P 1
P 1
https://www.emerald.com/insight/1355-2554.htm
IJEBR
29,1 The influence of digital
entrepreneurship and
entrepreneurial orientation
80 on intention of family businesses
Received 12 February 2022
Revised 21 April 2022
to adopt artificial intelligence:
22 May 2022
Accepted 22 May 2022 examining the mediating role
of business innovativeness
Nitin Upadhyay
IT Systems and Analytics, Indian Institute of Management Jammu, Jammu, India
Shalini Upadhyay
Department of Humanities and Social Sciences, BITS Pilani - K K Birla Goa Campus,
Zuarinagar, India
Mutaz M. Al-Debei
Department of Business Analytics Technology, Al-Ahliyya Amman University,
Amman, Jordan and
Business School, The University of Jordan, Amman, Jordan
Abdullah M. Baabdullah
Department of Management Information Systems,
Faculty of Economics and Administration, King Abdulaziz University,
Jeddah, Saudi Arabia, and
Yogesh K. Dwivedi
Emerging Markets Research Centre (EMaRC), School of Management,
Swansea University, Swansea, UK and
Symbiosis Institute of Business Management,
Pune and Symbiosis International (Deemed University), Swansea, India
Abstract
Purpose – This study aims to investigate the adoption intention of artificial intelligence (AI) in family
businesses through the perspectives of digital entrepreneurship and entrepreneurship orientation.
Design/methodology/approach – The study examines contributing factors explaining the adoption
intention of AI in the context of family businesses. The developed research model is examined and validated
using structural equation modelling based on 631 respondents’ data. Purposeful sampling is used to collect the
respondents’ data.
Findings – The proposed model included two endogenous (i.e. business innovativeness and adoption
intention) and six exogenous variables (i.e. affordances, culture and flexible design, entrepreneurial orientation,
International Journal of
Entrepreneurial Behavior & Declarations of interest: none
Research The authors would like to thank the Editor-in-Chief, Guest Editor and anonymous reviewers for their
Vol. 29 No. 1, 2023
pp. 80-115 careful reading of our manuscript and their many insightful comments and suggestions. The authors
© Emerald Publishing Limited would like to acknowledge and thank their respective institutes for providing a conducive environment
1355-2554
DOI 10.1108/IJEBR-02-2022-0154 to undertake the study.
generativity, openness and technology orientation) through ten direct paths and three indirect paths. The The intention
results depicted the significant influence of all the exogenous variables on the endogenous variable reflecting
support of all the hypotheses. The business innovativeness partially mediates the relationships of culture and of family
flexible design, entrepreneurial orientation and technology orientation with adoption intention. Further, the businesses
results demonstrated a model variance of 24.6% for business innovativeness and 64.2% for adoption intention
of artificial intelligence in the family business.
Research limitations/implications – The study contributes to theoretical developments in entrepreneurship
and family business research and AI’s theoretical progress, especially to digital entrepreneurship.
Originality/value – Theoretically, it contributes to the literature of entrepreneurship, particularly digital 81
entrepreneurship. Additionally, the research model adds to the role of entrepreneurial orientation and digital
entrepreneurship in the emerging family entrepreneurship literature. Considering the scarcity of research in
this field, the empirically validated model explaining critical antecedents of AI adoption intention in the family
business is a foundation for discussion, critique and future research.
Keywords Family business, Digital entrepreneurship, Entrepreneurial orientation, Artificial intelligence,
Technology adoption, Business innovativeness
Paper type Research paper
1. Introduction
Growth in the digital economy is disrupting all sorts of businesses, and for them to stay relevant
in the market, they need to be more perceptive and agile (PwC, 2019). In the digital economy, all
kinds of businesses are witnessing several strategic, financial and operational implications due
to technological innovations and digital transformations (Ali et al., 2022; Kitsios and
Kamariotou, 2022; Kraus et al., 2019a, b; Kraus et al., 2022; Nambisan et al., 2019; Olanrewaju
et al., 2020). Even the most significant global businesses have now entered the digital economy
space, leaving aside the functioning of the core industrial sector (Sebastian et al., 2017; KPMG,
2017). Businesses are finding ways to innovate the products or services continuously (Malik
et al., 2021). In addition, businesses are redefining consumer value creation and decision-making
by embracing various digital technologies (Upadhyay et al., 2021). Emerging technologies such
as artificial intelligence (AI), cloud, the Internet of things and big data are now being
appreciated by businesses worldwide (European Commission, 2017) that help them to (re)shape
(traditional) businesses, strategies, operations and models (Hradecky et al., 2022; Bag et al.,
2021). However, various regulatory, operational and technological changes affect business
growth and competitiveness (PwC, 2019). Amidst all changes within and across the borders,
family businesses remain attractive to the market segment. Surprisingly, despite family
businesses dominating the economic landscape, accounting for two-thirds of the business
worldwide, there is a scarcity of research on family business contributions in the digital space.
Moreover, these businesses generate annual gross domestic product (GDP) of 70–90% and
provide 50–60% of jobs in most countries worldwide (Family Firm Institute, 2017).
As per the KPMG (2017) report, two out of three top concerns of family businesses are
digitalization and innovation. Emerging economies in the last few years have experienced a
diffusion of digital technology and services in non-family and family businesses (Family Firm
Institute, 2017). Additionally, research demonstrates family businesses’ high economic and
financial performance than non-family businesses (PwC, 2019). According to World Bank’s
Global Economic Prospects report (WB, 2019), India is considered the fastest-growing major
emerging economy globally. In India, the growth in the family businesses towards the digital
economy continues to grow. Moreover, family businesses thrive to remain competitive and
aspire to contribute to India’s economic resurgence in the digital economy. Indian family
businesses contribute in terms of performance and numbers to the economy (Kean et al., 2021).
