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Socioemotional wealth importance within family firm internal communication
Abstract
Purpose
One of the key characteristics that distinguishes the family business from other firms is the importance of accruing and maintaining socioemotional wealth (SEW). Using an experimental design, this exploratory study investigates the communication practices of family business leaders responding to employees responsible for a business disruption. The purpose of this paper is to determine whether managers take action to protect SEW while responding to a crisis.
Design/methodology/approach
Three employees of a family firm participated in the experiment. A family member employee and a non-family employee were instructed to write a message informing a family member leader of a business disruption they created (infecting a computer with malware). The family member leader then received these messages and wrote a response to each employee. These responses were then content analyzed to determine whether messages expressed SEW importance and to see if SEW content differed based on the recipient’s familial status.
Findings
Content analysis of messages intended for family members and non-family employees indicated that messages intended for family members contain significantly different content associated with dimensions of Socioemotional Wealth Importance scale, particularly in terms of reinforcing family dominance, sustaining family continuity, and maintaining family enrichment.
Originality/value
This study is the first to examine crisis communication within the family firm and whether SEW endowment occurs via internal communication within the family firm. By utilizing an experiment, this study extends the SEW literature further by adding to the diversity of techniques utilized to study this topic.
... Nevertheless, socioemotional wealth is a concept that emphasizes the importance of non-financial goals and values for family-owned businesses. According to this perspective, family-owned businesses are motivated by financial performance and factors including family identity, legacy, and social responsibility (Marett et al.,2018). Thus, socioemotional wealth theory suggests that family-owned businesses may prioritize these non-financial goals over financial performance. ...
... Recent studies propose that the agency and stewardship views have applications in the family business context. The degree of embeddedness of family actors in the family and business determines which view would be applicable (Marett et al.,2018).' ...
... The relevant literature on which they are based is also presented for each set of items. Items were also taken from scales such as the Family Business Commitment Questionnaire developed by Carlock and Ward (2001), the F-PEC scale for Family Businesses (Kwan and Zhu, 2021), the Caring Contract scale used by (Martín et al., 2013), and the items used to capture intentions for transgenerational control (Marett et al., 2018). Therefore, the FIBER scale has its foundation in previous literature and derives from various sources. ...
... Not only the financial structure of the company is defended here but also the family within. Maintaining sustainability is also reflected in the continuity of the dynasty members in control and managing of the company (Maloni et al., 2017); however, we need to address the fact that this generational transmission can be significantly affected, when differences pop up in each generation (Marett, Marler, & Marett, 2018), which affect communications between members but most likely the socioemotional wealth (SEW) of the company. The intellectual capital working in an organization continually progresses up the organizational hierarchy of the company. ...
... Thus, family businesses can be classified as innovative, risky, serious, and friendly, where there is great growth in family or finances. While interaction with stakeholders does not establish a change in the company, we pretend to establish that they can better define their position against others and have a clearer idea of the projection as a corporate brand, connected to the objectives, values, and expectations of the stakeholders (Ussman et al., 2001), and where you can have a better and more precise idea of its performance in the supply chain (Maloni et al., 2017), related to the consumer (Allen et al., 2018) and to internal communications between members of the organization (Marett et al., 2018) (Fig. 5). ...
Financial and non-financial wealth in the family company has been a subject of discussion by several authors, placing family and profitability as the focus of their leaders’ decisions. In this study, we explain how the relevant variables work together to defend this wealth while considering the management of emotional and social intelligence and considering innovation and risk factors as elements of the decisions taken by the leading members of the family business. Through theoretical review, the authors present the wealth of socioemotional intelligence matrix or SEIW matrix, and according to the use of this socioemotional intelligence, four types of enterprises can be defined, which in turn takes us to pose the three-dimensional model Dual-SEIW as a solution. This model establishes, for the stakeholders, a performance profile of the business where the priorities are money and family.
... Furthermore, this approach could be useful with data that are generally difficult to obtain by other means (Kabanoff et al. 1995). Additionally, despite some research in the family business literature using content analysis (e.g., Marett et al. 2018), this technique is underutilized (Cleary et al. 2019). Secondly, following Jain et al. (2023), the Chairman's Statements are considered the most suitable to capture various FI-BER dimensions of SEW in the case of family firms. ...
After having gained prominence in the late 20th century, corporate social responsibility (CSR) has emerged as a critical business aspect, adopted widely across the corporate landscape. Although family firms play a significant global role, research on their relationship with CSR performance remains sparse and inconclusive. This paper seeks to bridge this gap by employing the primary classification of family firms, the socioemotional wealth perspective, and its FIBER model to examine their influence on CSR performance. The focus is on Canadian public companies listed on the S&P/TSX Composite Index from 2014 to 2022. Utilizing the NBC Canadian Family Index, the findings suggest that family firms exhibit superior CSR performance compared to their non-family counterparts. Further analyses indicate that family firms with greater control and influence by family members, those named after the family, those with strong emotional ties, and first-generation family firms tend to have enhanced CSR performance. By developing a socioemotional wealth score through FIBER dimensions to classify family firms, this study underscores the association of family firms with higher CSR performance, validating the robustness of the results.
