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CORPORATE ENTREPRENEURSHIP IN FAMILY FIRMS:

A STEWARDSHIP PERSPECTIVE
KIMBERLY A. EDDLESTON*
College of Business Administration
Northeastern University
319 Hayden Hall
Boston, MA 02115-5000
Tel: (617) 373-4014
Fax: (617) 373-8628
E-mail: K.eddleston@neu.edu
FRANZ W. KELLERMANNS*
College of Business and Industry
Mississippi State University
THOMAS M. ZELLWEGER*
Center for Family Business
University of St.Gallen

ACADEMIC ABSTRACT
Entrepreneurship has been recognized as an important factor contributing to firm success.
Despite the potential benefit of entrepreneurship to sustain a family firm across
generations, entrepreneurship has been under researched in the family business context.
Building on research that emphasizes the important role of the family, we investigate how
strategic decision-making processes and family member involvement impact a family
firms investment in entrepreneurship. Our findings suggest that comprehensive decisionmaking and a long-term orientation are positively related to corporate entrepreneurship in
family firms. We further found family harmony to moderate the relationships between
human capital, professionalism, and long-term orientation and corporate
entrepreneurship.
EXECUTIVE SUMMARY
It is often questioned whether the family acts as a resource or a constraint to family firms.
Family firms are often depicted as having problems with nepotism and hiring family
members that lack the appropriate skills or experience, often referred to as adverse
selection in the agency theory literature. Leaders of family firms are also commonly
portrayed as limiting family members involvement in decision-making and being
reluctant to invest in innovation or entrepreneurship. However, recently there has been
research that has taken a very different view of the family; research that considers how
family members can act as stewards of their firms, thereby contributing to firm
performance. This study employs this positive view of family and demonstrates how
comprehensive decision-making and a long-term orientation can positively influence
corporate entrepreneurship in family firms. It also demonstrates how family harmony can
further facilitate corporate entrepreneurship leading to greater entrepreneurship in firms
with much professionalism and long-term orientations. In addition, this study shows that

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family harmony may compensate for low human capital in family firms, thereby
increasing the firms corporate entrepreneurship. As such, this study reveals how specific
strategic decision-making processes and family involvement influences corporate
entrepreneurship in family firms. Given that more than 80 percent of operating firms and
77 percent of all new ventures are family businesses and fewer than 30% of family firms
succeed to the second generation, understanding how the family may influence the
entrepreneurial behaviors of a firm is of the utmost importance. Our results clearly show
that positive family relationships and involvement can lead to greater corporate
entrepreneurship. Accordingly, this study has implications regarding family firm
competitive advantage, innovation and survival.

