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INTERNATIONAL STUDIES OF MANAGEMENT & ORGANIZATION
2021, VOL. 51, NO. 4, 297–327

https://doi.org/10.1080/00208825.2021.1969137
From family commitment to entrepreneurial orientation:

exploring the role of cultural mechanisms in mature
family firms
Christopher Arz
Institute of Marketing and Management, Entrepreneurship (570 C), University of Hohenheim,
Stuttgart, Germany
ABSTRACT KEYWORDS
At a stage of life cycle maturity, the unique advantages of family influence Entrepreneurial orientation;
are often outweighed by organizational conditions of conflict, risk-aversion, family firms; family
and inertia which makes it difficult to exploit entrepreneurial opportunities. commitment culture; long-
term orientation;
Guided by the proposition that a positive culture enables the entrepre- stewardship climate
neurial spirit to be preserved over time, this study focuses on examining
the cultural dynamics between family and business social systems to
advance our understanding of the heterogeneity of mature family firms in
terms of entrepreneurial orientation (EO). Specifically, it bridges the link
between family commitment and firm-level EO by considering long-term
orientation and stewardship climate to operate as organizational culture
mechanisms. From a quantitative study of 208 family firms, the findings
provide evidence for EO to be supported by the proposed serial mediation
process. A family’s strong commitment toward the business thus seems to
stimulate EO only when passing through long-term-oriented priorities
among the firm’s dominant coalition and an organizational environment
characterized by collective stewardship.
Introduction
The increasingly dynamic competitive landscapes of the twenty-first century force family firms
beyond founding and growth stages to overcome organizational inertia and risk-aversion in order
to stay competitive. We know from life cycle theory (Adizes 1979), however, that such enterprises
often display a heavy focus on the present core competencies and maintenance of the status quo.
Although several studies have highlighted the importance of entrepreneurial orientation (EO) for
family firm performance and survival (Salvato 2004; Kellermanns and Eddleston 2006; Naldi et al.
2007; Short et al. 2009), firms at this stage tend to live on past successes and to neglect the
exploration of new entrepreneurial opportunities (Kuratko, Hornsby, and Hayton 2015). Long-
lived family businesses have to deal with legacy issues and often face high degrees of structural
formality, bureaucracy, and conservatism which may lead to strategic simplicity and low levels of
flexibility (Zellweger and Sieger 2012). Family traditions and the involvement of multiple genera-
tions may intensify this situation by provoking conflict and draining firm resources (Miller,
Steier, and Le Breton-Miller 2016).
Yet, recent studies offer a novel perspective, suggesting that an involving and empowering
organizational culture enables the entrepreneurial spirit to be preserved at a stage of life cycle
CONTACT Christopher Arz christopher.arz@uni-hohenheim.de Institute of Marketing and Management,

Entrepreneurship (570 C), University of Hohenheim, 70593 Stuttgart, Germany.
ß 2021 Taylor & Francis Group, LLC
298 C. ARZ
maturity. For instance, Arz (2019) illustrates through an in-depth case study that organizational-
level cultural concepts translate family values of altruism and preservation into EO in a second-
generation family firm. Since organizational culture is claimed to become more important as
firms mature (Flamholtz 1990), and to have greater contribution to organizational effectiveness
than organizational strategy and structure (Zheng, Yang, and McLean 2010), it may be a crucial
factor for revitalizing and sustaining a family firm’s EO (Arz 2017; Cherchem 2017).
Consequently, great potential lies in examining how organizational culture mechanisms can
bridge the gap between family influence and EO.
While studying EO in family firms has attracted increasing scholarly attention in recent years,
leading to a diverse and fragmented body of knowledge (L opez-Fernandez, Serrano-Bedia, and
Perez-Perez 2016; Hernandez-Linares and Lopez-Fernandez 2018), scholars have overlooked that
life cycle maturity may complicate a family firm’s ability to revitalize its competitive profile,
emphasize innovation, and recognize growth opportunities (Hoy 2006). To add knowledge to our
understanding of why some mature family firms are more entrepreneurial than others, this study
explores the cultural dynamics between family and business social systems, that is, the set of
shared values and beliefs, and the patterned network of social relationships constituting family
and business as distinct but overlapping entities (Habbershon, Williams, and MacMillan 2003).
The study thus addresses the following research question:
How does the organizational culture of mature family firms translate the commitment of the family toward
the business into firm-level EO?
To facilitate a valid response to this question, I theorize a serial mediation process. Guided by
the grounded model of Arz (2019), the study adopts a cultural lens on the concepts of family
influence, temporality, and stewardship to explore how the deep and prevailing expectations asso-
ciated with the family’s value systems are translated into firm-level EO. Specifically, a family com-
mitment culture (Astrachan, Klein, and Smyrnios 2002; Klein, Astrachan, and Smyrnios 2005) is
considered to create conditions that nurture the development of a firm’s future vision and a
long-term continuity plan which, in turn, will cultivate an organizational climate characterized by
collective stewardship (Pearson and Marler 2010; Neubaum et al. 2017). With such a stewardship
climate being present, the entrepreneurial potential of nonfamily members is unlocked which will
increase their contributions to firm-level EO.
Overall, adding to the controversial debate on EO in family firms, the article makes three dis-
tinct contributions to the literature. First, it examines how cultural dynamics between family and
business social systems may add value to firm-level entrepreneurship. Drawing from a multi-layer
culture framework, the theorized serial mediation model expands our understanding of organiza-
tional culture mechanisms that translate family influence into EO. Hence, it sheds new light upon
the complex family influence-EO link (Hernandez-Linares and L opez-Fernandez 2018), providing
insight into the specific business-level processes through which family commitment manifests.
The study thereby adds to research on organizational culture and entrepreneurship in family
firms (e.g., Zahra, Hayton, and Salvato 2004; Discua Cruz, Hamilton, and Jack 2012; Cherchem
2017). Second, supporting contextualization in entrepreneurship research (Welter 2011), the study
emphasizes the unique challenges that flow from life cycle maturity in family firms in the pursuit
of EO. Although we know that the degree of innovation and entrepreneurial activity tends to dif-
fer across stages of company life cycle (Hoy 2006), previous research on EO in family firms has
neglected this aspect. This article offers a fresh perspective by illustrating the role of organiza-
tional culture in preserving the positive impact of family influence on EO at a mature phase of
the company life cycle. Third, adopting a family essence approach (Chrisman et al. 2012), it
emphasizes the cultural dimension of family influence and introduces the concept of family com-
mitment culture to research on EO in family firms. Moving beyond the structural components of
family involvement that currently dominate EO research seems valuable, given that family
INTERNATIONAL STUDIES OF MANAGEMENT & ORGANIZATION 299
cultures exert a powerful influence on managers’ systems of meaning, how they interpret and
respond to environmental challenges (Zahra et al. 2008).
Theoretical framework
EO and life cycle maturity in family firms
Family firms are created as a consequence of the entrepreneurial behavior of one or more found-
ers who proactively recognize and exploit opportunities, explore innovative ideas, and take calcu-
lated risks (Casillas, Moreno, and Barbero 2010). This behavior, however, often decreases when a
stage of maturity is entered in an organization’s life cycle. In general, a maturity stage is charac-
terized by increasing formalization of organizational structure, norms and routines of practices,
emphasizing stable and efficient operations (Scott and Bruce 1987; Adizes 1979). Furthermore,
firms at this stage usually have reached a certain size and age (Lester, Parnell, and Carraher
2003). In family firms, a desire for preservation of family dynasty and the fulfillment of family
obligations based on blood ties (G omez-Mejıa et al. 2007) may intensify the complicating factors
behind life cycle maturity. Family business managers then tend to favor risk-averse market strat-
egies over innovativeness to protect the current market position and take account of a family’s
legacy. In addition, multigenerational involvement and succession issues can provoke relationship
conflict which may direct efforts toward creating family harmony instead of satisfying business
needs (Kellermanns and Eddleston 2006; Miller, Steier, and Le Breton-Miller 2016).
The ultimate quest for family firm leaders then lies in revitalizing and maintaining the entre-
preneurial capacity of their enterprises; a challenge that is captured under the label of corporate
entrepreneurship (Guth and Ginsberg 1990). Representing a popular approach for conceptualizing
corporate entrepreneurship at the firm level (Rauch et al. 2009), EO derives from the work of
Miller (1983), who defines an entrepreneurial firm as “one that engages in product-market innov-
ation, undertakes somewhat risky ventures, and is first to come up with ‘proactive’ innovations,
beating competitors to the punch” (771).
To date, little is known about why some family firms are more entrepreneurial than others,
and which family- and business-level capabilities help family firms to preserve their EO. On the
one hand, scholars suggest that family-related organizational behavior, such as long-term goal-set-
ting mechanisms, strategic planning and decision-making based on management continuity, and
leadership flowing from altruistic tendencies, create conditions that promote entrepreneurial per-
formance (Aldrich and Cliff 2003; Rogoff and Heck 2003; Zahra, Hayton, and Salvato 2004;
Zahra 2005; Kellermanns and Eddleston 2006; Eddleston, Kellermanns, and Zellweger 2012; Arz
2019). On the other hand, it appears that family firms display risk-averse and conservative attrib-
utes, and a reluctance to change which may hinder them to stimulate EO (Zahra 2005; Naldi et
al. 2007; Nordqvist, Habbershon, and Melin 2008; Pimentel, Couto, and Scholten 2017). To shed
light upon the dual relationship between family business and EO (Nordqvist, Habbershon, and
Melin 2008; Casillas, Moreno, and Barbero 2011), different types of family influence, such as fam-
ily involvement in ownership, management, and governance, generational involvement, and fam-
ily-to-firm unity, have been examined (Hernandez-Linares and Lopez-Fernandez 2018). However,
the question of how the potential of family influence for maintaining and increasing EO is
unlocked through cultural dynamics at a stage of life cycle maturity has been overlooked in
prior research.
Intending to contribute to this controversial debate, this study emphasizes that a multi-layer
culture framework may help us to better understand how positive cultural mechanisms can over-
come organizational inertia and stimulate EO. It thus follows the view that ownership and man-
agement continuity may provide mature family firms with the unique ability to establish and
maintain an EO-supportive culture (Hoy 2006; Kellermanns and Eddleston 2006).
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Figure 1. Theoretical multi-layer culture model in family firms.
Culture in mature family firms: a multi-layered perspective

