Skip to main content
SpringerLink
Log in

Goal Orientation and Performance of Family Businesses

  • Original Paper
  • Published:
Journal of Family and Economic Issues Aims and scope Submit manuscript

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.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

References

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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 

  • 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 

  • 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.

  • Chrisman, J. J., & Carroll, A. B. (1984). Corporate responsibility-reconciling economic and social goals. Sloan Management Review, 25(2), 59–65.

    Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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 

  • 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.

  • 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.

    Article  Google Scholar 

  • Headd, B. (2003). Redefining business success: Distinguishing between closure and failure. Small Business Economics, 21, 51–61. doi:10.1023/A:1024433630958.

    Article  Google Scholar 

  • Hofer, C. W., & Schendel, D. (1978). Strategy formulation. Minneapolis, MN: West Publishing.

    Google Scholar 

  • 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.

  • 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 

  • 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 

  • 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 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • Locke, E. A., & Latham, G. P. (1999). A theory of goal setting and task performance. Englewood Cliffs, NJ: Prentice-Hall.

    Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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 

  • 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.

  • 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.

    Article  Google Scholar 

  • Newman, W. H., & Logan, J. P. (1971). Strategy, policy, and central management. Cincinnati, OH: South Western.

    Google Scholar 

  • Oughton, E., & Wheelock, J. (2003). A capabilities approach to sustainable household livelihoods. Review of Social Economy, 61(1), 1–22. doi:10.1080/0034676032000050248.

    Article  Google Scholar 

  • 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 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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 

  • 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.

    Article  Google Scholar 

  • Scarborough, N. M., & Zimmerer, T. W. (1987). Strategic planning for the family owned business. Business, 37, 11–19.

    Google Scholar 

  • 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 

  • 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.

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

  • 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.

    Article  Google Scholar 

  • 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 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

  • 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.

    Article  Google Scholar 

Download references

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.

Author information

Authors and Affiliations

  1. Department of Family, Consumer, and Human Development, Utah State University, 2905 Old Main Hill, Logan, UT, 84322-2905, USA

    Yoon G. Lee

  2. Department of Agricultural Economics, Purdue University, 403 West State Street, West Lafayette, IN, 47907, USA

    Maria I. Marshall

Authors
  1. Yoon G. Lee
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Maria I. Marshall
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Yoon G. Lee.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Lee, Y.G., Marshall, M.I. Goal Orientation and Performance of Family Businesses. J Fam Econ Iss 34, 265–274 (2013). https://doi.org/10.1007/s10834-012-9329-9

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10834-012-9329-9

Keywords

Search

Navigation