According to the McKinsey report, family businesses with a dominating figure of more than 60%
in the Indian companies’ landscape have revenue of more than $1 billion (Bjornberg et al., 2014).
The opportunity space of AI in disruptive businesses at all levels, including operational,
strategic contributing to competitive advantage and enhanced performances, is immense
IJEBR (Borges et al., 2021; Dwivedi et al., 2021; Johnson et al., 2022; Werle and Laumer, 2022).
29,1 Scholars argue that AI dominance is evident in shaping the businesses and marketplace
(Makridakis, 2017). Prior research reports (for example, KPMG, 2017) that emerging
technologies offer both opportunities and challenges to businesses. However, family
businesses tend to differ in response to entrepreneurial opportunities and challenges
compared with non-family businesses (Konig et al., 2013). Moreover, new opportunities for
developing entrepreneurial ventures, activities and pursuits in the digital entrepreneurship
82 space can be explored (Giones and Brem, 2017; Nambisan et al., 2019). Therefore, family
businesses must improve their entrepreneurial orientation to sustain themselves and
compete in the fiercely competitive environment and rapidly changing technological
innovation landscape (Cenamor et al., 2019). Moreover, emerging economies are pacing
towards market-based policies (Boso et al., 2013). However, businesses operating in such an
environment face strategic, operational and financial turbulences (Ivanov and Sokolov, 2013).
Hughes (2018) argues that despite the potential benefits of emerging technologies (for
example, AI) in businesses, businesses from emerging economies remain sceptical about their
adoption, usage and usefulness. Prior research address factors such as lack of commitment and
support of top management, lack of business innovativeness, the poor orientation of
technology, lack of conducive culture and flexible environment that may account for such
scepticism (Akhtar et al., 2019; Duan et al., 2019). Previous studies argue on building a firm’s
innovativeness for strategizing capabilities, including product expansion and diversity, design
flexibility and customer satisfaction (Jantunen et al., 2012). Further, a firm’s technological
orientation enables them to attain technological advancements to offer effective services and
products. Family businesses are contemplating, adopting and exploiting new sources of
competitive advantage by embracing emerging technological innovations (PwC, 2019).
However, there is a paucity of research in understanding how family businesses are
carrying out digital transformations by exploring and embracing emerging technological
innovations in the digital entrepreneurship space. Family business scholars have to explore
and address the digital transformational landscape of family businesses to unfold their
development and growth levers. Scholars and practitioners argue that as compared to any
other known technologies, AI surpasses all the outcome expectations and opportunities space
(Makridakis, 2017). Even family businesses witness market-fit viable and potent
opportunities to explore and exploit AI (Marr and Ward, 2019). Family businesses to
exploit it for their competitive advantage and develop a market leadership position have to
explore vital factors to adopt and use AI. However, there is a paucity of research in the family
business to explore and exploit AI (Basly and Hammouda, 2020). As such, novel theorizing on
the adoption of AI in the family business is indeed required (Nambisan et al., 2019; Sussan and
Acs, 2017).
Organizations benefit from strategic connections, collaborations and collective
intelligence in driving entrepreneurial activities and projects by adopting and deploying
novel digital technologies (Anderson, 2014). Besides, technological adoption alters the digital
entrepreneurship space’s organizational business processes, operations, offerings and
business models. Zaki (2019) observes manifestation and organizational transformations (for
example, outside-in) through digital entrepreneurship. However, George and Marino (2011)
and Baker and Sinkula (2009) argue that entrepreneurially oriented organizations redefine
industry configurations and organizational forms and initiate innovative projects to shape
market offerings for their advantage at a faster pace. D€orner and Edelman (2015) argue that
every business, including family firms, has to identify, explore and re-examine the way of
doing business in the digital entrepreneurship space. Additionally, businesses need to
understand the new and novel ways of capturing, generating and delivering business values
by leveraging digital technologies. Scholars and practitioners argue that AI provides novel
opportunities to transform the marketplace and business and entrepreneurial activities (Le
Dinh, Vu and Ayayi, 2018; von Briel et al., 2018; Verma et al., 2021). However, Kraus et al. The intention
(2019a, b) and Nambisan (2017) argue that little has been explored in identifying digital of family
technologies’ role in driving entrepreneurial ventures, activities and pursuits in the extant
research in entrepreneurship and family business. Additionally, though AI’s digital
businesses
entrepreneurship is vital in undertaking and operationalizing entrepreneurial pursuits and
ventures, family firms are still contemplating emerging technologies adoption and usage
(PwC, 2019). As such, the major objective of the research is to examine the role that
entrepreneurial orientation and digital entrepreneurship play for the family business in 83
adopting AI. Although there are multiple technology adoption models, many factors drive the
adoption of technology. Therefore, it is paramount to unfold driving factors related to AI
adoption in the family business by developing a novel theoretical adoption intention model,
family business artificial intelligence (FBAI), explaining the adoption intention of AI in the
family business. We consider two important theoretical perspectives: digital
entrepreneurship and entrepreneurial orientation to examine the adoption intention of
family businesses towards AI. Therefore, the article intends to answer the following research
questions:
(1) What factors determine the adoption intention of AI in the family business?
