ArticlePDF Available

Family firms and corporate social responsibility: exploring "concerns"

Authors:

Abstract

Structured abstract Purpose – Scholars are devoting increasing attention to understanding a specific type of strategic initiative in family firms: corporate social responsibility (CSR). Prior studies have focused on the strengths of family firms’ CSR performance. However, it is argued that to better understand family firms and their engagement in CSR, a more granular approach is needed that teases apart the strengths and concerns of CSR performance. Thus, this study theorizes about the negative (i.e., concerns) dimensions of family firms’ CSR performance. Design/methodology/approach – To examine the interrelationship between the percentage of family ownership and a firm’s CSR concerns, a sample of 71 public firms from Fortune 500 companies was constructed. The sample included firm data from 1994 to 2006. Findings – As predicted, a higher percentage of family owners’ equity is positively related to diversity-oriented CSR concerns and negatively related to employee relations and environmental CSR concerns. However, the percentage of equity owned by family members is not associated with community, product quality and safety, and corporate governance CSR concerns. Originality / value – The paper fills important gaps in the existing research on the influence of family ownership on CSR concerns.
Interlibrary Loan
Electronic Article Delivery
If your article is missing pages or illegible, even after printing, or if you have any questions
about this service, please contact the Interlibrary Loan office:
Email: ill@utc.edu Phone: 423-425-4739
Website: http://www.lib.utc.edu/services/ill/interlibrary-loan.html
WARNING CONCERNING COPYRIGHT RESTRICTIONS
The copyright law of the United States (Title 17, United States Code)
governs the making of photocopies or other reproductions of copyrighted
materials.
Under certain conditions specified in the law, libraries and archives are
authorized to furnish a photocopy or other reproduction. One of these
specified conditions is that the photocopy or reproduction is not to be "used for
any purpose other than private study, scholarship, or research". If a user
makes a request for, or later uses, a photocopy or reproduction for purposes
in excess of "fair use", that user may be liable for copyright infringement.
This institution reserves the right to refuse to accept a copying order if, in its
judgment, fulfillment of the order would involve violation of copyright law.
Journal of Strategy and Management
Family firms and corporate social responsibility: exploring "concerns"
Nai Hua Lamb, Frank Butler, Philip Roundy,
Article information:
To cite this document:
Nai Hua Lamb, Frank Butler, Philip Roundy, "Family firms and corporate social responsibility: exploring "concerns"", Journal
of Strategy and Management, https://doi.org/10.1108/JSMA-02-2016-0010
Permanent link to this document:
https://doi.org/10.1108/JSMA-02-2016-0010
Downloaded on: 07 November 2017, At: 11:25 (PT)
References: this document contains references to 0 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 20 times since 2017*
Users who downloaded this article also downloaded:
(2017),"Financial and non-financial determinants of corporate social responsibility: empirical evidence from Pakistan",
Social Responsibility Journal, Vol. 13 Iss 4 pp. 780-797 <a href="https://doi.org/10.1108/SRJ-08-2016-0146">https://
doi.org/10.1108/SRJ-08-2016-0146</a>
(2017),"Corporate governance and corporate social disclosures: a meta-analytical review", International Journal
of Accounting &amp; Information Management, Vol. 25 Iss 4 pp. 434-458 <a href="https://doi.org/10.1108/
IJAIM-01-2017-0005">https://doi.org/10.1108/IJAIM-01-2017-0005</a>
Access to this document was granted through an Emerald subscription provided by emerald-srm:151079 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service
information about how to choose which publication to write for and submission guidelines are available for all. Please
visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of
more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online
products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication
Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.
*Related content and download information correct at time of download.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
Family firms and corporate social responsibility: exploring "concerns"
Introduction
Family firms – firms founded or owned by individuals sharing kinship or marriage ties
(Chua et al., 2003; Feldman et al., in press) – represent a phenomenon of longstanding economic
(Astrachan and Shanker, 2003) and cultural (Aronoff and Ward, 1995) importance. Family firms
account for 80-90% of firms worldwide; indeed, members of the Family 500, which represents
the largest family firms in the world, account for a combined $6.5 trillion in annual sales
(equivalent to the third largest economy in the world) (Zellweger, 2015). Earlier research found
that family firms in the U.S. generate 89% of total tax returns, 64% of GDP, and employ 62% of
the total workforce (Astrachan and Shanker, 2003; Siebels and Knyphausen-Aufseb, 2012). The
Fortune 500 is also comprised of family firms, such as Samsung, Comcast, and BMW. Overall, it
has been argued that the family firm is “the predominant form of business” (Yu et al., 2012: 33;
Chrisman et al., 2004).
Because of the prevalence of family firms, they have garnered sustained interest from
family business and strategy scholars (Le Breton-Miller and Miller, 2008; Sharma et al., 2012).
This research has explored how such businesses can differ from non-family firms on several
dimensions, including their professionalization (Stewart and Hitt, 2012), goal setting (Chrisman
et al., 2012), governance (Miller et al., 2013), and resources (Verbeke and Kano, 2012). Overall,
this work has found that family firms are unique in how they construct and implement their
strategies (Chrisman et al., 2005).
A strategic initiative that is generating intense practitioner and academic interest is family
firms’ investments in corporate social responsibility (CSR) – the philosophy and practice of
voluntarily integrating social and environmental concerns into a firm’s operations (Jamali et al.,
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
2008). Research has found, for instance, that family and nonfamily firms differ not only in their
general behaviors (e.g. Berrone et al., 2012), but also in the extent to which they engage in CSR
(e.g. Block and Wagner, 2014), that family values influence this engagement (Marques et al.,
2014), and that a family firm’s orientation towards CSR can impact their performance (Niehm et
al., 2008). However, despite the progress that has been made in understanding family firms’
strategic decisions involving CSR, much remains to be learned.
A glaring omission in prior work on the corporate responsibility of family firms involves
understanding how family ownership influences negative CSR performance. Indeed, prior work
has tended to either treat CSR as a homogenous activity, not differentiating between strengths
and concerns, or has examined the impact of CSR strengths or concerns on other factors (e.g.,
firm’s financial value). Very little work has sought to examine the factors influencing specific
CSR dimensions. However, corporate responsibility is composed of a diverse collection of
initiatives, which span a complicated set of issues related to the community, the environment, the
safety of its products, and its relations with employees (Cruz et al., 2014; Dyer and Whetten,
2006). Firms can perform positively or negatively on each of these dimensions. For instance, in
the community dimension, a firm can exhibit strengths such as charitable giving or support for
educational initiatives, or concerns such as having a negative economic impact on the
surrounding community or having an investment controversy. This suggests that firms not only
differ in their degree of investment in each dimension of CSR (Wong et al., 2011), but that they
will also differ in their CSR strengths and concerns across the dimensions. Thus, it is important
to take a more fine-grained approach to examining what can influence specific CSR dimensions.
Given the importance of family firms, the research question asked is, how does family ownership
influence a firm’s corporate social responsibility concerns?
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
In addressing this question, this study examines six dimensions of CSR concerns:
community, diversity, employee-relations, environment, product quality and safety, and
corporate governance. Our findings suggest that family firms display fewer environment-related
and employee-related CSR concerns. On the other hand, family firms’ exhibit higher levels of
diversity-related CSR concerns. These findings represent contributions to work on family firm
strategies and corporate social responsibility. Specifically, our findings indicate that the “family-
ness” of a firm can have important strategic implications as it is an important determinant of
negative CSR performance. However, this influence does not affect all dimensions of negative
CSR performance equally.
The remainder of the paper is structured as follows. First, a summary of work examining
CSR in family firms is provided. Then, the importance of teasing apart family firms’ positive
(strengths) and negative (concerns) CSR performance and examining the antecedents of the latter
is addressed. Second, a conceptual framework and set of hypotheses about the relationship
between family firm ownership and six specific dimensions of CSR is developed. The
hypotheses are then tested using a sample of 71 public firms from Fortune 500 companies over a
13-year period (1994-2006). Finally, this study is concluded by discussing the implications of the
empirical findings for family business strategy and CSR literatures, the limitations of the study,
and the directions for future research.
Literature review
Family firms and CSR performance
Scholars’ interest in the social responsibilities of business dates back to before the turn of
the last century (e.g., Henderson, 1896; Clark, 1916). However, the center of focus in recent
decades has been on “corporate social responsibility” (CSR), a multidimensional concept that
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
embodies the relationship between businesses and society (cf. De Bakker et al,. 2005 and
Lockett et al., 2006 for comprehensive reviews). Despite its complexity, some studies examining
firms’ CSR performance have treated CSR as a homogenous activity and have not differentiated
between different dimensions of the construct (cf. Block & Wagner, 2014 for an exception).
However, since CSR can include a variety of activities and initiatives, more recent work has
demonstrated that firms can have unique CSR strengths and concerns (Mattingly and Berman,
2006). For example, Cui and colleagues (2016) disaggregate the strengths and concerns
components of CSR and examine their differential influence on investors’ information
asymmetry. However, Cui and colleagues do not attempt to predict the individual dimensions of
CSR concerns. Chatterji, Levine & Toffel (2009) also examine CSR concerns, but they limit
their focus to environmental concerns and specifically to hazardous waste, regulatory problems,
and substantial emissions, and do not consider other types of negative CSR performance.
Chatterji et al. also focus on using CSR concerns to predict past and future environmental
performance, but, like Cui et al. (2016), do not explore the predictors of CSR concerns. Servaes
& Tamayo (2013) examine the impact of CSR concerns (on firm value); however, like other
studies, even though they conduct separate analyses of CSR strengths and concerns, they do not
disaggregate the dimensions of CSR concerns. Also, they focus on CSR concerns as a predictor
rather than examining its antecedents. Finally, Lamb & Butler (2016) and Block & Wagner
(2014) examine the influence of family firms on CSR performance. However, these studies also
treat CSR strengths and concerns as monolithic constructs and do not disaggregate the specific
dimensions of CSR. This is an important omission in prior research because it means that the
antecedents of specific dimensions of CSR are not known.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
To establish that family firms’ engagement in CSR is a unique phenomenon, it was
necessary for studies to demonstrate that family and non-family firms differ in their CSR
activities (e.g., Lopez-Cozar et al., 2014). Cruz and colleagues (2014) argue and find that,
relative to non-family firms, being a family firm has a positive effect on social dimensions of
CSR linked to external stakeholders, yet has a negative impact on internal social dimensions. A
small collection of studies have directly examined differences among family firms in specific
types of CSR performance, but, again, these studies have generally focused on positive CSR
outcomes.