Rooted in anthropology, the concept of culture brings in the important collectivist dimension of
social process and captures the “social or normative glue that holds organizations together”
(Smircich 1983, 344). While most prior studies adopt organizational culture as a single construct
(e.g., Zahra, Hayton, and Salvato 2004; Cherchem 2017), Schein’s (2017) theoretical model con-
siders culture as a “family of concepts” and emphasizes the importance of distinguishing between
several layers. Inspired by the recent application of this model in the family business context by
Arz (2019), organizational culture emerges through the interaction between family and business
social systems (Figure 1).
This multi-layered understanding of culture is especially useful for researching the complexity
of social processes in mature family firms and their impact on firm-level EO because it enables
generating a deeper understanding of how cultural patterns emerge and influence organizational
behaviors. Within this framework, the family is considered a distinct, intimate social group that
holds its very own cultural values. However, binding social ties, an emotional attachment and
identification with the firm (Berrone et al. 2012) enable the family’s priorities to form enduring
organizational values which are then shared among a family firm’s dominant coalition, defined as
a group consisting of both family and nonfamily members who form “the powerful actors in an
organization who control the overall organizational agenda” (Chua, Chrisman, and Sharma 1999,
24). By acting as social principles for nonfamily employees and setting the frame for organiza-
tional routines and practices (Hatch 1993), organizational values serve as a subtle mechanism
through which a family firm’s management can trigger the emergence of organizational climates,
thus influencing employees’ work behaviors and a firm’s strategic posture, such as EO.
A cultural lens on family influence, temporality, stewardship, and the impact on EO

This article adopts the illustrated framework to explore how EO can be stimulated in a situation
of life cycle maturity. In doing so, three concepts specific to the culture of family firms are
employed. First, consistent with the essence approach proposed by Chrisman et al. (2012), this
study embraces family influence as a source of pride based on a family’s legacy of achievement
and emphasizes the role of shared values among family members for developing meaningful fam-
ily and business relationships (Carlock and Ward 2001). Specifically, it uses the concept of family
commitment culture (FCC) which includes the family’s support of the organization’s goals, a will-
ingness to contribute to and a desire for an intimate relationship with the organization
(Astrachan, Klein, and Smyrnios 2002; Klein, Astrachan, and Smyrnios 2005). It thus derives
from the concept of organizational commitment, referring to an individual’s identification with
and involvement in a particular organization by believing in its goals, purposes, and values, thus
willing to give something of themselves (Porter et al. 1974; Mowday, Steers, and Porter 1979).
Due to its relevant impact on the dominant organizational values and decision-making processes
in family firms (Nordqvist, Habbershon, and Melin 2008), FCC is considered a key factor for the
development of a family firm’s culture.
Second, temporal considerations are crucial to enhance our understanding of how leaders of
mature family firms make strategic decisions and interact with subordinates, thereby influencing
the quality of social relationships in their organizations (Le Breton-Miller and Miller 2014). In
this respect, long-term orientation (LTO) has been found to be a dominant value orientation in
family firms (Brigham et al. 2014; Arz 2019) and, since anthropologists argue that each group
makes basic assumptions about the nature of time, an important cultural dimension according to
Schein (2017). When transferred to the situation of family firm maturity, managers need to prop-
erly balance long-range comprehensive planning for the future, short-run pragmatic decision-
making, and preservation of family reputation and heritage. In this respect, LTO refers to prior-
ities, goals, and concrete investments that come to fruition after an extended period of time (Le
Breton-Miller and Miller 2006), considering that forces from the past, such as traditions and leg-
acy issues, influence the future. In other words, to carry an organization toward a healthy future,
a mature family firm has to build up from its past and sustain the present. Such multitemporal
LTO (Le Breton-Miller and Miller 2011) may manifest as a dominant logic (Brigham et al. 2014),
defined as a shared cognitive map that determines decision making, practices, and procedures in
the management of family firms (Prahalad and Bettis 1986; Bettis and Wong 2003).
Third, the study links the organizational climate layer, the most tangible layer of culture
(Schein 2017), to the phenomenon of stewardship in family firms. Stewardship theory offers a
perspective characterized by humanistic relationships where nonfamily managers behave like
stewards and, instead of being motivated by individual goals, naturally align with the principal’s
interests, feeling a sense of purpose and accepting the organization’s vision (Davis, Schoorman,
and Donaldson 1997; Corbetta and Salvato 2004). While most prior works adopting a stewardship
perspective provide a unidirectional examination of the family firm leader practicing stewardship
(Madison et al. 2016) and use proxies (Zahra et al. 2008) or variables representing a subset of
stewardship theory (e.g., Eddleston and Kellermanns 2007; Eddleston, Kellermanns, and Zellweger
2012; Davis, Allen, and Hayes 2010), this study takes a broader stance. Guided by the tenets of
social exchange theory (Cropanzano and Mitchell 2005), which emphasizes contingent interper-
sonal transactions that enable social interactions to evolve over time into trusting, loyal, and
mutual commitments (Gouldner 1960; Graen and Uhl-Bien 1995), it considers reciprocal steward-
ship (Pearson and Marler 2010) to create an organization-wide climate (Schneider, Ehrhart, and
Macey 2013; Neubaum et al. 2017), referred to as stewardship climate (SCL).
Research model and hypotheses

The research model of this study proposes that LTO and SCL operate as organizational culture
mechanisms that are triggered by the emotional attachment of the family to the business and
positively influence entrepreneurial performance in mature family firms. Following this logic,
FCC is suggested to stimulate EO through a serial mediation process (Figure 2). First, the pres-
ence of FCC makes it more likely for LTO to be present (a1) which, in turn, creates the condi-
tions for SCL to be cultivated in a family firm (a3). Consequently, as a first step, LTO should
mediate between FCC and SCL (a1 x a3). Second, SCL, as the salient layer of a family firm’s cul-
ture, activates the entrepreneurial potential of organizational members and is thus likely to foster
EO (b2). Therefore, as a second step, SCL should mediate between LTO and EO (a3 x b2).
Family commitment culture and long-term orientation

Through processes of extra-family socialization (Zellweger et al. 2019), the emotional value of
family commitment is likely to create favorable conditions for the development of an LTO
among a family firm’s dominant coalition. It has been argued that LTO is more likely to be
demonstrated if family members have an emotional stake in and closely identify with the
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Figure 2. Serial mediation model of stimulating EO in mature family firms.
business, its legacy and purpose (Le Breton-Miller and Miller 2011), and integrate family val-
ues into the business system (Lumpkin and Brigham 2011). As the culture is to a large extent
rooted in the family heritage and tradition (Heck 2004), and family members promulgate the
founder’s values by taking active and long-term roles in management (Hall, Melin, and
Nordqvist 2001), family support and loyalty is transmitted to the firm’s dominant coalition.
Particularly, when FCC is high, the notion of family is expanded beyond the biological family,
creating what Peredo (2003) calls a “spiritual kin-based business” and making a family firm’s
dominant coalition a “quasi-family” (Arz 2019). Within this social group, processes of social
learning (Wenger 2000) facilitate family values to become organizational because nonfamily man-
agers confirm, incorporate and act based on these values. With high levels of FCC, a family’s
intimate relationship with the business manifests in non-economic goals and cross-generational
thinking (Chrisman et al. 2012) which needs an LTO to help the family reach those goals.
Managers are thus likely to adopt a preference for long-lasting decisions, considering that long-
standing aspirations and legacy issues affect future decisions and actions (Lumpkin and Brigham
2011). In this situation, both family and nonfamily managers become more concerned with trans-
generational sustainability (Anderson and Reeb 2003; Casillas, Moreno, and Barbero 2011) and
long-term economic and socioemotional value (G omez-Mejıa et al. 2007) which leads to higher
levels of LTO.
Furthermore, when a family is strongly committed to and willing to make personal invest-
ments in the business, the firm’s management will be more concerned about the image of the
firm and the future of the business (Le Breton-Miller and Miller 2006). With high levels of FCC,
planning and forecasting for the future, and decision-making based on business continuity and
image preservation will become a personal matter for a family firm’s dominant coalition. Business
achievement and perseverance then derives from family pride, loyalty, and tradition (Brockhaus
2004). As a result, family business managers get strongly attached to the business’ mission and
are proud to be a part of it (Le Breton-Miller and Miller 2006; Lumpkin and Brigham 2011).
Under those conditions, it is likely that managers will prioritize long-term profitability over
short-term gains and value the use of patient capital to accomplish an enduring mission for the
long-run benefit of family members (Miller and Le Breton-Miller 2005; Zellweger 2007). The fam-
ily members’ commitment to their firm is therefore expected be positively associated with
long-term priorities in the management. In summary, these observations suggest the follow-
ing hypothesis:
Hypothesis 1: The presence of a strong commitment of the family toward the business embeds long-term-
oriented values among a family firm’s dominant coalition (a1).
Long-term orientation and stewardship climate