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INTRODUCTION
Corporate entrepreneurship has been recognized as a key factor contributing to firm
success, increasing a firms profitability, revenue streams, and growth (Lumpkin & Dess,
1996; Zahra, 1996; Zahra, Neubaum, & Huse, 2000). Corporate entrepreneurship is
designed to revitalize a firms business by changing its competitive profile or by
emphasizing innovation (S. A. Zahra, 1995; Shaker A. Zahra, 1996). Entrepreneurial
behaviors may be particularly crucial to a family firm as it strives to identify and take
advantage of opportunities in the dynamic and uncertain competitive environment of the
twenty-first century (Sirmon & Hitt, 2003). Indeed, family firms that engage in the
innovative, proactive, and risk-taking behaviors that characterize corporate
entrepreneurship (Miller, 1983) are major contributors to economic development and
growth in the U. S. and world economy (Zahra, Hayton, & Salvato, 2004). In spite of
this and entrepreneurships potential to sustain family firms across generations, little
research has investigated corporate entrepreneurship in family firms (e.g., Rogoff &
Heck, 2003; Salvato, 2004).
Rather, family firms are often criticized for failing to invest in new ventures (CabreraSuarez, Saa-Perez, & Almeida, 2001), avoiding risk (Morris, 1998) and resisting change
(Levinson, 1987). Family ownership profoundly affects how resources are valued in
family firms (Habbershon, Williams, & MacMillan, 2003). While family members
control the firms assets and decision-making, they also tend to be overly concerned with
wealth preservation, thereby inhibiting their firms investment in entrepreneurship and
growth strategies (Carney, 2005). Families often become fixated on maintaining the
status quo, failing to seek new ventures or invest in technology (Ward, 1987). This
interaction between the family and the business may therefore effect a family firms
decision to invest in corporate entrepreneurship. For family firms to last through the
generations and to remain successful they must be able to enter new markets and
modernize existing operations so as to garner new business (Ward, 1987). Indeed, recent
research shows that family firms more commonly maximize their profits by investing in
political rent-seeking behavior rather than by investing in innovation (Ellington, Jones, &
Deane, 1996; Morck & Yeung, 2003, 2004). Accordingly, it is of utmost importance to
better understand corporate entrepreneurship in family firms, considering that family
firms that invest in innovation appear to have greater potential for high performance
(McCann, Leon-Guerrero, & Haley, 2001).
Research needs to investigate how families may foster or inhibit entrepreneurial
behaviors in family firms (Kellermanns & Eddleston, 2006). Although previous research
has often compared family and non-family businesses, few studies have examined what
capabilities distinguish successful family firms from their less successful counterparts or
the positive advantages that family involvement can have on a family firm (Nordqvist,
2005; Sirmon & Hitt, 2003). Such a study is important given that more than 80 percent
of operating firms and 77 percent of all new ventures are family businesses (Chua,
Chrisman, & Chang, 2004). Indeed, the impact of individual family members and overall
family involvement may be critical to entrepreneurial behavior and firm success
(Astrachan, 2003). Research that has employed a stewardship perspective has shown that

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families that act as stewards of their firms provide a socially-complex resource that
differentiates successful family firms (Eddleston & Kellermanns, 2007; Eddleston,
Kellermanns, & Sarathy, 2007).
Drawing from stewardship theory we therefore argue that effective family participation
and involvement contributes to corporate entrepreneurship in family firms. In line with
stewardship theory, we investigate how decision-making processes influence corporate
entrepreneurship, specifically examining comprehensive decision-making and long-term
orientation. Further, because the agency theory perspective often criticizes family firms
for hiring family members who are not adequately qualified and calls for family firms to
become more professionally managed (Bloom & Van Reenen, 2006; Prez-Gonzlez,
2006), we consider the effects of human capital and professionalism on family firm
corporate entrepreneurship. We then consider how family harmony, a key factor drawn
from stewardship theory of the family firm, acts as a moderator to facilitate corporate
entrepreneurship.
Our paper contributes to the literature in three ways. First, we add to the corporate
entrepreneurship literature. While studies investigating the antecedents of corporate
entrepreneurship in non-family firms are common (e.g., Covin & Selvin, 1991; Lumpkin
& Dess, 1996; Zahra et al., 2000), little research has investigated how family
involvement impacts corporate entrepreneurship. Second, we show that family harmony
matters to corporate entrepreneurship. This underscores the importance of family firm
research as a separate field of study and highlights how effective family relationships
may be a source of competitive advantage to family firms. Third, we add to the literature
on stewardship theory. We demonstrate how strategic decision-making processes those
that are comprehensive and long-term oriented contribute to corporate entrepreneurship
in family firms. Furthermore, in consideration of the agency theory literature, we
examine the effects of human capital and professionalism.
LITERATURE REVIEW AND THEORETICAL DEVELOPMENT
Both agency theory (e.g. Chrisman, Chua, & Litz, 2004; Schulze, Lubatkin, Dino, &
Buchholtz, 2001) and stewardship theory (e.g. Eddleston & Kellermanns, 2007;
Eddleston et al., 2007) perspectives have been supported in the family firm context.
Agency theory is seen as a suitable perspective to explain the effects of personal
relationships on efficiency (Greenwood, 2003) and the organizational arrangements
aimed at minimizing costs related to dysfunctional behaviors (Corbetta & Salvato, 2004:
365). Agency theory assumes that managers, or agents have different goals from the
businesss owners, or principals. As a result, some opportunistic managers are apt to
pursue their own self interests as opposed to the firms best interests. Proponents of
agency theory therefore argue that managers need to be controlled and offered financial
incentives in order to align their interests with those of the firm.
Within the family firm literature, agency theory guides research on the costs and
dysfunctional behaviors attributed to family involvement (Chrisman, Chua, & Steier,
2003) and studies have shown that agency costs do exist in some family firms (e.g.

