Advertisement

Journal of Family and Economic Issues

, Volume 34, Issue 3, pp 265–274 | Cite as

Goal Orientation and Performance of Family Businesses

  • Yoon G. Lee
  • Maria I. Marshall
Original Paper

Abstract

Family businesses consist of family members pooling their resources together to achieve a particular goal for the family business. The objectives of this study were to profile the characteristics of the family businesses and business owners by owners’ goal orientation and to examine the influence of goal orientation on family business performance. The mean differences in values of business size, business age, and business liabilities were statistically significant by owners’ goal orientation. The major findings of this study suggest that owner goal orientation had a statistically significant effect on business performance. Specifically, setting a business goal such as growth or a positive reputation with customers had a significant and positive impact on family business performance.

Keywords

Business success Family business Goal setting Performance 

Notes

Acknowledgments

This paper reports results from the Cooperative Regional Research Project, NC-1030 “Family Firms and Policy in Times of Disruption”, partially supported by the Cooperative States Research, Education, and Extension Service (CSREES); U.S. Department of Agriculture; Baruch College, the experiment stations at the University of Hawaii at Manoa, Purdue University (Indiana), Iowa State University, University of Minnesota, Cornell University (New York), Montana State University, North Dakota State University, The Ohio State University, Oklahoma State University, Utah State University, and University of Wisconsin-Madison.