An SCL, characterized by a desire for accomplishing the collective good, equality and inclusion,
employees’ motivation based on higher order needs, and a strong identification with the firm, its
strategy and objectives (Davis, Schoorman, and Donaldson 1997; Le Breton-Miller and Miller
2009; Vallejo 2009; Hernandez 2012; Neubaum et al. 2017), is cultivated throughout a family firm
via dynamic leader-member exchange (Pearson and Marler 2010). As initiators in that process,
family business leaders who commit to cultural values consistent with LTO are likely to work
toward forming high-quality, stewardship-based relationships (Le Breton-Miller and Miller 2014).
Particularly, as an LTO among the firm’s dominant coalition flows from the family’s concerns
for later generations which will need talented, motivated and loyal staff, family business leaders
will be more committed to talent development, providing their followers with opportunities for
long-term engagements and career-growth. Furthermore, there often is an emotional attachment
that long-term-oriented managers feel for those who work for them (Le Breton-Miller and Miller
2006) which leads to strong stewardship motives. Such firms then find it important to make sig-
nificant investments in the people who operate the business (Miller, Le Breton-Miller, and
Scholnick 2008; Lumpkin and Brigham 2011). Consequently, managers displaying high levels of
LTO will inspire subordinates’ long-term work performance and stimulate them to improve for
their own good. In these situations, leader-member relationships are likely to be characterized by
egalitarian interactions and a discouragement of inequalities (Neubaum et al. 2017), with leader-
ship being based not on a position in a hierarchy but on mature partnerships and on the use of
personal power (Hernandez 2012).
Similarly, openness and transparency are more likely to be evident when LTO is high as long-
term-oriented leaders want to know what is really happening in the market rather than adopting
a short-term management-by-the-numbers approach. This will require a greater involvement of
lower-level employees and a mature leader-follower relationship at eye level. Furthermore, creat-
ing a vision for the firm gets very personal for family business managers adopting an LTO
(Carney 2005) as it reflects the continuity of a family’s history and reputation (Le Breton-Miller
and Miller 2006). It will thus serve as a strong symbol which organizational members can identify
with and, consequently, stimulate an organizational climate in which individual and organiza-
tional goals are aligned and nonfamily members trade self-serving behaviors for the pursuit of the
commonly shared vision.
The inspiring and visionary behavior of family business leaders and the favorable treatment of
their followers, will result in subordinates trusting the leader and feeling a sense of purpose and
direction for their everyday work tasks. Followers who find themselves in this situation then take
a social exchange role (Graen and Uhl-Bien 1995): They feel compelled to offer something in
return and thus tend to be more accountable for the performance and long-term survival of the
organization. Consequently, subordinates will respond with higher work performance which, in
turn, encourages leaders to stick to their stewardship intentions. Through these ongoing recipro-
cal stewardship behaviors which are initiated by the LTO mindset of the leaders, satisfying and
mature relationships, characterized by mutual respect, trust, and obligation, are established
(Pearson and Marler 2010). Eventually, the sum of these relationships then cultivates an SCL
throughout the organization. Overall, this leads to the following hypothesis:
Hypothesis 2: The presence of long-term-oriented values among a family firm’s dominant coalition cultivates
a stewardship climate throughout the organization (a3).
Stewardship climate and EO

Within an SCL, people are motivated not to accomplish individual goals but to maximize organ-
izational performance which may lead to great effectiveness (James, Jennings, and Devereaux
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Jennings 2017). EO relies on proactive and voluntary contributions of nonfamily organizational

members as new business opportunities often emerge spontaneously within a certain market
environment, and operational-level employees tend to have a deeper understanding of the market
and customer needs. Following the theoretical suggestions on employees’ challenging extra-role
behavior in organizations (Eldor and Harpaz 2016), that is, employees’ constructive and voluntary
behaviors, which are not prescribed or formally rewarded by the organization (Van Dyne,
Cummings, and McLean Parks 1995), this study proposes that the presence of a stewardship-
based climate positively influences firm-level EO in mature family firms.
Particularly, an SCL is likely to produce a work environment which activates nonfamily
employees’ intrapreneurial behavior, that is, voluntary behavior aimed at the perception of oppor-
tunities, generation of ideas, creation of new products, and the development of new business lines
(Edu Valsania, Moriano, and Molero 2016). For instance, as SCL is characterized by low power
distance, different viewpoints and diverse voices are tolerated. This facilitates a work behavior
where employees actively participate in strategic discussions, speak up freely, and contribute their
innovative thoughts without fear of repercussions. Consequently, it is likely for some new ideas
to be implemented in an SCL whereas the very same ideas may not even get recognized in an
agency-based climate. Furthermore, as SCL produces a participative environment that is based on
the belief that employees can be trusted, low levels of formal control and relatively loose monitor-
ing systems will follow (Carney 2005; Eddleston, Kellermanns, and Zellweger 2012). Hence, family
firms with high levels of SCL encourage their employees to make intuitive decisions when new
business opportunities arise and pursue entrepreneurial activities in a less formal and calculated
way, which may give these firms more flexibility and speed (Miller and Le Breton-Miller 2005;
Naldi et al. 2007; Short et al. 2009).
Similarly, a climate characterized by organizational identification, shared vision, and intrinsic
motivation inspires employees to put personal interests aside for the sake of the firm’s success.
Organizational members are then willing to take personal risks to accomplish organizational
objectives, and anticipate entrepreneurial opportunities that may contribute to the long-term
well-being of the firm. By leading individuals to adopt a family firm’s interests and goals as their
own, prior research has shown that organizational identification activates intrapreneurial work
behavior (Moriano et al. 2014; Ed u Valsania, Moriano, and Molero 2016).
Moreover, the collectivist tendencies within an SCL are likely to result in better inter-unit col-
laboration as employees then tend to think and act beyond their formal scope of responsibility
which, in mature enterprises, is often narrow and highly specified. While the cross-functional
thinking needed for entrepreneurial activities often gets lost in mature firms (Guth and Ginsberg
1990), SCL helps overcome these difficulties as it naturally supports proactive information
exchange, thorough discussions of strategic options from multiple perspectives, and, consequently,
comprehensive strategic decision-making for initiatives associated with EO (Lyon, Lumpkin, and
Dess 2000; Eddleston, Kellermanns, and Zellweger 2012). Taken together, these observations sug-
gest the following hypothesis:
Hypothesis 3: The presence of an organization-wide stewardship climate has a positive impact on a family
firm’s entrepreneurial orientation (b2).
The mediating roles of long-term orientation and stewardship climate