(2) To what extent entrepreneurial orientation and digital entrepreneurship explain the
family business adoption intention of AI?
We first describe the vital factors and contributing model that explains the adoption intention
of AI in family businesses. Then we empirically test and validate the model based on the
respondents’ data from the Indian family businesses. To the best of our knowledge, the
present research is the first to throw light on the adoption intention of AI in the context of
family businesses. We propose advancements in AI theoretical progress (Dwivedi et al., 2021;
Upadhyay et al., 2021), specifically in the family business, through the perspectives of
entrepreneurial orientation and digital entrepreneurship.
We, therefore, propose several contributions in the domain of family businesses and
digital entrepreneurship. First, we explore the digital entrepreneurship and AI intersection.
Second, we gather and examine vital factors explaining the adoption intention of AI in family
businesses. Third, we contribute to examining digital entrepreneurship, entrepreneurial
orientation, technology orientation, business innovativeness and culture and flexible design
in family businesses. Finally, we develop insights and a valuable stream of research in
response to the call by Nambisan et al. (2019) and Basly and Hammouda (2020).
The remainder of this paper is structured as follows: Section 2 provides theoretical
background followed by hypothesis development. Next, Section 3 elaborates on the research
methodology, followed by the results in Section 4. Next, Section 5 provides discussion on
findings emerged from this research investigation covering theoretical implications,
implications for practice, limitations and future research directions. Finally, conclusion in
presented in Section 6.
values (Wareham et al., 2014). As such, the openness appropriateness of the technology
enables firms to innovate by leveraging connection, collaboration and collective intelligence
mechanisms (Anderson, 2014). Benlian, Hilkert and Hess (2015) argue that technology
openness contributes to platform and business ecosystems innovation. Moreover, openness
in technology’s standards and interfaces facilitates value creation (Tiwana, 2014).
AI’s flexible and open application programming interfaces and standards facilitate firms
to develop new and novel products and services, collaborate and co-create business values
(Upadhyay et al., 2021). Considering family businesses, they all see the potential of AI
openness in scale and degree to support, assist and drive family businesses. For example,
family businesses can expand their reach and be more inclusive in decision-making and
governance by leveraging AI openness. Therefore, we posit the following hypothesis:
IJEBR H2. Openness of AI in digital entrepreneurship influences the adoption intention of AI in
29,1 the family business.
2.4.3 Affordances. Affordance depicts an object’s potential possibilities and actions offered to
the user in a specific context. It means that affordance arises from the relationship between the
user and object in a context where a user observes potential allowable actions for achieving a
goal (Leonardi, 2011). Additionally, it does not deal with the state or action after actualizing an
88 action rather it focuses on the potential action (Strong et al., 2014). Affordances of systems and
technology influence organizational and entrepreneurial pursuits. When observing a great level
of affordance from a particular technology, organizations get involved in developing and
rolling new and novel products and services (Strong et al., 2014). Affordance becomes a vital
factor in technology adoption (Faraj and Azad, 2012). Usage of similar digital artefacts,
platforms or infrastructure does not generate similar outcomes. However, using such in a
specific context can generate, capture and deliver values (Nambisan, 2017; Nambisan et al.,
2019). The digital technologies show affordance via their synergetic features and functions to
support products and services. As AI is used to support, assist and drive businesses, its
affordance understanding is essential to examine and explore potential actions. Emerging
technologies, such as AI, shape, establish and strengthen relationships among objects and
entities in a use context. Therefore, we posit the following hypothesis:
H3. Affordances of AI in digital entrepreneurship influences the adoption intention of AI
in the family business.
2.4.4 Technology orientation. Technology orientation refers to the organization’s capability to
recognize and adapt to emerging technologies. Gatignon and Xuereb (1997) argue that
technology-oriented firms exhibit a strong tendency to be ready to experiment with new
technologies and develop new products. Family businesses with technology orientation
prioritize new technologies in shaping and developing business offerings. Costa, Lages and
Hortinha (2015) argue that technology oriented firms can resolve issues related to technology,
regulators and legal concerns and client. Concerning family business, we argue that
technology orientation towards AI to explore and exploit it in supporting, assisting and
driving business values (operationally and strategically) becomes prominent. Family
businesses exhibiting strong technology orientation will adopt new and novel technologies,
such as AI. Thus, we propose the following hypothesis:
H4. Family business technology orientation towards AI in digital entrepreneurship
influences the adoption intention of AI in the family business.
Organizational technology orientation is vital in developing new ideas, products, processes
and systems (Henard and Szymanski, 2001; Zhou et al., 2005). Organizations that proactively
participate and adopt and utilize new, novel and advanced technologies might contribute to
improved business innovations. This is due to their emphasis on using them to meet customer
requirements and be competitive in the market (Cooper, 1994). The organizational level of
technology orientation influences its ability to attain business innovativeness. Family
businesses can leverage technology orientation to advance and improve business
innovativeness. As such, we posit the following hypothesis:
H5. Family business technology orientation towards AI in digital entrepreneurship
influences business innovativeness.
