Family background

By now, you should have acknowledged that culture is an important determinant of entrepreneurial behaviour.

You have seen through examining different national cultures (GEM studies) that culture is a shared attribute; individuals with common cultural backgrounds will tend to have more similar views of their environments than individuals with different cultural backgrounds. Shared perceptions can be formed through sub-cultures such as social networks (both strong and weak ties) and family relations.

You have just explored social networks and strong and weak ties, and so in this step you will explore family relations.

Family is an important dimension of culture because family historically represents a fundamental form of social organisation (Chrisman et al 2002). Family involvement in an individual’s decision to start a business can be quite powerful, both in a positive sense if they provide endorsement and support, and in a negative sense if they do not support the decision or try to discourage the potential entrepreneur.

Families provide practical support to potential and developing entrepreneurs; the family can help when it comes to raising funds, for example. The Business Development Bank of Canada (BDC) shows personal investment to be the most common source of start-up funding, with friends and family – referred to as ‘love money’ – as the next most common option. Friends and family are also often the testing ground for embryonic ideas and for validating the initial sensemaking that the idea is a viable business opportunity (Hoyte et al. 2019).

Parents that already have a business can inspire their children to follow in their footsteps and either take over the family business or set up their own business. Parental role models in entrepreneurial families seem to increase their offspring’s decision to become self-employed, but this influence is moderated by personality (Chlosta et al. 2012), namely openness to experience. If you remember from Week 1, openness to experience is one of the five-factor personality dimensions linked to the inclination to start a business.

While the personality dimension suggests that individuals with certain traits have a higher probability of becoming self-employed (Rauch and Frese 2007; Zhao and Seibert 2006; Barrick and Mount 1991), the importance of family highlights the fact that individuals tend to learn from others who are role models for them (Bandura 1986).

Researchers have found that early exposure to parental role models will affect the children’s attitude towards becoming self-employed themselves (Dyer et al. 1994; Carr and Sequeira 2007) and that growing up in a family with self-employed family members may positively influence entrepreneurial attitude, intentions and potential for entrepreneurial activity (Dunn and Holtz-Eakin 2000).

Finally, children in an entrepreneurial family can benefit from being mentored by parental figures (Kim et al. 2006; White et al. 2007) and by accessing the business networks of their parents, as you saw in the case of James Dyson, who received business expertise from Robert Bedlam, a friend of his father.

Your task

Identify a family member (immediate or extended) that acts as a role model for becoming an entrepreneur and explain why they inspire you.

References

Bandura, A. (1986) Social Foundations of Thought and Action. Engelwood Cliffs, NJ: Prentice-Hall

Barrick, M. R., and Mount, M. K. (1991) ‘The Big Five Personality Dimensions and Job Performance: A Meta-analysis’. Personnel Psychology 44 (1), 1-26

Carr, J. C., and Sequeira, J. M. (2007) ‘Prior Family Business Exposure as Intergenerational Influence and Entrepreneurial Intent: A Theory of Planned Behavior Approach’. Journal of Business Research 60 (10), 1090-1098

Chlosta, S., Patzelt, H., Klein, S.B., and Dormann, C. (2012) ‘Parental Role Models and the Decision to Become Self-employed: The Moderating Effect of Personality’. Small Business Economics 38 (1), 121-138

Chrisman, J. J., Chua, J. H., and Steier, L. P. (2002) ‘The Influence of National Culture and Family Involvement on Entrepreneurial Perceptions and Performance at the State Level’. Entrepreneurship Theory and Practice 26 (4), 113-130

Dunn, T., and Holtz-Eakin, D. (2000) ‘Financial Capital, Human Capital and the Transition to Self-employment: Evidence from Intergenerational Links’. Journal of Labor Economics 18 (2), 282-305

Dyer, Jr., Gibb, W., and Handler, W. (1994) ‘Entrepreneurship and Family Business: Exploring the Connections’. Entrepreneurship Theory and Practice 19 (1), 71-83

Hoyte, C., Noke, H., Mosey, S. and Marlow, S. (2019) ‘From Venture Idea to Venture Formation: The Role of Sensemaking, Sensegiving and Sense Receiving’. International Small Business Journal 37 (3), 268-288

Kim, P., Aldrich, H. E., and Keister, L. A. (2006) ‘Access (Not) Denied: The Impact of Financial, Human, and Cultural Capital on Entrepreneurial Entry in the United States’. Small Business Economics 27 (1), 5-22

Rauch, A., and Frese, M. (2007) ‘Let’s Put the Person Back into Entrepreneurship Research: A Meta-analysis on the Relationship between Business Owners’ Personality and Business Creation and Success’. European Journal of Work and Organizational Psychology 16 (4), 353-385

White, R. E., Thornhill, S., and Hampson, E. (2007) ‘A Biosocial Model of Entrepreneurship: The Combined Effect of Nurture and Nature’. Journal of Organizational Behavior 28 (4), 451-466

Zhao, H., and Seibert, S. E. (2006) ‘The Big Five Personality Dimensions and Entrepreneurial Status: A Meta-analytical Review’. Journal of Applied Psychology 91 (2), 259-271

Share this article:

This article is from the free online course:

Perspectives on Entrepreneurship

Coventry University