TY - JOUR

T1 - Family involvement in Chinese and German Small Business

AU - Schmitt, Antje

AU - Frese, Michael

PY - 2011

Y1 - 2011

N2 - The goal of this study was to examine cultural differences in the value of family involvement in German and Chinese small businesses due to their differences in collectivism/individualism. Our analyses, based on a sample of 562 Chinese and German owners, showed that family involvement — measured as the number of family members that work in the business — is higher in China than in Germany. Compared to German business owners, Chinese owners received most of their start-up capital from family members. Moreover, we were interested in whether family involvement is related to the business owner's ability to make use of start-up capital to turn it into business outcomes. Building on existing literature and based on the match hypothesis we hypothesized that the effects of family involvement on business outcomes depend on the cultural values underlying a business. Our analyses revealed that family involvement negatively affected relationships of start-up capital with business outcomes both in China and in Germany. Our study contributes by showing that a negative effect of family involvement on the ability to make use of start-up capital is not only evident in individualistic cultures such as Germany but does also apply to collectivistic Chinese businesses. Practically, owners in both cultures are suggested to develop strategies in order to prevent and overcome negative effects of family involvement on business outcomes. Our results suggest fruitful avenues for future research.

AB - The goal of this study was to examine cultural differences in the value of family involvement in German and Chinese small businesses due to their differences in collectivism/individualism. Our analyses, based on a sample of 562 Chinese and German owners, showed that family involvement — measured as the number of family members that work in the business — is higher in China than in Germany. Compared to German business owners, Chinese owners received most of their start-up capital from family members. Moreover, we were interested in whether family involvement is related to the business owner's ability to make use of start-up capital to turn it into business outcomes. Building on existing literature and based on the match hypothesis we hypothesized that the effects of family involvement on business outcomes depend on the cultural values underlying a business. Our analyses revealed that family involvement negatively affected relationships of start-up capital with business outcomes both in China and in Germany. Our study contributes by showing that a negative effect of family involvement on the ability to make use of start-up capital is not only evident in individualistic cultures such as Germany but does also apply to collectivistic Chinese businesses. Practically, owners in both cultures are suggested to develop strategies in order to prevent and overcome negative effects of family involvement on business outcomes. Our results suggest fruitful avenues for future research.

KW - Business psychology

KW - Entrepreneurship

U2 - 10.1142/S0218495811000775

DO - 10.1142/S0218495811000775

M3 - Journal articles

VL - 19

SP - 261

EP - 285

JO - Journal of Enterprising Culture

JF - Journal of Enterprising Culture

SN - 0218-4958

IS - 3

ER -