2.4.5 Culture and flexible design. An organization’s culture refers to “the social or normative
glue that holds an organization together and expresses the values or social ideals and beliefs
that organization members come to share” (Cooper, 1994). An organization’s culture is vital for
technological advancements, developing products and services, exploring opportunities and
attaining business values. Gurbaxani and Dunkle (2019) advise checking and (re) aligning an The intention
organization’s culture and workforce flexibility with the ever-increasing dynamics of the digital of family
business context. It implies organizations have to transform their culture to respond to new and
innovative developments. Samara and Terzian (2021) advocate that cultural flexibility as
businesses
necessary to operationalize digital entrepreneurship. Organizational culture is a powerful
unifying force that promotes agreement, understanding of procedures and practices in a shared
manner. As such, organizational culture reflects the groups and their manifestation around
underlying technology. Chrisman, Chua and Litz (2003) argue that culture dynamism is more 89
prevalent in the family business than in non-family business (Singal and Gerde, 2015, p. 12),
which might influence the adoption of new technologies. As such, Cooper (1994) discusses
relooking at people, tasks and structure when an organization’s culture conflicts with
technology. Samara and Terzian (2021) discuss the significant role of culture and flexibility in
accelerating the digital transformation to (re)define business value chain, business models and
engagement. Concerning the family business, we argue that culture and flexible design aspects
affect the adoption of emerging technology, such as AI.
H6. Family business culture and flexible design in digital entrepreneurship influences
the adoption intention of AI in the family business.
As business innovativeness is vital for the organization’s success, several scholarly research
studies focus on identifying its determining factors (Crossan and Apaydin, 2010).
Organization culture and design emerged as the most influential factor in the earlier
studies (Mumford, 2000). Organizational culture and flexible design can encourage business
innovativeness among the workforce because it drives them toward accepting business
innovativeness as an organizational philosophy. Earlier research studies provide enough
evidence to establish relationships between organization culture and flexible design and
business innovativeness (B€ uschgens et al., 2013; Lin et al., 2013; Naranjo-Valencia et al., 2016;
Rezaei et al., 2018; Uzkurt et al., 2013). Therefore, we posit the following hypothesis:
H7. Family business culture and flexible design in digital entrepreneurship influences
business innovativeness in the family business.
2.4.6 Entrepreneurial orientation. Entrepreneurial orientation depicts organizational tendency
in exploring potential opportunities (Boso et al., 2013) via developing supportive capabilities,
such as pro-activeness, innovativeness, risk-taking, opportunity-seeking, autonomy and
competitive aggressiveness (Lumpkin and Dess, 1996). The management team needs to
understand and be ready to respond to the changes thrown by digital technology. Additionally,
they have to be cognizant of the interactions and relationships dynamics of the customers with
the firms and the products and services (Berman, 2012; Hughes, 2017). Naman and Slevin (1993)
argue that entrepreneurial orientation facilitates the organization to innovate and adapt to the
competitive market environment. Organizations, through business innovativeness, create
value for themselves, clients and consumers (Weerawardena, 2003) by developing new ideas,
products and processes. In this regard, organizations have to continuously sense the
environment’s dynamism and seek the opportunity to participate and compete in the market
(Preda, 2013). As such, entrepreneurial orientation reflects how organizations have to leverage
the market opportunities either proactively or conservatively. Therefore, Rauch et al. (2009)
argue that organizations can generate business innovation by considering entrepreneurial
orientation as a strategic decision-making process. For that reason, by developing and
improving entrepreneurial orientation, business innovativeness can be improved (Beekman
et al., 2012) as one of its key activities is to develop new ideas, products, systems and processes.
Therefore, we posit the following hypothesis:
IJEBR H8. Family business entrepreneurial orientation in digital entrepreneurship influences
29,1 business innovativeness in the family business.
Hughes (2017) argues that organizational leaders must exhibit the capability to examine and
understand the potential implications of the technology marketplace. Zaheer et al. (2019)
demonstrate that a successful digital start-up founder exhibits an entrepreneurial mindset
and can sense and explore the market, able to discover technological implications and
90 respond promptly to marketplace dynamics. Hughes (2017) mentions that entrepreneurially
oriented individuals focus on problems, opportunities and outcomes rather than current
products, services and activities. Considering family business, collective entrepreneurial
orientation can come from members of the family or their agents or the manifestation of a
group of employees or management team (Babinet, 2018; Bettinelli et al., 2014). EO is vital for
family firms’ competing in the digital space towards achieving digital entrepreneurship. AI
potential in supporting, assisting and driving business showcasing both operational and
strategic implication to business attracts family business to exploit it. We argue the family
business exhibiting potent EO will adopt new and novel technologies, such as AI. Thus, we
propose the following hypotheses:
H9. Family business entrepreneurial orientation in digital entrepreneurship influences
the adoption intention of AI in the family business.
2.4.7 Business innovativeness. Business innovativeness refers to the “organization’s capabilities
to explore and exploit new market opportunities by leveraging new technologies, policies and best
practices for competitive advantage within the industry and globally” (Seyfang and Smith, 2007).
When engaging in and supporting new ideas, experimentation, creative processes and
entrepreneurial pursuits, organizations tend to generate business value by developing new
and novel products and services in terms of products and services (Lumpkin and Dess, 1996).
Kellermanns et al. (2012) argue business innovativeness is vital for the family business for its
continuity and competitive advantage. Further, firms exhibiting great business innovativeness
tend to utilize new and innovative technologies to develop new and novel products and services.
Gudmundson, Tower and Hartman (2003) demonstrate evidence of higher innovations by family
businesses than non-family businesses. We argue the family business exhibiting strong business
innovativeness will adopt new and novel technologies, such as AI. Thus, we propose the following
hypothesis:
H10. Business innovativeness in digital entrepreneurship influences the adoption
intention of AI in the family business.
