ABSTRACT
The number of studies on strategic management practices and their influence on entrepreneurship in family business has been on the rise lately. Yet, there have been few studies that investigate their relationships to large family business groups, where corporate management needs to ensure alignment between the corporate level strategy and the business unit level strategy. This paper aims to examine and analyze the influence of corporate parenting style played by the corporate center in the form of strategic planning, strategic control, and financial control on business unit Entrepreneurial Orientation (EO), which, in turn, affects a business unit’s strategic initiative and performance. The study used a structural equation model involving 106 respondents who are CEOs and senior management officers in business units managed by 16 corporate centers of family business groups in Indonesia. The study results show that the presence of a corporate center affects business unit performances through the influences on the EO level. Corporate centers that follow a strategic planning and strategic control approach have a positive influence on the EO level in business units. On the other hand, the financial control approach has a negative influence on the EO level in business units. At the business unit level, it was found that the EO level does not have a direct relationship to performance, but its influence on performance will be positive whenever EO has been implemented in the form of strategic initiatives. The study’s implication and future research directions for family business groups are discussed.