Following the hypothesized relationships, the organizational culture of family firms seems to be
an essential and necessary part in linking FCC with EO. Consistent with the multi-layer culture
theory guiding this study, I therefore expect LTO and SCL to function as double-mediators of the
FCC-EO link. First, LTO is suggested to mediate the link between FCC and SCL. In other words,
FCC as a family-level cultural resource nurtures a stewardship-based organizational climate only
when it is carried forward through LTO. A time-sensitive dominant logic for management deci-
sion making and action occurs when nonfamily managers interact closely with a highly commit-
ted family, thus continuously learning what is valuable for the family and what is essential for the
management of the business (Wenger 2000). Hence, extra-family socialization establishes LTO as
a common mindset which then triggers family business leaders’ initiating role in the social
exchange processes that nurture reciprocal stewardship in family firms (Pearson and Marler
2010). Although prior research has argued that LTO is an ingredient of the stewardship perspec-
tive (Eddleston, Kellermanns, and Zellweger 2012), the two concepts are to be considered related
but independent when conceptualized at different cultural layers. That is, while LTO represents a
management-level dominant logic (Brigham et al. 2014), SCL refers to the presence of organiza-
tion-wide stewardship practices (Neubaum et al. 2017). LTO in this sense operates as a crucial
mechanism to unlock the potential of FCC as a source of SCL in family firms. Based on the argu-
ments made above, I expect that the more a family demonstrates FCC, the more likely the dom-
inant coalition of the firm will develop an LTO and, subsequently, will enhance the likelihood of
an SCL to be cultivated throughout the organization. Based on this logic, I hypothesize
the following:
Hypothesis 4a: Long-term orientation mediates the relationship between family commitment culture and
stewardship climate (a1 x a3).
Second, the positive effect of LTO on EO should be transmitted through SCL. That is, without
SCL being present, I expect there is little reason for the LTO-EO relationship to exist. This is
consistent with the recent debate on whether LTO and EO can be compatible in family firms
(e.g., Lumpkin, Brigham, and Moss 2010), suggesting that this link is complex and a direct rela-
tionship does not seem to be empirically conclusive. The question therefore is how exactly LTO
can contribute to EO. Eventually, as entrepreneurial activities in mature firms occur when agency
costs associated with opportunism can be reduced and the firm’s social resources can be directed
toward a common goal, displaying high levels of LTO without it leading to an increase in organ-
ization-wide SCL does not seem sufficient to explain how EO is stimulated. Put differently, with-
out reciprocal stewardship being cultivated through intra-firm socialization based on LTO, the
potential benefits of cultural values such as business continuity, perseverance, and long-range
planning would remain ineffective because a dominant logic, eventually, is only as useful as its
actual application in managerial practice. Hence, LTO alone is not able to activate nonfamily
employee intrapreneurial behavior which is considered crucial for EO in mature family firms
(Arz 2019). Rather, it is a stewardship-based organizational climate, initiated through family firm
leaders time-sensitive mindset, that triggers employees’ intrapreneurial potential and, in turn,
their contribution to EO. An increase of LTO can thus intensify SCL, which then raises the likeli-
hood of EO improving. In summary, this leads me to the following:
Hypothesis 4b: Stewardship climate mediates the relationship between long-term orientation and
entrepreneurial orientation (a3 x b2).
Methods
Sampling and data collection
The data of this study was gathered via a web-based survey addressing the owners and CEOs of
German family firms. For the purpose of this study, considering that the components of family
involvement represent an important precondition to family essence (Chrisman et al. 2012), I
define family firms as privately held organizations where ownership resides within one family
group (Litz 1995; Chua, Chrisman, and Sharma 1999), the family is represented in the manage-
ment team and substantially influences the key decisions and direction of the firm (Sharma,
306 C. ARZ
Melin, and Nordqvist 2014), and the business is perceived to be a family business by the leading
representative of the firm (Ram and Holliday 1993). I used Orbis database to identify those firms.
To arrive at the final target population, I applied a number of inclusion criteria. First, because
family influence on the business is likely to be stronger for the headquarter than for subsidiaries,
I selected only firms that are headquartered in Germany. Second, as my research explicitly focuses
on the conditions of family firm maturity, and a multitemporal perspective on LTO requires a
population of older firms so that the elements of the past (i.e., continuity, legacy, persistence) can
be captured, I included only firms that were founded before 1994 (i.e., are at least 25 years old),
have at least 25 employees, and a revenue of at least e5 million. This approach reduces the possi-
bility of including startups that are at an early stage of their company life cycle. Third, only those
firms in which shareholders are one or more private persons or family known by name, and in
which a shareholder is also a manager, were selected. Consistent with the family business defin-
ition guiding this article, application of those criteria increases the possibility of creating a sample
that is narrowly focused on family firms. The remaining 3,997 firms were then cross-referenced
with various published directories and individual company websites to ensure the accuracy of the
data and identify email addresses. Due to incorrect addresses, firm failures, or firm policies
against completing mail surveys, I eliminated another 442 firms from the list which resulted in a
final target sample of 3,555 firms.
Data collection took place between December 2017 and April 2018. As is common for research
on culture and EO in family firms (e.g., Zahra 2005; Eddleston, Kellermanns, and Zellweger 2012;
Cherchem 2017), I used a key informant approach surveying the family firm owner and/or CEO.
This is adequate because these positions determine the strategic direction and their cognitive
maps are considered to represent the essential aspects of all members of the organization (Lyles
and Schwenk 1992). As such, they provide information that is as reliable and valid as multiple
informants (Zahra and Covin 1993). An invitation and a link to a web-based survey were sent by
email to the owners or CEOs of the firms identified. After several reminders, the study yielded
404 responses for an initial response rate of 11.4%. However, of those, I eliminated responses
with incomplete data. Furthermore, only questionnaires completed by the firm owner and/or
CEO were included in the study sample. Of the respondents included in the sample, 83.5% were
family member owners and CEOs, and 16.5% were nonfamily member CEOs. I compared the
means of the responses between family and nonfamily members and did not observe significant
differences in the utilized measures.
Although a family firm approximation was used for the creation of the target population, it is
likely that nonfamily firms were included. Therefore, consistent with prior research efforts (e.g.,
Craig and Dibrell 2006; Naldi et al. 2007; Zahra et al. 2008; Dibrell and Moeller 2011; Zellweger
et al. 2012; Hoffmann, Wulf, and Stubner 2016), the respondents were asked to classify them-
selves as being a family business, thereby using two questions: (1) “Are ownership and manage-
ment control of the company dominated by one family?” and (2) “Do you consider your business
to be a family business?”. This procedure yielded a final sample of 208 useful responses for an
effective response rate of 5.9%. This response rate is comparable to previous family firm research
relying on the collection of primary data (e.g. Chrisman, Chua, and Litz 2004; Hoffmann, Wulf,
and Stubner 2016). The sample characteristics are displayed in Table 1.
I tested for differences between early and late respondents to control for potential nonresponse
bias (Armstrong and Overton 1977). This procedure is performed under the assumption that late
respondents are more similar in nature to nonrespondents than early respondents. T-tests showed
no significant differences with regard to the employed measures and, consequently, non-response
bias is not a serious issue in this study. To further mitigate concerns, I compared the final sample
with the initial population in terms of firm age, firm size (number of employees and sales), and
industry. While the comparison revealed that the respondents were similar in size composition to
the firms in the population, it should be considered that the firms in the sample appear to be
Table 1. Sample characteristics.

Number of firms Percentage
Industry type
Automotive 12 5.77
Chemicals/pharmaceuticals 1 0.48
Construction/real estate 30 14.42
Engineering 7 3.37
Financial services 5 2.40
FMCG/food 11 5.29
Health care 11 5.29
Other services 5 2.40
Processing 11 5.29
Professional services 51 24.52
Technology/IT 5 2.40
Telecommunications & media 5 2.40
Textiles & clothing 13 6.25
Tourism/travel 5 2.40
Retail & wholesale 11 5.29
Transport/logistics 25 12.02
Total 208 100.00
Number of employees
25 to less than 50 71 33.94
50 to less than 250 104 50.00
250 to less than 500 19 9.17
500 and above 14 6.88
Total 208 100.00
Firm age (years since founding)
25 to less than 50 92 44.23
50 to less than 75 48 23.07
75 to less than 100 31 14.90
100 to less than 150 33 15.87
150 and above 4 1.92
Total 208 100.00
Total sales revenue
e5 million to e10 million 101 48.62
More than e10 million to e50 million 61 29.36
More than e50 million to e500 million 44 21.10
More than e500 million 2 0.92
Total 208 100.00
Generational involvement
One generation 72 34.62
Two generations 108 51.92
Three and more generations 28 13.46
Total 208 100.00
Involvement of the founder
Founder managed 73 35.10
Non-founder managed 135 64.90
Total 208 100.00
CEO tenure (years)
1 to less than 10 27 12.98
10 to less than 20 45 21.63
20 to less than 30 69 33.17
30 to less than 40 48 23.08
40 and above 19 8.65
Total 208 100.00
slightly older and that the sample includes considerably more firms operating in the service sector
and less firms operating in retail & wholesale compared to the firms in the population.
Measures
To the extent possible, the measures used in this study were derived from prior research. When
measures and items for a construct were not available, the items were conceptually derived from
308 C. ARZ
profound theoretical conceptualizations. Translation of the questionnaire from English to German

involved two persons who are fluent in both German and English. By adopting the method of
back-translation (Brislin 1980), it was ensured that there was no loss of information within the
translation process. Pretesting of the questionnaire involved eight individuals, of whom two were
researchers, one was a business owner, three were family business managers, and two were non-
family business managers. The pretest respondents were interviewed for feedback regarding the
clarity and intent of the survey items, thereby especially evaluating measures that include new
questionnaire items. The results served to refine the questionnaire and were implemented prior
to finalizing the research instrument (Arz and Kuckertz 2019). To minimize bias in the responses,
the questionnaire included different question formats and scale anchors. Further, it contained
reverse coded items to minimize acquiescence bias (Podsakoff et al. 2003). As a first step in creat-
ing a valid measurement model bespoke to the context of the study, I used exploratory factor
analysis (EFA), applying principal component analysis with promax rotation, to uncover the the-
orized constructs or create more meaningful constructs in relation to my data. The items for the
variables employed for this study are provided in Appendix S1.
Entrepreneurial orientation (EO)

Consistent with the suggestion of George and Marino (2011), EO was measured as a multidimen-
sional second-order construct reflected by three dimensions, namely innovativeness, proactive-
ness, and risk-taking. All items reflecting the EO dimensions were adopted from Covin and
Slevin (1989) and Knight (1997), and measured using 5-point semantic differential type scale. As
the utilized EO construct has withstood vigorous testing of its properties in terms of validity and
reliability, EFA resulted in the expected three factors. The Cronbach’s alpha values were .81 for
innovativeness, .80 for proactiveness, and .79 for risk taking.
Family commitment culture (FCC)

Consistent with the works of Zahra et al. (2008) and Segaro, Larimo, and Jones (2014), I meas-
ured FCC adopting the family culture dimension of the F-PEC Scale of family influence
(Astrachan, Klein, and Smyrnios 2002; Klein, Astrachan, and Smyrnios 2005) which is based on
the family business commitment questionnaire (Mowday, Steers, and Porter 1979; Carlock and
Ward 2001), thereby however removing two items of the original scale because of their focus on
the individual rather than the family level of analysis. I employed a 5-point Likert scale ranging
from 1 “not at all” and 5 “to an extreme extent”. EFA uncovered that the ten items that have
been utilized loaded on a single factor, thus confirming the theorized measure. The Cronbach’s
alpha value was .90.
Long-term orientation (LTO)

