Satisfaction with Past Financial Performance, Risk Taking, and Future Performance Expectations in the Family Business

Raj V. Mahto, Dmitry Khanin

Research output: Contribution to journalArticle

15 Citations (Scopus)

Abstract

Prior research has shown that past financial performance and risk-taking proclivity influence firms' goal setting and future performance expectations. In this study, we analyze how such factors manifest themselves in the context of the family business. Drawing from the behavioral theory of the firm, we argue that owners-managers of family firms satisfied with their past financial performance will correspondingly upgrade their future performance expectations. Based on strategic reference points theory, we also propose that satisfaction with past performance in family firms will be negatively associated with risk taking. Finally, we conjecture that family firms may exhibit heterogeneity in their risk orientation so that greater risk taking will be positively associated with family firms' future performance expectations. The results of structural equation modeling analysis of two combined surveys of family firms supported the hypotheses.

Original languageEnglish
Pages (from-to)801-818
Number of pages18
JournalJournal of Small Business Management
Volume53
Issue number3
DOIs
Publication statusPublished - Jul 1 2015
Externally publishedYes

Fingerprint

Industry
Managers
Family business
Financial performance
Family firms
Risk taking
Financial risk
Owner-managers
Reference point
Upgrade
Structural equation modeling
Behavioral theory of the firm
Goal setting
Factors

ASJC Scopus subject areas

  • Management of Technology and Innovation
  • Strategy and Management
  • Business, Management and Accounting(all)

Cite this

Satisfaction with Past Financial Performance, Risk Taking, and Future Performance Expectations in the Family Business. / Mahto, Raj V.; Khanin, Dmitry.

In: Journal of Small Business Management, Vol. 53, No. 3, 01.07.2015, p. 801-818.

Research output: Contribution to journalArticle

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