... Additionally, they are thought to enhance employee passion, motivation, inspiration, trust, job security, commitment and job satisfaction (Ramos et al., 2021), contributing to social welfare and employee happiness (Rivo-L opez et al., 2022). Family businesses are also seen as providing a greater variety of roles, a more favorable environment for career development and better crisis management (Knezovi c et al., 2021), emphasizing the importance of employees' socioemotional wealth (Marett et al., 2018). ...
Abstract
Purpose – The purpose of this research is to delve into the scientific literature on hotel housekeepers in family
hotel businesses to suggest new research directions in this field.
Design/methodology/approach – This paper is based on a concise literature review to discuss the past and
future of research on family hotel business.
Findings – Research on family hotel businesses and the relationships and working conditions of their
employees is limited. Most studies are focused on family businesses in general, without specific emphasis on a
particular sector, or a specific job within each sector, or the type of company within a sector.
Originality/value – This paper synthesizes existing research on family businesses, particularly family hotel
businesses, to delve into work conditions in both fields. It seeks to establish connections with the job conditions
of hotel housekeepers as a means of addressing some of the challenges they face in their working environment.
... The mainstream literature in financial accounting research in family firms has been dominated by earnings management studies (Borralho et al., 2020a;Borralho et al., 2020b;Jaggi et al., 2009;López-González et al., 2019;Paiva et al., 2019;Prencipe & Bar-Yosef, 2011;Prencipe et al., 2008), with a lesser number of studies focused on different reporting quality issues, such as narratives (Drago et al., 2018) or voluntary disclosures (Engel et al., 2019). Marett et al. (2018) also studied SEW importance in family firm communication. However, they focused on internal communication using an experimental design. ...
Extant research suggests that the most significant elements of a family firm’s socioemotional wealth (SEW) can drive financial reporting decisions. This paper explores this empirically by analyzing corporate disclosures of a case organization – Guinness, a multinational family brewing firm – over an extended period. We identify the presence of the SEW dimensions in the firm’s corporate disclosures and explore the relationship between the most salient SEW dimension (family identity) and readability, measured by the Bog index. The analysis finds a positive association between family identity and readability in the period when the firm under study can be defined as a family firm. Other SEW dimensions do not appear to have an influence on readability. In addition, at the end of the period of study, when the firm under study ceased to be a family firm, the SEW dimensions failed to have an effect on readability.
La investigación previa sugiere que los elementos más destacados de la riqueza socioemocional de las empresas familiares pueden influir en la información financiera divulgada por parte de las mismas. Este trabajo intenta analizar la proposición previa de forma empírica mediante el estudio de la información divulgada por parte de una empresa familiar multinacional, Guinness, durante un largo período de tiempo. En el estudio se identifica la presencia de las dimensiones de la riqueza socioemocional en la información corporativa de la empresa y se explora la relación entre la dimensión más destacada (identidad familiar) y la legibilidad. Los resultados muestran una relación positiva entre la identidad familiar y la legibilidad en el período en el que la empresa estudiada se considera una empresa familiar. El resto de las dimensiones de la riqueza socioemocional no parecen influir en la legibilidad. Además, al final del período de estudio, cuando la empresa estudiada dejó de ser una empresa familiar, las dimensiones de la riqueza socioemocional dejaron de tener un impacto en la legibilidad.
... By nurturing an environment where family members are encouraged to build social ties through the business organization with internal stakeholders such as employees and other shareholders, and also with external stakeholders such as vendors, financiers and society at large, the next generation of family managers may be more inclined to commit to the family enterprise. Studies have shown that strategic measures such as frequent family meetings where current family managers discuss current state of the business and future strategies, and invite suggestions from other family members even those who are currently not involved in the business operations may help future family business leaders to visualize the benefits of being engaged with the family enterprise (Marett et al., 2018). Such close interactions among family members have been known to create stronger emotional bonds by uniting the family to a common vision (Samara and Paul, 2018). ...
Purpose
Drawing on the stakeholder theory, the purpose of this study is to examine relationships between family identity, emotional attachment and binding social ties, and commitment of family firm owners to the family enterprise in the context of an emerging economy. Furthermore, this study examines whether the strength of the above relationships significantly vary between the founder generation and the subsequent generation of owners.
Design/methodology/approach
A set of hypotheses is tested by applying partial least squares structural equation modeling on a sample of 357 family-owned manufacturing companies in Bangladesh. Deploying SmartPLS (v. 3.2), the path model is analyzed through bootstrapping procedure. The moderating effect is tested through multigroup analysis.
Findings
The findings suggest that the relationships between emotional attachment and family identity and commitment are positive and significant, whereas the association between binding social ties and commitment was not significant. Furthermore, a multigroup analysis revealed that there is a significant difference between the founder generation and their next generation in terms of influence of binding social ties and family identity on commitment, whereas there appears to be no difference in terms of emotional attachment and commitment between the two generations.
Practical implications
This study shows that compared to the founder generation, the next generation prioritizes family identity and social bonds, which leads to greater levels of collective commitment to the organization. Such knowledge may provide clues to incumbent family-firm leaders by identifying the areas where they need to emphasize in generating greater levels of commitment among their successors.