The LTO construct is an underdeveloped and fragmented area of research (Lumpkin, Brigham,
and Moss 2010), and has been operationalized in different ways and across different levels of ana-
lysis in prior research (individual level, e.g., Bearden 2006; national level, e.g., Hofstede 2010;
organizational level, e.g., Zahra, Hayton, and Salvato 2004; Zellweger 2007; Shi, Sun, and Prescott
2012). Intending to create a direct measure of LTO representing a multitemporal value orienta-
tion among a family firm’s dominant coalition, I followed the conceptual arguments and defini-
tions provided by Lumpkin and Brigham (2011), Le Breton-Miller and Miller (2011), and
Brigham et al. (2014). Specifically, I conceptualized a multidimensional second-order construct,
including three dimensions: futurity, continuity, and perseverance. Based on LTO theory, I then
created an initial list of potential scale items for each dimension. While some items were created
exclusively for this study, others were adopted from existing scales. The resulting preliminary set
of items was discussed with the researchers involved in pretesting of the questionnaire to generate
feedback regarding the clarity of the items and to identify the ones that best correspond to the
definition of each dimension.
As the futurity dimension represents the most common approach for measuring LTO, items
were derived from prior research. Specifically, I adopted four items that were utilized by
Hoffmann, Wulf, and Stubner (2016) based on the work of Covin and Slevin (1989) but also
added one further item based on the theoretical conceptualization of Brigham et al. (2014) to
include the aspect of “forecasting and evaluating long-range consequences”. Items for perseverance
and continuity dimensions are grounded in the content-analytic measure provided by Brigham et
al. (2014) in their validation study. To ensure consistency among the items across all three
dimensions, the wording was guided by the futurity items adopted from Hoffmann et al. (2016),
including statements such as “the management in our firm values ( … )” and “( … ) is important
to our management”. For all items, I employed a 5-point Likert scale ranging from 1 “not at all”
and 5 “to an extreme extent”.
As may be expected for a novel second-order construct, EFA displayed fairly complex factor
structures, that is, cross loadings between items, which required conceptual modifications to be
made. Following Hair et al. (2006), I used a cutoff point of <.30 for loadings to remove items
which did not significantly load onto a factor and removed cross-loaded factors. Applying these
criteria, three items of the futurity and one item of the continuity dimension had to be eliminated
in order to create a robust three-factor model. After these modifications, the Cronbach’s alpha
values were .62 for futurity, .70 for continuity, and .85 for perseverance.
Stewardship climate (SCL)

This study has built on the conceptualization of Neubaum et al. (2017) to measure stewardship as
a collective organizational-level phenomenon, and, more specifically, as an organizational climate
concept. Although Neubaum et al. already provided an assessment of reliability and validity for
their six-dimensional measure of SCL, my data made modifications necessary. Specifically, EFA
uncovered that, due to significant cross-loadings, the dimensions use of personal power and
involvement orientation had to be removed, along with one item of the organizational identifica-
tion dimension. In turn, I included shared vision as this dimension is considered to be a further
reliable indicator of SCL. When leaders practice stewardship, they are typically motivated to
involve their employees by communicating openly and transparently (Pearson and Marler 2010),
thus making the firm’s vision and goals explicit for organizational members. This, in turn, creates
a climate where employees are committed to the company’s goals and vision and view themselves
as partners in charting the direction of the organization. Consequently, this perspective is
included in the SCL construct as it reflects the important aspects of transparency, openness, and
alignment of individual and organizational goals in collective stewardship theory. EFA revealed
that shared vision loads significantly on SCL as a second-order construct and that a robust five
factor-structure is uncovered when shared vision is included. The items for this dimension have
been adopted from Sinkula, Baker, and Noordewier (1997).
Again, for all items reflecting the utilized dimensions, I employed a 5-point Likert scale rang-
ing from 1 “not at all” and 5 “to an extreme extent”. After the modifications illustrated above,
the Cronbach’s alpha values were .63 for organizational identification, .69 for low power distance,
.81 for collectivism, .90 for intrinsic motivation, and .86 for shared vision.
Covariates
To quantify the variance caused by factors extraneous to research questions, I controlled for firm
age, firm size, and CEO tenure as literature suggests that these variables may be associated with
EO, especially in mature firms (e.g., Wales, Wiklund, and McKelvie 2015; Boling et al. 2016;
310 C. ARZ
Nun~ez-Pomar et al. 2016; Gr€

uhn et al. 2017). I included age by incorporating the number of
years since the company’s foundation. For firm size, I asked respondents to report their total
number of employees relative to their competitors on a 5-point Likert-type scale with 1, “bottom
20%” to 5, “top 20%” (Zahra et al. 2008). For CEO tenure, respondents were asked to report the
number of years in which the CEO has been employed in his or her current position (Boling et
al. 2016).
Multigroup control variables

This study employed two multigroup control variables to test if the hypothesized relationships
differ across different types of family firms. First, as scholars suggested that differences between
single- and multi-generation family firms may influence LTO (e.g., Cater and Justis 2009), SCL
(e.g., Pearson and Marler 2010), EO (e.g., Kellermanns and Eddleston 2006; Kellermanns et al.
2008; Casillas, Moreno, and Barbero 2011; Cruz and Nordqvist 2012; Sciascia, Mazzola, and
Chirico 2013), and the link between organizational culture and EO (Cherchem 2017), I included
generational involvement as a categorical variable. Thus, I included a single-item question in the
survey instrument that asked respondents to indicate how many generations were currently
involved in the management of their family firm (one generation or multiple generations).
Second, differences between founder managed and non-founder managed family firms have been
suggested to impact the strength of organizational culture (Schein 1995) and the degree to which
EO is present in a family firm (e.g., Miller and Le Breton-Miller 2011; Block 2012; Cruz and
Nordqvist 2012; Block et al. 2013). I therefore included a single-item question in the survey
instrument that asked respondents to report whether or not the founder is involved in the man-
agement of their family firm.
Analysis and results

Intending to follow the call for greater statistical rigor in family business research (Debicki et al.
2009), the data analysis of this study follows a two-step procedure: assessing measurement models
using confirmatory factor analysis (CFA) followed by assessing path relationships using covari-
ance-based structural equation modeling (SEM) (Anderson and Gerbing 1988). SEM is particu-
larly suitable for testing the hypotheses of this study because mediated relationships are
anticipated (Hayes 2009; Monsen and Boss 2009). Furthermore, it is able to handle second-order
constructs, simultaneously incorporates observed and latent constructs, informing conceptual
modifications where required, and accounts for the bias effects of random measurement error in
the latent constructs (Shook et al. 2004). For CFA and SEM, the statistical software AMOS 25.0
was employed and the Maximum Likelihood (ML) estimation method was used. As a sufficient
condition for the use of ML estimation method, I observed satisfying values of skewness (< 3.0)
and kurtosis (< 10.0) for the items included in the model,1 thus indicating that there is no
extreme violation of univariate normality (Kline 2005). However, as the Mardia test (Mardia
1970) indicates a violation of multivariate normality (c.r. ¼ 17.05), the significance test of the v2
might be affected.2 Therefore, the Bollen-Stine bootstrap has been applied “to correct for the
standard error and fit statistic bias [ … ] due to the non-normal data” (Enders 2005, 620). The
model fit was assessed using v2/df, the comparative fit index (CFI), the root mean squared error
of approximation (RMSEA), and the standardized root mean residual (SRMR). In general, a value
of 2.0 or lower for v2/df, a value of .90 or higher for the CFI, a value of .08 or lower for the
RMSEA, and a value of .10 or lower for the SRMR are said to indicate adequate fit (Premkumar
and King 1994; Hu and Bentler 1999; Weston and Gore 2006). To specifically test the hypothe-
sized mediating effects, this study follows the SEM approach as suggested by MacKinnon et al.
(2002) and James, Mulaik, and Brett (2006), and recently applied by Wang (2008) and Kollmann
and St€ockmann (2014) in the EO context. For a more rigorous test, I also conducted bootstrap
analysis as suggested by Shrout and Bolger (2002) and Zhao, Lynch, and Chen (2010) to clarify
the statistical significance of the mediating effects. This method has also recently been applied by
Schneider et al. (2005) and Kollmann and St€ockmann (2014). Furthermore, I used multigroup
analysis to control for a potential effect of generational involvement and involvement of the foun-
der on the hypothesized relationships.
Measurement model
Measurement validation requires the application of CFA, especially to validate the newly formed
constructs of LTO and SCL. All items showed satisfying factor loadings. Therefore, no further
items had to be removed from the measurement model. Using the model fit indexes illustrated
above, the analysis shows that the proposed multifactor measurement model adequately fits the
data: v2 ¼ 929.009, df ¼ 672, Bollen-Stine bootstrap p-value ¼ .09, v2/df ¼ 1.382, CFI ¼ .933,
RMSEA: .043, SRMR ¼ .058. Once the overall CFA model has been accepted, each construct is
evaluated separately by assessing the psychometric properties. Reliability was examined by assess-
ing both Cronbach’s alpha (Peter 1979) and composite reliability (CR; Fornell and Larcker 1981).
All constructs showed satisfying Cronbach’s alpha and CR values of above .60 (Hair et al. 2006).
Convergent validity was assessed by using the average variance extracted (AVE; Fornell and
Larcker 1981). All the AVEs for first-order factors used in this study were above .40.
Furthermore, I verified that for each latent variable, the AVE by its measure is larger than the
maximum shared variance (MSV) with any other latent variable (Fornell and Larcker 1981). At
the same time, no interfactor correlation is above the critical level of .65 (Tabachnick and Fidell
1996) and the square root of the AVE of each latent variable is larger than its correlation with
any other latent variable, thus showing evidence for discriminant validity (Hair et al. 2006). The
results of the measurement analysis are displayed in Table 2.
As I collected data for dependent and independent variables from identical informants using a
single survey instrument, I controlled for common method bias (Organ and Greene 1981). In line
with Podsakoff and Organ (1986) and Podsakoff et al. (2003), I conducted Harman’s single-factor
test to assess the possibility of common influence across all responses. All items included in the
measurement model were entered into an EFA and multiple factors emerged, but no single factor
accounted for the majority of the variance in the measures. Of the eleven factors that are identi-
fied, the main factor accounted for only 20.49% of the total variance. This suggests that a mono-
method is unlikely, and that the study’s data can be accepted as valid (Podsakoff and Organ
1986). Furthermore, I performed CFA to identify and isolate potential method effects (Podsakoff
et al. 2003). Each of the 40 items underlying the latent variables are also represented as an indica-
tor of a large common variance factor in the CFA model. The analysis shows that the proposed
multifactor measurement model displays improved model fit when compared to the common
variance factor model (v2 ¼ 3279.398, df ¼ 777, Bollen-Stine bootstrap p-value ¼ .000, v2/
df ¼ 4.221, CFI ¼ .349, RMSEA: .125, SRMR ¼ 1.523). Consequently, common method bias is
not an issue in this study.
SEM model: hypotheses testing

