| Summary: | 碩士 === 元智大學 === 經營管理碩士班(國際企業學程) === 101 === In previous studies of small and medium-sized enterprises (SME), decisions made by family-controlled firms and SMEs are considered as an extension of the owners’ volition. Very few of the studies probe into the influence of embedded social networks on family-controlled firms and SMEs. In related studies, few explicitly confer the relationship between embedded social networks, business scale and type of enterprise. Compared to larger enterprises, SMEs possess fewer resources, so embedded social networks may affect decision-making processes of family-controlled firms and SMEs significantly. Furthermore, in a family SME, with control and ownership by a single entity, limits of checks and balances regarding ownership do not exist, and the likelihood that a family SME may be influenced by its embedded social network is increased. This study focuses on how an embedded social network affects the decision-making processes of a family SME regarding making risky investments. The case study in this paper explores how an owner’s embedded social network influenced the interests of shareholders, managers and merged partners when a family SME pursued growth and the gain of a greater share of the market through risky investments. In addition, we also inspect how the enterprise in the case study handles its corporate governance, management mechanisms and risk control. The finding of this study reveals that the more significantly a family SME is influenced by its embedded social network, the higher the possibility it is that a family SME will make risky investments when pursuing growth. This finding differs from that of previous studies which indicate that family-controlled firms and SMEs maintain a risk aversion attitude toward risky investments. The finding of this study attempts to provide family SMEs with suggestions on how to reduce risks and design corresponding management mechanisms in order to avoid making errors while pursuing expansion through risky investments.
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