The Influence of Familial Socio-Political Forces on New Venture Creation Strategy in Family Business

Working Papers
Bhatnagar, Navneet., Ramachandran, Kavil. "The Influence of Familial Socio-Political Forces on New Venture Creation Strategy in Family Business", Hyderabad, India
Abstract:
New venture (NV) creation is critical to growth and long-term survival of business groups. In family business (FB) context, the socio-political dynamics of family sub-system influences decision-making in business sub-system. However, the effect of this phenomenon on NV creation strategy and process in family business has not been adequately examined. This paper triangulates observations from the literature and 25 in-depth interviews of FB leaders with insights from two FB practitioners, and employs abductive reasoning to theorize the influence of familial socio-political forces on NV creation strategy of family businesses. The results show that in addition to the economic rationale, the proposer’s socio-political clout in the family and the leadership's predisposition to the NV proposer are critical influences on the NV creation strategy of family businesses.