The SEM model in this study, consisting of four latent constructs (i.e., FCC, LTO, SCL, and EO)
and representing a serial mediation model, resulted in an adequate fit and the model fit indexes
were: v2 ¼ 1107.729, df ¼ 835, Bollen-Stine bootstrap p-value ¼ .08, v2/df ¼ 1.327, CFI ¼ .929,
RMSEA: .040, SRMR ¼ .065. As a necessary condition for serial mediation, FCC positively influ-
ences LTO (a1 ¼ .29, p < .01), LTO is positively associated with SCL (a3 ¼ .63, p < .001), and
SCL is positively associated with EO (b2 ¼ .25, p < .05). The results of the significance tests of
Table 2. Descriptive statistics, reliability, and validity tests.
312
Mean SD Cr. a AVE MSV CR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

1. Innovativeness 2.94 1.10 .81 .60 .26 .82 (.78)
2. Proactiveness 3.58 .87 .80 .57 .30 .80 .52 (.75)
3. Risk taking 2.94 .84 .79 .55 .30 .79 .42 .55 (.74)
C. ARZ
4. Continuity 4.18 .67 .70 .51 .27 .75 .00 .06 .09 (.72)
5. Futurity 3.91 .76 .62 .45 .32 .62 .02 .15 .02 .52 (.67)
6. Perseverance 4.19 .65 .85 .62 .32 .83 .12 .04 .03 .52 .57 (.79)
7. Organizational identification 4.47 .59 .63 .50 .34 .65 .18 .31 .12 .27 .53 .37 (.70)
8. Low power distance 4.09 .67 .69 .43 .31 .69 .27 .32 .14 .16 .26 .26 .56 (.65)
9. Collectivism 4.18 .64 .81 .62 .40 .83 .04 .21 .09 .38 .41 .29 .58 .40 (.79)
10. Intrinsic motivation 3.62 .71 .90 .76 .39 .90 .08 .03 .06 .24 .38 .30 .53 .39 .51 (.87)
11. Shared vision 3.59 .70 .86 .61 .40 .86 .02 .12 .08 .30 .46 .43 .57 .45 .63 .62 (.78)
12. Family commitment culture 4.53 .60 .90 .53 .08 .90 .03 .09 .08 .19 .27 .18 .23 .15 .29 .08 .17 (.73)
13. Firm size (number of employees 3.00 1.08 – – – – .08 .16 .19 .06 .03 .12 .05 .01 .15 .07 .13 .22 –
relative to competitors)
14. Firm age (years) 64.39 37.04 – – – – .24 .21 .08 .08 .09 .04 .15 .16 .06 .05 .03 .09 .03 –
15. CEO tenure (years) 23.47 11.82 – – – – .02 .04 .13 .01 .03 .08 .03 .01 .09 .06 .10 .09 .07 .12 –
n ¼ 208; numbers in parentheses represent the square root of AVE of each latent variable. SD: standard deviation; AVE: average variance extracted; MSV: maximum shared variance; CR:
composite reliability.
Figure 3. SEM model’s results. n ¼ 208, p < .05; p < .01; p < .001. Standardized parameter estimates. Simplified version
of the actual model. FCC: family commitment culture; LTO: long-term orientation; SCL: stewardship climate; EO: entrepreneurial
orientation.
the indirect effects derived from applying bootstrap analysis with k ¼ 5,000, bias corrected, and a
95% confidence interval (Shrout and Bolger 2002; Zhao, Lynch, and Chen 2010) underline the
idea of serial mediation as well. Both the effect of FCC on SCL through LTO (a1 x a3 ¼ .17, p <
.01) and the effect of LTO on EO through SCL (a3 x b2 ¼ .22, p < .05) are significant. Moreover,
the direct effects between FCC and SCL (a2 ¼ .07, n.s.), FCC and EO (c’ ¼ .01, n.s.), and LTO
and EO (b1 ¼ .12, n.s.) are not significant, which provides evidence for the proposed complete
mediation structure (FCC represents an indirect determinant of EO). Against this background, all
hypotheses, H1, H2, H3, H4a, and H4b, are supported. Figure 3 presents the results of the
SEM model.
Results of multigroup control variables

