System‐Spanning Values Work and Entrepreneurial Growth in Family Firms

• Author: Innan Sasaki,Johanna Raitis,Josip Kotlar
• Date: 01 January 2021
• Published date: 01 January 2021
• DOI: http://doi.org/10.1111/joms.12653

© 2020 Society for the Advancement of Management Studies and John Wiley & Sons, Ltd.

System-Spanning Values Work and Entrepreneurial

Growth in Family Firms

Johanna Raitisa, Innan Sasakib and Josip Kotlarc

aTurku University; bUniversity of Warwick; cPolitecnico di Milano

ABSTRACT Culture and values are key drivers of corporate entrepreneurship in early stages of

family firm development, but value conflicts often arise over time that progressively inhibit their

entrepreneurial efforts. How can family firms reconcile conflicting values to sustain corporate en-

trepreneurship over time? Our 45-year longitudinal case study of a large global family firm shows

that family business leaders’ practices of invoking and flexibly using family and business values

were crucial to achieve sustained entrepreneurial behaviour and growth over an extended period

of time. We theorize these efforts as system-spanning values work enfolding through specific family,

business, and temporal mechanisms. By identifying and elucidating three types of values work

(i.e., rooting, revitalizing, and spreading), our study advances current understanding of the micro-

foundations underpinning the relationship between values and entrepreneurship in family firms.

Keywords: community, corporate entrepreneurship, embeddedness, family firms, growth,

values

INTRODUCTION

Culture and values are widely acknowledged as key drivers of corporate entrepreneurship,

as they profoundly shape firms’ ability to change and adapt to the external environment

(Hornsby et al., 1999; Morris and Schindehutte, 2005). The role of culture is particularly

salient in family firms (e.g., Eddleston et al., 2012; Hall et al., 2001; Zahra, 2005; Zahra

et al., 2004), as their values are embedded in idiosyncratic social structures reflecting

each family’s unique history and relationship with the local community (e.g., Aldrich and

Cliff, 2003). Research suggests that family and community-embedded values are key in

promoting entrepreneurial behaviour in the early stage of a family firm’s lifecycle (Miller

et al., 2013; Rogoff and Heck, 2003). However, over time, family firms are increasingly

compelled to incorporate external values and norms that may be incompatible with their

Journal of Man agement Studi es 58:1 January 20 21

doi:10. 1111/j om s.1 26 53

Address for reprints: Josip Kotlar, Politecnico di Milano, School of Management, Via R. Lambruschini 4/B,

20156 Milano, Italy (josip.kotlar@polimi.it).

System-Spanning Values Work and Entrepreneurial Growth in Family Firms 105

© 2020 Society for the Advancement of Management Studies and John Wiley & Sons, Ltd.

original values, giving rise to value conflicts and cultural breakdowns that impede further

entrepreneurial behaviour and growth (e.g., Hjorth and Dawson, 2016; Jaskiewicz et al.,

2016; Miller et al., 2013; Reay et al., 2015).

A small but significant stream of qualitative research has revealed that mimetic and norma-

tive pressures over time compel family firms to adopt new values in the form of institutional

logics (Reay et al., 2015) or governance practices (Parada et al., 2010). Thus, existing research

acknowledges that family firms’ culture and values change over time throughout its inter-

play with external constituencies, either enabling or constraining entrepreneurial processes

(Hall et al., 2001; Parada et al., 2010; Reay et al., 2015). This research points to a process of

‘high-order learning in which old cultural patterns are continuously questioned and changed’

(Hall et al., 2001). Unfortunately, yet, the practices through which family firms can manage

value conflicts to sustain corporate entrepreneurship over time remain largely a black box

(Hoy and Sharma, 2010; Jaskiewicz et al., 2015; Reay et al., 2015; Zahra, 2018).

To address this important research gap, we rely on a 45-year longitudinal case study

(Eisenhardt and Graebner, 2007; Yin, 2009) of a large, global family firm that is still

deeply embedded in the family and the local community (e.g., Aldrich and Cliff, 2003),

which provided a rare opportunity to study value dynamics and their effects on corpo-

rate entrepreneurship over time. Taking a micro-foundations perspective (De Massis and

Foss, 2018), our study uncovered the values practices that allowed this family firm to

sustain entrepreneurial behaviour over an extended period of time. This analysis reveals

value tensions triggered by critical events destabilizing the family system and/or business

system as the firm developed and grew (Gersick et al., 1997). Based on our analysis, we

develop the new concept of system-spanning values work to describe the practices through

which family business leaders can invoke and use values across the family system and the

business system, as well as across different temporal orientations. Our findings highlight

three types of values work – rooting, revitalizing, and spreading – and explain how each ad-

dress value tensions and sustain entrepreneurial growth over time.

The findings presented in this paper contribute to extending current knowledge of the

relationship between family business values and corporate entrepreneurship in family

firms by providing a more nuanced understanding of value dynamics in family fir ms (e.g.,

Hall et al., 2001; Parada et al., 2010; Reay et al., 2015). This helps research move from

a monolithic view of family firm culture toward a deeper appreciation of the micro-level

practices that family business leaders use to encourage entrepreneurial behaviour over

time. These insights also extend the concept of family business culture (e.g., Hall et al.,

2001) and values work more generally (e.g., Wright et al., 2020), thereby opening up new

research questions at the intersection of organizational culture and corporate entrepre-

neurship studies (e.g., Morris and Schindehutte, 2005).

THEORETICAL BACKGROUND

Corporate Entrepreneurship across the Family Business Lifecycle

The family business literature has long emphasized the complex dynamics underlying

the entrepreneurial behaviour of family fir ms (Chua et al., 1999; Harvey and Evans,