An Exploration of the Entrepreneurial Learning Processes in a Transgenerational Entrepreneurial Family Firm

Importance and Key Contribution Entrepreneurial learning is a social phenomenon (Gibb 1997) with such learning taking place in context (Pittaway and Cope 2007) via a “process of co-participation” whereby learning... [ view full abstract ]

Importance and Key Contribution

Entrepreneurial learning is a social phenomenon (Gibb 1997) with such learning taking place in context (Pittaway and Cope 2007) via a “process of co-participation” whereby learning involves “reflecting, theorizing, experiencing, and action” (Taylor and Thorpe 2004, p.204). However, current entrepreneurial learning theories rarely acknowledge the context within which people learn (Pittaway and Rose 2006) and the “participation spaces” where learning is perpetuated and transformed (Cope and Down 2010). Within this paper, we consider the transgenerational entrepreneurial family to be one such participation space. We contend that the transgenerational entrepreneurial family is distinctive from the traditional family business which are often renowned for being conservative and valuing longevity (Miller and Le-Breton-Miller, 2005), with this distinction based on the premise of their entrepreneurial legacy, which motivates engagement with entrepreneurial behaviours that nurture the next generation of entrepreneurial leaders (Jaskiewicz, Combs, and Rau 2015). Given the call for more research “connecting family systems and the entrepreneurial phenomenon-(Aldrich and Cliff, 2003: 575), it is to this body of work that we make contributions to, by exploring the role of the family ownership group on the entrepreneurial learning process in a transgenerational entrepreneurial family. Such a context warrants investigation as it focuses on a distinct firm performance type, namely, the creation of “economic and social value, repeatedly and for generations not yet born” (Nason, González, and Sharma 2014, p.4). Therefore, we advance the entrepreneurial learning literature by focusing on the transgenerational entrepreneurial family as a particular “participation space” where learning is perpetuated and transformed (Cope and Down 2010).

Theoretical Base

We align the organizational learning and the transgenerational entrepreneurship literatures by extending the 4I organizational learning framework (Crossan, Lane, and White 1999) and providing a more nuanced understanding of group level learning, namely the family ownership group within the transgenerational entrepreneurial family. Individual entrepreneurial learning is defined as the process by which a person acquires, assimilates, and organizes new knowledge with pre-existing structures and how this learning affects subsequent entrepreneurial action (Rae 2012; Corbett 2005). One of the key mechanisms of entrepreneurial learning is the learning that occurs as a result of critical incidents or episodes which are either significant successes or failures (Cope 2005).The conversion of individual learning to organisational learning whereby new knowledge is transferred to an organisation consists of two processes; integrating which is “the process of developing shared understanding amongst individuals and the taking of coordinated action through mutual adjustment” and institutionalizing “the process of ensuring that routinized actions occur” (Dutta and Crossan 2005, p.434). In addition to this, Unger and Lorscheider (1996) consider groups as the fundamental links between individual and organisational learning – hence our focus is on the family ownership group within the transgenerational entrepreneurial family, with learning sustained beyond the first generation’s influence. In organizing the various arguments relating to the entrepreneurial learning process within a transgenerational entrepreneurial family, a framework is required that incorporates elements of organizational learning, comprised of evolving knowledge stored in individuals, family ownership group, and organizations which constitute the fundamental family infrastructure and which support the transgenerational entrepreneurial family’s entrepreneurial strategy and implementation processes. Accordingly, we draw upon Crossan, Lane, and White’s (1999) 4I organizational learning framework which identifies four main processes (intuiting, interpreting, integrating, and institutionalizing) through which learning occurs across three levels (individual, group, organization).


Methods

In order to capture the entrepreneurial learning process, a longitudinal single case study was deemed appropriate. Accordingly, we draw upon insights from the family ownership group and top management team members of a third-generation family firm known for the purposes of this paper as MME, gleaned across five years (2007- 2012). Data was gathered as a combination of interviews, focus group findings, archival records (e.g., company publications, company and industry reports), and observations. Four waves of interviews, (totalling 21 interviews of average length 80 minutes), were conducted with multiple family and non-family stakeholders. The first stage of analysis was identifying critical incidents which we achieved through comparative analysis of individual and collective interviews and triangulation methods. The next stage of analysis was sifting through the critical incidents for learning outcomes of entrepreneurial, financial and social value across generations. Following this, we gathered 123 text pieces (for example, archival records) and quotations and categorized the data into individual, family ownership group, and organizational levels of analysis. Lastly, we drew upon the 4I organizational learning framework (Crossan, Lane, and White 1999) and mapped the 123 text pieces onto the four learning phases (namely intuiting, interpreting, integrating, and institutionalizing). Throughout the analysis, we cross-referenced the data with theory and set aside the textual pieces not applicable to the framework.

Findings

Five critical incidents resulting in distinct learning outcomes of cross-generational value emerged. We identify these learning outcomes as High Risk Innovation Strategy; Long Term Capital Investment; Professionalization in the Firm; Family Corporate Governance; and Importance of Family Identity. We posit that the family ownership group is an active participant in the transfer of learning from the individual to the organization and in fostering the transgenerational entrepreneurial family firm’s entrepreneurship capabilities. When a dedicated learning approach is adopted, the family ownership group facilitates the institutionalization of learnings that create new streams of cross-generational value. We find that these learnings outlast the founder’s influence and become embedded in the organisational culture due to the family ownership group’s continuous involvement. In this case, the three generations of the Brown family group distill the learnings of individual family managers. Our findings provide novel evidence of the family ownership group as a distinct “participation space” (Cope and Down 2010) that ensures the preservation of learnings following the founder’s demise. As a result of this insight, we have refined the 4I organizational learning framework to demonstrate that entrepreneurial learning goes beyond a generation (n=3) and in fact is co-created in a cyclical, collective participation by overlapping generations.

Implications

Based on this evidence, we make four considerable contributions. First, our longitudinal case study of a third generation firm shows the transgenerational entrepreneurial family is a legitimate “participation space” (Cope and Down 2010) and that while the organization pursues growth orientated strategies, the family ownership group ensures the transgenerational learnings both flourish and persist. Second, we introduce the concept of transgenerational entrepreneurial learning, which in MME’s case facilitated new streams of cross-generational value; thus, constituting our contribution to the family enterprising domain. Third, while many studies have empirically tested the 4I organizational learning framework (Crossan, Lane and White 1999), we extend the group level by inclusion of the family ownership group, and provide a more nuanced framework for transgenerational entrepreneurial learning. In practical terms, our longitudinal study highlights how transgenerational entrepreneurial learning aids firm survival, so informing both policy makers and practitioners of the importance of learning engagement on firm performance and survival.

References

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Entrepreneurial Learning, Transgenerational Entrepreneurship, Family Business. [ view full abstract ]

Entrepreneurial Learning, Transgenerational Entrepreneurship, Family Business.