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Chrisman et al., 2004; Schulze et al., 2001). Referred to as adverse selection in the
agency theory literature, family firms often hire family members who are less able,
committed, industrious or ethical, or whose interests are less compatible with the family
firm than the owners expected (Chrisman et al., 2004, p. 336). Family firms also often
suffer from shirking and the consumption of unearned perks by family members
(Chrisman et al., 2004). Common remedies to these problems include greater emphasis
on human capital when hiring family members (Chrisman et al., 2004) and an increase in
professionalism through the use of boards of advisors and governance mechanisms
(Schulze et al., 2001).
Recently, a more positive view of the role of the family has begun to take shape in the
family firm literature. Based on stewardship theory, family members are viewed as
stewards of the business, willing to put aside personal interests for the sake of the firm
(i.e., Corbetta & Salvato, 2004; Eddleston & Kellermanns, 2007; Eddleston et al., 2007).
The stewardship perspective of the family firm views productive family relationships as a
source of competitive advantage (i.e., Corbetta & Salvato, 2004; Eddleston &
Kellermanns, 2007; Eddleston et al., 2007). Stewardship theory depicts organizational
members as collectivists, pro-organizational and trustworthy (Davis, Schoorman, &
Donaldson, 1997). Stewards believe that their interests are aligned with the firm and
therefore, they are motivated to maximize their firms performance. The stewardship
framework emphasizes participative decision-making, long-term orientation and
collective, trusting relationships (Davis et al., 1997). These factors encourage employees
to identify with the firm thereby pushing employees to pursue organizational goals, solve
organizational problems, and overcome barriers that are preventing the successful
completion of tasks (Davis et al., 1997).
Comprehensive Decision-Making
According to stewardship theory, stewards are motivated to maximize organizational
performance because their interests are aligned with those of the organization and
stewards maximize their own utility by making decisions that are in the organizations
best interest (Davis et al., 1997; Tosi, Brownlee, Silva, & Katz, 2003). In an effort to
maximize the organizations performance, stewards may therefore be more diligent in
evaluating options and making strategic decisions, particularly since stewardship
enhances open communication and a participative management style (Davis et al., 1997).
Such comprehensive decision-making may foster corporate entrepreneurship in family
firms. Indeed, Zahra (2005) identified goal congruency between the firm and family
members as a possible contributor to entrepreneurial behavior in family firms.
Whereas the free exchange of ideas and interaction among top decision-makers is
beneficial in general (Thomas & McDaniel Jr., 1990), a comprehensive decision-making
approach is especially necessary in family firms (Kellermanns & Eddleston, 2004) to
leverage the benefits of the altruistic relations prevalent in this type of firm. Corporate
entrepreneurship is likely to be prompted by deliberate strategic and managerial intent
that reflects the willingness of management to change and experiment (Karagozoglu &
Brown, 1988). Family firms need to adopt strategic planning in order to integrate