In addition to establishing that family firms’ engagement in CSR is unique from non-
family firms, scholars have also examined if, as a group, family firms were homogeneous in their
perceptions of CSR. For example, building off prior work (Quazi and O’Brien, 2000), Deniz and
Suarez (2005) examined the perceptions of Spanish family firms towards CSR. Of the 112 firms,
most of which were SMEs, they found that only 26 viewed CSR as a source of competitive
advantage, 33 did not and lacked the resources to pursue CSR initiatives, and another 41 pursued
CSR but viewed it as a net cost and not a source of advantage (Deniz and Suarez, 2005). This
study, and others (e.g., Marques et al., 2014; Uhlaner et al., 2004) establishes that family firms
are not homogeneous in terms of their orientation towards CSR. Overall, the findings suggest
that further research is necessary to examine on which specific CSR dimensions family firms
tend to differ.
In examining this question, studies have taken several approaches. Some studies have
focused on understanding why family firms differ in their CSR engagement. Family firms can
have a unique approach to CSR for several reasons. Since the family’s name is often entwined
with the venture itself, the extent to which the firm engages in CSR can be perceived as a
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
reflection of the family’s personal beliefs and level of engagement in social issues (Morgan and
Gomez-Mejia, 2014). At the same time, family firms tend to favor the pursuit of goals that are
driven by more than financial motivations, such as the accumulation of socio-emotional wealth
(e.g., Gomez-Mejia et al., 2007). The result is that, as prior research has identified, family firms
generally enjoy higher levels of overall CSR performance (e.g., Berron et al., 2010; Block, 2010;
Block and Wagner, 2014; Dyer and Whetten, 2006).
We argue that to truly understand the impact that being a family firm has on CSR,
scholars should focus greater attention on family firms’ CSR concerns and, more granularly, on
specific CSR concerns. In contrast to strengths, CSR concerns are negative outcomes and events,
such as fines levied due to improper hazardous waste disposal. In nonfamily firms, it has been
demonstrated that CSR concerns (measured using the Kinder, Lydenberg, Domini, and Company
(KLD) “concern” ratings) tend to better predict future violations than CSR strengths (Chatterji et
al., 2009). This suggests that casting light on the determinants of CSR concerns may reveal new
insights into whether and how family firms outperform other firms in their CSR performance and
how firms can differ in their negative CSR performance.
In the next section we theorize about the influence of family ownership on negative
corporate social performance. We structure our theorizing according to six dimensions of
negative corporate social performance identified in prior research: community, diversity,
employee relations, environmental, product quality and safety, and corporate governance
concerns (e.g., RiskMetrics Group, 2010). Drawing from multiple theoretical perspectives, which
operate at the socio-cognitive level and help to explain the unique effects of firms, we
hypothesize that family ownership will have a differential influence on these individual CSR
concern dimensions.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
Theory development
Community concerns
Community concerns involve actions and events such as investment controversies,
infringing on the rights of indigenous peoples, tax disputes, and other concerns of community
stakeholders (e.g., corporate actions that lead to community activism against the firm
(RiskMetrics Group, 2010). As described, family firms tend to favor the pursuit of goals beyond
simply financial gains, in part because the founders of a family firm possess distinct but
overlapping identities associated with the family and the firm, and these identities are associated
with motivations that may or may not overlap (e.g., maintaining the family’s social status,
scaling the business; Zellweger et al., 2010). One implication is that family firms select among
organizational and strategic actions based on the effect they will have on the pursuit of family
goals. This suggests that family firms will be less likely to engage in actions that result in
negative reputation-effects because such effects can, in turn, tarnish the family’s reputation
(Deephouse and Jaskiewicz, 2013). Family firms, thus, seek to minimize reputational
“spillovers” (Mayer, 2006) that may occur from negative CSR activities.
However, not every family has the same stake in their family firm (Villalonga and Amit,
2006). Some families have more ownership than others, which is reflected in the possession of a
higher percentage of equity. As the percentage of ownership increases, family owners will have
greater control of the firms’ actions, including activities related to CSR. Thus, this study argues
that since family firms will have a greater incentive to maintain positive relations with their
community, as family ownership increases, family firms will be less likely to engage in actions
that result in community CSR concerns.
Formally, it is hypothesized:
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
H
1
: A higher percentage of family owners’ equity decreases a firm’s community CSR
concerns.
Diversity concerns
Diversity concerns involve issues such as lack of gender diversity on boards of directors
or top management teams, payment of fines or penalties as a result of affirmative action lawsuits,
and other discrimination issues involving the actions of the firm (RiskMetrics Group, 2010). This
study argues that as the percentage of family ownership increases, a family firm will have greater
diversity-related CSR concerns (i.e., they will perform worse on the diversity dimension of
CSR), for several reasons. Prior research has long-documented that people tend to hire others
that look and behave like them (Embrick, 2011; Moore, 1979; Rivera, 2012), thus reinforcing
existing relationships, social networks, and interlocks (Davis and Greve, 1997; Musacchio and
Read, 2007). This preference for similarity is one mechanism underlying the homophily principle
(i.e., that similarity breeds connections; McPherson et al., 2001). Homophilous pressures, if left
unchecked, result in organizations becoming more homogeneous.
Family firms are not immune to this natural trend towards homogenization. Indeed, it can
be argued that since family members represent a homogenous group that is similar along several
dimensions (e.g. race, background, experiences), they will have a tendency to hire and promote
others that look and behave like them. In addition, there can be an incentive for family to hire
other family members in order to further consolidate the family’s power in the firm. As a
family’s stake in the firm increases, they will have even more capability to make such decisions.
Thus, it is hypothesized:
H
2
: A higher percentage of family owners’ equity increases a firm’s diversity CSR
concerns.
Employee relation concerns
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
Employee-related CSR concerns involve topics such as poor union relations, health and
safety concerns (e.g., company fines for violating employee health and safety), and reductions or
misallocations of retirement benefits (RiskMetrics Group, 2010). Although family firms tend to
exhibit positive overall employee-related CSR performance (Block and Wagner, 2014), it is not
clear the extent to which they exhibit CSR concerns. This study contends that family firms will
strive to minimize concerns associated with employee-related CSR since poor employee
relations can produce negative reputation effects that may transfer from the firm to the family
and influence both organizational and familial reputations. For example, downsizing activity (an
employee-related CSR concern) has been demonstrated to have a negative impact on a firm’s
general reputation (Flanagan and O’Shaughnessy, 2005). If family owners are concerned that
such activities will have negative firm and family effects, then as their level of ownership (and
control) increases, they will be less likely to engage in actions that produce such concerns.
In contrast, although non-family firms are also likely to try to minimize employee-related
CSR concerns, the ownership of the firm will not share the same apprehension about (personal)
reputational spillover. That is, it is unlikely that a firm’s non-family shareholders will perceive
that their personal reputations will be impacted by firms’ employee relations. Moreover, non-
family ownership is more likely to be driven by market rationalities (Steier, 2003), which may be
associated with actions, such as layoffs, that can result in improved financial performance, but
negative CSR concerns. It is possible that family firms may be more likely to layoff nonfamily
members than family members, which could create employee retention concerns (cf. Heyden,
Blondel, and Carlock, 2005). However, we argue that, overall, family firms will have less
employee relation concerns relative to nonfamily firms due to the potency of reputation effects.
Therefore, it is hypothesized:
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
H
3
: A higher percentage of family owners’ equity decreases a firm’s employee CSR
concerns.
Environmental concerns
Environmental CSR concerns cover activities such as improper hazardous waste
disposals that lead to fines being levied against the company, regulatory violations related to air
or water quality, and the emission of ozone depleting or toxic chemicals (RiskMetrics Group,
2010). Prior scholars have shown that, in general, family firms pollute less than non-family firms
(Gomez-Mejia et al., 2007); thus, it is plausible that the higher the family ownership, the less
likely that the family firm will be involved in overall environment concerns. Moreover, it is not
uncommon for family firms to bear the names of the family. Thus, to preserve the family
reputation, family owned firms will seek to minimize the concerns associated with
environmental CSR. While both non-family firms and family firms likely seek to keep this type
of concern to a minimum, the additional transfer effect of negative reputation onto the family
will lead the family to seek to minimize environmental CSR concerns.
Therefore, it is hypothesized that:
H
4
: A higher percentage of family owners’ equity decreases a firm’s environmental CSR
concerns.
Product quality and safety concerns
Product quality and safety CSR concerns occur when a firm has been involved in issues
such as product recalls or safety litigation (e.g., from faulty or contaminated products)
(RiskMetrics Group, 2010). Building on prior arguments, this study suggests that family firms
will strive to minimize the possibility of negative events at the firm-level affecting the family
because of their particular regulatory focus (Higgins, 1997). Regulatory focus theory contends
that individuals and groups can differ based on the extent to which they are motivated by growth,
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
advancement, and achievement (associated with a promotion focus) or by security, protection,
and safety (associated with a prevention focus; Brockner et al., 2004).
Family firms will be focused on minimizing product quality and safety concerns because
they are generally more prevention focused than other firms (Jaskiewicz and Luchak, 2013).
Family firms’ inclination towards a prevention focus suggests that they will be more likely to
frame outcomes in terms of losses and non-losses (rather than gains and non-gains) and to view
success as a negative outcome being avoided. Thus, they will be more likely to take actions to
avoid the losses associated product quality and safety violations. As argued, as family ownership
increases, family members will have even greater decision-making control, which will give them
greater ability to minimize product and safety concerns. Therefore, it is proposed:
H
5
: A higher percentage of family owners’ equity decreases a firm’s product and safety
CSR concerns.
