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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

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.

Suggested Citation

  • Hirigoyen, Gérard & Labaki, Rania, 2012. "The role of regret in the owner-manager decision-making in the family business: A conceptual approach," Journal of Family Business Strategy, Elsevier, vol. 3(2), pages 118-126.
  • Handle: RePEc:eee:fambus:v:3:y:2012:i:2:p:118-126
    DOI: 10.1016/j.jfbs.2012.03.004
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    References listed on IDEAS

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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.
    2. Labaki Rania, 2013. "Beyond the Awaking of a “Sleeping Beauty”: Toward Business Models Inclusive of the Emotional Dimension in Entrepreneurship," Entrepreneurship Research Journal, De Gruyter, vol. 3(3), pages 265-276, July.
    3. Hauck, Jana & Prügl, Reinhard, 2015. "Innovation activities during intra-family leadership succession in family firms: An empirical study from a socioemotional wealth perspective," Journal of Family Business Strategy, Elsevier, vol. 6(2), pages 104-118.

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    Keywords

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

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