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innovation and foster new product development throughout the organization (McCann et
al., 2001; Upton, Teal, & Felan, 2001). Therefore, comprehensive decision-making,
characterized as the extensive consideration and evaluation of multiple strategic options,
should enhance corporate entrepreneurship in family firms.
Hypothesis 1: Comprehensive decision-making is positively related to corporate
entrepreneurship in family firms.
Long-term Orientation
A long-term orientation is a key component of the stewardship perspective (Davis et al.,
1997). Stewardship behaviors like trust, reciprocal altruism and relational contracts take a
relatively long time to exert their effect on firm performance (Corbetta & Salvato, 2004).
In addition, stewardship theory advocates a focus on long-term effectiveness, particularly
in uncertain environments (Davis et al., 1997) since longer time spans may be necessary
to measure true performance. As such, stewardship theory supports a more patient
management philosophy whereby short-term profits are not paramount and the strategic
focus is more long-term. This long-term orientation is complimentary to the long time
spans often advocated by successful family businesses (Corbetta & Salvato, 2004) and
has been depicted as a unique resource to family firms (Sirmon & Hitt, 2003). Indeed,
maintaining the business for future generations is commonly seen as a key goal for family
firms (e.g., Gomez-Mejia, Hynes, Nunez-Nickel, & Moyano-Fuentes, 2007; Kets de
Vries, 1993; Seymour, 1993; J.L. Ward, 1997).
Within stewardship theory it has been argued that since non-family managers suffer from
a lack of altruism and therefore a finite time horizon problem, these managers are lead to
decisions that improve performance during their tenure with the organization, but could
be harmful in the long run. Altruism among family members leads to adoption of
strategies that solves the problem of a managers finite time horizon by linking an
individual managers tenure (time horizon) with that of the familys tenure with the firm
(De Paola & Scoppa, 2001). Stein (1988; 1989; 1996) shows how the presence of
blockholders with relatively long investment horizons (e.g. family blockholders) can
mitigate the incentives for myopic investment decisions by managers. Indeed, Zahra and
colleagues (2004: 363) note that a long-term orientation allows family firms to dedicate
the resources required for innovation and risk taking, thereby fostering entrepreneurship.
Hypothesis 2: Long-term orientation is positively related to corporate
entrepreneurship in family firms.
Human Capital
Referred to as adverse selection induced by altruism in the agency literature (Schulze,
Lubatkin, & Dino, 2003b), family firms often hire family members who are less able,
committed, industrious, or ethical, or whose interests are less compatible with the family
firm than the owner expected (Chrisman et al., 2004, p. 336). While non-family firms
emphasize outside work experience and education in promotion decisions, many family

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firms do not (Fiegener, Brown, Prince, & File, 1996). A lack of emphasis on human
capital can be a real problem for family firms.
However, family firms that are most successful in building and preserving their
innovative capacity emphasize the importance of human capital by effectively using
family and non-family talent and resources (McCann et al., 2001). That is, innovative
family firms place great importance on building an effective management team and
providing non-family employees with opportunities for growth (McCann et al., 2001).
These firms also highly value the need to provide family members with opportunities for
personal growth and development (McCann et al., 2001). Accordingly, we propose:
Hypothesis 3: Human capital is positively related to corporate entrepreneurship in
family firms.
Professionalism
According to agency theory research, family firms can suffer from unique agency costs
due to the co-mingling of the family and the business. For example, family firms can
suffer from nepotism, the entrenchment of ineffective managers (Randall Morck,
Shleifer, & Vishny, 1988) and predatory managers (Morck & Yeung, 2003). Such agency
costs may be perpetuated because family firms are less likely to use formal monitoring,
governance and control mechanisms than non-family firms (Daily & Dollinger, 1993;
Schulze et al., 2001). Furthermore, due to their private and self-dealing tendencies, the
autonomy of the controlling owners can further increase ineffective decision-making
(Chrisman et al., 2004), allowing the owners to decide against a new venture because it
threatens the status quo (Schulze et al., 2001). As a result family firms are often advised
to move to professional management and to operate more professionally in order to avoid
such agency costs (Levinson, 1971).
Boards of directors may assist the strategic planning of family firms through their
influence on the owners (Chrisman et al., 2004). There are clear advantages to having a
board of advisors; they are able to monitor firm performance, discipline firm managers,
and offer needed expertise and perspectives to the firm (Schulze et al., 2001).
Furthermore, a board of directors requires regular performance reports and can help to
correct problems before they become catastrophic (Chrisman et al., 2004). However,
research has found that the presence of a board of directors is not related to sales growth
(Chrisman et al., 2004) and that outsider representation on family firm boards is
negatively related to firm performance (Schulze et al., 2001). Thus we argue that it is not
merely the presence of a board of directors or outsiders on the board that enhance family
firm performance, but rather the sharing of ideas and perspectives between board
members and family members that improve strategic planning, and specifically, corporate
entrepreneurship. By combining the tacit knowledge of family members with the unique
perspectives of advisors, family firms may be able to increase their corporate
entrepreneurship. Therefore:

