Conference PaperPDF Available

Emotions of family business decision makers and innovation performance



The research suggests that emotions play a significant role in family business, however the research of the role of family business decision maker emotions in innovation performance is insufficient. Thus, there is little understanding of how emotions of decision makers are related to family business innovation performance. Can the emotions of the family business decision maker be a stimulus of a successful business? The aim of the paper is to reveal the role of family business decision maker emotions in family business innovation performance.
Emotions of family business decision makers and innovation performance
Neringa Gerulaitienė
Kaunas University of Technology
School of Economics and Business
Gedimino str. 50, LT-44239 Kaunas, Lithuania
Asta Pundzienė
Kaunas University of Technology
School of Economics and Business
Gedimino str. 50, LT-44239 Kaunas, Lithuania
Eglė Vaičiukynaitė
Kaunas University of Technology
School of Economics and Business
Gedimino str. 50, LT-44239 Kaunas, Lithuania
Problem definition
Family business dominates in economies of many countries (de Vries, 2019). It possesses
unique characteristics in comparison with non-family business including family traditions and
values, as well as the lifespan of the firm. Scholarly literature indicates that often family
business survives into the second generations (de Vries, 2019). The main problems of family
businesses are such as financial issues, the question of competence of family members,
business succession issues, inability to separate work and personal relationships when conflicts
are transferred from home to work and vice versa.
The research suggests that emotions play a significant role in family business (Michel et.
al. 2019); however the research of the role of family business decision maker emotions in
innovation performance is insufficient. Thus, there is little understanding of how emotions of
decision makers are related to family business innovation performance. Can the emotions of
the family business decision maker be a stimulus of a successful business?
In our research, innovation performance is defined as the ability to transform innovation
inputs into outputs (Zizlavsky, 2015, p. 818). In other words, innovation performance
encompasses different kinds of innovations such as product innovations, process innovations,
organizational innovations, as well as marketing innovations. Previous studies have focused on
understanding how family ownership affects business innovation performance. The findings
suggest that innovative business takes into account the risk and unconventional decisions
(Hess, 2017). However, the role of emotions was largely ignored.
Both positive and negative emotions can lead to significant decisions for business
innovation (Anderson and Thompson, 2004; Forgas, 1999; Stanley, 2010). Emotions of
decision makers, both family members and non-family members, might influence their actions
and that might boost innovation performance or hinder it.
In this research, family business decision makers might be a family or a non-family
members in managerial positions. Scholarly literature distinguishes the differences and
similarities between a manager-family member and a manager-non-family member. According
to Gomez-Mejia et al. (2011), family business avoids hiring a manager-non-family member,
because the owners are afraid of losing family business control and reveal its business secrets.
On the other hand, a manager-non-family member may bring new ideas and knowledge to the
business that may lead to innovation performance.
The aim of the paper is to reveal the role of family business decision maker emotions
in family business innovation performance.
This exploratory research provides several significant contributions in the field of
family business. First, this paper contributes to the scant literature on the role of emotions in
the family business. Second, the paper explains the relationship between diverse emotions of
family business decision makers and a family business innovation performance.
Theoretical foundation
Individual behaviour is influenced by many emotions (Chaudhuri, 2006), and these
emotions more or less can be characterized according to their action tendency (Frijda, 1986).
For instance, the emotion of fear is associated with uncertainty and avoidance of some
actions/withdrawal. The literature proposes a variety of methods to define and classify
emotions. The variety of definitions comes from two basic theoretical perspectives, such as
psycho-physiological and cognitive appraisal (i.e., constructionist). The psycho-physiological
theory considers deems that the source of emotion is the primary emotional experience without
individual cognition (Chaudhuri, 2006). While the cognitive appraisal or constructionist
perspective considers that diverse emotions occur from the combination of two fundamental
components core affect and the elements of conceptualization (e.g., cultural knowledge and
situational context) (Gray et. al., 2017). Core affect is a continuous assessment of one’s
current state, and it influences other psychological processes accordingly (Schultz et. al.,
2010). The mood is an excellent example of core affect. The conceptualization takes into
account the cognitive appraisals of the environment. In accordance with constructionist
perspective, a family business decision maker can experience emotions based on their
interpretation of the situational context and thus, their ways of the expression of these emotions
(i.e., facial expression, gestures, language) may differ. Emotions such as anger or fear are often
defined as negative emotions, while the emotion of happiness is classified as a positive
emotion. Different emotions evoke different ideas that might determine appropriate actions of
the decision maker e.g. promote or inhibit the implementation of new ideas. Thus, we propose
the following:
Proposition 1. Emotions of the decision makers (both family and non-family members)
affect innovation performance of the family business.