Originality/value
To the best of the author’s knowledge, this appears to be the first such study that provides a nuanced understanding of how family generation in control of the family firm influences the relationships between psychosocial components of socioemotional wealth and collective commitment of the owners of family firms in the context of an emerging economy.
... The mainstream literature in financial accounting research in family firms has been dominated by earnings management studies Borralho, Gallardo-Vázquez, Hernández-Linares, & Paiva, 2020;Jaggi, Leung, & Gul, 2009;López-González, Martínez-Ferrero, & García-Meca, 2019;Paiva et al., 2019;Prencipe & Bar-Yosef, 2011;Prencipe, Markarian, & Pozza, 2008), with a lesser number of studies focused on different reporting quality issues, such as narratives (Drago et al., 2018) or voluntary disclosures (Engel, Hack, Stanley, & Kellermanns, 2019). Marett, Marler, and Marett (2018) also studied SEW importance in family firm communication. However, they focused on internal communication using an experimental design. ...
Extant research suggests that the most significant elements of a family firm’s socioemotional wealth (SEW) can drive financial reporting decisions. This paper explores this empirically by analyzing corporate disclosures of a case organization – Guinness, a multinational family brewing firm – over an extended period. We identify the presence of the SEW dimensions in the firm’s corporate disclosures and explore the relationship between the most salient SEW dimension (family identity) and readability, measured by the Bog index. The analysis finds a positive association between family identity and readability in the period when the firm under study can be defined as a family firm. Other SEW dimensions do not appear to have an influence on readability. In addition, at the end of the period of study, when the firm under study ceased to be a family firm, the SEW dimensions failed to have an effect on readability.
... A crisis can occur due to internal factors, for example due to changes in ownership (e.g. Kashmiri & Brower, 2016;Lingo & Elmes, 2019;Marett et al., 2018) or due to external factors, for instance epidemic outbreaks (e.g. Eggers, 2020) and abrupt changes in the political (e.g. ...
Innovation research forms an emerging field of inquiry within the family firm (FF) literature. Numerous studies have suggested factors that influence FFs’ innovative behaviour but this body of work is highly fragmented, with inconsistent findings. Bearing this in mind and also taking into account that innovation can foster FFs’ internationalisation, this work advances the FF internationalisation literature by developing a conceptual framework that provides new explanations on the tendencies of internationalised FFs to innovate, especially in periods of crisis. To develop the proposed conceptual framework, we integrate and discuss papers published in International Business and FF journals, and develop nine propositions based on the family governance heterogeneity logic. The implications of this integrative conceptual framework are discussed.
... Continuity of the family legacy in the firm is an important distinction between family and non-family firms (Chrisman et al., 2012;Marett et al., 2018;Rousseau et al., 2019). This SEW dimension is related to the satisfaction that family managers derive from being able to contribute to the trans-generational sustainability of family influence over the firm. ...
Purpose
Although family business literature acknowledges that family firms owners are motivated by a set of socioemotional wealth (SEW) goals along with firm-centric business goals, yet a consistently predictable pattern of relationship between SEW and financial wealth is yet to be discerned. The purpose of this paper is to propose a theoretical model based on the stakeholder approach to suggest that family commitment mediates the association between the dimensions of SEW and firm performance.
Design/methodology/approach
A set of hypotheses are proposed that are tested using structural equation modeling with data collected from 357 medium to large sized privately held family firms in Bangladesh. The data analysis is done with SmartPLS (v.3.2).
Findings
The results indicate that family commitment partially mediates the relationships between family control and influence, family identification, emotional attachment and renewal of family bonds through dynastic succession and firm performance. The only non-significant relationship was between binding social ties and firm performance. The results provide a more nuanced understanding of the link between SEW goals and firm performance, and present important implications for theory and practice.
Research limitations/implications
The cross-sectional nature of the study exposes it to the specter of common method bias despite the fact that procedural remedies were initiated to minimize the impact of such occurrence. A longitudinal study with data obtained from multiple individuals at different levels of the organization would possibly yield more robust findings. Furthermore, in the absence of a multi-country and multi-sector analysis, a broad generalization of the findings may not be feasible.
Practical implications
The knowledge that family identity, emotional attachment and renewal of family bonds through dynastic succession may be leveraged to enhance the commitment of subsequent generation of family firm owners to the firm that may be pertinent to incumbents who desire to see their successors more engaged in the family enterprise. Furthermore, knowing that excessive focus on family control over the firm leads to negative outcomes is also pertinent to family firm leaders.
Social implications
Survival of family businesses is vital to the global economy as one of the primary drivers of global GDP growth and source of new employment. Policy makers can benefit from the findings of this study to customize policies that take into cognizance the importance of SEW owners of family firms and the fact that some of these SEW goals actually benefit the firm in terms of enhanced commitment to the enterprise and consequently superior firm performance.
Originality/value
The role of family commitment as a mediator between SEW and firm performance has not been dominant in the literature. By providing a finer-grained understanding of how family commitment accounts for the relationship between family-centric non-economic goals such as SEW and firm-centric goals such as business performance, the study presents a theoretical link between sociomemotional wealth and financial wealth in the context of private family firms.