Corporate governance concerns
Corporate governance concerns involve issues associated with a lack of accounting,
transparency, and political accountability at the highest levels of the organization (RiskMetrics
Group, 2010). In family firms, family members often control multiple top-level positions (e.g.,
CEO, CFO, and Board Chair). In controlling these positions, family members can operate as
“block” of decision makers. Such coalitions are often characterized by less transparency and
accountability in their decision-making (Pettigrew, 2001), which is one reason why professional
investors are often reluctant to invest in family-dominated firms (Gomez-Mejia et al., 2011).
Investors fear that familial ties can produce a veil that obscures how and why decisions are
made. Thus, it is argued that when family owners hold a higher percentage of equity in the firm,
the firm will be more likely to have corporate governance concerns.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
H
6
: A higher percentage of family owners’ equity increases a firm’s corporate
governance CSR concerns.
Figure 1 summarizes the conceptual model.
--------------------------------------------
Insert Figure 1 about here
--------------------------------------------
Methods
Sample and data collection
To examine the interrelationship between the percentage of family ownership and a
firm’s CSR concerns, a sample of 71 public firms from Fortune 500 companies was constructed.
Out of these 71 public firms, 33 (approximately 47%) are considered family firms. The sample
included firm data from 1994 to 2006. Family ownership data was collected from proxy
statements and from Compact Disclosure, a database containing financial information from the
SEC filings of publicly traded companies. CSR scores were obtained from the Kinder,
Lydenberg, Domini, and Company (KLD) database. Specific firm information (e.g., firm size
and return on sales) was gathered from the COMPUSTAT North America database. Ownership
data was then matched with the firm-level information. The final sample consists of 71 firms
over the 13 year period, which represents over 600 firm-year observations.
Measures
CSR concerns. KLD divides a firm’s CSR rating into strengths and concerns. For example, for
the community dimension, strengths include categories such as charitable giving and investments
in education, whereas the concerns include categories such as investment controversies.
Although prior scholars often create a composite measure of CSR by taking strengths minus
concerns (or look at omnibus measures of strengths and concerns), other studies have shown that
strengths and concerns should not be combined (Chatterji et al., 2009). Thus, based on the
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
hypotheses developed in this study, the use of separate KLD’s CSR concerns scores for each
dimension was chosen.
The dependent variables represent six different CSR concerns: community, diversity,
employee relations, environment, product quality and safety, and corporate governance. As
described, these variables were measured using data from the KLD database and, specifically,
from KLD STATS (Statistical Tool for Analyzing Trends in Social and Environmental
Performance), which has been used by most studies of CSR (e.g. David et al., 2007; Graves and
Waddock, 1994; Johnson and Greening, 1999). In the sample in this study, the CSR concerns
range from 0 to 5 (a score of 0 means no concerns in the respective dimension; 5 means the firm
has concerns in 5 sub-categories in the dimension).
Family ownership. Family ownership is measured by the percentage of equity owned by family
members. In order to be defined as a family firm, the family has to own more than 5 percent of
the company; this measure corresponds with defining a family firm by the percentage of family
ownership in the company (Miller et al., 2007). Family data were collected from the proxy
statements and cross-checked with LexisNexis Corporate Affiliations, Hoovers, and individual
company websites. This predictor is lagged by one year because prior research has shown that it
can take time for organization-level predictors to influence outcomes (Beckman et al., 2004).
Control variables. Although the goal of this paper is to tease out the determinants of the
concerns of CSR, it is important to control for firms’ overall CSR performance. Current CSR
was measured by using KLD’s data. In order to minimize year effects, a 2-year average was
used. It might be the case that a firm’s specific CSR concern (e.g., negative environmental
performance) determines its overall level of CSR. We control for this effect by including a
measure of prior CSR performance as a control. In order to account for industry effects, the
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
mean industry CSR for firms with the same three-digit SIC was used as a control. Industry CSR
is calculated as a 2-year average to minimize the year effect. It is possible that firms with better
financial performance make more investments in CSR activities since they have more resources.
To account for this possibility, firm performance using return on sales (ROS) was used as a
control. In addition, prior research has shown that larger firms are more likely to increase their
CSR (Stanwick and Stanwick, 1998). This can be explained by the fact that larger firms often
have more resources available to commit to CSR activities. Therefore, following Lenox and
Eesley (2009), Firm Size was used as a control and measured by total assets. To account for the
skewed distribution of size, the natural logarithm was used. Available Slack is resources that a
firm has not committed to a specific use and is measured using the current ratio (i.e., current
assets / current liabilities). R&D is used as a proxy for the innovation capacity of a firm, which
can be positively related to CSR activities (Branco and Rodrigues, 2006). It is measured (in
thousands of dollars) as the sum of expenditures in research and development.
Prior research has shown that outside directors and institutional investors can influence
CSR (Johnson and Greening, 1999). Outside Directors was calculated as the number of outside
directors divided by the total number of directors. Institutional Investors was measured as the
total percentage of the equity owned by institutions. The Ownership Herfindahl was calculated
as a measure of ownership concentration. Specifically, following prior work, the percentage of
each shareholder that owns more than 0.2% of the firm was squared (Baysinger et al., 1991). The
ownership Herfindahl is akin to the Herfindahl-Hirschman Index, which ranges from 0 to 10,000
(increases represent greater ownership concentration). Finally, prior research has shown that
different types of institutional owners can have a differential influence on CSR (Johnson and
Greening, 1999), therefore, Bushee’s (1998) classification system was used and controlled for
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
the most commonly examined types of institutional owners: dedicated owners and transient
owners (measured by the percentage of the equity owned by each ownership type). All control
variables were lagged by one year except Current CSR, Prior CSR, and Industry CSR (Beckman
et al., 2004; Carpenter and Westphal, 2001; Westphal and Zajac, 1997).
Results
Table 1 contains descriptive statistics and correlations. Table 2 shows the t-tests for the
difference between means of variables for family and non-family firms. As the table indicates,
there are significant differences between the two groups. Hierarchical, multivariate multiple
regression analysis was used to obtain the empirical results, which is appropriate because we
have six outcome variables (corresponding to the six dimensions of CSR). This type of analysis
is preferred over running OLS models separately because it can conduct tests of the coefficients
across the different dependent variables (Afifi and Clark, 2004).
Tables 3 and 4 present the results from the multivariate regression models. Models in
Table 3 include only control variables. Table 4 adds the effects of family ownership.
---------------------------------------------
Insert Tables 1-3 about here
---------------------------------------------
Community concerns. It was predicted that a higher percentage of family owners’ equity is
negatively related to community-related CSR concerns. Regression results indicate that this
relationship is not statistically significant (
= 0.002, p > 0.10), Thus, Hypothesis 1 is not
supported. This would be similar to Block and Wagner’s findings on community support, and
explained by the family utilizing their own family foundations than the firm itself (Block and
Wagner, 2014). One alternative explanation why it is nonsignificant may be because that the
percentage of family owners’ equity does not influence community-related concerns. In other
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
words, it is possible that family firms alone have enough explanatory power to influence
community-related concerns. Therefore, as a supplemental test, the difference between means
(µ
family firm
= 0.097, µ
non-family firm
= 0.199, p < 0.001) was examined, which indicates that family
firms exhibit fewer community-related CSR concerns than non-family firms. Taken together,
they show that a higher percentage of family owners’ equity cannot be shown to be statistically
related to community-related CSR concerns, but being a family firm does show a reduced
number of community-related concerns.
Diversity concerns. We predicted that as the percentage of family ownership increases, a family
firm will have greater diversity-related CSR concerns because family firms are more likely to
hire people that look and behave like them (Embrick, 2011; Moore, 1979; Rivera, 2012). Our
analyses demonstrate that a higher percentage of family owners’ equity is positively related to
diversity CSR concerns (
=0.010, p < 0.001). Thus, Hypothesis 2 is supported. The t-test for the
difference between family and non-family mean values provide further support for this outcome
(µ
family firm
= 0.228, µ
non-family firm
= 0.217, p < 0.001). Our results support the notion of family
firms’ natural tendency towards homogenization and homophily.
Employee relation concerns. We proposed that family firms will strive to minimize concerns
associated with employee-related CSR since poor employee relations can produce negative
reputation effects that may influence both organizational and familial reputations. Supporting the
prediction, a higher percentage of family owners’ equity is negatively related to employee
relations CSR concerns (
= -0.012, p<0.01), which supports Hypothesis 3. These result
demonstrate that as the level of family ownership increases, firms will be less likely to engage in
actions that produce employee relation concerns. The results of the t-test (µ
family firm
= 0.413, µ
non-
family firm
= 0.493, p < 0.10) provide marginal support for the multivariate regression findings.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
Environment concerns. We argue that in order to protect the family names, family firms will try
to minimize environmental CSR concerns. We found that a higher percentage of family owners’
equity is negatively related to environmental CSR concerns (
= -0.012, p<0.001), Thus,
Hypothesis 4 is supported. The difference between family and non-family environmental
concerns means supports the regression results (µ
family firm
= 0.403, µ
non-family firm
= 0.753, p <
0.001), lending additional support to this hypothesis. Both results support that while both non-
family firms and family firms likely seek to keep this type of concern to a minimum, the
additional transfer effect of negative reputation onto the family will lead family firms to seek to
minimize environmental CSR concerns.
Product quality and safety concerns. We propose that family firms will strive to minimize the
possibility of negative events at the firm-level because of their particular regulatory focus.
It was predicted that a higher percentage of family owners’ equity is negatively related to
concerns in product quality and safety. This relationship is not significant (
= 0.002, p > 0.10),
which does not provide support for Hypothesis 5. The results of the t-test (µ
family firm
= 0.413, µ
non-
family firm
= 0.600, p < 0.001), however, indicate that there is a significant difference between
family firms and non-family firms. Family firms demonstrate fewer product quality and safety-
related CSR concerns than non-family firms. Taken together, the results suggest that while the
percentage of the family owners’ equity may not directly influence the product quality and safety
concerns, being a family firm does reduce product quality and safety-related CSR concerns.