Some researchers revealed that emotions promote innovativeness. Differences in
emotion regulation lead to differences in firm effectiveness (Zott and Huy, 2007). Stewart et.
al. (1999) discovered that age has a negative correlation with innovation and risk-taking. Older
owners tend to be more conservative, they do not make risky decisions, reducing their
entrepreneurial activities because their fear to lose family wealth (e.g. Kellermanns et al.,
2012). Other researchers state that manager-family member is often guided by emotions (e.g.
Bertrand and Schoar, 2006). Emotions of manager stimulates emotions of others, including
employees, family members, clients, investors, suppliers (Lockyer and McCabe, 2011). Thus,
we argue that manager-family member is more emotional than manager-non-family member
towards innovation performance of the family business. The emotions of family member
manager might affect firm innovation performance positively or negatively.
Proposition 2. Manager-family member is more emotional towards innovations
performance of the family business.
The conceptual model is presented below (see Figure 1).
Figure 1. Family business decision maker emotions and their impact on innovation
The paper relied on multiple case studies approach because the role of family business
decision maker emotions and innovation performance is not explained thoroughly. Twelve
cases of Lithuanian family business were included in this research. Specifically, six innovative
and six non-innovative family businesses were selected from service, manufacturing and trade
industries. Innovative family businesses were chosen on the basis of the following criteria: the
number of new products/services created per year; the number of patents per year; awards and
honours in product innovation, percentage of revenue per year from new products/services.
Family businesses were chosen based on the definition of family business of the
European Commission and the criteria that it established (European Commission, 2018, p. 1):
The majority of decision-making rights are in the possession of the natural person(s) who
established the firm, or in the possession of the natural person(s) who has/have acquired the
share capital of the firm, or in the possession of their spouses, parents, child, or children’s
direct heirs; The majority of decision-making rights are indirect or direct; At least one
representative of the family or kin is formally involved in the governance of the firm; Listed
companies meet the definition of family enterprise if the person who established or acquired
the firm (share capital) or their families or descendants possess 25 per cent of the decision-
making rights mandated by their share capital.”
The multiple case study contains secondary data analysis, structured interviews, and a
focus group. The structured interview consists of questions regarding the role of emotions,
Manager-family vs
Family business decision
maker emotions
-Positive emotions
-Negative emotions
Innovation performance
-Product innovation
-Process innovation
-Organizational innovation
-Marketing innovation
family business innovation performance, the importance of types of family business decision
makers and their emotions. The sample of the case study included family business owners,
managers-family members/managers-non-family members, relatives, spouses of the family
business owners, non-family members of employees, and family members that are working in
family businesses. The focus group was used to engage in conversation with family business
employees (non-family members) and collect data about the role of emotions on family
business innovation performance. Secondary data included information about the respondent
and family business. The combination of aforementioned methods is used to collect detailed
information about the analysed phenomenon.
In total 29 respondents (19 male and 10 female) participated in the research. 15
respondents represented innovative family businesses and 14 respondents non-innovative
family businesses. The interviews were conducted with and the focus group was formed from
4 family business owners, 9 managers-family members, 3 managers-non-family members, 3
relatives, 4 spouses of the family business owners, 5 non-family members of employees, and 1
family member that is working in the family business. The majority of respondents (27) had a
higher education degree and other (2) - a college degree. More detailed data about the
respondents and family businesses is presented in the Annex 1.
The proposition 1 was approved among innovative family businesses. Respondents of
three (out of six) innovative family businesses have mentioned that they seek to manage their
emotions when they are making important strategic decisions for the firm and to follow
calculations, facts, and business logic: If you begin with emotions, you will end bankrupt.
Business is business. Emotion in a good sense can help your creativity. In that case it is fine. I
know a few of these, who have a good emotion and start a business with that product. It turns
out later that all of those consumers are mere family members. And the conclusion is sad.
Business demands the shutdown of emotions.”
The responses among innovative family business respondents spread equally between
managers-family members, owners, and managers-non-family members. According to them, if
the business is run based on emotions, then it leads to business failure. Moreover, they
mentioned that positive emotions can generate some new business ideas that need to be verified
later with calculations. From non-innovative family businesses respondents only from one
family business paid attention to the importance of decision-maker emotions in the family
business and their impact on business innovation performance.
The proposition 2 was approved. The majority of respondents (eleven family businesses
out of twelve) distinguished that managers-family members are more emotional that managers-
non-family members: The advantage of manager-non-family member is that she/he can make
decisions impartially. Non-family member would not rely on emotions and follow business
canons. Interestingly, that all respondents of managers-non-family members also agreed that
they are less emotional comparing with family members.