References

  1. Adams, A. F., I. I. I., Manners, G. E., Jr, Astrachan, J. H., & Mazzola, P. (2004). The importance of integrated goal setting: The application of cost-of-capital concepts to private firms. Family Business Review, 17(4), 287–302. doi: 10.1111/j.1741-6248.2004.00019.x.CrossRefGoogle Scholar
  2. Anderson, A. R., & Miller, C. J. (2003). “Class matters”: Human and social capital in the entrepreneurial process. Journal of Socio-Economics, 32(1), 17–37. doi: 10.1016/S1053-5357(03)00009-X.CrossRefGoogle Scholar
  3. Anderson, J. C., Rungtusanatham, M., & Schroeder, R. G. (1994). A theory of quality management underlying the Deming Management Method. Academy of Management Review, 19(3), 472–509. Retrieved June 10, 2010, from http://www.jstor.org/stable/258936.
  4. Baron, R. A., & Markman, G. D. (2003). Beyond social capital: The role of entrepreneurs’ social competence in their financial success. Journal of Business Venturing, 18(1), 41–60. doi: 10.1016/S0883-9026(01)00085-4.CrossRefGoogle Scholar
  5. Bennington, L., & Cummane, J. (1997). The road to privatization: TQM and business planning. International Journal of Public Sector Management, 10(5), 364–376. doi: 10.1108/09513559710180592.CrossRefGoogle Scholar
  6. Bosma, N., van Praag, M., Thurik, R., & de Wit, G. (2004). The value of human and social capital investments for the business performance of startups. Small Business Economics, 23(3), 227–236. doi: 10.1023/B:SBEJ.0000032032.21192.72.CrossRefGoogle Scholar
  7. Bracker, J. S., & Pearson, J. N. (1986). Planning and financial performance of small, mature firms. Strategic Management Journal, 7(6), 503–522. doi: 10.1002/smj.4250070603.CrossRefGoogle Scholar
  8. Brush, C. G. (1992). Research on women business owners: Past trends, a new perspective, and future directions. Entrepreneurship Theory and Practice, 16(2), 5–30.Google Scholar
  9. Caputo, R. K., & Dolinksky, A. (1998). Women’s choice to pursue self-employment: The role of financial and human capital of household members. Journal of Small Business Management, 36(3), 8–17.Google Scholar
  10. Carland, J. W., Hoy, F., Boulton, W. R., & Carland, J. C. (1984). Differentiating entrepreneurs from small business owners: A conceptualization. Academy of Management Review, 9(2), 354–359. Retrieved October 19, 2009, from http://www.jstor.org/stable/258448.
  11. Chrisman, J. J., & Carroll, A. B. (1984). Corporate responsibility-reconciling economic and social goals. Sloan Management Review, 25(2), 59–65.Google Scholar
  12. Chrisman, J. J., Chua, J. H., & Litz, R. (2003). A unified systems perspective of family firm performance: An extension and integration. Journal of Business Venturing, 18, 467–472. doi: 10.1016/S0883-9026(03)00055-7.CrossRefGoogle Scholar
  13. Cooper, A. C., & Gimeno-Gascon, F. J. (1992). Entrepreneurs, processes of founding, and new firm performance. In D. Sexton & J. Kasda (Eds.), State of the art of entrepreneurship research. Boston: PWS-Kent Publishing Co.Google Scholar
  14. Danes, S. M., Loy, J. T., & Stafford, K. (2008). Business planning practices of family-owned firms within a quality framework. Journal of Small Business Management, 46(3), 395–421. doi: 10.1111/j.1540-627X.2008.00250.x.CrossRefGoogle Scholar
  15. Davis, J. A., & Tagiuri, R. (1989). The influence of life-stage on father–son work relationships in family companies. Family Business Review, 2(1), 47–74. doi: 10.1111/j.1741-6248.1989.00047.x.CrossRefGoogle Scholar
  16. Distelberg, B., & Blow, A. (2010). The role of values and unity in family businesses. Journal of Family and Economic Issues, 31(4), 427–441. doi: 10.1007/s10834-9221-4.CrossRefGoogle Scholar
  17. Dunn, B. (1995). Success themes in Scottish family enterprises: Philosophies and practices through the generations. Family Business Review, 8(1), 17–28. doi: 10.1111/j.1741-6248.1995.00017.x.CrossRefGoogle Scholar
  18. Frese, M., Krauss, S. I., & Friedrick, C. (2000). Microenterprises in Zimbabwe: The function of sociodemographics personal initiative, and goal setting for entrepreneurial success. In M. Frese (Ed.), Success and failure of microbusiness owners in Africa: A psychological approach. Westport, CT: Quorum Books.Google Scholar
  19. Gimeno-Gascon, J., Folta, T. B., Cooper, A. C., & Woo, C. Y. (1997). Survival of the fittest? Entrepreneurial human capital and the persistence of underperforming firms. Administrative Science Quarterly, 42(4), 750–783. Retrieved June 6, 2010, from http://www.jstor.org/stable/2393656.
  20. Goetz, S. J., & Freshwater, D. (2001). State-level determinants of entrepreneurship and a preliminary measure of entrepreneurial climate. Economic Development Quarterly, 15, 58–70. doi: 10.1177/089124240101500105.CrossRefGoogle Scholar