The extant literature has sufficiently established the role of business innovativeness towards
behavioural intentions (Upadhyay, 2019, 2020). Research suggests that firms demonstrating a
high level of innovation tend to showcase behavioural intention towards new and novel
technologies (Aboramadan et al., 2020) to develop new ideas, processes, products and systems
(Krasnicka et al., 2018). Crossan and Apaydin (2010) and Mumford (2000) argue the role of culture
and organizational design to foster innovations. For example, earlier studies found aspects of
cultural values and organizational design, such as freedom and autonomy (Ahmed, 1998;
Aboramadan et al., 2020), teamwork (Arad et al., 1997; Aboramadan et al., 2020) and flexibility
(Martins and Terblanche, 2003; Aboramadan et al., 2020) to improve a firm’s innovation.
Additionally, entrepreneurial orientation plays a vital role in a firm’s innovation as it facilitates
improving commercial and market activities (Nieto et al., 2015; Yuan et al., 2015). Besides, a firm’s
technology orientation enables its level of innovation (Zhou et al., 2005). Though relationships of
EO, TO, CFD and BI with behavioural intentions have been examined in earlier studies, the role of
BI in mediating relationships between EO, TO, CFD and BI with behavioural intentions (adoption)
has not yet been explored. We argue that additional insight regarding the role of BI for the
relationships between EO, TO, CFD and intentions is needed in the context of family business The intention
adoption intention of AI. As such, we posit the following hypothesis: of family
H11. Business innovativeness in digital entrepreneurship mediates the relationships businesses
between (a) technology orientation (b) culture and flexibility design (c)
entrepreneurial orientation and adoption intention of AI in the family business.
The theoretical research model is shown in Figure 1.
91
3. Methodology – data collection and sample
We follow the quantitative survey methodology as the validated instruments were readily
available from the earlier studies (Upadhyay et al., 2021; Miller, 1983; Gatignon and Xuereb,
[+]
Generativity
H1
[+]
openness H2
[+]
[+]
H3
Affordance
Business
Culture & Innovativeness
Flexibility Design H9
[+]
Entrepreneurship
Orientation
Figure 1.
Family business
Mediation hypotheses
artificial intelligence
H11a-H11c
adoption
intention model
Note(s): Dashed arrows represent mediation
IJEBR 1997; Seyfang and Smith, 2007; Dettmers et al., 2013; Bamgbade et al., 2019; Dutot and
29,1 Bergeron, 2016; Fan et al., 2021) to measure the latent constructs (Fowler Jr, 2002) to
examine the contribution of the vital factors explaining the adoption intention of AI. The
survey questionnaire consisted of 30-item set for the constructs – openness (3 items),
generativity (3 items), affordance (3 items), entrepreneurial orientation (5 items), technology
orientation (4 items), business innovativeness (4 items), culture and flexibility (5 items) and
family business adoption intention of AI (3 items). The questions were close-ended with
92 multiple choices for the respondents to select. A seven-point Likert scale, where
“1 5 strongly disagree; 2 5 disagree; 3 5 somewhat disagree; 4 5 neither agree nor
disagree; 5 5 somewhat agree; 6 5 agree; 7 5 strongly agree”, was employed for the
respondents to rate each question. Table A1 presents the items and sources of the
constructs. The study incorporated a self-administered questionnaire to reduce the risk of
the reliability of the information. The self-administered questionnaire ensured that the
differences in asking questions and their presentation were eliminated (Fowler, 2002). We
utilize purposeful sampling to gather data from the family business respondents in India
(Dwivedi et al., 2007). First, we utilized Prowess database maintained by the Centre for
Monitoring Indian Economy (CMIE) that contains financial and shareholding data, annual
reports and other information filed with regulatory agencies of a large number of listed and
unlisted companies. It is the most widely used database for research on Indian companies.
We baseline the family businesses from the BSE 500 index businesses. BSE 500 represents
more than 90% of the market capitalization of BSE representing all types of businesses.
Therefore, it serves as the best representation of the Indian market. Second, we approach
the Confederation of Indian Industry (CII) and the entrepreneurship unit of various
institutes of National Importance in India to connect to the respondents as they possess
direct communication with the family businesses.
Four experts from the premier institute of India established the face validity of the
questionnaire. Based on their suggestions, certain items were reworded for clarity in the
study. The questionnaire’s effectiveness in terms of its clarity was checked using a pilot
study for a small population group. Researchers noted the time duration taken to answer the
questionnaire. The researchers incorporated an introduction section to acquaint the potential
respondents with the survey and its purpose based on the pilot study results. Based on the
required amendments, the questionnaire was considered appropriate for the actual study.
The survey questionnaire was administered through online survey (Google survey form)
among the potential respondents based on their consent to participate in the research. Ilieva
et al. (2002) suggest that “online surveys’ average response time is 5.59 days”. We kept the
survey open for 21 days (between 11-01-2022 and 31-01-2022) considering the slack time due
to ongoing pandemic. A total of 899 questionnaires were administered, with 761 filled
questionnaires returned. Screening of the filled questionnaire revealed that 130
questionnaires contained missing data and fields. After discarding the questionnaires with
missing data, a final respondent size of 631 was obtained for the research giving a response
rate of 70.18%. As the survey was administered through online mode, we also tested for a
non-responsive bias and mean difference for the early and late respondents as recommended
by Armstrong and Overton (1977). We did not observe any significant difference on the
responses of early and late respondents. Likewise, the non-responsive bias observed to
be low.
