The marionette: embeddedness in a community of family-controlled firms

Abstract

Purpose Being embedded in family has proven to bring opportunities and facilitate resources for a firm. However, it has its dark side, where too much family involvement may hamper the entrepreneur’s ability to develop psychological ownership of the firm. By focusing on the role that family plays in entrepreneurship, this paper aims to explore how embeddedness and agency interact during the entrepreneurial process. The research questions are as follows: how does family interact in the entrepreneurial process? How does embeddedness inform this process? Design/methodology/approach The paper builds on a longitudinal case study of a small firm that is part of a local community of family-controlled firms. The narrative was created through in-depth interviews with the business owner covering a period of eight years from the opening to the closure of the firm. Departing from theories of family embeddedness, the family is viewed as part of the context. Findings The findings show how agency operates in a community of family-controlled firms and how entrepreneurship is thus partly executed outside the firm’s legal boundaries. The metaphor of a marionette illustrates how family may tie up and restrain an entrepreneur. This hampers the entrepreneur in developing psychological ownership of the firm and thereby restrains the firm’s development. This shows a downside to having too much positive influence from embeddedness. Research limitations/implications The paper stresses the social role of family by emphasising the value that a family can bring to an entrepreneurial process and thereby to society at large. Practitioners need to reflect on the effects of embeddedness. By recognising the downsides of too much help from outsiders, they may instead strive for a balance. By introducing the theory of psychological ownership to the literature on embeddedness, this paper opens the space for future developments of this cross-section. Originality/value The paper contributes to the entrepreneurship literature by unfolding the mechanisms of family embeddedness and illustrating how embeddedness informs the entrepreneurial process in different ways. Even though over-embeddedness has been investigated before, this has primarily focused on the negative control from outside the firm. This paper uses the notion of psychological ownership to shed light on the previously hidden problem of too much positive influence from family.