The role of regret in the owner-manager decision-making in the family business: A conceptual approach

Gérard Hirigoyen and Rania Labaki

Journal of Family Business Strategy, 2012, vol. 3, issue 2, 118-126

Abstract: This article responds to recent calls of scholars for more research on emotions in the family business by providing an initial analytical study of the owner-manager regret in decision-making. First, we suggest an enlarged theoretical framework for analyzing decision-making in the family business by building on the behavioural model of emotions in decision-making of Loewenstein and Lerner (2003) and Regret Theory. Second, we offer a first characterization of the emotion of regret in the family business. Given the overlap between the family and the business systems, we introduce a dual dimension of regret that is family-based and business-based. We also extend the analysis towards a dynamic view of regret by accounting for the owner-manager's experienced regret at the time of decision in addition to the traditionally analyzed expected regret. Departing from the common assumption that the owner-manager is altruistic towards the family and acts as a steward for the business, we consider that the owner-manager's expected outcomes refer to emotional and financial value maximization. Based on these characterizations, we develop a conceptual model with a series of propositions on the role of the owner-manager regret in decision-making. Finally, we present the theoretical, conceptual and practical contributions of the study as well as its limitations from which stem research avenues on regret and decision-making in the family business.

Keywords: Decision-making; Emotions; Family business; Regret; Value (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:fambus:v:3:y:2012:i:2:p:118-126

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DOI: 10.1016/j.jfbs.2012.03.004

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