... In such a configuration, family firms present an extensive implementation of internal communication practices to support organizational performances. Internal communication creates strong relationships not only between family members (Marett et al., 2018) but also between managers and employees. Internal communication develops shared goals, shared knowledge, and mutual respect. ...
Human Resource Management practices configurations
in family firms
Flamini G., Gnan L, Bojadjiev M
Abstract
The paper aims at investigating configurations of human resource management (HRM) practices in family firms. Four bundles of HRM practices (HRMP - labeled the Administrative, Shared, Integrated, and Professional bundle) are advanced and explored in a sample of 849 family firms. Support for the proposed HRMP configurations has been verified in the data. Next, the paper explores relationships with HRMP functional goals and organizational performances in family firms. The study verifies the assumption of equifinality of the four HRMP configurations as the combined effect of the HRMP on organizational performances of family firms, albeit these configurations reveal different functional goals. Then, we discuss implications, limitations, and further steps for research.
... To succeed in relationship competency, Kaur and Bains (2013) stated that entrepreneurs have to rely on good interpersonal and communication skills, their ability to influence others, and gain support. Thus communication is a critical aspect of day-to-day functioning that enables a firm to build social capital, foster identification with the firm, and develop the goodwill required to create a sense of community around common values and goals (Marett, Marler and Marett, 2018). As a matter of fact, human capital is a process of developing a strategy & support the business through problem solving, value adding, heterogeneity of the product, and quality of the product (Baum, 1994;Unger et al., 2011). ...
Microenterprise is essential for strengthening the economies in developing countries through job creation, skills’ development, self-esteem, and knowledge. This study intended to measure the effect of human capital on entrepreneurial competencies and the effect of entrepreneurial competencies on the performance of informal microenterprises owned and managed by women-microentrepreneurs in Kelantan, Malaysia. This study has employed a cross-sectional design and collected quantitative data from 384 informal women-entrepreneurs in Kelantan, Malaysia. The result indicated that human capital and entrepreneurial competencies had a significant positive effect on women microenterprises’ performance. Despite the increase in the number of research in this subsector, little attention has been given to the effect of human capital and entrepreneurial competencies on business performance in Malaysia. Therefore, this study aims to examine human capital, entrepreneurial competencies, and business performance among informal microenterprises owned and managed by women in Kelantan, Malaysia. Given that investments in human capital and entrepreneurial competencies improve the performance of informal microenterprises, the government and development organizations should, therefore, focus on entrepreneurship development programs, so that to improve the entrepreneurial competencies among women microentrepreneurs in Kelantan, Malaysia.
El endomarketing promueve el bienestar de los empleados vinculándose con la Salud Mental Positiva Ocupacional para mejorar su bienestar mental. Este estudio tiene como objetivo argumentar la conexión entre la SMPO y el endomarketing mediante una metodología cualitativa, basada en una revisión sistemática según la declaración PRISMA; de 511 estudios se obtuvo una muestra final de 50, endomarketing (68 %) y SMPO (22 %); de 39 cuantitativos el 70 % con fiabilidad mínima (α=0.83); Internal Market y Satisfacción de los cualitativos fueron las categorías predominantes. La SMPO y el endomarketing muestran objetivos comunes destacando la importancia de construir relaciones sólidas en el ámbito empresarial para motivar y retener al personal. La implicación más relevante del estudio subraya que el bienestar, a menudo equiparado con la salud mental, no refleja completamente su complejidad, lo que sugiere la necesidad de incorporar el concepto de capacidad para abordar de manera integral la salud mental.
This study aims to identify the primary factors that strengthen the crisis resilience of family businesses and develop a framework for the family business resilience (FBR) factors. This article provides a comprehensive picture of the family firm resilience literature by examining 189 research articles between 2003 and 2022. The articles were searched through a systematic literature review following the PRISMA statement, using the Web of Science and Scopus databases. The study findings indicate that family businesses are more resilient to external shocks than non-family businesses. The core factors of resilience in family firms are identified, and a framework for the identified factors is presented. Considering the significance of family businesses to the economy, understanding how to strengthen the resilience capability of businesses is essential for organisations’ long-term viability. Knowing the factors contributing to business resilience may help business leaders fix problems before significant changes in the outside world occur, often when the business’s future is tested. The aspect of resilience may be addressed in training programs designed to nurture resilient entrepreneurs and should be considered in the strategies of universities, public authorities, and other actors in the entrepreneurial ecosystem.
Purpose
Family businesses require internal communication (IC) to guide and provide direction, and the unique nature of involving both family and nonfamily employees add complexity. Navigating this complexity helps to ensure effective direction and management of family businesses. This paper explores the existing research concerning IC within family businesses and discusses the lenses and contexts through which it is commonly studied.
Design/methodology/approach
This paper provides a concise literature review to identify the most common lenses through which IC in family business has been researched.
Findings
IC in family enterprises is mostly studied through the lenses of IC between family generations, IC and the influence on family identity, and IC in times of crises. Existing research is largely focused on the role of family in IC, and limited consideration is given to the role of nonfamily members and family members outside of the business.