  21. Headd, B. (2003). Redefining business success: Distinguishing between closure and failure. Small Business Economics, 21, 51–61. doi: 10.1023/A:1024433630958.CrossRefGoogle Scholar
  22. Hofer, C. W., & Schendel, D. (1978). Strategy formulation. Minneapolis, MN: West Publishing.Google Scholar
  23. Holmquist, C., & Sundin, E. (1989). The growth of women’s entrepreneurship: Push or pull factors? Paper Presented to EIASM Conference on Small Business. University of Durham Business School.Google Scholar
  24. Ibrahim, N. A., Angelidis, J. P., & Parsa, F. (2004). The status of planning in small businesses. American Business Review, 22(2), 52–60.Google Scholar
  25. Kalleberg, A. L., & Leicht, K. T. (1991). Gender and organizational performance: Determinants of small business survival and success. Academy of Management Journal, 34(1):136–161. Retrieved June 6, 2010, from http://www.jstor.org/stable/256305.Google Scholar
  26. Kuratko, D. F., Hornsby, J. S., & Naffziger, D. W. (1997). An examination of owner’s goals in sustaining entrepreneurship. Journal of Small Business Management, 35(1), 24–33.Google Scholar
  27. Lee, S. Y., Florida, R., & Acs, Z. J. (2004). Creativity and entrepreneurship: A regional analysis of new firm formation. Regional Studies, 38(8), 879–891. doi: 10.1080/0034340042000280910.CrossRefGoogle Scholar
  28. Lee, Y. G., Danes, S. M., & Shelley, M. C., I. I. (2006). Work roles, management and perceived well-being for married women within family businesses. Journal of Family and Economic Issues, 31(4), 523–541. doi: 10.1007/s10834-006-9030-y.CrossRefGoogle Scholar
  29. Lee, Y. G., Jasper, C. R., & Fitzgerald, M. A. (2010). Gender differences in perceived business success and profit growth among family business managers. Journal of Family and Economic Issues, 31(4), 458–474. doi: 10.1007/s10834-010-9226-z.CrossRefGoogle Scholar
  30. Locke, E. A., & Latham, G. P. (1999). A theory of goal setting and task performance. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
  31. Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist, 57(9), 705–717. doi: 10.1037/0003-066X.57.9.705.CrossRefGoogle Scholar
  32. Lyles, M. A., Baird, I. S., Orris, J. B., & Kuratko, D. F. (1993). Formalized planning in small business: Increasing strategic choices. Journal of Small Business Management, 31(2), 38–50.Google Scholar
  33. Lynksey, M. J. (2004). Knowledge, finance, and human capital: The role of social institutional variables on entrepreneurship in Japan. Industry and Innovation, 11(4), 373–405. doi: 10.1080/1366271042000289379.CrossRefGoogle Scholar
  34. Maes, J., Sels, L., & Roodhooft, F. (2005). Modeling the link between management practices and financial performance. Evidence from small construction companies. Small Business Economics, 25(1), 17–34. doi: 10.1007/s11187-005-4255-y.CrossRefGoogle Scholar
  35. Mahto, R. V., Davis, P. S., Pearce, J. A., I. I., & Robinson, R. B., Jr. (2010). Satisfaction with firm performance in family businesses. Entrepreneurship Theory and Practice, 34(5), 985–1001. doi: 10.1111/j.1540-6520.2010.00393.x.CrossRefGoogle Scholar
  36. Markman, G. D., & Baron, R. A. (2003). Person-entrepreneurship fit: Why some people are more successful as entrepreneurs than others. Human Resource Management Review, 13(2), 281–301. doi: 10.1016/S1053-4822(03)00018-4.CrossRefGoogle Scholar
  37. Masuo, D., Fong, G., Yanagida, J., & Cabal, C. (2001). Factors associated with business and family success: A comparison of single manager and dual manager family business households. Journal of Family and Economic Issues, 22(1), 55–73. doi: 10.1023/A:1009492604067.CrossRefGoogle Scholar
  38. Matthews, C. H., & Scott, S. G. (1995). Uncertainty and planning in small and entrepreneurial firms: An empirical assessment. Journal of Small Business Management, 33(4), 34–52.Google Scholar
  39. Miller, C. C., & Cardinal, L. B. (1994). Strategic planning and firm performance: A synthesis of more than two decades of research. Academy of Management Journal, 37(6), 1649–1665. Retrieved June 6, 2010, from http://www.jstor.org/stable/256804.
  40. Montgomery, M., Johnson, T., & Faisal, S. (2005). What kind of capital do you need to start a business: Financial or human? Quarterly Review of Economics and Finance, 45(1), 103–122. doi: 10.1016/j.qref.2003.11.005.CrossRefGoogle Scholar
  41. Newman, W. H., & Logan, J. P. (1971). Strategy, policy, and central management. Cincinnati, OH: South Western.Google Scholar