4. Results
4.1 Profile of respondents
The profile of respondents consisting of 631 respondents is shown in Table 2. The final data
of respondents comprised 65.1% male and 43.8% female respondents. A significant part of
Percentage
The intention
Category Frequency (%) of family
businesses
Gender Male 411 65.1
Female 220 43.8
Age 18–25 36 5.7
26–35 110 17.4
36–45 230 36.4 93
46–55 170 26.9
55 and above 85 13.4
Educational background Bachelor’s degree 192 30.4
Postgraduate degree 410 64.9
Doctorate 29 4.5
Marriage Status Single 185 38.86
Married 291 61.13
Respondents industry
Industry turnover range is of Rs. 3.3–Rs. 53,275.33 million
Industry types Total industry Industry types Total industry
Manufacture of chemicals and 12 Computer programming, 4
chemical products consultancy and related
activities
Manufacture of pharmaceuticals, 14 Hotels and restaurants 5
medicinal chemical and botanical Table 2.
products Demographic profile of
Manufacture of basic metals 16 Health services 7 respondents
the total sample, belonged to the 36–45 (36.4%) and 46–55 (26.9%) years age group,
followed by 17.4% (n 5 110) belonging to the 26–35 years age group. Regarding the
respondents’ educational qualifications, 30.4% respondents were bachelor’s degree
holders, 64.9% were postgraduate degree holders and 4.5% were doctorate holders. The
turnover of the family businesses falls in the range of Rs. 3.3–Rs. 53,275.33 million. The
dominant industry types are manufacture of chemicals and chemical products (12),
manufacture of pharmaceuticals, medicinal chemical and botanical products (14),
manufacture of basic metals (16), computer programming, consultancy and related
activities (14), hotels and restaurants (5), and health services (7). The detailed demographic
characteristics of respondents are provided in Table 2.
FL Cα a
rho_A CR AVE
Fornell–Larker criterion 1 2 3 4 5 6 7 8
Heterotrait–monotrait ratio 1 2 3 4 5 6 7 8
(1) Affordances
(2) Business innovativeness 0.418
(3) Culture and flexible design 0.676 0.47
(4) Eentrepreneurial orientation 0.514 0.395 0.53
(5) Family business adoption intention of AI 0.693 0.571 0.703 0.618
(6) Generativity 0.65 0.614 0.648 0.582 0.73 Table 5.
(7) Openness 0.607 0.419 0.583 0.509 0.665 0.631 Discriminant validity:
(8) Technology orientation 0.627 0.415 0.545 0.531 0.699 0.622 0.586 heterotrait–
Note(s): HTMT<0.85 (Kline, 2015) monotrait ratio
H3 Affordance 2.13
H10 Business innovativeness 1.53
H6 H7 Culture and flexibility Design 1.516 2.05
H8 H9 Entrepreneurial orientation 1.490 1.633
Family business AI intention
H1 Generativity 2.546 Table 6.
H2 Openness 1.856 Full collinearity test for
H4LH5 Technology orientation 1.524 1.905 inner VIF value
IJEBR (Diamantopoulos and Siguaw, 2006; Hair et al., 2010). Results summarized in Table 7 show
29,1 that all the associations have p-values < 0.05 and T-statistic> 1.96 (for a significance of 5%)
(Hair et al., 2016a,b); thus, we conclude that all the hypothesized relationships are significant.
Further, we perform an assessment of the predictive relevance of the model (Q2) by using
blindfolding to compute the Q2 for the endogenous variables – business innovativeness (0.205)
and family business adoption intention of AI (0.523). As the Q2 value of the endogenous
variables are greater than 0, the presence of predictive relevance and a greater than large size
96 effect is evident. Additionally, we perform an assessment of the model’s predictive power using
the PLS Predict algorithm. The PLS Predict algorithm checks through Q2_predict whether the
model can outperform most naı€ve linear regression benchmarks (Shmueli et al., 2016). We
observe lower prediction errors for all items than naı€ve linear regression benchmarks. As such,
we conclude that the proposed model depicts high predictive performance. Further, we assess
the effect size of each endogenous variable using f2 measure (do Valle and Assaker, 2016) to
check the model’s predictive stability. All variables except affordances (effect size 5 0.07) and
entrepreneurial orientation (0.08) depict having greater than small effect size as their f2 fell
between 0.021 and 0.16 (e.g. effect: large ≥ 0.35, medium ≥ 0.15, small ≥ 0.02) (Cohen, 1992). The
model is evaluated considering the fit indices such as root mean square residuals (RMSR) and
normed fit index (NFI) and found to satisfy the cut-off criteria of the indices (SRMR <0.08 and
NFI >0.90) (Dash and Paul, 2021). Through our analysis, we conclude that our model explains
the endogenous constructs and showcases high predictive relevance, power and stability, see
Table 7. Figure 2 shows an empirically validated research model.