To verify the stability of the hypothesized multi-layer culture model, this study used a multigroup
analysis to test if there are any differences in the hypothesized relationships across generic types
of family firms. First, I compared single-generation (n ¼ 72) and multi-generation (n ¼ 136) fam-
ily firms. Second, I compared founder managed (n ¼ 73) and non-founder managed family firms
(n ¼ 135). I used Anderson and Gerbing’s (1982) v2 difference test to evaluate if the differences
are statistically significant across groups. For each control variable, seven constrained models
(where different paths are specified as equal across groups) were tested and compared with the
unconstrained model (where all paths were allowed to vary freely across groups). For both varia-
bles, the v2 of each constrained model was not significantly higher than the unconstrained model,
indicating there was no difference in the hypothesized relationships across both single-generation
and multi-generation and founder and post-founder family firms. The results of the multigroup
analysis are reported in Table 3.
Discussion
Implications
The study’s findings extend a number of insights that have been generated by prior studies in the
field. Most significantly, by integrating adjacent family business theories into a multi-layer culture
model (Schein 2017), the insights of this study generate a better understanding of how family
commitment can add value to EO. Using data from 208 family firms, SEM model’s results
Table 3. Results of multigroup analysis.
314
Statistical
Description v2 df D v2 D df significance
Multigroup analysis by Unconstrained model 1995.007 1442 – – –
generational Constrained model A: The path of FCC to LTO is specified as equal across groups 1997.079 1443 2.072 1 n.s.
involvement† Constrained model B: The path of LTO to SCL is specified as equal across groups 1995.462 1443 .455 1 n.s.
C. ARZ
Constrained model C: The path of SCL to EO is specified as equal across groups 1995.007 1443 .000 1 n.s.
Constrained model D: The paths of FCC to LTO and LTO to SCL are specified as equal 1997.345 1444 2.338 2 n.s.
across groups
Constrained model E: The paths of FCC to LTO and SCL to EO are specified as equal 1997.079 1444 2.072 2 n.s.
across groups
Constrained model F: The paths of LTO to SCL and SCL to EO are specified as equal 1995.463 1444 .456 2 n.s.
across groups
Constrained model G: All the above paths are fixed as equal across groups 1997.345 1445 2.338 3 n.s.
Multigroup analysis by Unconstrained model 2054.791 1442 – – –
involvement of Constrained model A: The path of FCC to LTO is specified as equal across groups 2056.446 1443 1.655 1 n.s.
the founder‡ Constrained model B: The path of LTO to SCL is specified as equal across groups 2055.831 1443 1.040 1 n.s.
Constrained model C: The path of SCL to EO is specified as equal across groups 2055.947 1443 1.156 1 n.s.
Constrained model D: The paths of FCC to LTO and LTO to SCL are specified as equal 2057.873 1444 3.082 2 n.s.
across groups
Constrained model E: The paths of FCC to LTO and SCL to EO are specified as equal 2057.574 1444 2.783 2 n.s.
across groups
Constrained model F: The paths of LTO to SCL and SCL to EO are specified as equal 2057.022 1444 2.231 2 n.s.
across groups
Constrained model G: All the above paths are fixed as equal across groups 2059.025 1445 4.234 3 n.s.
n ¼ 208.
†Including 72 single-generation family firms, and 136 multi-generation family firms.
‡Including 73 founder managed family firms, and 135 non-founder managed family firms.
Dv2: difference in v2 value between models; D df: difference in the number of degrees of freedom; n.s.: nonsignificant. EO: entrepreneurial orientation; LTO: long-term orientation; SCL:
stewardship climate; FCC: family commitment culture.
underline the idea that processes of organizational socialization facilitate shifts between cultural
layers, enabling family commitment to be translated into EO by management-level long-term
orientation and an organization-wide stewardship climate. While the majority of research relied
on a resource-based view, using instruments like the competing values framework (Cameron and
Quinn 2006) to explore the link between generic types of organizational cultures and EO in fam-
ily firms (e.g., Cherchem 2017), this study emphasizes the essence of culture as a multi-layered
social control system (Arz 2017) and made it accessible for quantitative-oriented research. The
article thereby offers a deeper understanding of how the family triggers organizational culture
mechanisms that effectively support entrepreneurial behavior.
Empirical evidence further confirms the proposition of Arz (2019, 15) that “a family’s long-
term commitment and emotional attachment to the firm may be compatible with EO”, and that a
positive culture enables EO to be preserved in family firms at a stage of life cycle maturity.
Particularly, by testing the theorized serial mediation model on a sample of family firms with
established businesses, thus excluding startups that are at an early stage of their company life
cycle, it enriches our understanding of the unique value that organizational culture adds to EO in
this type of firms. From a multigroup analysis, SEM model’s results indicate that the hypothesized
cultural process is not affected by different managerial conditions. Concretely, it challenges the
suggestion of Le Breton-Miller, Miller, and Bares (2015) that EO is positively related to the pres-
ence of a founder but negatively related to the involvement of later family generations in manage-
ment. Similarly, although founder managed family firms have been argued to have an advantage
in implementing a stewardship-based culture over non-founder managed family firms (Pearson
and Marler 2010), my model revealed no significant differences in the hypothesized relationships
across the two generic firm types. Likewise, whereas Cherchem (2017) suggests that EO benefits
from a hierarchical culture, characterized by formalization, coordination and tight control sys-
tems, when multiple generations are involved, the insights of this study urge multi-generation
family firms to overcome hierarchical tendencies and centralized decision-making, pointing to a
culture of collectivism, empowerment, and intrinsic motivation to preserve the entrepreneurial
capacity of their organizations.
A further contribution of this article lies in the investigation of the complex family influence-
EO link which has been a major focus of prior research. Current knowledge in the field, however,
is limited by a heavy focus on structural types of family involvement, such as involvement in
ownership (Zahra 2005; Block 2012; Zahra 2012), management (Casillas and Moreno 2010;
Casillas, Moreno, and Barbero 2011; Revilla, Perez-Lu~ no, and Nieto 2016), and governance
(Miller and Le Breton-Miller 2011; Bauweraerts and Colot 2017; Lee and Chu 2017; Pimentel,
Couto, and Scholten 2017), and an insufficient understanding of how the family adds value to
EO. For instance, family involvement in the board has been argued to either promote entrepre-
neurial behavior due to the family director’s long-term investments and close monitoring (Le
Breton-Miller, Miller, and Bares 2015) or to hinder EO because a family executive may tend to
opt conservative strategies to perpetuate family legacy (Bauweraerts and Colot 2017). Similarly,
while family ownership has been suggested to be negatively associated with a family firm’s level
of R&D intensity (Block 2012), it may also increase the breadth and speed of organizational
learning which then positively influences the pace of EO (Zahra 2012). This research adds to the
field by emphasizing the cultural dynamics between family and business social systems and adopt-
ing a family essence approach (Chrisman et al. 2012). It thus follows the calls for investigating
how family values influence corporate entrepreneurship (Kellermanns and Eddleston 2006; Arz
2019) and for unraveling the specific organizational culture mechanisms of a family firm that
mediate between family culture and firm-level outcomes such as EO (Zahra et al. 2008). In doing
so, it enriches the literature examining how family commitment is used to create competitive
advantage (Corbetta and Salvato 2004; Zahra et al. 2008) and points to EO as the product of col-
lective efforts of both family and nonfamily organizational members.
316 C. ARZ
The theorized model also contributes to the recent debate on whether LTO and EO are funda-
mentally opposed to one another or if they can be generally compatible. Due to a tendency to
preserve family rituals, tradition, and wealth, and create cross-generational stability (Lumpkin,
Martin, and Vaughn 2008), LTO may tend to make family firms more conservative, less flexible,
and adverse to change, leading to greater caution and conservative decision-making processes
(Hall, Melin, and Nordqvist 2001; Schulze, Lubatkin, and Dino 2002; Short et al. 2009; Gentry,
Dibrell, and Kim 2016). On the other hand, a growing body of research indicates that LTO is
associated with stronger performance of family firms, making it a key source of competitive
advantage (e.g., Mcconaughy, Matthews, and Fialko 2001; Chrisman, Chua, and Steier 2002;
Zahra 2003; Anderson and Reeb 2003; Miller and Le Breton-Miller 2005; Martınez, St€ ohr, and
Quiroga 2007). For instance, LTO could make a firm more tolerant for experimentation, encour-
age pioneering and anticipation of future trends and technologies, and allow time to reduce
uncertainty before acting (Lumpkin, Brigham, and Moss 2010). The study’s findings support the
latter view as they indicate that a dominant coalition’s preference for managing for the long run
represents an indirect determinant of EO. LTO in this sense operates as an interface between
family priorities and organizational behavior, translating family commitment into a climate of
collective stewardship which, in turn, increases EO in a situation of family firm maturity. In con-
nection to that, by drawing on collective/reciprocal stewardship theory based on social leader-
member exchange (Pearson and Marler 2010), the article also offers new insights into how stew-
ardship may lead to competitive advantage for family firms. By adopting this theoretical stance,
the study suggests that LTO operates as a distinct feature that facilitates the emergence of recipro-
cal stewardship behaviors between leaders and followers rather than representing an integral con-
stituent of stewardship theory (Eddleston, Kellermanns, and Zellweger 2012).
Limitations
Although this study gained several valuable insights, some limitations exist. To begin with, I oper-
ationalized EO as a multidimensional reflective second-order construct. While this approach has
been suggested to be best suited when seeking to capture Miller’s (1983) and Covin and Slevin’s
(1989) original definition of EO as a strategic posture (George and Marino 2011; Wales 2016),
prior research on EO in family firms adopted different approaches in terms of measurement spe-
cification and dimensionality (Hernandez-Linares and L opez-Fernandez 2018). That is, while
some considered EO as an aggregated concept, others deconstructed EO in its dimensions. As
these represent fundamentally different theoretical approaches (George 2011), it would be inter-
esting to investigate the consequences of differing construct representations.
The multidimensional construct employed for LTO, on the other hand, represents a rather
novel measure which made modifications necessary during EFA. Therefore, I would ideally have
tested the new factor structures on a different sample. Particularly, when following the multidi-
mensional approach, special attention should be paid to the futurity dimension. While, according
to EFA, the employed items seem to be solid indicators for futurity as a single latent variable, sig-
nificant cross-loadings observed for the multidimensional conceptualization of LTO required the
elimination of items. Consequently, futurity items may have to be adapted in upcoming research
to better fit the proposed multidimensional second-order structure and increase reliability.
Moreover, there is potential bias in this study as I relied on a single informant approach for
the collection of my data. Ideally, I would have been able to get a complete cohort of family and
nonfamily employees within the same firm to explain how family commitment is translated into
EO through mechanisms of organizational culture. Consequently, although the cognitive maps of
top managers are considered to represent the essential aspects of all members of the organization
(Lyles and Schwenk 1992) and several tests indicated that common method bias is not a serious
issue in this study, research raising similar questions might consider collecting data from multiple
respondents at different levels within the family firm to mitigate any concerns associated with a
single respondent. This approach may be particularly useful for SCL, as organizational climate
has been argued to represent an aggregation of individual-level perceptions (Schneider, Ehrhart,
and Macey 2013).
A further methodological issue is the cross-sectional nature of the work, meaning no causal
conclusions can be drawn. From my analysis, I can only conclude that there is an association
between the variables in focus of this study. Future research should investigate these relationships
via a longitudinal design in order to more fully understand the causal effects.
Future research directions

My study also highlights several questions that deserve further investigations. First, while family
essence represents a valuable perspective to the study of cultural dynamics in the pursuit of EO,
future research may include further structural components of a family’s involvement as modera-
tors in a multi-layer culture model. Drawing on the sufficiency conditions suggested by De
Massis et al. (2014), family involvement provides a family with the legitimacy and power to
imprint its values on the organization. Hence, scholars may ask: Does a greater percentage of
ownership held by family members and/or a higher number of family members involved in gov-
ernance and management strengthen the effect of family commitment on firm-level cultural con-
cepts and EO? Similarly, the family essence perspective could be expanded by including more
immediate, family-centered consequences of a family’s commitment to the business and by exam-
ining these in relation to an extended temporal frame: Do family-centered non-economic goals
(Chrisman et al. 2012) mediate between FCC and LTO?
Furthermore, while the theorized sociocultural processes have been found to be supportive of
EO, we do not know whether EO positively influences the performance of the family firms in my
sample. Although a number of prior studies provided evidence for a positive EO-performance
link (Rauch et al. 2009), this remains an avenue for further research in the field, as this link may
not be as clear in the family business context (Schepers et al. 2014). For instance, the cultural
concepts included in this study’s research model may also be considered as contextual factors,
thereby asking: Do long-term oriented dominant logic in management and organization-wide
stewardship practices moderate the link between EO and firm performance in family firms?
Another worthwhile line of research may focus on family dynamics as an interesting factor
affecting cultural transformation processes in family firms. For instance, building on a longitu-
dinal research design, scholars could raise the questions: How do both family and organizational
culture of family firms change during and after succession? Is the transition from one generation
to the next supported by family commitment and a multitemporal perspective in the family firm’s
dominant coalition? What are the implications of such family dynamics for EO?
Moreover, this study’s empirical setup is within the national context of Germany. Although
the findings have the potential to be generalized to family businesses in Western Europe and
North America, it could be interesting for future research to verify the findings within other
national contexts, especially in the Asia-Pacific region, or conduct comparative studies with a
cross-country analysis. Drawing on the suggestions of Fayolle, Basso, and Bouchard (2010), future
research may address the following questions: How does national culture influence family values
and a family firm’s culture? How does national culture encourage the pursuit of entrepreneurial
opportunity at a family firm’s stage of maturity? Do differences between national cultures of dif-
ferent regions in the world explain how family culture is transformed into firm-level EO?
Finally, while my research focused on the heterogeneity of family firms, the study could also
be expanded to nonfamily firms in the future. Is the conceptualized multi-layered cultural process
more likely to be found in family than in nonfamily firms? Which socialization processes
318 C. ARZ
promote the emergence of a multitemporal value orientation within a nonfamily management