Originality/value
The paper synthesizes the direction and findings of existing research into IC within family business and provides avenues for future research. Managerial implications are also presented based on the synthesis of existing literature.
Purpose
This study aims to examine how differences in the strength of interpersonal ties affect the social structure of organisational family and non-family relationships and their implications for work-related interactions.
Design/methodology/approach
This study used a quantitative approach. The hypotheses were tested using multi-group analysis in PLS-SEM as implemented in WarpPLS Version.
Findings
The results show that both family and non-family organisational members are inclined to ask from others whom they previously have given information, implying that reciprocity in work-related interactions in the workplace is present at the dyad level. Furthermore, the existing robust strength of ties among family employees facilitate a three-way relationship where each member is responsible for the quality of work-related interactions between other members. This means that triadic communication is only present within family networks. While, the absence of strong interpersonal ties within non-family network fuels the popularity effect, where non-family employees who are perceived to be knowledgeable tend to be approached by others for work-related information.
Originality/value
This study brings to the fore a nuanced perspective that complements our current understanding of the implications of social relationships within family and non-family employee groups on work-related interactions in the workplace. It provides clues on how family and non-family employees identify with the firm through their informal relational embeddedness towards work-related interactions within the organisation.
This study aims to depict the current state of research on socioemotional wealth (SEW) in family businesses considering its definitions, roles, and dimensions. Using the SPAR-4-SLR protocol (Paul, Lim, O’Cass, Hao, & Bresciani, 2021), we develop a systematic review of literature on SEW covering 74 studies published between 2007 and 2022. We propose a comprehensive definition of SEW based on four nonfinancial aspects and an association model that reviews the roles of SEW as an antecedent, a consequence, or a moderator. We also offer a new conceptual model for SEW comprising a general dimension and ten specific dimensions to facilitate empirical inquiries into areas beyond those considered by extant SEW models. Finally, we highlight avenues for future research, emphasizing opportunities to advance the understanding of SEW in family business research.
This chapter shows the forms of relationship between the family business (FB) and its customers, through marketing and branding management. By reviewing literature, authors address three concepts: marketing and branding to generate value, the strategic and operational phase within business management, and consumer behavior along with the performance of the Company based on the rational or emotional. With these elements and through an exploratory theoretical method, authors present in a first phase the SOFT model as a starting point for understanding the decision making within the FB. Subsequently, the chapter defines that the client's decisions exposed to the marketing and branding actions are given through his triune brain, in which there are intellectual, limbic, and reptilian decisions. Authors propose through these two perspectives the relational concept between FB and client that they have called MindKeting as an exploratory proposal that helps to understand the types of decisions and actions that must be taken at the time of marketing management and brand of FB.
Purpose
– The purpose of this paper is to explore how family firms in general, and founder- and descendant-led firms in particular, espouse long-term oriented goals of continuity, perseverance and futurity in their narratives.
Design/methodology/approach
– Primary data from 11 founder-led and 13 descendant-led family firms from Austria was collected in a narrative setting for a better understanding of their long-term orientation (LTO). Content analysis via the help of Atlas.ti was employed.
Findings
– Findings suggest that family firms anchor decision making with a constant awareness of their past, incorporate anticipation in decision making and exhibit patience for investment. However, even though family firms jointly emphasize a LTO, they approach it differently. Founder-led family firms put the founder and its family central to business decisions, emphasize idea development and admit their own mulishness. Descendant-led family firms attempt to maintain the business over generations, believe in the importance to develop new projects and target a sturdy development of the firm.
Originality/value
– Family firms often have been accorded a certain long-term strategic orientation. However, what is missing from prior research is a more nuanced understanding of the LTO construct, as well as the heterogeneity of family firms in this regard. The findings contribute to extant research by showing how LTO is expressed in family firm narratives, providing a better understanding of the LTO construct, an omnipresent characteristic frequently used in family firm literature.
Assumptions about the long-term orientation (LTO) of family firms are common in family business research. Drawing on prior conceptualizations, this article further develops and validates the LTO construct using content analysis techniques on two separate samples of data. Validation comes through empirical analysis of content validity, external validity, dimensionality, and concurrent validity. We find that family firms are higher than nonfamily firms on all three dimensions of LTO. We also discuss how future research can use this now-validated construct to address key questions in family business research, as well as inform the broader business literature.
Globally, family firms are the dominant organizational form. Family involvement in business and unique family dynamics impacts organizational strategy and performance. However, family control of business has rarely been adopted as a discriminating variable in the organizations and the natural environment (ONE) research field. Drawing on the theory of planned behavior we develop a conceptual framework of the drivers of proactive environmental strategy (PES) in family firms. We argue that family involvement in business influences the attitudes, subjective norms, and perceived behavioral control of a firm's dominant coalition. Together these factors determine the extent of the dominant coalition's intentions to undertake PES. Further, family firms with lower levels of relationship conflict within the controlling family will be more successful in translating the dominant coalition's intentions to allocate resources for the pursuit of PES. Research implications of the theory are discussed.