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Hypothesis 4: Professionalism is positively related to corporate entrepreneurship in

family firms.
Moderating Effect of Family Harmony
According to stewardship theory, stewards gain utility from fulfilling the goals and
objectives of the organization (Davis et al., 1997). This increased goal congruence
motivates stewards to adopt innovative and proactive behaviors that involve calculated
risks, but can also significantly improve performance (Corbetta & Salvato, 2004: 359).
Research on stewardship theory in the family firm has shown that positive, altruistic
family relationships directly enhance firm performance (Eddleston et al., 2007). The
family and the business are inextricably intertwined in family firms, with success in one
leading to success in the other (Olson et al., 2003). Some researchers argue that the
interaction between the family system and business system can create the greatest value
for a family firm (Gersick, Davis, Hampton, & Lansberg, 1997; Lansberg, 1983). In line
with this view and the stewardship perspective we argue that family harmony facilitates
corporate entrepreneurship in family firms by acting as a moderator of the proposed
relationships.
Hypothesis 5a: Family harmony moderates the relationship between
comprehensive decision-making and corporate entrepreneurship.
Hypothesis 5b: Family harmony moderates the relationship between long-term
orientation and corporate entrepreneurship.
Hypothesis 5c: Family harmony moderates the relationship between human capital
and corporate entrepreneurship.
Hypothesis 5d: Family harmony moderates the relationship between
professionalism and corporate entrepreneurship.
METHOD
We utilized a mail survey approach to collect data for our study, which is consistent and
has been commonly employed in prior research (e.g. Chrisman, Gatewood, & Donlevy,
2002; Eddleston & Kellermanns, 2007; Schulze, Lubatkin, & Dino, 2003a). We obtained
an extensive mailing list of 1250 privately held family businesses compiled by a family
business center at a major university in Switzerland. We took two steps to ensure that the
firms participating in our study were family businesses. First, all organizations affiliated
with the universitys family firm center identified themselves as family firms. Second, in
all responding firms ownership resided within the family and at least two family members
were employed in the organization (e.g. Eddleston & Kellermanns, 2007; Eddleston et al.,
2007).
We obtained 219 questionnaires from two mailings, representing 179 distinct family
firms. This resulted in a 14.3% rate. This response rate can be considered satisfactory and

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comparable to other studies with family firm or survey-based studies (e.g. Chrisman,
Chua, Chang, & Kellermanns, 2007; Cycyota & Harrison, 2002; Simonin, 1997).
Measures
Our study investigated the antecedents of corporate entrepreneurship in family firms and
the moderation effect of family harmony on the relationship between the antecedents and
corporate entrepreneurship. All constructs were measured using Likert-type scales with a
7-point response format anchored by strongly disagree to strongly agree unless
otherwise noted (all >.72).
Independent Variables and Moderator
Comprehensive Decision Making. We measured this construct using three items from the
strategic management and decision making literature (Knight et al., 1999; Talaulicar,
Grundei, & v. Werder, 2005). A sample item is, When strategic decisions have been
made, several options are considered. Human Capital. While human capital is a
complex construct that has been assessed in multiple ways (Hitt, Bierman, Shimizu, &
Kochhar, 2001; Snell & Dean, 1992), in order to adapt this measure to a wide variety of
firms, we utilized two items, which assessed the overall education and skill level of the
workforce: The workforce is well educated and The workers are very skilled and
experienced. Long-term Orientation. The four items used to assess long-term orientation
were inspired by Zellweger (2007) whose research focused on the impact of an increased
time horizon on investment possibilities. Sample items include, The family firm is able
to invest in projects that are less profitable than the ones of the competitors and The
family firm has the possibility to seize investment projects that take a longer time to see
financial returns back. Professionalism. The level of professionalism in the strategic
decision-making process has a variety of characteristics. We wanted to assess the direct
input of both the family and the board of directors in the decision making process. As
such, we asked questions like: Boards of Directors participate in developing the
corporate strategy and Family members have the capability to manage and implement
change processes or new strategic directions. Family Harmony. This five item measure
was taken from a study conducted by Beehr et al. (1997). Sample items include, Within
the business family we have family harmony and unity and Working together with
family members is a positive aspect in our family firm.