team? What are factors impeding or promoting a stewardship climate in nonfamily firms?
Conclusions
The present article is an important contribution to the literature on EO in family firms. As, to
date, research is undecided on why some mature family firms are able to preserve their entrepre-
neurial capacity while others are not, this study provides a better understanding of the cultural
processes through which family influence is translated into EO. A multi-layered understanding of
culture allows for an exploration of the productive interaction between family and business social
systems. The results of the empirical model support the theorized serial mediation process, indi-
cating that family commitment, reflected by the degree to which a family feels loyalty and pride
and strives for an intimate relationship with the business, can stimulate EO only when it is car-
ried through an organizational culture characterized by long-term management priorities and an
organization-wide climate of collective stewardship. The model is applicable to both single- and
multi-generation as well as founder and post-founder family firms, indicating that the observed
cultural process enables keeping the entrepreneurial spirit alive in a situation of life
cycle maturity.
Disclosure statement
No potential competing interest is to be reported for this manuscript.
Notes
1. Two items of the FCC scale (“The family feels loyalty to the family business” and “The family really cares
about the fate of the family business”) have been eliminated due to violation of univariate normality. Due
to the reflective specification of the scale, however, eliminating these items does not change the overall
content of FCC.
2. Bentler (2005) suggests a multivariate c.r. value of > 5.00 to be indicative of non-normally distributed
data. However, it is noteworthy that statistical tests intended to detect violation of multivariate normality,
such as the Mardia (1970) test, are limited by the fact that slight departures from normality could be
statistically significant in a large sample (n ¼ >200) and, therefore, should be interpreted with caution
(Kline 2005).
Notes on contributor
Christopher Arz (Ph.D.) is a research fellow at University of Hohenheim, Institute of Marketing and Management.
His main research interests are corporate entrepreneurship, family business and the role of social processes in
organizations, with particular focus on the phenomenon of organizational culture. Christopher is experienced in
both conducting quantitative-oriented studies and qualitative case study research.
ORCID
Christopher Arz http://orcid.org/0000-0002-1122-2157
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Appendix S1. Measures used in this study.
Measures used in this study

Entrepreneurial orientation (EO construct)
Innovativeness
In general, the top managers of my firm favor …
1. A strong emphasis on the marketing of tried and true products or services (left anchor, coded 1); a strong emphasis on
R&D, technological leadership, and innovations (right anchor, coded 5)
How many new lines of products or services has your firm marketed in the past 5 years?
2. No new lines of products or services (left anchor, coded 1); very many new lines of products or services (right anchor,
coded 5)
3. Changes in product or service lines have been mostly of a minor nature (left anchor, coded 1); changes in product or
service lines have usually been quite dramatic (right anchor, coded 5)
Proactiveness
In dealing with its competitors, my firm …
1. Typically responds to actions which competitors initiate (left anchor, coded 1); changes in product or service lines have
usually been quite dramatic (right anchor, coded 5)
2. Is very seldom the first business to introduce new products/services, administrative techniques, operating techniques etc.
(left anchor, coded 1); is very often the first business to introduce new products/services, administrative techniques,
operating techniques etc. (right anchor, coded 5)
In general, the top managers of my firm have …
3. A strong tendency to “follow the leader” in introducing new products or ideas (left anchor, coded 1); a strong tendency
to be ahead of other competitors in introducing novel ideas or products (right anchor, coded 5)
Risk taking
In general, the top managers of my firm have …
1. A strong proclivity for low-risk projects (with normal and certain rates of return) (left anchor, coded 1); a strong proclivity
for high-risk projects (with chances of very high returns) (right anchor, coded 5)
In general, the top managers of my firm believe that …
2. Owing to the nature of the environment, it is best to explore it gradually via careful, incremental behavior (left anchor,
coded 1); owing to the nature of the environment, bold, wide-ranging acts are necessary to achieve the firm’s objectives
(right anchor, coded 5)
When confronted with decision-making situations involving uncertainty, my firm …
3. Typically adopts a cautious, ’wait-and-see’ posture in order to minimize the probability of making costly decisions (left
anchor, coded 1); typically adopts a bold, aggressive posture in order to maximize the probability of exploiting potential
opportunities (right anchor, coded 5)
Family commitment culture (FCC construct)
(five-point Likert scale 1 representing “not at all” to 5 representing “to an extreme extent”)
To what extent do you agree with the following?
1. The family feels loyalty to the family business.
2. The family is proud to tell others that they are part of the family business.
3. The family agrees with the family business goals, plans, and policies.
4. The family really cares about the fate of the family business.
5. There is so much to be gained by participating with the family business on a long-term basis.
6. The family supports the family business in discussion with friends, employees, and other family members.
7. Family and business share similar values.
8. The family members share similar values.
9. The family members are willing to put in a great deal of effort beyond that normally expected to help the family
business be successful.
10. The family has influence on the business.
Long-term orientation (LTO construct)
(five-point Likert scale – 1 representing “not at all” to 5 representing “to an extreme extent”)
Futurity
1. Forecasting and evaluating the long-range consequences is valuable for the firm.
2. The management in our firm focuses in particular on long-term profitability.
3. Long-term goals have priority over short-term goals among our management.
4. The management in our firm invests deeply into the long-term development of employees.
(continued)
Continued.
Measures used in this study
5. The management in our firm emphasizes long-term investments.
Continuity
1. The management in our firm values decisions and actions that are long lasting.
2. The management in our firm values a strong link to the past/ the firm’s history.
3. The management in our firm values constancy to pursue an enduring mission.
4. Preserving reputations for the longevity of the business is important to our management.
Perseverance
1. The management in our firm beliefs that efforts made today will be valuable in the future.
2. The management in our firm demonstrates patience for future rewards.
3. Persistence is important to our management.
Stewardship climate (SCL construct)
(five-point Likert scale 1 representing “not at all” to 5 representing “to an extreme extent”)
Organizational identification
To what extent do the following statements reflect the beliefs of the employees of your company?
1. The company’s successes are the employees’ successes.
2. When someone praises the company, it feels like a personal compliment.
3. Employees feel a sense of “ownership” for this organization rather than just being an employee.
Collectivism
To what extent do the following statements reflect the beliefs of the employees of your company?
1. Cooperation among team members usually helps solve problems.
2. Team-based work provides the best work performance.
3. Teamwork is central to an effective organization.
Low power distance
To what extent do you agree with the following statements about managerial decision-making behaviors in your company?
1. Managers make most decisions without consulting subordinates. (reverse coded)
2. Managers frequently use authority and power when dealing with subordinates. (reverse coded)
3. Managers do not delegate important tasks to employees. (reverse coded)
Shared vision
1. There is a commonality of purpose in my organization.
2. There is a total agreement on our organizational vision across all levels, functions and divisions.
3. All employees are committed to the goals of this organization.
4. Employees view themselves as partners in charting the direction of the organization.
Intrinsic motivation
To what extent are employees in your organization satisfied with various facets of their job?
1. The extent that supervisors express appreciation to subordinates.
2. The extent that supervisors give credit to subordinates for their work.
3. The extent that supervisors give praise to employees for good job performance.
Item has been eliminated due to violation of univariate normality.
Item has been eliminated due to low factor loading and/or cross-loading during exploratory factor analysis (EFA).
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INTERNATIONAL STUDIES OF MANAGEMENT & ORGANIZATION

2021, VOL. 51, NO. 4, 297–327

From family commitment to entrepreneurial orientation:

CONTACT Christopher Arz christopher.arz@uni-hohenheim.de Institute of Marketing and Management,

Figure 1. Theoretical multi-layer culture model in family firms.

Culture in mature family firms: a multi-layered perspective

A cultural lens on family influence, temporality, stewardship, and the impact on EO

Research model and hypotheses

Family commitment culture and long-term orientation

Figure 2. Serial mediation model of stimulating EO in mature family firms.

Long-term orientation and stewardship climate

Stewardship climate and EO

Jennings 2017). EO relies on proactive and voluntary contributions of nonfamily organizational

The mediating roles of long-term orientation and stewardship climate

Table 1. Sample characteristics.

profound theoretical conceptualizations. Translation of the questionnaire from English to German

Entrepreneurial orientation (EO)

Family commitment culture (FCC)

Long-term orientation (LTO)

Stewardship climate (SCL)

Nun~ez-Pomar et al. 2016; Gr€

Multigroup control variables

Analysis and results

SEM model: hypotheses testing

Mean SD Cr. a AVE MSV CR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Results of multigroup control variables

Future research directions

promote the emergence of a multitemporal value orientation within a nonfamily management

Appendix S1. Measures used in this study.

Measures used in this study

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