The main reason of emotionality of managers-family members was mentioned as taking
higher responsibility: First of all, there is a question of responsibility. You take a
responsibility for yourself and for everything: what you did, what you created and what you
have. You risk everything. Manager-non-family member just goes out and finds a new job
without any consequences. But you take a risk of everything. At the same time, the responses
about the emotions and their effect on family firm innovation performance differed.
Respondents from three non-innovative family businesses argued that non-family member
could achieve better innovation performance in family business because they might have more
knowledge and competences.
Limitations and future directions
The research context should be broadened by involving family businesses with different
life cycles which may reveal some unique aspects of the role of emotions on family business
innovation performance. Future research might include more experienced countries with
deeper family business traditions and replicate the main findings. Finally, different
management roles of family business decision makers and control over the business should be
studied more thoroughly.
Acknowledgements. This project has received funding from the European Union’s
Horizon 2020 research and innovation programme under grant agreement No 810329.
Anderson, C. and Thompson, L. (2004), “Affect from the top down: How powerful individuals’
positive affect shapes negotiations”, Organizational Behavior and Human Decision
Processes, Vol. 95 No. 2, pp. 125139.
Bertrand, M. and Schoar, A. (2006), “The role of family in family firms”, Journal of Economic
Perspectives, Vol. 20 No. 2, pp. 7396.
Bertschi-Michel, A., Kammerlander, N. and Strike, V. M. (2019), Unearthing and Alleviating
Emotions in Family Business Successions”, Entrepreneurship Theory and Practice,
available at:
Chaudhuri, A. (2006). Emotion and reason in consumer behaviour. New York, US: Routledge
Taylor & Francis Group.
De Vries, M. F. K. (2019), Saving a Family Business from Emotional Dysfunction. In Down
the Rabbit Hole of Leadership (pp. 101-105). Palgrave Macmillan, Cham.
Forgas, J.P. (1999), On feeling good and being rude: Affective influences on language use
and request formations”, Journal of Personality and Social Psychology, Vol. 76 No. 6,
pp. 928939.
Frijda, N. H. (1986). The emotions. Cambridge, UK: Cambridge University Press.
Gomez-Mejia, L.R., Cruz, C., Berrone, P. and Castro, J. (2011), The bind that ties:
Socioemotional wealth preservation in family firms”, The Academy of Management
Annals, Vol. 5 No. 1, pp. 653-707.
Gray, K., Schein, C., & Cameron, C. D. (2017), “How to think about emotion and morality:
circles, not arrows”, Current opinion in psychology, Vol. 17, pp. 41-46.
Hess, E. (2017), “Here’s why emotions are the secret sauce of innovation, available at:
Kellermanns, F. W., K. Eddleston, R. Sarathy, and F. Murphy (2012), “Innovativeness in
family firms: A family influence perspective”, Small Business Economics, Vol. 38 No.
1, pp. 85101.
Lockyer, J. and McCabe, D. (2011), “Leading through fear: emotion, rationality and innovation
in a UK manufacturing company”, European Journal of International Management, Vol.
5 No. 1, pp. 48-61.
Russell, J. A. (2017), “Cross-Cultural similarities and differences in affective processing and
expression”, in Jeon, M. (ed.) Emotions and Affect in human factors and human-
computer interaction. Orlando: Academic press, pp. 123-141.
Stanley, L. J. (2010), Emotions and family business creation: An extension and implications”,
Entrepreneurship: Theory & Practice, Vol. 34 No. 6, pp. 1085-1092.
Stewart, W., Watson, W., Carland, J. C., Carland, J. W. (1999), “A proclivity for
entrepreneurship: A comparison of entrepreneurs, small business owners, and corporate
managers”, Journal of Business Venturing, Vol. 14 No. 2, pp. 189-214.
Zizlavsky, O. (2016), Innovation performance measurement: research into Czech business
practice”, Economic Research-Ekonomska Istraživanja, Vol. 29 No. 1, pp. 816-838.
Zott, C. and Huy, Q. N. (2007), How Entrepreneurs Use Symbolic Management to Acquire
Resources”, Administrative Science Quarterly, Vol. 52 No. 1, pp. 70-105.
ResearchGate has not been able to resolve any citations for this publication.
Full-text available
Emotion and morality are powerful conscious experiences. There are two ways to think about their psychological basis: arrows and circles. Arrows ground each experience in its own specialized mechanism (mechanism x causes phenomenon x; mechanism y causes phenomenon y). Examples of arrows include when feelings of disgust are attributed to a specialized “disgust circuit” and when judgments of impurity are attributed to a specialized “purity foundation.” In contrast, circles—Venn diagrams—describe experiences as emerging from the overlap of more fundamental domain-general processes (different combinations of processes a, b, c cause both phenomena x and y). Circles are used by constructionist theories of emotion and morality, including the Theory of Dyadic Morality, which grounds moral judgment in the combination of norm violations, negative affect, and perceived harm. Despite the intuitive popularity of arrows, we show that scientific evidence is more consistent with circles.
