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The role of regret in the owner-manager decision-making in the family business: A conceptual approach

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  • Hirigoyen, Gérard
  • Labaki, Rania
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    Abstract

    This article responds to recent calls of scholars for more research on emotions in the family business by providing an initial analytical study of the owner-manager regret in decision-making. First, we suggest an enlarged theoretical framework for analyzing decision-making in the family business by building on the behavioural model of emotions in decision-making of Loewenstein and Lerner (2003) and Regret Theory. Second, we offer a first characterization of the emotion of regret in the family business. Given the overlap between the family and the business systems, we introduce a dual dimension of regret that is family-based and business-based. We also extend the analysis towards a dynamic view of regret by accounting for the owner-manager's experienced regret at the time of decision in addition to the traditionally analyzed expected regret. Departing from the common assumption that the owner-manager is altruistic towards the family and acts as a steward for the business, we consider that the owner-manager's expected outcomes refer to emotional and financial value maximization. Based on these characterizations, we develop a conceptual model with a series of propositions on the role of the owner-manager regret in decision-making. Finally, we present the theoretical, conceptual and practical contributions of the study as well as its limitations from which stem research avenues on regret and decision-making in the family business.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Family Business Strategy.

    Volume (Year): 3 (2012)
    Issue (Month): 2 ()
    Pages: 118-126

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    Handle: RePEc:eee:fambus:v:3:y:2012:i:2:p:118-126

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    Related research

    Keywords: Decision-making; Emotions; Family business; Regret; Value;

    References

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    Cited by:
    1. Goel, Sanjay & Mazzola, Pietro & Phan, Phillip H. & Pieper, Torsten M. & Zachary, Ramona K., 2012. "Strategy, ownership, governance, and socio-psychological perspectives on family businesses from around the world," Journal of Family Business Strategy, Elsevier, vol. 3(2), pages 54-65.

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