Corporate governance concerns. It was predicted that a higher percentage of family owners’
equity is positively related to corporate governance CSR concerns because family owners may
operate as block of decision makers, thus reducing the transparency and accountability in their
decision making. The relationship is not statistically significant (
= -0.002, p > 0.10), which
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
does not provide support for Hypothesis 6. The results of the t-test (µ
family firm
= 0.494, µ
non-family
firm
= 0.612, p < 0.01) provide evidence that family firms may actually experience fewer
corporate governance related CSR concerns than non-family firms. This finding is puzzling,
given it is opposite of our a priori prediction. We conjecture that family firms’ fewer governance
concerns are attributable to family firms placing a premium on the value of their family names
and realizing that major governance issues can sully this name or decrease strategic
competitiveness (cf. Steier, 2001). Thus, family firms take the steps necessary to reduce any
potential governance problems, resulting in fewer overall corporate governance concerns. Taken
together, both results suggest that corporate governance concerns may not be influenced by the
level of family ownership, but instead the presence of family ownership. In other words, having
more family control may not necessarily mean more corporate governance issues.
In summary, we find that a higher percentage of family owners’ equity is positively
related to diversity-oriented CSR concerns and negatively related to employee relations and
environmental CSR concerns. The percentage of equity owned by family members is not
associated with community, product quality and safety, and corporate governance concerns.
However, our analysis also shows that being a family firm does influence these CSR concerns.
Specifically, findings indicate that family firms have fewer community, product quality and
safety, and corporate governance CSR concerns, regardless of the percentage of family
ownership.
Post Hoc Analyses
In order to test the robustness of our models, we ran several post hoc analyses. We
replaced the percentage of the family ownership with a new variable, family CEO. Family CEO
is a dichotomized variable, in which 1 indicates that the CEO is also a member of the family, and
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
0 otherwise. After conducting the hierarchical, multivariate multiple regression analysis, we
found that the results are identical, except for product concerns. It was significant in our original
model with the percentage of the family ownership as the predictor. It became nonsignificant
when we used family CEO as a predictor.
We also used founding family to replace the percentage of the family ownership as the
predictor. Founding family is a dichotomized variable, in which 1 indicates that the family is a
founding family, and 0 otherwise. After conducting the hierarchical, multivariate multiple
regression analysis, we found that the results are also identical, except community and product
concerns. They were significant in our original model with the percentage of the family
ownership as the predictor. They became nonsignificant when we used founding family as a
predictor. Finally, we also tested for nonlinear effects of family ownership; but did not find any
evidence supporting their significance.
Discussion
Although research is beginning to explore the important differences that exist between
family and non-family firms’ CSR strategies, it is unclear how being a family firm influences
specific negative CSR activities and outcomes. This study goes beyond prior work focusing on
CSR strengths or on CSR concerns as monolithic effect and takes steps to explore the
relationship between family ownership and individual dimensions of CSR concerns. By
examining several specific facets of CSR, this study finds that as the percentage of family
ownership increases firms have fewer employee and environmental CSR concerns. In contrast,
diversity related CSR concerns increase as family ownership increases.
Implications for theory
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
Implications for family business strategy. Family firms must often overcome the negative
perceptions and stereotypes of stakeholders (Stewart and Hitt, 2012). For instance, such firms are
perceived to engage in nepotism and closed decision making. Moreover, outside stakeholders
often perceive that the primary goal of family ownership is to “take care of the family” (Carrigan
and Buckley, 2008). These perceptions can dissuade stakeholders (e.g., perspective employees,
investors) from wanting to engage with family firms. However, this study finds that family
ownership is associated with fewer community and environmental concerns, which suggests that
family firms are not myopic in their interests and goals. Thus, the findings run counter to many
negative perceptions of family businesses. In addition, the findings suggest that CSR represents
an element of family firms’ strategic “toolkit,” which can be used to influence stakeholders’
perceptions. That is, family firms can mitigate (or not exacerbate) negative stakeholder
perceptions by being proactive and strategic about their CSR investments.
Implications for corporate social responsibility. The findings of this study provide evidence that
there are fundamental differences in family and nonfamily firms’ involvement in CSR issues.
One explanation for why family businesses may possess a unique CSR strategy is that they are
firms that must juggle multiple organizational logics. In general, logics are “socially constructed,
historical pattern of material practices, assumptions, values, beliefs, and rules by which
individuals […] provide meaning to their social reality” (Thornton, 2004: 69). A family firm is
governed by both a familial logic, which is characterized by a focus on socio-emotional wealth,
kinship dynamics, and family control, and a business (or “commerce”) logic, which is focused on
efficiency, competition, and profit-maximization (Berrone et al., 2012; Gomez-Mejia et al.,
2011). The coexistence of multiple logics within the same organization produces a tension that
must be managed (Battilana and Dorado, 2010). In a family firm, the tension associated with
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
dual logics may influence the extent to which a firm engages in CSR and, more specifically, the
type of CSR concerns that plague a firm. This suggests that other organizations that must balance
multiple logics (e.g. social enterprises) may also need to pursue nuanced approaches to CSR.
Managerial implications
The findings of this study indicate that family ownership is associated with fewer
concerns on some dimensions of CSR (environmental issues and employee relations) and more
concerns on others (diversity). This suggests that family business managers should not approach
social responsibility as a monolithic activity and should recognize that the complex dynamics
inherent in family firms may make them more susceptible to certain negative CSR outcomes. For
example, this study has shown that family firms can potentially have more diversity-related CSR
concerns. Thus, family firm managers should be strategic about investing in this type of CSR and
conscious of their decisions involving diversity. By acknowledging these differences, family
firms will be more likely to avoid strategic and operational “blind spots” (Grundy and Wensley,
1999), which can hinder the firm’s CSR performance.
Limitations and future research
Although it is recognized that the majority of family businesses are not large, public
companies, this study follows prior work (Chatterji et al., 2009) in examining this specific subset
of family firms. We focus on these types of firms, primarily, because CSR data is not widely
available for smaller, private firms. However, it is important for future research to examine if this
study’s findings generalize to family firms of other sizes and to private forms of ownerships.
In addition, there may be some limitations in the sample size of the study. Because of the
structure of the data, the final number of sampled firms was modest (n =71), however, as
described, the analysis included more than 600 firm-years of data. Future research could validate
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
the findings of this study in a larger and more diverse sample in terms of not only the ownership
structure of firms (i.e., private vs. public) but also by the inclusion of international firms. For
example, it may prove fruitful to examine if cross-cultural differences in family dynamics, at
both the family- and firm-levels, result in substantive differences in family firms’ general
approach to CSR and to CSR strengths and concerns. Further, our study possibly has an
endogeneity problem that can exist between our independent variables (CSR concerns) and the
control variable, current CSR. The dimensions of CSR concerns can have an effect on the overall
CSR level. However, it is an important control variable that needs to be included. Thus, we ran
an additional endogeneity test to test if an unobserved variable affects the outcome using
treatment-effects estimators. The result is nonsignificant (χ2=0.7621; p =0.38669), meaning that
we cannot reject the null hypothesis and therefore, there is no evidence of endogeneity.
Another avenue of future research is regarding the findings on community CSR concerns.
Block and Wagner (2014) found a negative effect on community CSR performance using an
aggregate measure of CSR strengths and concerns. The findings in this study suggest that
community CSR concerns are lower in family firms. These incongruent findings should be
explored in more detail. One suggestion posed by Block and Wagner (2014) is that the family
may leverage a foundation in the family’s name for this dimension. This finding would not be at
odds with the findings of this study. As family firms may experience fewer community CSR
concerns, that does not mean that the experience positive community CSR performance. Future
research should explore the possibility that these families are leveraging their names for
betterment in their communities through family foundations, or other external organizations that
may possess their names.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
Finally, this study does not examine the impact of CSR concerns on firms’ overall
performance. However, this would seem to be a ripe area for future research because, as it can be
argued, negative CSR performance can have reputational, strategic, and financial ramifications.
As the findings of this study indicate, the implications of negative CSR performance may be
especially salient for family firms, which must navigate the delicate balance between familial
and organizational goals and strategies. This study goes beyond prior work on corporate social
responsibility to take the first steps in clarifying how differences between family and nonfamily
firms can result in important differences in specific types of CSR performance.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
References
Afifi, A., Clark, V. A., and May, S. (2004), Computer-aided Multivariate Analysis (4th ed.),
Chapman & Hall/CRC, Boca Raton, FL.
Aronoff, C. E., and Ward, J. L. (1995), “Family-owned businesses: a thing of the past or a model
for the future?”, Family Business Review, Vol. 8 No. 2, pp.121-130.
Astrachan, J. H., and Shanker, M. C. (2003), “Family businesses’ contribution to the US
economy: A closer look”, Family Business Review, Vol. 16 No. 3, pp. 211-219.
Battilana, J., and Dorado, S. (20100, “Building sustainable hybrid organizations: The case of
commercial microfinance organizations”, Academy of Management Journal, Vol. 53
No.6, pp. 1419-1440.
Baysinger, B. D., Kosnik, R. D., and Turk, T. A. 1991. Effects of board and ownership structure
on corporate R&D strategy. Academy of Management Journal, 34(1): 205-214.
Beckman, C. M., Haunschild, P. R., and Phillips, D. J. 2004. Friends or strangers? firm-specific
uncertainty, market uncertainty, and network partner selection. Organization Science,
15(3): 259-275.
Berrone, P., Cruz, C., and Gomez-Mejia, L. R. (2012), “Socioemotional wealth in family firms
theoretical dimensions, assessment approaches, and agenda for future research”, Family
Business Review, Vol. 25 No. 3, pp. 258-279.
Berrone, P., Cruz, C., Gomez-Mejia, L. R., and Larraza-Kintana, M. (2010), “Socioemotional
wealth and corporate responses to institutional pressures: Do family-controlled firms pollute
less?”, Administrative Science Quarterly, Vol. 55 No. 1, pp. 82-113.