Standard
Explanatory Original Sample deviation T statistics P
paths sample (O) mean (M) (STDEV) (jO/STDEVj) 2.50% 97.50% values
Model fit
[+]
H1
: 0. 97
122
***
Openness H2:
0.13
6 ***
[+]
[+]
Entrepreneurial
Orientation
Mediation hypotheses
H11a: 0.024***; H11b: 0.038*** and H11c: 0.02***
Y if the direct path between X to Z and Z to Y is significant”. The results demonstrate that the
direct paths from EO to BI (β 5 0.175, p 5 0.000), TO to BI (β 5 0.144, p 5 0.001), CFD to BI
(β 5 0.138, p 5 0.001) and from BI to FBAIAI (β 5 0.212, p 5 0.000) were positive and
statistically significant. Accordingly, Matthews et al. (2018) proposed that full mediation is
established when the indirect path is significant while the direct path is insignificant; if both
the direct and indirect paths are significant, partial mediation is established. Business
innovativeness partially mediated the EO–BI–FBAIAI, TO–BI–FBAIAI and CFD– BI–
FBAIAI relationships (Table 8).
IJEBR Original Sample Standard
29,1 sample mean deviation T statistics p
Explanatory paths (O) (M) (STDEV) (jO/STDEVj) 2.50% 97.50% values
Direct effect
H4 0.184 0.184 0.039 4.741 0.112 0.261 0
H5 0.144 0.143 0.045 3.219 0.058 0.226 0.001
98 H6 0.124 0.127 0.028 4.44 0.065 0.179 0
H7 0.138 0.141 0.043 3.194 0.057 0.222 0.001
H8 0.126 0.123 0.034 3.711 0.064 0.188 0
H9 0.175 0.172 0.042 4.161 0.092 0.257 0
H10 0.212 0.211 0.034 6.296 0.156 0.288 0
Indirect effect
H11a: Technology 0.024 0.023 0.008 2.932 0.011 0.045 0.004
orientation →Business
innovativeness
→Family business
adoption intention of AI
H11b: Culture and 0.038 0.039 0.012 3.313 0.018 0.064 0.001
flexibility design
→Business
innovativeness
→Family business
adoption intention of AI
H11c: Entrepreneurial 0.02 0.02 0.008 2.485 0.007 0.037 0.013
orientation →Business
Table 8. innovativeness
Mediation analysis: →Family business
direct and indirect adoption intention of
effects AI
innovativeness, technology orientation and generativity need attention for improving their
respective performances. Culture and flexibility has emerged as having relatively higher
importance than any other constructs. A push in the performance improvements of culture and
flexibility, affordance, openness and entrepreneurial orientation is required. Constructs
performance and importance are shown in Table 9 and Table 10, respectively.
5. Discussion
The current study developed a research model and empirically validated it by explaining
factors contributing to AI adoption intention in the family business. We first identified critical
factors through the perspectives of digital entrepreneurship and entrepreneurial orientation
IJEBR that influence the adoption intention of AI. Then we empirically validated the significance
29,1 and explanation of the research model.
The proposed model included two endogenous (i.e. adoption intention and business
innovativeness) and six exogenous variables (i.e. affordances, culture and flexible design,
entrepreneurial orientation, generativity, openness and technology orientation). This study
examined and analysed factors that influence the adoption intention of AI in the family
business. The results depicted that our model explains the endogenous construct and
100 showcase high predictive relevance, power and stability. The result demonstrated a model
variance of 24.6% for business innovativeness and 65.3% explaining the adoption intention
of AI in the family business, respectively. The factor culture and flexible design emerged as
the top factors contributing to the adoption intention’s explanation. It is suggested that
family businesses building conducive culture and flexible design greatly influence the
inclination to adopt artificial intelligence. Undoubtedly, the workforce will be able to test run
the pilot projects, share setbacks and success and build competency by upholding shared
values. The results corroborate with the earlier studies (for example, Ogbonna and Harris,
2005; Bamgbade et al., 2019). Ogbonna and Harris (2005) argue the significance of culture and
flexible design in adoption in family firms. Additionally, Bamgbade et al. (2019) demonstrate
the significant influence of culture and flexible design to adopt technology in the construction
industry as a vital component of the organizational capabilities to achieve sustainability.
Similarly, the study confirms earlier study findings indicating that business
innovativeness (Bamgbade et al., 2019; Thong and Yap, 1996) and technology orientation
(Olivia et al., 2010; Hunter and Perreaul, 2006) influence the adoption intention of the
technology. Olivia, Matthew and Meuter (2010) demonstrate technology orientation as the
significant factor explaining the adoption intention of EHR systems in the healthcare industry.
They mentioned that technology orientation helps the workforce map hospital administrative
and business functions with the EHR. Likewise, Hunter and Perreaul (2006) note that
technology orientation contributes to sales technology’s adoption intention. Business
innovativeness partially mediates the relationships of entrepreneurial orientation, culture
and organizational design, and technology orientation with behavioural intentions.
Affordances 54.125
Business innovativeness 40.951
Culture and flexible design 51.235
Entrepreneurial orientation 51.493
Family business adoption intention of AI 61.269
Generativity 41.066
Table 9. Openness 51.477
Construct performance Technology orientation 47.73
Affordances 0.105
Business innovativeness 0.135
Culture and flexible design 0.281 0.175
Table 10. Entrepreneurial orientation 0.138 0.114
Constructs importance Generativity 0.111
(unstandardized total Openness 0.101
effects) Technology orientation 0.163 0.19
Bamgbade et al. (2019) and Thong and Yap (1996) discuss the importance of business The intention
innovativeness to adopt technology to achieve competitive advantage. Scholars witness that of family
the top leadership in the business depicts the decision-making and business innovativeness of
the firm (Rizzoni, 1991; Rothwell, 1977). As such, it is paramount for the top leaders in the
businesses
business to be cognizant of the latest developments and able to develop sensemaking of the
market dynamics.