This paper presents new evidence on the role of embeddedness in predicting contract duration in the context of Information Technology (IT) Outsourcing. Contract duration is a strategic decision that aligns interests of clients and vendors, providing the benefits of business continuity to clients and incentives to undertake relationship specific investments for vendors. Considering the salience of this phenomenon, there has been limited empirical scrutiny into how contract duration is awarded. We posit that clients and vendors obtain two benefits from being embedded in an inter-organizational network. First, the learning and experience accumulated from being embedded in client-vendor network could mitigate the challenges in managing longer-term contracts. Second, the network serves as a reputation system that can stratify vendors according to their trustworthiness and reliability, which is important in longer-term arrangements. In particular, we attempt to make a substantive contribution in theorizing about embeddedness at four distinct levels: structural embeddedness at the node level, relational embeddedness at the dyad level, contractual embeddedness at the level of a neighborhood of contracts and finally, positional embeddedness at the level of the entire network. We analyze a dataset of 22039 outsourcing contracts implemented between 1989 and 2008. We find that contract duration is indeed associated with structural and positional embeddedness of participant firms, with the relational embeddedness of the buyer-seller dyad and with the duration of other contracts to which it is connected through common firms. Given the nature of our data, identification using traditional OLS based approaches is difficult given the unobserved errors being clustered along two non-nested dimensions and the autocorrelation in a firm’s decision (here the contract) with those of contracts in its reference group. We employ a multi-way cluster robust estimation and a network auto-regressive estimation to address these issues. Implications for literature and practice are discussed.
Abstract
Using game theory to expand our understanding of the interaction between a founder and a successor in a family business, we explore the impact of poor interpersonal communication on family harmony during the succession process. Results show how deficient communication leads to disagreements and clashes between the founder and the successor and systematically reduces family harmony during the succession process. We term these situations communication traps. The findings demonstrate how inadequate communication hampers a transition process above and beyond psychological effects, even when the involved individuals share the same priorities, attitude, and interests.
Business sustainability has been defined as meeting current needs while providing the ability of future generations to meet their own needs. However, few firms invest in practices geared at sustainability. In this paper we investigate how family ties to future generations via the intention of transgenerational succession can be associated with the adoption of sustainable practices. Using data from 281 wineries in the United States collected through a survey questionnaire, we show that ties to future generations, measured as the intention of the winery owner to pass down the winery to their children, are associated with the adoption of sustainable certification.
This article makes the case for the socioemotional wealth (SEW) approach as the potential dominant paradigm in the family business field. The authors argue that SEW is the most important differentiator of the family firm as a unique entity and, as such, helps explain why family firms behave distinctively. In doing so, the authors review the concept of SEW, its different dimensions, and its links with other theoretical approaches. The authors also address the issue of how to measure this construct and offer various alternatives for operationalizing it. Finally, they offer a set of topics that can be pursued in future studies using the SEW approach.
We draw from socioemotional wealth and social identity research to develop a theory on reputational differences among family and non‐family firms. We propose that family members identify more strongly with their family firm than non‐family members do with either a family or non‐family firm. Heightened identification motivates family members to pursue a favourable reputation because it allows them to feel good about themselves, thus contributing to their socioemotional wealth. We hypothesize that when the family's name is part of the firm's name, the firm's reputation is higher because family members are particularly motivated for their firm to have a better reputation. Family members also need organizational power to pursue a favourable reputation; thus, we hypothesize that the level of family ownership and family board presence should be associated with more favourable reputations. We find support for our theory in a sample of large firms from eight countries with disparate governance systems and cultures.
This article begins to integrate ideas from the relational management perspective of public relations with the symbolic approach to crisis communication. The fusion centers on the relation history as part of an organization's performance history. The belief is that relationship affects the crisis situation by shaping perceptions of the crisis and the organization in crisis. The experimental study found support connecting relationship history to the crisis situation. The results are termed the velcro effect because only a negative relationship history produced an effect on organizational reputation and crisis responsibility. The article offers a model of the crisis situation to explain how relationship history fits with the variables used in the symbolic approach.
The objective of this article is to clarify the conceptual domains of organizational identity, image, and reputation. To initiate this theory development process, we present a “social actor” conception of organizational identity. Identity-congruent definitions of image and reputation are then specified and an integrated model proposed. With the aid of this model, a structural flawin the organizational reputation literature is identified and suitable remedies proposed. In addition, the authors explore the implications of invoking identity and identification in explanations and justifications of organizational reputation.
Crisis managers benefit from understanding how crisis communication can be used to protect reputational assets during a crisis. Situational Crisis Communication Theory (SCCT) offers a framework for understanding this dynamic. SCCT provides a mechanism for anticipating how stakeholders will react to a crisis in terms of the reputational threat posed by the crisis. Moreover, SCCT projects how people will react to the crisis response strategies used to manage the crisis. From its empirical research emerges a set of evidence-based crisis communication guidelines. The development of SCCT is discussed along with the presentation of its guidelines for crisis communication.