Block, J. H. (2010), “Family management, family ownership, and downsizing: Evidence from
S&P 500 firms”, Family Business Review, Vol. 23 No. 2, pp. 109-130.
Block, J.H. and Wagner, M., (2014). “The effect of family ownership on different dimensions of
corporate social responsibility: evidence from large US firms”, Business Strategy and the
Environment, Vol. 23 No. 7, pp.475-492.
Branco, M. C., and Rodrigues, L. L. (2006), “Corporate social responsibility and resource-based
perspectives”, Journal of Business Ethics, Vol. 69 No. 2, pp. 111-132.
Brockner, J., Higgins, E. T., and Low, M. B. (2004), “Regulatory focus theory and the
entrepreneurial process”, Journal of Business Venturing, Vol. 19 No. 2, pp. 203-220.
Carpenter, M. A., and Westphal, J. D. (2001), “The strategic context of external network ties:
Examining the impact of director appointments on board involvement in strategic
decision making”, Academy of Management Journal, Vol. 44 No. 4, pp. 639-660.
Carrigan, M., and Buckley, J. (2008), “‘What's so special about family business?’An exploratory
study of UK and Irish consumer experiences of family businesses”, International
Journal of Consumer Studies, Vol. 32 No. 6, pp. 656-666.
Chatterji, A. K., Levine, D. I., and Toffel, M. W. (2009), “How well do social ratings actually
measure corporate social responsibility?”, Journal of Economics & Management
Strategy, Vol. 18 No. 1: pp. 125-169.
Chua, J. H., Chrisman, J. J., and Steier, L. P. (2003), “Extending the theoretical horizons of
family business research”, Entrepreneurship Theory and Practice, Vol. 27 No. 4, pp.
331-338.
Chrisman, J. J., Chua, J. H., and Litz, R. A. (2004), “Comparing the agency costs of family and
nonfamily firms: Conceptual issues and exploratory evidence”, Entrepreneurship Theory
and Practice, Vol. 28 No. 4, pp. 335-354.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
Chrisman, J. J., Chua, J. H., Pearson, A. W., and Barnett, T. (2012), “Family involvement,
family influence, and familycentered noneconomic goals in small firms”,
Entrepreneurship Theory and Practice, Vol. 36 No. 2, pp. 267-293.
Chrisman, J. J., Chua, J. H., and Sharma, P. (2005), “Trends and directions in the development of
a strategic management theory of the family firm”, Entrepreneurship Theory and
Practice, Vol. 29 No. 5, pp. 555-576.
Clark, J. M. (1916), “The changing basis of economic responsibility”, The Journal of Political
Economy, pp. 209-229.
Cruz, C., LarrazaKintana, M., GarcésGaldeano, L., and Berrone, P. (2014), “Are family firms
really more socially responsible?”, Entrepreneurship Theory and Practice, Vol. 38 No.
6: pp. 1295-1316.
Cui, J., Jo, H. and Na, H., (2016), “Does corporate social responsibility affect information
asymmetry?” Journal of Business Ethics, pp.1-24.
Davis, G. F., and Greve, H. R. (1997), “Corporate elite networks and governance changes in the
1980s”, American Journal of Sociology, Vol. 103 No. 1: pp. 1-37.
De Bakker, F. G., Groenewegen, P., and Den Hond, F. (2005), “A bibliometric analysis of 30
years of research and theory on corporate social responsibility and corporate social
performance”, Business & Society, Vol. 44 No. 3, pp. 283-317.
Deephouse, D. L., and Jaskiewicz, P. (2013), “Do family firms have better reputations than non
family firms? an integration of socioemotional wealth and social identity theories”, Journal
of Management Studies, Vol. 50 No. 3, pp. 337-360.
Deniz, Maria de la Cruz, and Suarez, M. K. C. (2005), “Corporate social responsibility and
family business in Spain”, Journal of Business Ethics, Vol. 56 No. 1: pp. 27-41.
Dyer, W. G., and Whetten, D. A. (2006), “Family firms and social responsibility: Preliminary
evidence from the S&P 500”, Entrepreneurship Theory and Practice, Vol. 30 No. 6,
pp.785-802.
Embrick, D. G. (2011), “The diversity ideology in the business world: A new oppression for a
new age”, Critical Sociology, Vol. 37 No. 5, pp. 541-556.
Feldman, E. R., Amit, R. R., and Villalonga, B. (in press), “Corporate divestitures and family
Control”, Strategic Management Journal.
Flanagan, D. J., and O’Shaughnessy, K. (2005), “The effect of layoffs on firm reputation”,
Journal of Management, Vol. 31 No. 3, pp. 445-463.
Henderson, C. R. (1896), “Business men and social theorists”, The American Journal of
Sociology, Vol. 1 No. 4, pp. 385-397.
Gomez-Mejia, L. R., Larraza-Kintana, M., and Makri, M. (2003), “The determinants of
executive compensation in family-controlled public corporations”, Academy of
Management Journal, Vol. 46 No. 2, pp. 226-237.
Gomez-Mejia, L. R., Haynes, K. T., Nunez-Nickel, M., Jacobson, K. J., and Moyano-Fuentes, J.
(2007), “Socioemotional wealth and business risks in family-controlled firms: Evidence
from Spanish olive oil mills”, Administrative Science Quarterly, Vol. 52 No. 1, pp. 106-
137.
Gomez-Mejia, L. R., Cruz, C., Berrone, P., and De Castro, J. (2011), “The bind that ties:
Socioemotional wealth preservation in family firms”, Academy of Management Annals,
Vol. 5 No. 1, pp. 653-707.
Heyden, L.V.D., Blondel, C. and Carlock, R.S., 2005. Fair process: Striving for justice in family
business. Family Business Review, Vol. 18 No. 1, pp.1-21.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
Higgins, E. T. (1997), “Beyond pleasure and pain”, American Psychologist, Vol. 52 No. 12, p.
1280.
Jamali, D., Safieddine, A. M., and Rabbath, M. (2008), “Corporate governance and corporate
social responsibility synergies and interrelationships”, Corporate Governance: An
International Review, Vol. 16 No. 5, pp. 443-459.
Jaskiewicz, P., and Luchak, A. A. (2013), “Explaining performance differences between family
firms with family and nonfamily CEOs: it's the nature of the tie to the family that
counts!”, Entrepreneurship Theory and Practice, Vol. 37 No. 6, pp. 1361-1367.
Johnson, R. A., and Greening, D. W. (1999), “The effects of corporate governance and
institutional ownership types on corporate social performance”, Academy of
Management Journal, Vol. 42 No. 5, pp. 564-576.
Lamb, N. H., and Butler, F. C. (2016), “The influence of family firms and institutional owners on
corporate social responsibility performance”, Business & Society, doi:
10.1177/0007650316648443.
Le Breton-Miller, I., and Miller, D. (2008), “To grow or to harvest? governance, strategy and
performance in family and lone founder firms”, Journal of Strategy and Management,
Vol. 1 No. 1, pp. 41-56.
Lenox, M. J., and Eesley, C. E. (2009), “Private environmental activism and the selection and
response of firm targets”, Journal of Economics & Management Strategy, Vol. 18 No. 1,
pp. 45-73.
Lockett, A., Moon, J., and Visser, W. (2006), “Corporate social responsibility in management
research: Focus, nature, salience and sources of influence”, Journal of Management Studies,
Vol. 43 No. 1, pp. 115-136.
Hilliard, I., Priede Bergamini, T., and López-Cózar Navarro, C. (2014), “Family and non-family
business differences in corporate social responsibility approaches”, ASEAN Journal of
Management & Innovation, Vol. 1 No. 2, pp. 74-85.
Marques, P., Presas, P., and Simon, A. (2014), “The heterogeneity of family firms in CSR
engagement: The role of values”, Family Business Review, Vol. 27 No. 3, pp. 206-227.
Mattingly, J. E., and Berman, S. L. (2006), “Measurement of corporate social action discovering
taxonomy in the Kinder Lydenburg Domini ratings data”, Business & Society, Vol. 45
No. 1, pp. 20-46.
Mayer, K. J. (2006), “Spillovers and governance: An analysis of knowledge and reputational
spillovers in information technology”, Academy of Management Journal, Vol. 49 No. 1,
pp. 69-84.
McPherson, M., Smith-Lovin, L., and Cook, J. M. (2001), “Birds of a feather: Homophily in
social networks”, Annual Review of Sociology, Vol. 27 No. 1, pp. 415-444.
Miller, D., Le Breton-Miller, I., Lester, R. H., and Cannella, A. A. (2007), “Are family firms
really superior performers?”, Journal of Corporate Finance, Vol. 13 No. 5, pp. 829-858.
Miller, D., Breton-Miller, I. L., and Lester, R. H. (2013), “Family firm governance, strategic
conformity, and performance: Institutional vs. strategic perspectives”, Organization
Science, Vol. 24 No. 1, pp. 189-209.
Moore, G. 1979. The structure of a national elite network. American Sociological Review, 44(5):
673-692.
Morgan, T. J., and Gomez-Mejia, L. R. (2014), “Hooked on a feeling: The affective component
of socioemotional wealth in family firms”, Journal of Family Business Strategy, Vol. 5
No. 3, pp. 280-288.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
Musacchio, A., and Read, I. (2007), “Bankers, industrialists, and their cliques: Elite networks in
Mexico and Brazil during early industrialization”, Enterprise and Society, Vol. 8 No. 4,
pp. 842-880.
Niehm, L. S., Swinney, J., and Miller, N. J. (2008), “Community Social Responsibility and Its
Consequences for Family Business Performance”, Journal of Small Business
Management, Vol. 46 No. 3, pp. 331-350.
Pettigrew, A. M. (2001), The Politics of Organizational Decision-Making (2
nd
edition),
Routledge Press, Abingdon, Oxon, UK.