The current study findings reveal entrepreneurial orientation as a significant factor
affecting the adoption intention of AI. Such results depict that family businesses act 101
entrepreneurially to attain a competitive advantage in the fierce dynamics of the marketplace.
Considering opportunity growth in AI technology in businesses, family business EO plays a
vital role in adopting AI. Our findings corroborate earlier studies (Fan et al., 2021; Karami and
Tang, 2019; Sahaym et al., 2019; Wiklund and Shepherd, 2003). Our current study findings also
concur with the suggestions of the earlier studies (Nambisan et al., 2019; Upadhyay et al., 2021),
which focus on the importance and role of openness, generativity and affordances for digital
entrepreneurship. Our findings suggest openness, generativity, and affordance influence the
adoption intention of AI. To be more relevant and competitive, by utilizing emerging
technology (for example, AI), family businesses can explore the marketplace and
operationalize entrepreneurial opportunities (Tiwana, 2014; Wareham et al., 2014). Family
businesses can strategize digital transformation plans which are driven by AI. Market services
operationalize the availability of AI services, products and solutions through various channels
(open source, collaboration and outsourcing). Along with this, it also offers open standards and
open APIs (Application programming interfaces) for horizontal and vertical solutions (Pfau
and Rimpp, 2021). In this way, the generativity and affordance affect the adoption of AI.
6. Conclusion
At the beginning of the paper, we set our objective to examine the critical factors explaining
the adoption intention of AI in the family business. To operationalize the research objective,
we performed a detailed review of the literature identifying critical factors. Further, we
developed our research model (FBAI) comprising two endogenous (i.e. family business’ AI
adoption intention and business innovativeness) and six exogenous variables (i.e.
affordances, culture and flexible design, entrepreneurial orientation, generativity, openness
and technology orientation). We demonstrated that our model explains the endogenous
constructs and showcases high predictive relevance, power and stability based on 631
respondents’ data. Furthermore, we confirmed the significant influence of all the exogenous
variables on the endogenous variable reflecting support of all the hypotheses. Moreover, we
established partially mediated relationships explained by business innovativeness for the
entrepreneurial orientation, technology orientation, culture and flexibility design with family
business’ AI adoption intention.
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Appendix The intention
of family
businesses
Construct Items Sources
Openness OP1: “AI allows multilevel actors’ Rothwell et al. (1974), Upadhyay et al.
participation, contribution, process and (2021)
outcomes” 113
OP2: “Actors’ participation, contribution,
process and outcomes are supported by
AI”
OP3: “AI provides various ways to
collaborate, participate, use process to
generate outcomes”
Affordance AF1: “AI is affordable in a use context” Faraj and Azad (2012), Gibson (1979),
AF2: “I require AI in a use context” Leonardi (2011), Upadhyay et al.
AF3: “In a use context, AI is affordable” (2021)
Generativity GE1: “AI helps to create new digital Doanld (1991), Turner and
artefacts, products and services” Fauconnier (1997), Upadhyay et al.
GE2: “AI provide APIs and libraries to (2021)
build new digital artefacts, products and
services”
GE3: “I can develop new digital artefacts,
products and services using AI APIs and
Libraries”
Entrepreneurial EO1: “Our firm appreciate innovations Dutot and Bergeron (2016), Fan et al.
orientation above everything else” (2021), Miller (1983)
EO2: “Our firm emphasize risk taking”
EO3: “Our firm intend to get into markets
before our competition”
EO4: “Our firm in last five years have
brought several new products or services
to the market”
EO5: “Our firm emphasize R&D,
technological leadership and
innovativeness instead of trusting only
those products and services, which we
have traditionally found to be good”
Technology orientation TO1: “Our firm uses innovative Bamgbade et al. (2019), Gatignon and
technologies in providing solutions” Xuereb (1997)
TO2: “Our firm uses state of the art of
technology for products development”
TO3: “Our firm is very proactive in
providing innovative solutions to respond
to clients’ needs”
TO4: “Our firm has the will and the
capacity to build and market innovative
solutions” Table A1.
Items and sources of
(continued ) constructs
IJEBR Construct Items Sources
29,1
Business BI1: “Creating new ideas, processes, Seyfang and Smith (2007), Bamgbade
innovativeness products and systems is critical to the et al. (2019)
success of our firm”
BI2: “Our firm tends to be an early adopter
of the innovative technologies”
114 BI3: “Our firm actively seeks innovative
technologies”
BI4: “Our firm proactively use innovative
technologies to meet changing customer
needs”
Culture and flexible CFD1: “Managers communicate to Cooper (1994), Bamgbade et al. (2019),
design workforce the shared values of the Iivari and Huisman (2007), Dettmers
organization” et al. (2013), Smircich (1983)
CFD2: “Workforce can identify and
articulate the firm’s shared values”
CFD3: “Workforces’ behaviours that are
coherent with organizational culture are
rewarded”
CFD4: “Organizational shared values
promote a willingness, even eagerness, to
change”
CFD5: “Managers provide support to
workforce to reach organizational goals”
Family business FBAIAI1: “Our firm is planning to adopt Parra-Lopez et al. (2011), Upadhyay
adoption intention of <accept> AI” et al. (2021), Venkatesh et al. (2012)
AI FBAIAI2: “Our firm will adopt AI for all
my requirements”
FBAIAI3: “I think that our firm will adopt
Table A1. <accept> AI”
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