Dependent Variable
Corporate Entrepreneurship. This construct was designed to tap a variety of
entrepreneurial behavior dimensions, namely innovation, risk taking and proactiveness.
As can be seen in the Appendix, the 7 point Likert-type scale was anchored by two items
at opposite ends of the continuum. We utilized a selection of items presented in
(Barringer & Bluedorn, 1999), which were earlier developed by Miller and Friesen
(1982) and Covin and Slevin (1988).

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Control Variables
We utilized eight different control variables in our study. First, we controlled for industry
with 5 dummy codes, firm age, and size. We further controlled for past performance, as
suggested in the corporate entrepreneurship literature regarding family firms
(Kellermanns & Eddleston, 2006).
RESULTS
The hypotheses proposed in the research model were tested using multiple regression
analysis. We entered 5 controls for industry, company size, firm age and past performance
in Model 1. In order to test the first four hypotheses, we entered the independent variables
in the second model. A significant change in R2 was observed ( R2 =.105, p <.001). Both,
decision making comprehensiveness ( = 0.229, p <.01) and long-term orientation ( =
0.207, p <.05) were found to have a significant positive affect on corporate
entrepreneurship in family firms, thus supporting Hypotheses 1 and 2. However, neither
human capital nor professionalism were found to significantly impact corporate
entrepreneurship in family firms, thus rejecting Hypotheses 3 and 4.
In order to test the hypothesized moderation effects, we first entered the moderator
independently in Model 3 and then entered the four interaction terms in Model 4. In
Model 4, a significant change in R2 was observed ( R2 =.049, p <.05). Hypothesis 5a,
which hypothesized that family harmony would moderate the relationship between
comprehensive decision making and corporate entrepreneurship was not supported ( = 0.122, n.s.). Hypothesis 5b, which argued that that the interaction between family
harmony and long-term orientation would affect corporate entrepreneurship was
marginally supported ( = .151, p <.10). Hypothesis 5c proposed that family harmony
would moderate the relationship between human capital and corporate entrepreneurship.
As Table II, Model 4 shows, a significant interaction was found between human capital
and family harmony ( = - 0.173, p <.05), thus supporting Hypothesis 5c. Hypothesis 5d
argued that family harmony would moderate the relationship between professionalism
and corporate entrepreneurship in family firms. A significant interaction was found, thus
supporting hypothesis 5d ( = -0.176, p <.05).

DISCUSSION AND CONCLUSION

Our paper reaffirms earlier suggestions in the literature that family members influence in
the family firm may critically affect their ability to engage in entrepreneurial behavior
(Astrachan, 2003). But, as Aldrich and Cliff (2003, p. 574) explain . . .very little
attention has been paid to how family dynamics affect fundamental entrepreneurial
processes. As such, our study is yet another step in further investigating the importance
of family firm involvement on entrepreneurial processes (Aldrich & Cliff, 2003).