Quazi, A. M., and O'Brien, D. (2000), “An empirical test of a cross-national model of corporate
social responsibility”, Journal of Business Ethics, Vol. 25 No. 1, pp. 33-51.
RiskMetrics Group. (2010), How to Use KLD Stats & ESG Ratings Definitions, RiskMetrics
Group, Boston, MA.
Rivera, L. A. (2012), “Hiring as cultural matching the case of elite professional service firms”,
American Sociological Review, Vol. 77 No. 6, pp. 999-1022.
Servaes, H., & Tamayo, A. (2013), “The impact of corporate social responsibility on firm value:
The role of customer awareness”, Management Science, Vol. 59 No. 5, pp. 1045-1061.
Sharma, P., Chrisman, J. J., and Gersick, K. E. (2012), “25 years of family business review:
Reflections on the past and perspectives for the future”, Family Business Review, Vol. 25
No. 1, pp. 5-15.
Siebels, J.F. and zu Knyphausen‐Aufseß, D., (2012), “A review of theory in family business
research: The implications for corporate governance”, International Journal of
Management Reviews, 14(3), pp.280-304.
Stanwick, P. A., and Stanwick, S. D. (1998), “The relationship between corporate social
performance, and organizational size, financial performance, and environmental
performance: An empirical examination”, Journal of Business Ethics, Vol. 17 No. 2, pp.
195-204.
Steier, L., 2001. Family firms, plural forms of governance, and the evolving role of trust. Family
Business Review, Vol 14 No. 4, pp.353-368.
Steier, L. (2003), “Variants of agency contracts in family-financed ventures as a continuum of
familial altruistic and market rationalities”, Journal of Business Venturing, Vol. 18 No. 5,
pp. 597-618.
Stewart, A., and Hitt, M. A. (2012), “Why can’t a family business be more like a nonfamily
business? modes of professionalization in family firms”, Family Business Review, Vol.
25 No. 1, pp. 58-86.
Thornton, P. H. (2004), Markets from Culture: Institutional Logics and Organizational
Decisions in Higher Education Publishing, Stanford University Press, Palo Alto, CA.
Uhlaner, L. M., van Goor-Balk, H. J. M., and Masurel, E. (2004), “Family business and
corporate social responsibility in a sample of Dutch firms”, Journal of Small Business
and Enterprise Development, Vol. 11 No. 2, pp. 186-194.
Villalonga, B., and Amit, R. 2006. How do family ownership, control and management affect
firm value?. Journal of Financial Economics, 80(2), 385-417.
Westphal, J. D., and Zajac, E. J. (1997), “Defections from the inner circle: Social exchange,
reciprocity, and the diffusion of board independence in U.S. corporations”,
Administrative Science Quarterly, Vol. 42 No. 1: pp. 161-183.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
Wong, E. M., Ormiston, M. E., and Tetlock, P. E. (2011), “The effects of top management team
integrative complexity and decentralized decision making on corporate social
performance”, Academy of Management Journal, Vol. 54 No. 6, pp. 1207-1228.
Yu, A., Lumpkin, G. T., Sorenson, R. L., and Brigham, K. H. (2012), “The landscape of family
business outcomes a summary and numerical taxonomy of dependent variables”, Family
Business Review, Vol. 25 No. 1, pp. 33-57.
Zellweger, T. (2015), “Global family business index”, Center for Family Business: University of
St Gallen.
About the authors
Nai Lamb is an Assistant Professor of Strategic Management at the University of Tennessee at
Chattanooga. Her research focuses on topics such as corporate governance, board interlocks, and
social networks. Her work has appeared in the Oxford Handbook of Corporate Governance and
in journals such as Business & Society, Journal of Accounting and Finance, and Management
Research Review. She holds a doctorate degree from Texas A&M University.
Frank C. Butler is a UC Foundation Associate Professor of Management at the University of
Tennessee at Chattanooga. His primary research interests are in mergers and acquisitions and
corporate governance issues. His work has been published in journals such as the Journal of
Management, Business Horizons, and Journal of Managerial Issues. He holds a doctorate degree
from Florida State University.
Philip T. Roundy is an UC Foundation Assistant Professor of Entrepreneurship at the University
of Tennessee at Chattanooga. In his primary stream of research he examines how social
entrepreneurs acquire the resources needed to found and grow their ventures. His other research
focuses on narratives and their role in executive cognition, evaluations of new ventures, and
strategic decision making. His work has been published in journals such as Strategic
Organization, Academy of Management Perspectives, the Journal of Small Business Strategy and
the Journal of Business and Entrepreneurship. He holds a doctorate degree from the University
of Texas at Austin.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
FAMILY FIRMS AND CSR
1
FIGURE 1
The Relationship between Family Ownership and Six Dimensions of Corporate Social Responsibility
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
FAMILY FIRMS AND CSR
1
TABLE 1
Descriptive Statistics and Correlations
1
Correlations>|.0908| are significant at p<.05
Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
1. Community Concerns 0.07 0.27
2. Diversity Concerns 0.22 0.42 0.06
3. Employee Concerns 0.42 0.65 0.14 0.08
4. Environment Concerns 0.55 0.94 0.35 -0.08 0.20
5. Product Concerns 0.41 0.75 0.11 0.01 0.10 0.14
6. CG Concerns 0.57 0.59 0.03 0.00 0.03 -0.05 0.31
7. Current CSR 1.39 3.16 -0.23 -0.21 -0.31 -0.35 -0.23 0.13
8. Prior CSR 1.20 2.96 -0.22 -0.18 -0.29 -0.40 -0.18 0.13 0.83
9. Industry CSR 0.23 1.29 -0.19 -0.12 -0.29 -0.36 -0.23 0.06 0.64 0.62
10. ROS 0.06 0.10 -0.05 -0.14 -0.26 -0.06 0.06 0.06 0.09 0.01 0.08
11. Firm Size 8.96 0.69 0.12 -0.03 0.06 0.21 0.36 0.31 0.10 0.12 -0.05 -0.03
12. Outside Directors 0.31 0.38 0.06 0.03 0.20 -0.02 0.16 0.25 0.00 0.09 -0.02 -0.18 0.27
13. Institutional Investors 0.27 0.35 0.06 0.05 0.14 -0.06 0.11 0.20 0.00 0.08 0.01 -0.15 0.22 0.90
14. Available Slack 0.39 0.26 -0.02 -0.12 -0.04 0.00 -0.06 -0.02 0.20 0.18 0.09 0.01 0.03 -0.05 -0.06
15. R&D 350.25 255.03 0.06 0.09 0.09 0.05 0.04 0.11 0.07 0.09 0.01 0.07 0.24 -0.02 -0.05 0.02
16. Ownership Herfindahl 201.89 466.91 -0.11 -0.04 0.02 0.03 -0.04 -0.17 -0.05 -0.04 0.00 -0.03 -0.16 -0.08 -0.09 -0.14 0.00
17. Dedicated Owners 10.74 9.84 0.10 -0.04 -0.06 -0.07 -0.05 -0.10 0.00 -0.01 0.09 -0.04 -0.18 -0.10 -0.06 0.08 -0.04 -0.23
18. Transient Owners 15.53 11.85 0.01 -0.08 -0.06 -0.12 -0.08 0.04 -0.03 0.02 0.02 -0.06 -0.07 0.27 0.26 -0.03 -0.14 -0.30 0.27
19. Family Owners 4.97 11.69 -0.10 0.02 -0.09 -0.09 -0.08 -0.18 0.01 0.02 0.08 0.02 -0.27 -0.05 -0.06 -0.15 -0.12 0.83 -0.14 -0.20
Variable
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
FAMILY FIRMS AND CSR
1
TABLE 2
A Comparison of Means for Family Firms and Non-Family Firms
Variables Mean for
Family Firms
Mean for Non-
Family Firms
Community Concerns
***
0.0969 0.1989
Diversity Concerns
***
0.3375 0.2167
Employee Concerns
0.4125 0.4927
Environment Concerns
***
0.4031 0.7532
Product Concerns
***
0.4125 0.5998
CG Concerns
**
0.4938 0.6120
Family Owners
***
15.7676 0.0000
Dedicated Owners
9.1986 9.4964
Transient Owners
*
12.9015 14.4605
Current CSR
*
0.1547 0.5288
Prior CSR
0.2906 0.5000
Industry CSR
-0.0021 -0.1020
ROS
0.0640 0.0611
Firm Size
***
8.9094 9.3630
Outside Directors
*
0.3591 0.4136
Institutional Investors
0.3044 0.2874
Available Slack
***
0.3614 0.4318
R&D
***
283.0621 371.3333
Ownership Herfindahl
***
459.5998 52.4064
1 †
p < 0.10;
*
p < 0.05;
**
p < 0.01;
***
p < 0.001
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
FAMILY FIRMS AND CSR
1
TABLE 3
The Effects of Family Ownership on Corporate Social Responsibility Concerns (with Control Variables Only)
Community Concerns Diversity Concerns Employee Concerns Environment Concerns Product Concerns CG Concerns
Variables Model 1 Model 2 Model 3 Model 4 Model 5 Model 6
Controls
Current CSR1 -0.0108†2 -0.0272** -0.0246 -0.0155 -0.0568** 0.0131
Prior CSR -0.0116 -0.004 -0.0366* -0.1042*** 0.0027 0.0008
Industry CSR -0.0066 0.0156 -0.0442 -0.0761* -0.0369 0.0162
ROS -0.0836 -0.5915** -1.4346*** -0.4128 0.8839** 0.4957*
Firm Size 0.0508** -0.0512 -0.0192 0.3508*** 0.4006*** 0.1824***
Outside Directors 0.0204 -0.0689 0.6513*** 0.3007 0.4984** 0.4245**
Institutional Investors 0.0199 0.1485 -0.3340* -0.4881* -0.3306 -0.1627
Available Slack 0.009 -0.1408* 0.0544 0.2424 -0.0881 -0.1176
R&D 0.0001 0.0002** 0.0003** 0.0000 -0.0001 0.0001
Ownership Herfindahl -0.0001* -0.0001** 0.0000 0.0001 0.0000 -0.0002***
Dedicated Owners 0.0035** -0.002 -0.0004 0.0002 0.0049 -0.0043
Transient Owners -0.0012 -0.0043** -0.0065** -0.0053 -0.0069** -0.0002
Constant -0.3882* 0.8252** 0.6413 -2.4099*** -3.0685*** -1.0974**
Observations 607 607 607 607 607 607
R2 0.1075 0.1064 0.2343 0.2619 0.2359 0.1682
F-Statistic 5.9619*** 5.8952*** 15.1483*** 17.5676*** 15.2854*** 10.0085***
1
All variables were lagged by 1 year except Current CSR, Prior CSR, and Industry CSR
2
p < 0.10;
*
p < 0.05;
**
p < 0.01;
***
p < 0.001
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
FAMILY FIRMS AND CSR
1
TABLE 4
The Effects of Family Ownership on Corporate Social Responsibility Concerns (with All Variables)
Community Concerns Diversity Concerns Employee Concerns Environment Concerns Product Concerns CG Concerns
Variables Model 7 Model 8 Model 9 Model 10 Model 11 Model 12
Controls
Current CSR1 -0.0108†2 -0.0272** -0.0245 -0.0154 -0.0568** 0.0131