Full-text available
This article deals with innovation performance and its measurement. The objective is to present the measuring of innovation performance as it is implemented in today's Czech business environment. It begins with a comprehensive theory and the definition of essential terms. The theoretical part is followed by the analysis of the current state of the issue from the perspective of enterprises in the Czech Republic. The analysis consists of four own primary questionnaire surveys. The research outputs reveal weaknesses in current approaches to innovation effectiveness measurement. Our enterprises use all possible means to increase productivity and achieve operational excellence. However, they tend to neglect the important area of research and development. It has been proven, with help of questionnaire surveys, that many enterprises still do not measure innovation performance despite the importance of innovation as an engine of growth. Only a few organisations appear to have an effective system for measuring their overall innovation performance.
Full-text available
Many critical and mainstream accounts of innovation present leaders and managers as rational agents who innovate to secure organisational goals such as profitability, productivity and/or control. We draw on a case study of Organisational Innovation (OI) from the UK manufacturing sector to question this assumption of instrumental rationality through exploring the dysfunctional consequences of the use of fear. Using the case study, we explore how the dominance of instrumental rationality is such that actions undertaken in its name can serve, in some circumstances, to ensnare managers and, at times, silence dissent.
Full-text available
Results of a two-year inductive field study of British ventures show that entrepreneurs are more likely to acquire resources for new ventures if they perform symbolic actions—actions in which the actor displays or tries to draw other people's attention to the meaning of an object or action that goes beyond the object's or action's intrinsic content or functional use. We identify four symbolic action categories that facilitate resource acquisition: conveying the entrepreneur's personal credibility, professional organizing, organizational achievement, and the quality of stakeholder relationships. Our data show that entrepreneurs who perform a variety of symbolic actions from these categories skillfully and frequently obtain more resources than those who do not. Our data also suggest three factors—structural similarity, intrinsic quality, and uncertainty—that moderate the relationship between symbolic management and resource acquisition. We theorize how the various symbolic action categories shape different forms of legitimacy that help entrepreneurs acquire resources.
Full-text available
How does mood influence verbal communication, such as the use of requests? On the basis of the Affect Infusion Model (J. P. Forgas, 1995a), 3 experiments predicted and found that (a) negative moods increase and positive moods decrease request politeness and (b) they do so most in difficult situations that require more substantive processing. In Experiment 1, sad mood enhanced and happy mood reduced request politeness, especially in difficult situations. In Experiment 2, similar mood effects on the politeness and elaboration of self-generated requests were found. In Experiment 3, these findings were replicated in a variety of request situations by use of a different mood induction. Recall data confirmed that more substantive processing enhanced mood effects on requesting. The cognitive mechanisms mediating mood effects on requesting are discussed, and the implications of the results for interpersonal communication and for recent affect–cognition theories are considered. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Using an inductive multi-case analysis, we follow one advisor and five family firm successions over four years to capture emerging emotions during the succession process. We investigate how the advisor’s mediation of these emotions affects individual-level satisfaction with the succession process. Our data reveal an iterative process: the advisor first unearths incumbents’ and successors’ negative emotions to surface emotional tensions before alleviating them. Emotion unearthing and alleviating speed the incumbent’s and successor’s role adjustments and advance succession, especially when the incumbent becomes “stuck” in the process. Our data further suggest that effective emotion mediation and complete role adjustment appear to be important factors fostering individual-level satisfaction with the succession process.
Emotions play a role in nearly everything we do and think. Understanding people and their interactions requires an understanding of emotion. And science can contribute to that understanding. Here, I cannot cover everything in the science of emotion, but cover enough to introduce the reader to an emerging new way of thinking about emotion that is an alternative to the traditional Basic Emotion Theory taught in textbooks. I contrast the new way with the traditional way by examining the subjective experience of emotion, information processing during emotion, and facial expressions of emotion.
Emotion and Reason in Consumer Behavior provides new insights into the effects that emotion and rational thought have on marketing outcomes. It uses sound academic research at a level students and professionals can understand. – Publisher description.
Morris, Allen, Kuratko, and Brannon found that family founders, nonfamily managers working in family firms, and nonfamily founders experience a wide range of emotions during the first 4 years of establishing a new business. They identify differences in the emotional experiences of these three groups. I extend their findings by suggesting that divergent emotional experiences may explain differences in risk-taking behavior between family and nonfamily firms, and between family firms. Furthermore, I suggest that family founders' early emotional experiences may affect the firm's culture, strategy, and decision-making processes well beyond the start-up phase.