Bounded Rationality and Bounded Reliability: A Study of Nonfamily Managers’ Entrepreneurial Behavior in Family Firms

Josip Kotlar and Philipp Sieger

Entrepreneurship Theory and Practice, 2019, vol. 43, issue 2, 251-273

Abstract: We use transaction cost economics to explain the individual-level entrepreneurial behavior of family and nonfamily managers in family firms. We argue that nonfamily managers exhibit lower entrepreneurial behavior than family managers, particularly after the founder’s departure from the business. Moreover, we identify an expanded set of factors through which family firms can facilitate nonfamily managers’ entrepreneurial behavior, including monitoring, incentives, distributive justice, access to the top management, and job control perceptions. We test these hypotheses in a sample of 296 family firm managers, contributing new insights on nonfamily managers and corporate entrepreneurship in family firms.

Keywords: bounded rationality; bounded reliability; transaction cost economics; (non)family managers; entrepreneurial behavior (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:43:y:2019:i:2:p:251-273

DOI: 10.1177/1042258718796085

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