Entrepreneurial mode of entry of the next generation: an inter-generational perspective
Date
2023
Authors
Muigai, S. W.
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Family business scholars and practitioners share a strong interest in understanding the entrepreneurial behaviour of next-generation family members. This stems from a broad recognition that family organizations are fertile grounds for nurturing entrepreneurial mindsets, but entrepreneurial entry into the family business is a challenge, making intergenerational succession one of the main challenges facing family businesses today. Against this backdrop, this study sought to examine the effect of a combination of family embeddedness factors (family business exposure, perceived parental entrepreneurial status, family business involvement, grandparents’ entrepreneurial status) with push and pull factors and formal employment outside of the family business (FB) in determining the entrepreneurial mode of entry (EME) choice of the next-generation family members in Kenya. These factors were conceptualised as follows: First, the influence of two explanatory variables on the choice of EME of the next-generation family members was examined - that is – first, the influence of parental business exposure(PBE) on the choice of EME and secondly, the opening of the black box of this parental business exposure to examine the influence of perceived parental entrepreneurial rewards on the choice of EME by the next-generation family members. The entrepreneurial mode of entry variable was conceptualized as entry through three choices; joining the family business (inheritance route), joining the family business through corporate venturing (CV) and independent own founding. These three EME choices by the next-generation family members were informed by the fact that exposure to a small family business in a developing country may yield a unique entrepreneurial entry route by the next-generation family members. This is because these small family businesses may not be able to engage all the next-generation family members. Furthermore, they may not have an objective of establishing entrepreneurial legacies across generations. There is, therefore, a need to understand the unique supply of entrepreneurs from these small family businesses in order to discriminate policies and practices that best suit them. Results from multinomial logit regressions of 440 next-generation family members revealed that parental business exposure and perceived parental entrepreneurial rewards were related to the likelihood of joining the family business either through an inheritance or a CV route (as opposed to own founding route). Other family embeddedness factors examined were exposure to enterprising grandparents and family business involvement, and the results indicated that they reinforced the likelihood of entry through these two routes. A necessity motivation drive and a longer period of formal employment outside of the family business, however, reduced the likelihood of joining the FB or CV of the next- generation family members as opposed to own founding. The results from this study contribute to the debate on intergenerational influence in entrepreneurial behaviour by offering a fine-grained understanding of the entrepreneurial entry of the next-generation family members who may be exposed to smaller family businesses. The study also contributes to social learning theory and social cognitive learning theory by providing evidence of the effects of learning experiences of individuals’ exposure to a family business on entrepreneurial entry. The study also offers suggestions to family business organisations seeking intergenerational succession on deliberate efforts they can make to nurture the entrepreneurial behaviour of the next-generation family members.
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Full - text thesis
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Citation
Muigai, S. W. (2023). Entrepreneurial mode of entry of the next generation: An inter-generational perspective [Strathmore University]. http://hdl.handle.net/11071/13516