We extend the socioemotional wealth (SEW) perspective by arguing that SEW can be negatively associated with proactive stakeholder engagement (PSE). We further suggest that the SEW dimensions can be associated with positive or negative valence. Lastly, we propose that negatively valenced SEW dimensions lead to family‐centric behavior, which negatively affects PSE. This multifaceted conceptualization of SEW allows us to explain how family firms can partake in harmful stakeholder behaviors despite having seemingly strong SEW. Our paper suggests that SEW can be either an affective endowment or burden for family firms and their constituents.
A growing body of research shows that family firms are different from other organizations in significant ways. In this paper we review this literature by examining how family firms differ from nonfamily firms along five broad categories of managerial decisions. These categories encompass a set of key organizational choices concerning management processes, firm strategies, corporate governance, stakeholder relations and business venturing. We argue that socioemotional wealth or affective endowment of family owners explain many of these choices. We also examine some contingency factors (namely family stage, firm size, firm hazard, and the presence of nonfamily shareholders) that moderate the influence of socioemotional wealth preservation as a point of reference when making managerial decisions in family firms. Lastly, we explore the firm performance consequences of family ownership.
Little is known about the impact of family ownership and management on corporate social performance. Some scholars have suggested that family firms are not likely to act in a socially responsible manner, while others have indicated that socially responsible behavior on the part of the family firm protects the family's assets. This preliminary study compares the degree to which family and nonfamily firms are socially responsible using data from 1991 to 2000 from the S&P 500. Two hundred sixty-one firms (202 nonfamily and 59 family) appeared in the S&P 500 for the 10-year period. Findings show that family firms are more socially responsible than nonfamily firms along several dimensions. This is likely due to family concern about image and reputation and a desire to protect family assets.
Leadership succession continues to form the core of the family business literature. Numerous studies have suggested factors that influence family members initial satisfaction with the succession process, but this body of work is highly fragmented and lacks a unifying framework. In this paper, we draw on stakeholder theory and other organizational, behavioral, and economic theories to develop a conceptual model that integrates the findings from the literature. The research and practical implica-tions of this integrative, ready to test, model are discussed.
Little previous research has focused on the CEO's salary in family-controlled public firms. This lack is addressed by comparing and contrasting the executive compensation contracts of family-member CEOs and non-family CEOs. Data gathered during the years 1995 through 1998 from 253 randomly selected family-controlled public firms was analyzed. Professional managers with no family ties to firm owners were found to be compensated at a higher rate than executives with family ties. This relative pay disadvantage increases as the family ownership position improves (which depresses the pay of the family CEO) and R&D investments increase (which improve the pay of the professional CEO but not the family CEO). On the other hand, family ties protect a CEO from bearing excessive personal risk, as indicated by a greater compensation premium, as uncontrollable (systematic) business risk increases. These findings point to a complex company dynamic: when family-member CEOs are in charge, altruistic motives exist that often result in risk protection for the CEO's personal income rather than in higher pay for these executives. (SFL)
The appropriate resources are necessary but insufficient to achieve a competitive advantage. Resources must also be managed effectively. Herein, we develop a resource management process model composed of three components that can lead to a competitive advantage. These components include the resource inventory (evaluating, adding, and shedding), resource bundling, and resource leveraging. We examine resource management in family firms and thus explore the unique characteristics of five resources and attributes of family firms that provide potential advantages over nonfamily firms. The resources are human capital, social capital, patient capital, survivability capital, along with the governance structure attribute.
The premise of this article is that to understand how family affects business, the issue of how individual family members relate to the family must also be addressed. To that end, we propose family orientation (FO) to assess the extent to which individuals perceive and value family involvement. Drawing on the family therapy literature, including Bowen's family systems theory and contextual family therapy, we identify and develop five dimensions of FO—tradition, stability, loyalty, trust, and interdependency. We also discuss factors that might affect an individual's FO score, how FO might enhance understanding of other family business processes and practices, and future research directions.
The increased chance of deception in computer-mediated communication and the potential risk of taking action based on deceptive information calls for automatic detection of deception. To achieve the ultimate goal of automatic prediction of deception, we selected four common classification methods and empirically compared their performance in predicting deception. The deception and truth data were collected during two experimental studies. The results suggest that all of the four methods were promising for predicting deception with cues to deception. Among them, neural networks exhibited consistent performance and were robust across test settings. The comparisons also highlighted the importance of selecting important input variables and removing noise in an attempt to enhance the performance of classification methods. The selected cues offer both methodological and theoretical contributions to the body of deception and information systems research.
In this paper, we bring structural holes theory to different cultural contexts by studying the effect of structural holes in four high-tech companies in China and assessing whether they confer the benefits to individuals occupying the brokering position in a career network that have been found in Western contexts. On the level of national culture, we propose that the typical collectivistic culture of China will dampen the effects of structural holes. On the organizational level, we propose that in organizations that foster a high-commitment culture--a culture that emphasizes mutual investment between people--the control benefits of structural holes are dissonant with the dominant spirit of cooperation ,and the information benefits of structural holes cannot materialize due to the communal-sharing values in such organizations. Empirical results of network surveys confirm our hypotheses, and interview data add depth to our explanations. Brokers do not fit with the collectivistic values of China. Further, the more an organization possesses a clan-like, high-commitment culture, the more detrimental are structural holes for employees' career achievements such as salary or bonus, even after controlling for a host of other factors that may influence these career outcomes. In high commitment organizations, the "integrators" who bring people together to fill structural holes enjoy greater career benefits. Publicado
Purpose
The purpose of this paper is to explain how the concept of socioemotional wealth can be combined with other important concepts in the family firm literature to develop a theory of the family firm.
