identity theory, we explore how family ownership and family expectations influence family firm image and entrepreneurial risk taking, and ultimately firm performance. We find support for a fully mediated model, utilizing a sample of 163 Swiss family firms. Family ownership was shown to positively influence the development of a family firm image. High family expectations of the firm leader was shown to promote a family firm image and risk taking. In turn, risk taking and family firm image contributed to firm performance. Accordingly, our study identifies why family ownership and family expectations can benefit family firm performance—through their influence on family firm image and entrepreneurial risk taking.

Research highlights▶ First, our drawing upon organizational identity theory to understand entrepreneurial risk taking and family firm image helps to demonstrate how the family has an enduring influence on the family firm – affecting investments in the firm's future through risk taking. ▶ Second, this study contributes to the family business literature by demonstrating the effects of entrepreneurial risk taking and family firm image on performance. This adds to our knowledge about family firms and illustrates how an emphasis on entrepreneurial risk taking and family involvement can contribute to family firm success. ▶ Third, the discussion of family firm image, may provide useful insights on how family firm differentiate themselves from non-family firms.