Internationalization of Family Firm - Research Paper Example

The present study aims towards creating a relationship between entrepreneurial orientation with generational involvement and internationalization. The study suggests that entrepreneurial orientation within the organization increases its performance. Entrepreneurial orientation has a significant role in increasing the acquisitive and experimental learning in an organization which in turn increases its performances, but the case is different for family firms. The long-term access of the family firm will be not always dependent upon the five dimensions of entrepreneurial orientation. It has been found that there lies a positive relationship between entrepreneurial orientation and the survival of the firms. When a relationship between entrepreneurial orientation and generational involvement is established it is seen that the entrepreneurial orientation has a positive impact on the growth of the second-generation business. On the other hand, firms having high family ownership are expected to internationalize more as compared to the firms having low family ownership. Finally, the firm’s entrepreneurial orientation is seen to have a positive relationship with internationalization.

A family business is identified as a commercial activity that involves the influence or control of one or more families. With the advent of industrialization, the increase in professionalization and progress in on the economy as the commercial activities take place outside the private sphere of family or home. With the growth of family businesses, several researchers have shifted their attention towards how these firms secure continuity, manage legacy and ensure survival (Kontinen & Ojala, 2012). Succession is an event while running the family business, signifies the transfer of management and ownership to the next generation. Little importance was provided towards understanding the families and how they conduct their business activities, innovation, and strategic renewal. The family business is seen as an organization in its conservative form, infrequently surrounding entrepreneurial dynamics (Nordqvist & Melin, 2010).   

Corporate entrepreneurship is an important factor behind the long-term or short-term success of the firm whether a family firm or non-family firm. Entrepreneurial orientation (EO) is defined as the presence of organizational level entrepreneurship that has been explained using five dimensions namely autonomy, innovation, competitive aggressiveness, proactiveness, and risk-taking. The main assumption behind entrepreneurial orientation is the entrepreneurial business that shows unique and different characteristics that vary from others. The strength of the entrepreneurial orientation of the firm shows a vigorous positive effect on the performance. Therefore, the presence of Entrepreneurial Orientation leads to the accomplishment of the success of the firm (Yildirim & Saygin, 2012). Family firms are established due to the entrepreneurial behavior of one or more founders who realize and take advantage of opportunities. survive and grow in their business they need to retain and increase their entrepreneurial orientation over generations. Thus, entrepreneurial orientation is an important aspect of the success of the family firm (Zellweger & Sieger, 2012). On the other h, and the involvement of the next generation in the family firm helps in their survival. The commitment and willingness showed by the next generation help in continuing the business successfully and sustain in the competitive environment. Internationalization is the procedure in which the organizations are involved in dealings and conducting business transactions with organizations located in other countries (Okoroafo & Koh, 2010; Bell, Crick & Young, 2004; Fan & Phan, 2007).