Prior CSR -0.0122 -0.0065 -0.0336* -0.1013*** 0.0023 0.0013
Industry CSR -0.0072 0.013 -0.0410
-0.0731
*
-0.0374 0.0166
ROS -0.0993 -0.6605*** -1.3514*** -0.3322 0.8723** 0.5084*
Firm Size 0.0557
**
-0.0297 -0.0451 0.3257
***
0.4042
***
0.1784
***
Outside Directors 0.0144 -0.095 0.6828*** 0.3312 0.4941
**
0.4293
**
Institutional Investors 0.0221 0.1585 -0.3461* -0.4998* -0.3289 -0.1645
Available Slack 0.0133 -0.1221
0.0317 0.2204
-0.0849 -0.121
R&D 0.0001 0.0003
***
0.0002
*
0 -0.0001 0.0001
Ownership Herfindahl -0.0001* -0.0003*** 0.0002* 0.0003* 0 -0.0001
Dedicated Owners 0.0034
**
-0.0024 0.0001 0.0006 0.0048 -0.0042
Transient Owners -0.0012 -0.0043** -0.0065** -0.0053 -0.0069** -0.0002
Predictor
Family Owners3 0.0023 0.0102*** -0.0123** -0.0119* 0.0017 -0.0019
Constant -0.4355** 0.6174* 0.8922* -2.1669*** -3.1034*** -1.0592**
Observations 607 607 607 607 607 607
R
2
0.1102 0.1279 0.2475 0.2679 0.2361 0.1686
F-Statistic 5.6473
***
6.6928
***
15.0047
***
16.6936
***
14.1011
***
9.2477
***
1
All variables were lagged by 1 year except Current CSR, Prior CSR, and Industry CSR
2 †
p < 0.10;
*
p < 0.05;
**
p < 0.01;
***
p < 0.001
3
Family Ownership was also operationalized using a dichotomous variable with 0 = non-family firms and 1 = family firm. The results were consistent.
Downloaded by University of Central Florida At 11:25 07 November 2017 (PT)
... Family harmony captures how the family members get along with each other as their strong compatibility results in high commitment and extra-role behaviours (Eddleston et al., 2018). A family business creates a sense of pride for its members as not only a source of their livelihood, but reflecting values and goals that builds a family's socio-emotional wealth (SEW), that is, "… non-financial aspects of the firm that meet the family's affective needs, such as identity, the ability to exercise family influence, and the perpetuation of the family dynasty" (Gómez-Mejía et al., 2007, p. 106), and reputation in public (Block & Wagner, 2014;Lamb et al., 2017;Soleimanof et al., 2018). ...
... 478). The literature suggests that family firms have a strong sense of family identity which is inseparable from the organisation that generates the feeling of an overlapping social identity (Lamb et al., 2017;Rantanen & Jussila, 2011). A family business is not just a source of economic wealth and wellbeing, but a source for reflection and enjoyment to the family, which allows them to create memories to pass down to future generations (Rantanen & Jussila, 2011). ...
... This overlap makes family business owners follow non-economic goals like family cohesiveness, pride, autonomy, and control (Block & Wagner, 2014), or as Lamb et al. (2017) state: "A family firm is governed by both a familial logic, which is characterised by a focus on socio-emotional wealth, kinship dynamics, and family control, and a business logic, which is focused on efficiency, competition, and profit-maximisation" (p. 481). ...
Article
Full-text available
This paper seeks to identify and summarise the big issues at the intersection of family businesses and employment relations business literatures. Family businesses have additional complexities compared with non-family businesses. Thus, the aim of this paper is to throw light on why this intersection is of interest in New Zealand and rationalise the need to research employment relations in the context of family businesses. We first present family businesses as an area for research by outlining the landscape of family businesses in New Zealand, followed by a review of the foundations of family business and employment relations research. We then highlight and discuss three overarching themes: familiness or family dynamics; formalisation/professionalisation; and incorporating employment relations perspectives. Finally, we conclude with future research directions and canvas potential research questions to introduce ways researchers can enhance our understanding of employment relations in family firms.
... Cependant, le souci d'une mauvaise réputation amènera les entreprises familiales à chercher à minimiser les préoccupations environnementales (Lamb et al., 2017) Nous posons ainsi notre quatrième sous-hypothèse : ...
... Des études ont montré qu'il existe une relation directe entre le management familial et la performance sociétale des entreprises (Lamb et al., 2017). ...
... La RSE est ainsi un concept multidimensionnel et sa décomposition en plusieurs dimensions permettrait de mieux l'appréhender.La RSE est composée d'un ensemble diversifié d'initiatives qui couvrent un ensemble complexe de problèmes liés à la communauté, l'environnement, la sécurité des produits et aux relations avec les employés(Cruz et al., 2014 ;Dyer et Whetten, 2006). C'est un concept multidimensionnel qui incarne la relation entre les entreprises et la société(Lamb et al., 2017). Les entreprises peuvent obtenir des résultats positifs ou négatifs pour chacune des dimensions. ...
Thesis
Au cours des deux dernières décennies, on s'intéresse de plus en plus aux facteurs et mécanismes favorisant la responsabilité sociale des entreprises. Ce champ de la recherche suscite plusieurs débats et spécifiquement dans un contexte de l'entreprise familiale.Selon des recherches antérieures, les entreprises familiales et non familiales diffèrent en ce qui concerne leurs performances sociétales mais les résultats dans ce domaine manquent d'unanimité. Ces différences dans les résultats reposent principalement sur l'hétérogénéité des variables prises en compte pour identifier l'entreprise familiale et l'implication de la famille. Ainsi, et afin de contribuer à une meilleure compréhension de la performance sociétale des entreprises familiales, nous adoptons une approche basée sur l'echelle F-PEC de mesure de l'implication familiale.
... As a result, we highlight for future research the importance of having a detailed understanding of what each database captures specifically, and hence, when it comes to studying the effect of share owners on CSR, to be knowledgeable and explicit as to what they aim to test, for example, behavior, perceptions of it, or performance outcomes. Unpacking the aggregate measures to its components may also be a better practice for empirical testing, as compared with relying on the aggregate measures exclusively (see, e.g., Lamb et al., 2017, included in our review); otherwise, it may be difficult to detect changes in the specific items . ...
Article
Short‐termism is increasingly seen as a problem for developing sustainable and responsible business. We posit that a long‐term ownership horizon is an enabling but not sufficient condition for sustainability and propose owner stewardship as an important contingency. We review 161 articles on the relationship between corporate ownership and sustainability/CSR, published during 2017–2021 and not covered by previous reviews. We find (1) in most cases, a positive effect of institutional ownership on sustainability, particularly for long‐term institutional investors; (2) in most cases, a positive effect of state ownership, seen as long‐term‐oriented; and (3) mixed results regarding family ownership, also seen as long‐term‐oriented. We also observe considerable heterogeneity in how prior research defines and measures the key constructs of our review. Long‐term ownership appears to be an enabling but not sufficient condition for corporate sustainability, and stewardship at the ownership level may be an important missing link. Furthermore, the wide variety of terminology and measures in the literature poses a challenge for knowledge accumulation. Efforts towards convergence and standardization seem important. An exclusive focus on short‐termism may be misleading. Business leaders and policymakers ought to consider other parameters, such as steward ownership.
... Además, las empresas familiares son consideradas como la forma de negocio predominante en el mundo, y son muy importantes para la sociedad ya que estas empresas están invirtiendo recursos en la RSE, la filosofía y la práctica de integrar voluntariamente las preocupaciones sociales y 253 Actividades de Responsabilidad Social Empresarial que apoyan el cumplimiento de los Objetivos de Desarrollo Sostenible en empresas... ambientales en las operaciones de la empresa, debido a los valores familiares que contribuyen al compromiso social (Lamb et al, 2017). ...
Chapter
Full-text available
Este artículo describe un proceso de investigación-acción destinado a fortalecer el autorreconocimiento de niños con discapacidad cognitiva el grado 3° de una Institución Educativa de Popayán - Colombia. Se tuvo en cuenta el modelo sociocognitivo, como proceso de intervención pedagógica a través de planes de clase con ajustes razonables, el cual se construye a partir de los resultados generados por la evaluación pedagógica realizada a cada estudiante. Los resultados evidencian la importancia de ajustar y realizar un buen proceso de flexibilización curricular basado en estrategias pedagógicas que permitan la oportunidad de adquirir aprendizajes con un mismo propósito para todos, mejorando en la dimensión socio-afectiva el autorreconocimiento de habilidades y destrezas de los estudiantes, la integración y participación de manera activa en clase; y en la dimensión cognitiva el rendimiento académico, al fortalecer el pensamiento lógico con aprendizajes significativos.