  42. Oughton, E., & Wheelock, J. (2003). A capabilities approach to sustainable household livelihoods. Review of Social Economy, 61(1), 1–22. doi: 10.1080/0034676032000050248.CrossRefGoogle Scholar
  43. Peake, W. O., & Marshall, M. I. (2011). Experience and entrepreneurship in industrialized countries: A meta-analysis. Southern Journal of Entrepreneurship, 4(1), 49–70.Google Scholar
  44. Perry, S. C. (2001). The relationship between written business plans and the failure of small businesses in the U.S. Journal of Small Business Management, 39(3), 201–208. doi: 10.1111/1540-627X.00019.CrossRefGoogle Scholar
  45. Robinson, R. B., Jr, & Pearce, J. A., I. I. (1983). The impact of formalized strategic planning on financial performance in small organizations. Strategic Management Journal, 4(3), 197–207. doi: 10.1002/smj.4250040302.CrossRefGoogle Scholar
  46. Rue, L. W., & Ibrahim, N. A. (1996). The status of planning in smaller family-owned business. Family Business Review, 9(1), 29–43. doi: 10.1111/j.1741-6248.1996.00015.x.CrossRefGoogle Scholar
  47. Rue, L. W., & Ibrahim, N. A. (1998). The relationship between planning sophistication and performance in small businesses. Journal of Small Business Management, 36(4), 24–32.Google Scholar
  48. Runyan, R., Droge, C., & Swinney, J. (2008). Entrepreneurial orientation versus small business orientation: What are their relationships to firm performance? Journal of Small Business Management, 46(4), 567–588. doi: 10.1111/j.1540-627X.2008.00257.x.CrossRefGoogle Scholar
  49. Scarborough, N. M., & Zimmerer, T. W. (1987). Strategic planning for the family owned business. Business, 37, 11–19.Google Scholar
  50. Schwenk, C. R., & Shrader, C. B. (1993). Effects of formal strategic planning on financial performance in small firms: A meta-analysis. Entrepreneurship Theory and Practice, 17(3), 53–64.Google Scholar
  51. Seijts, G. H., Latham, G. P., Tasa, K., & Latham, B. W. (2004). Goal setting and goal orientation: An integration of two different yet related literatures. Academy of Management Journal, 47(2), 227–239. Retrieved October 19, 2009, from http://www.jstor.org/stable/20159574.
  52. Sharma, P., Chrisman, J. J., & Chua, J. H. (1997). Strategic management of the family business: Past research and future challenges. Family Business Review, 10(1), 1–16. doi: 10.1111/j.1741-6248.1997.00001.x.CrossRefGoogle Scholar
  53. Sorenson, R. L. (2000). The contribution of leadership style and practices to family and business success. Family Business Review, 13(3), 183–200. doi: 10.1111/j.1741-6248.2000.00183.x.CrossRefGoogle Scholar
  54. Stafford, K., Bhargava, V., Danes, S. M., Haynes, G., & Brewton, K. E. (2010). Factors associated with long-term survival of family businesses: Duration analysis. Journal of Family and Economics Issues, 31(4), 442–457. doi: 10.1007/s10834-010-9232-1.CrossRefGoogle Scholar
  55. Tagiuri, R., & Davis, J. A. (1992). On the goals of successful family companies. Family Business Review, 5(1), 43–62. doi: 10.1111/j.1741-6248.1992.00043.x.CrossRefGoogle Scholar
  56. Valencia, M., Lamolla, L., & Amorós, J. E. (2007). Women entrepreneurs’ business goals and performance: In harmony? (summary). Frontiers in Entrepreneurship Research, 27(8), Article 4. Retrieved October 19, 2009, from http://www.digitalknowledge.babson.edu/fer/vol27/iss8/4.
  57. Villanueva, J., & Sapienza, H. J. (2009). Goal tolerance, outside investors, and family firm governance. Entrepreneurship Theory and Practice, 33(6), 1193–1199. doi: 10.1111/j.1540-6520.2009.00340.x.CrossRefGoogle Scholar
  58. Vinzant, J. C., & Vinzant, D. H. (1996). Strategic management and total quality management: Challenges and choices. Public Administration Quarterly, 20(2), 201–219.Google Scholar
  59. Vos, E., Yeh, A. J., Carter, S., & Tagg, S. (2007). The happy story of small business financing. Journal of Banking and Finance, 31(9), 2648–2672. doi: 10.1016/j.jbankfin.2006.09.011.CrossRefGoogle Scholar
  60. Winter, M., Fitzgerald, M. A., Heck, R. K. Z., Haynes, G. W., & Danes, S. M. (1998). Revisiting the study of family businesses: Methodological challenges, dilemmas, and alternative approaches. Family Business Review, 11(3), 239–252. doi: 10.1111/j.1741-6248.1998.00239.x.CrossRefGoogle Scholar
  61. Winters, D., & Latham, G. (1996). The effect of learning versus outcome goal on a simple versus a complex task. Group and Organization Management, 21(2), 236–250. doi: 10.1177/1059601196212007.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Department of Family, Consumer, and Human DevelopmentUtah State UniversityLoganUSA
  2. 2.Department of Agricultural EconomicsPurdue UniversityWest LafayetteUSA

Personalised recommendations