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In line with the stewardship perspective of family firms, our study shows that
comprehensive decision making and long-term orientation are important antecedents of
corporate entrepreneurship in family firms. Indeed, our findings pertaining to a
comprehensive decision making process complement earlier findings that stress the
importance of strategic planning and participative decision making in family firms
(Eddleston & Kellermanns, 2007; Kellermanns & Eddleston, 2006). The positive
association between long-term orientation and corporate entrepreneurship suggests that
cross-generational sustainability appears to promote corporate entrepreneurship in family
firms. Indeed, patient financial capital may be an important resource that encourages high
levels of entrepreneurial behavior in family firms since it provides these firms with
strategic advantages and investments opportunities that are avoided by short-term
oriented firms (Sirmon & Hitt, 2003; Zellweger, 2007). Furthermore, our study provides
some insight into why family firms pursue entrepreneurial endeavors, complimenting the
recent study by Gomez-Mejia and colleagues (2007) who found that family firms are
more likely to engage in risky behavior than non-family firms because family firms seek
to maintain wealth for future generations.
Contrary to our expectations, neither professionalism nor human capital was shown to
have a direct effect on corporate entrepreneurship in family firms. However, both of these
variables were found to affect entrepreneurial behavior when family harmony was taken
into account. Family harmony was also found to significantly influence the relationship
between long-term orientation and corporate entrepreneurship. Thus, our findings
highlight the importance of the family in examining the family firm.
To facilitate the interpretation of the moderation effects, the significant interactions were
plotted in Figures 1, 2, and 3. Figure 1 indicates that a long-term orientation has a much
stronger and positive effect on the corporate entrepreneurship of family firms with
harmonious family relationships, as compared to those firms low in family harmony. In
regards to Figure 2, the interaction between family harmony and human capital shows a
complex interaction where high family harmony is able to offset negative consequences
of low levels of human capital. Figure 2 also demonstrates that in family firms with little
family harmony, a strong emphasis on human capital is necessary in order to see a high
investment in corporate entrepreneurship. However, unexpectedly, we also see that
family firms with much human capital have less corporate entrepreneurship when family
harmony is high. Figure 3 shows, as predicted, that family firms with much
professionalism and family harmony have the greatest corporate entrepreneurship. We
also see that when family firms are managed professionally but lack family harmony,
their corporate entrepreneurship suffers.
------------------------------------------Figures 1-3 available upon request
------------------------------------------Our study offers a wide variety of future research opportunities. Future studies may want
to investigate additional variables characterizing family influence (e.g., Klein, Astrachan,
& Smyrnios, 2005) or cross-level influences that address organizational, family and

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individual level influences on entrepreneurial behavior to create a multi-level

understanding of the phenomenon. Further, although the performance effects of corporate
entrepreneurship on firm performance have been investigated in cross-sectional designs
(e.g, Kellermanns & Eddleston, 2006), a longitudinal design would enable us to better
assess causality in both the antecedent and consequences of entrepreneurial behavior in
family firms. In particular, the factors that help and hinder the success of family firms
entrepreneurial ventures need to be examined.
In addition, while our study focused on corporate entrepreneurship in family firms, the
variables employed in our study could also have implications for non-family firms.
Indeed, future research should investigate the benefits of long-term orientation and
comprehensive decision-making on corporate entrepreneurship in non-family firms.
Further, although we did not find a direct effect of human capital and professionalism on
corporate entrepreneurship in family firms, future research should investigate if the
proposed relationships hold in non-family firms. Of course, our moderator family
harmony is a variable that cannot be easily transferred into the realm of non-family firms.
However, related variables like constructive relationships, cohesion, or consensus could
be worth investigating as moderators in both family and non-family firms (Ensley &
Pearson, 2005; Kellermanns & Floyd, 2005; Kellermanns, Floyd, Pearson, & Spencer,
2007). Studies that compare the antecedents of corporate entrepreneurship in family and
non-family firms should also be pursued, with emphasis on the unique characteristics and
goals of each.
In conclusion, our study provides further support for the stewardship theory of the family
firm while also corroborating some of the advice advocated by agency theory scholars.
Our findings suggest that comprehensive decision-making and a long-term orientation are
positively related to corporate entrepreneurship in family firms. We further found family
harmony to moderate the relationships between human capital, professionalism, and longterm orientation and corporate entrepreneurship.

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