... Además, las empresas familiares son consideradas como la forma de negocio predominante en el mundo, y son muy importantes para la sociedad ya que estas empresas están invirtiendo recursos en la RSE, la filosofía y la práctica de integrar voluntariamente las preocupaciones sociales y 253 Actividades de Responsabilidad Social Empresarial que apoyan el cumplimiento de los Objetivos de Desarrollo Sostenible en empresas... ambientales en las operaciones de la empresa, debido a los valores familiares que contribuyen al compromiso social (Lamb et al, 2017). ...
... Además, las empresas familiares son consideradas como la forma de negocio predominante en el mundo, y son muy importantes para la sociedad ya que estas empresas están invirtiendo recursos en la RSE, la filosofía y la práctica de integrar voluntariamente las preocupaciones sociales y Actividades de Responsabilidad Social Empresarial que apoyan el cumplimiento de los Objetivos de Desarrollo Sostenible en empresas... ambientales en las operaciones de la empresa, debido a los valores familiares que contribuyen al compromiso social (Lamb et al, 2017). ...
... Therefore, and despite the SEW perspective being a prevalent theoretical framework that enables academics to better explain why FFs perform distinctly in terms of social issues (Berrone et al., 2010;Neubaum et al., 2012), prior literature has not addressed, to the best of our knowledge, whether a wide range of properly assessed SEW dimensions, individually or combined, determine the CSR approach of FFs, considering a wide spectrum of CSR actions. Given that FFs are not homogeneous in terms of CSR (Lamb et al., 2017), we need to have a more comprehensive understanding of the net influence of different SEW reference points of family actors (Dick et al., 2020) on the CSR approach chosen. ...
Article
Full-text available
How family firms adopt a certain corporate social responsibility (CSR) approach remains a relatively unexplored matter in family firm and firm ethics research. Hence, we study how and why the CSR approach (broad vs. narrow; benefits vs. costs) differs within family firms, addressing the influence of the socio-emotional wealth (SEW) dimensions, individually or combined. We used empirical evidence gathered through 13 case studies of firms from the Andalusia region and we used the interpretative approach of the grounded theory based on case study data. Results of our analyses lead to propose that family firms with a higher identification and more positive than negative valence with regard to emotional attachment and family enrichment dimensions will be more likely to exhibit a broad approach of CSR. Likewise, those family firms adopting CSR actions with stakeholders due to instrumental use of image and reputation dimension will more probably display a benefits approach. JEL CLASSIFICATION: L26; M14
... The findings reveal that family ownership has a negative impact on CSR concerns, while the presence of a family CEO has a positive impact. Similarly, Lamb & Butler (2017) provide heterogeneity findings when examining the interrelationship between a firm's percentage of family ownership and its CSR concerns for a sample of 71 public firms from Fortune 500 companies. They reveal that family owners' equity in one hand, is positively related to CSR concerns (e.g. ...
Article
This study extends the previous study by investigating the key determinates of Corporate Social Responsibility (CSR) disclosure. The study aims to explore firstly the level of CSR disclosure in the Saudi Arabian environment to determine these companies' CSR towards their stakeholders. In addition, the study aims to investigate the possible impact of family antecedents on Saudi Arabian listed companies CSR disclosure during the period from 2015 to 2017. Family members can play an important role in encouraging their companies to disclose CSR information in their annual reports. This study sheds the light on the role of family companies in disclosing CSR components by comparing them with non-family companies. Consequently, this study ran the Ordinary Least Square (OLS) model in order to test the relationship between five main family antecedents and CSR disclosure. We measured CSR disclosure by a dichotomous checklist that depended on a manual content analysis. The findings demonstrate that, when compared to companies in developing countries, the Saudi Arabian listed companies have a low level of CSR disclosure. In addition, there is a significant relationship between CSR disclosure and two main family antecedents, namely, family ownership and family cross directorship. Further, when compared to non-family companies, family Saudi Arabian companies disclose more CSR information in their annual reports.
... Lin et al. (2018) analysed the impact of ownership composition and female directors on charitable donations. Other authors (Lamb et al., 2017) connect family ownership with CSR concerns. In comparison, Lin et al. (2015) explore the impact of such CG mechanisms on community engagement. ...
Article
Full-text available
Purpose This study aims to provide the intellectual structure of the academic literature on board characteristics and corporate social responsibility disclosure (CSRD) and corporate social responsibility performance (CSRP). To do that, the authors analyse the main theories, data sources and methodologies used by researchers, providing information on methodological bias and research gaps. Beyond that, this study offers a novel picture of the most critical drivers of CSRP/CSRD and offer constructive suggestions to guide future research. Design/methodology/approach A content analysis was performed on 242 articles extracted from the Web of Science database from 1992 to 2019. Findings Results indicate that board characteristics have a significant and increasing impact on corporate social responsibility (CSR) literature. The results also revealed that the board practices play a crucial role in managing CSRP/CSRD-related issues. The study also identifies the effect of the critical board characteristics on CSRP, CSRD quantity and CSRD quality. Furthermore, the study findings provide an overarching picture of the patterns and trends of the systematic nexus between board characteristics and CSRP/CSRD quality and quantity. Practical implications The study findings help provide an overarching picture of the systematic nexus patterns and trends between board characteristics and CSRP/CSRD quality and quantity. These results draw potential future avenues to bridge the void in the current board–CSR literature by presenting fruitful and indispensable directions for future research (governance mechanisms, new methodologies, variables, countries, etc.). It also suggests multidimensional and in-depth insights for reforming the board of directors’ guidelines. Originality/value To the best of the authors’ knowledge, minimal attention has been paid to systematising the literature on board and CSR.
Article
Full-text available
Research on corporate social responsibility (CSR) has traditionally focused on managerial discretion and stakeholders’ influence. This study extends current research by addressing the effect of family firms and institutional owners on CSR performance, namely, CSR strengths and concerns. Based on stewardship theory and the socioemotional wealth perspective, we propose that family firms are more likely to value CSR performance. Next, drawing from multiple agency theory, we predict that institutional owners, unlike family owners, will influence a firm’s CSR performance differently. We tested our hypotheses using a sample of 153 firms from 1994 to 2006 and found general support for our hypotheses. A higher percentage of family owned equity and the presence of a family CEO are found to increase CSR strengths, whereas transient institutional owners have an opposite effect. The presence of a family CEO and founding family are found to reduce CSR concerns. Contrary to our predictions, dedicated institutional owners are positively associated with CSR concerns.
Article
Full-text available
In this study, we examine the empirical association between corporate social responsibility (CSR) and information asymmetry by investigating their simultaneous and endogenous effects. Employing an extensive U.S. sample, we find an inverse association between CSR engagement and the proxies of information asymmetry after controlling for various firm characteristics. The results hold using 2SLS considering the reverse side of information asymmetry influencing CSR activities. The results also hold after mitigating endogeneity based on the dynamic panel system generalized method of moment. Furthermore, the CSR–information asymmetry relation is amplified in high-risk firms due to managers’ efforts to build a good reputation. Last, we find that CSR engagement is inversely associated with reputational risk measure and lower predicted value of reputational risk is positively associated with lower information asymmetry measures. We interpret these results as supporting the stakeholder theory-based, reputation-building explanation that considers CSR engagement as a vehicle to build and maintain firm reputation thereby enhancing the information environment.
Article
Full-text available
According to previous research, family and non-family businesses differ with respect to corporate social responsibility (CSR) policies in Japan. In this article, we address these differences and explore the main determinants of CSR in Japan, using a sample of 200 Japanese firms drawn randomly from a CSR database. In contrast with this previous research, we find that the characteristics of either family or non-family businesses do not influence CSR policies in general; however, when they do (for example, in human resources management), the influence is less strong for family businesses. We also find that firm size and innovation inclination are explanatory factors for CSR, supporting prior research in contexts other than Japan.
Article
Little is known about the relationship between family firms and downsizing. This study aims to close this gap. The study distinguishes between family management and family ownership as two distinct dimensions of family firms and analyzes their respective influences on downsizing. The findings suggest that the extent of family ownership decreases the likelihood of deep job cuts, whereas family management has no impact. However, family management is found to moderate the relationship between firm profitability and the likelihood of downsizing. It is suggested that family owners care more about their reputation for social responsibility than do other owners, motivating them to avoid deep job cuts.
Article
Using proxy data on all Fortune-500 firms during 1994–2000, we find that family ownership creates value only when the founder serves as CEO of the family firm or as Chairman with a hired CEO. Dual share classes, pyramids, and voting agreements reduce the founder's premium. When descendants serve as CEOs, firm value is destroyed. Our findings suggest that the classic owner-manager conflict in nonfamily firms is more costly than the conflict between family and nonfamily shareholders in founder-CEO firms. However, the conflict between family and nonfamily shareholders in descendant-CEO firms is more costly than the owner-manager conflict in nonfamily firms.
Article
The historiographies of Mexico and Brazil have implicitly stated that business networks were crucial for the initial industrialization of these two countries. Recently, differing visions on the importance of business networks have arisen. In the case of Mexico, the literature argues that entrepreneurs relied heavily on an informal institutional structure to obtain necessary resources and information. In contrast, the recent historiography of Brazil suggests that after 1890 the network of corporate relations became less important for entrepreneurs trying to obtain capital and concessions, once the institutions promoted financial markets and easy entry for new businesses. Did entrepreneurs in Brazil and Mexico organize their networks differently to deal with the different institutional settings? We examine whether in Mexico businessmen relied more on networks of interlocking boards of directors and other informal arrangements to do business than in Brazil. Our hypothesis is confirmed by three related results: (1) the total number of connections (i.e., the density of the network) was higher in Mexico than Brazil; (2) in Mexico, there was one dense core network, while in Brazil we find fairly dispersed clusters of corporate board interlocks; and most importantly, (3) politicians played a more important role in the Mexican network of corporate directors than their counterparts in Brazil. Interestingly, even though Brazil and Mexico relied on very different institutional structures, both countries had similar rates of growth between 1890 and 1913. However, the dense and exclusive Mexican network might have ended up increasing the social and political tensions that led to the Mexican Revolution (1910–1920).