Different Strokes on Transgenerational Entrepreneurship

Nigeria pinpointed on map

The article “Different Strokes for Different Folks: The Roles of Religion and Tradition for Transgenerational Entrepreneurship in Family Businesses”, recently appearing in the journal Entrepreneurship Theory and Practice, echoes to the statement in Anna Karenina about families (unhappy ones in Tolstoy’s context) are different in their own way. In this paper the authors — Nonyelum Lina Eze, a PhD candidate in management sciences at Ramon Llull University’s ESADE Entrepreneurship Institute; Mattias Nordqvist, a professor at the House of Innovation at the Stockholm School of Economics;  Georges Samara, at the University of Sharjah’s College of Business Administration, Sharjah, United Arab Emirates; and Maria José Parada Balderrama, an associate professor the Department of Strategy and General Management at ESADE — examine how family businesses differ in their entrepreneurial spirit across generations and across regions in Nigeria. Beneath the paper’s abstract, Lina Eze explains the thinking behind the original research and how the societal terrain of Nigeria shapes entrepreneurship.

This study explores how differences originating in religion and traditions imbue family features and business practices that affect the capacity of family businesses to continue being entrepreneurial across generations; that is, to maintain transgenerational entrepreneurship. Building on an in-depth qualitative study of family businesses, we show how differences in religion and traditions within three subregions of a developing country shape the family structure, the functioning of the family, and the family mindset with concomitant implications on the business practices that foster or hinder transgenerational entrepreneurship. Theoretical and practical contributions are discussed in the context of entrepreneurship and family business.

Although Nigeria is a nation-state, there are several divisions, such as religion and traditions. These are mostly reflected in the country’s politics, whereby when a political class with a particular religion or tradition is in power, others suffer or are marginalized. This contextual background led me to suspect that religion and traditions might have a role to play in how family businesses in such a setting behave. Family businesses have gained a reputation as the most prevalent form of business organization worldwide, making a significant contribution to GDP. Moreso, family businesses are an important engine for entrepreneurship in most economies. Therefore, it makes sense to ensure the sustenance of family businesses.

eze and nordqvist and samara and parada
Nonyelum Lina Eze, left, Mattias Nordqvist, Georges Samara, and Maria José Parada Balderrama

Simultaneously, transgenerational entrepreneurship has been on the front burner as a process for sustaining family businesses across generations by combining the unique bundle of resources that stem from family involvement and the next generation’s entrepreneurial mindsets generation. However, to take transgenerational entrepreneurship as a strategy for sustaining family businesses across generations, it becomes imperative to deepen our understanding of factors that can drive or constrain it.

This study found that prevailing subregional religion and traditions affect transgenerational entrepreneurship. Evidence obtained from analyzing interviews with 30 informants in top-level management positions in 18 multigenerational family businesses and one family business expert informed this posit. The study context is Nigeria, a developing country with different religions, Christianity-based and Islam-based, depending on the subregion. The authors found that religion and traditions in the subregion where family businesses operate have shaped the family structure (marriage arrangement and family size), family functioning (role of wife and transfer of values to next generation) and family mindset (risk-taking orientation and the feasibility of primogeniture), which has led to unique sets of business practices that influence transgenerational entrepreneurship.

The varying use of these business practices aid in understanding the differences in transgenerational entrepreneurship of family businesses that are either Christian or Muslim in Nigeria.

• Using valuable resources provided by a wife or underutilizing or failing to use the valuable resource that a wife offers.

• The ability to attain unified business decisions influence transgenerational entrepreneurship. Whereas cohesiveness and efficiency impact positively, divisiveness jeopardizes decisionmaking, limiting their transgenerational entrepreneurship capacity.

• Exploiting entrepreneurial opportunities could be business-sustaining or family-sustaining. Both have different outcomes for transgenerational entrepreneurship.

• Finally, deploying resources at transition by consolidation enables the retention of resources control by one member of the next generation (primogeniture) – providing the necessary background for transgenerational entrepreneurship. Conversely, adopting disintegration allows resource distribution to all family stakeholders (Sharia inheritance norm) – leading to the depletion and fragmentation of the family business resources, eventually inhibiting transgenerational entrepreneurship.

Consequently, understanding these idiosyncrasies could help chart an intervention effort geared towards addressing perceived gaps within these regional settings to sustain family businesses.

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