Psychological Antecedents of Decision Comprehensiveness and Their Relationship to Decision Quality and Performance in Family Firms: An Upper Echelons Perspective

Abstract

We present a model of family firm performance that tests the notion that strategic decision comprehensiveness plays a pivotal role in family business decision quality and performance. With insights derived from upper echelons theory, our model further proposes that two key decision maker traits associated with an individual’s information-gathering process—risk-taking propensity and need for cognition—influence strategic decision comprehensiveness and have indirect effects on both study outcomes. Study results using a time-lagged sample of family firm leaders provide broad support for our proposed model and provide insight into the performance and decision-making heterogeneity present in family firms.