Family Culture and Firm Performance: The Moderating Roles of Two Distinct Strategic Orientations in Nigerian Family Businesses:Family Culture and Firm Performance

摘要

Family businesses have been critical to the economic landscape of many developed countries for centuries and remain so till today. The role of family involvement in these businesses remains an important line of enquiry in family business research. However, there appears to be a huge neglect in the literature on family business and entrepreneurship, with regards to Africa as a research context for family businesses. This is very surprising, considering Africa’s size ‘as the second largest continent in the world’, and the widely held view that Africa is dominated by small-scale businesses, informal markets, and traditional firms that are responsible for a large percentage of its economic growth (Bruton, Ahlstrom and Obloj, 2008; Lyon and Porter, 2009).Specifically, numerous researches have noted that intrinsic resources are available when the family is involved in the ownership, management, governance and succession of a firm. Despite this widely reported positive connection of family involvement and firm performance, very few studies have focused on family culture, which is considered to be the very foundation and identity of the family. Having recognised this gap, this thesis sets out to explore the direct association between family culture and firm performance vis-à-vis other factors that might be influencing the same.Using a sample of 237 family business owners in Lagos, the second largest city in Africa by population, family culture is measured empirically with the culture sub-scale obtained from the well-defined and tested F-PEC Scale (Astrachan, Klein and Smyrnois, 2002). First, investigated in this study using regression analyses is the influence of family culture and two distinct strategic orientations – Entrepreneurial Orientation and Small Business orientation – on the performance of these family firms. Next, using Andrew Hayes’ PROCESS regression analysis, the moderation effects of environmental dynamism, Small Business Orientations and four dimensions of Entrepreneurial Orientation, on the ‘family culture-firm performance link,’ are investigated. Finally, using the one-way analysis of variance and independent t-tests, the levels of family culture and firm performance are compared based on the following parameters: ethnicity of the business families, gender of the owner and/or manager, and the generation controlling the business.The findings of the regression analyses show that there are positive and significant associations between family culture, autonomy, innovativeness and Small Business Orientation, and the performance of family businesses, after controlling for the other components of family involvement. It is noteworthy to mention that in this study, the multidimensionality of the Entrepreneurial Orientation scale advocated by Lumpkin and Dess (1996; 2001) is confirmed. Similarly, the presence of a second strategic orientation which mostly promotes the non- economic goals of family businesses (Small Business Orientation) is also corroborated. The moderation regression analysis using Andrew Hayes’ PROCESS shows only one dimension of Entrepreneurial Orientation (risk-taking) as having a significant and positive effect on the ‘family culture-firm performance link’. The findings of the one-way analysis of variance show no significant difference in the levels of family culture and firm performance based on ethnicity; however, the independent t-test shows that family culture is higher in businesses that have females as owners and/or managers. Furthermore, there is also a significant difference in family culture when tested against the generation controlling the business; the founder-led generation (first generation) is found to have a higher level of family culture than those led by the second generation.