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Diversification Decisions of Family SMEs under Uncertainty: Goals as a Rule of Thumb

Author

Listed:
  • Doucet Pablo
  • Requejo Ignacio
  • Suárez-González Isabel

    (Business Administration Department and IME, University of Salamanca, Campus Miguel de Unamuno, s/n, E-37007, Salamanca, Spain)

Abstract

Leveraging on the behavioural mixed gamble lens, we contend that heterogeneity in organisational goals leads to different diversification behaviours in family firms. Using survey and archival data on a sample of 988 family SMEs homogenous in their (high) family involvement level, we show that family SMEs that pursue nonfinancial (financial) goals exhibit lower (higher) probability of extending the boundaries of the firm to new product and/or market domains. Interestingly, in the face of threats, only those family SMEs that prioritise financial goals exacerbate their propensity to diversify, while increased vulnerability leads to an even lower probability of adopting diversification decisions among family SMEs with nonfinancial goals.

Suggested Citation

  • Doucet Pablo & Requejo Ignacio & Suárez-González Isabel, 2023. "Diversification Decisions of Family SMEs under Uncertainty: Goals as a Rule of Thumb," Entrepreneurship Research Journal, De Gruyter, vol. 13(3), pages 567-600, July.
    • Handle: RePEc:bpj:erjour:v:13:y:2023:i:3:p:567-600:n:10
    DOI: 10.1515/erj-2021-0436
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