Design/methodology/approach
This is a conceptual paper based on a review of the paper of Martin and Gómez-Mejía in this issue as well as the family business literature in general.
Findings
Martin and Gómez-Mejía (this issue) present a theoretical model and propositions on the relationship between socioemotional and financial wealth that advances understanding of family firm decision-making. That paper provides an initial step toward a theory of the family firm that can explain why firms select the family form of organization to conduct economic activities, what determines their scale and scope and why heterogeneity is observed among family firms. This commentary takes another step toward such a theory by discussing how the combined consideration of goals, governance and resources could be used to address the above three questions.
Originality/value
The precepts of a new theory of the family firm is presented that incorporates the concepts of goals (socioemotional wealth), governance (family ownership and control) and resources (familiness) of family firms to explain why family firms exist and potentially thrive as well as to explain the heterogeneity among family firms.
Family firms are thought to pursue nonfinancial goals that provide socioemotional wealth, but socioemotional wealth is feasible only with family control of the firm. Using prospect theory, we hypothesize that socioemotional wealth increases with the extent of current control, duration of control, and intentions for transgenerational control, thus adding to the price at which owners would be willing to sell their firms to nonfamily buyers. Findings from two countries show that current control has no impact, and duration of control has a mixed impact. However, intention for transgenerational control has a consistently positive impact on the perceived acceptable selling price.
Purpose
– The purpose of this paper is to use the socio‐emotional wealth perspective to examine how the level of family involvement reduces the propensity to use incentives to non‐family managers in small to medium‐sized enterprises (SME) family firms.Design/methodology/approach – Primary data were collected from US firms. To evaluate the hypotheses, a logit model was employed on a final sample of 2,019 small family firms.
Findings
– Results suggest that family influence and control and intra‐family transgenerational succession intentions are negatively related to the propensity to use incentives. Also, the interaction effects of family management and ownership reduce the propensity to use incentives.
Originality/value
– The paper’s empirical findings imply that despite their potential economic benefits, family involvement reduces the probability that incentives will be offered to non‐family managers because such incentives are perceived to be inconsistent with the preservation of the family’s socioemotional wealth. Also, choices that reflect a preference for socioemotional wealth may not only be a function of decision framing and loss aversion but also by the size of the economic pay‐offs that might be available. The findings suggest that non‐family managers in SME family firms may be affected by a family’s preoccupation with its socioemotional endowments. Thus, the authors expect that this paper provides further avenues to explore the decisions about attaining non‐economic and economic goals and other strategic issues in family firms.
The behavioral agency model suggests that to preserve socioemotional wealth, lossaverse family firms usually invest less in R&D than nonfamily firms. However, behavioral agency model predictions are inconsistent with the well-accepted premise that family firms have a long-term investment orientation. We reconcile these seemingly incompatible predictions by adding insights from the myopic loss aversion framework, which deals with the impact of decision-making time horizons. The combination of these two prospect theory derivatives led us to hypothesize that family firms usually invest less in R&D than nonfamily firms but the variability of their investments will be greater owing to differences in the compatibility of long- and short-term family goals with the economic goals of a firm. However, when performance is below aspiration levels, we theorize that family goals and economic goals tend to converge. In this situation, the R&D investments of family firms are expected to increase and the variability of those investments decrease, relative to nonfamily firms. Analysis of 964 publicly held family and nonfamily firms from the Standard & Poor's 1500 between 1998 and 2007 support our hypotheses, confirming a need to take the heterogeneity of family firms more fully into account.
Research problem: This study investigates the difference in perceptions within the family-owned businesses of messages received from family members and outsiders to assess the role that relational familiarity (the amount of prior experience two people share communicating with each other) plays in internal business communication in these settings. Previous research has shown that this relational familiarity–along with experience with the communicative medium, the message topic, and the business context—lead to channel expansion (the ability to reduce uncertainty from a message with limited communicative cues) for business communicators. But the impact of relational familiarity on communication competence and personal biases between family members—which could impact the ability of relational familiarity to achieve its intended goals—has yet to be fully explored. Research questions: (1) Does increased relational familiarity between communicators lead to increased perceptions of message effectiveness and appropriateness in lean media settings? (2) In family business settings where familial biases may be prevalent, is increased relational familiarity linked to perceptions of increased sender likeability and lowered message negativity? Literature review: Channel Expansion Theory, which proposes that communicators can overcome the limitations of a medium by using their personal experience, guides this study. Previous research found that with personal experience with the communicator sending the message, a message receiver can enhance the limited capacity of a medium to convey cues that aid in understanding the message. Four perceptual variables—message effectiveness, message appropriateness, message negativity, sender likeability—result in benefits accrued from channel expansion and relational familiarity, such as reduced uncertainty and equivocality about the message topic. Methodology: A quasiexperimental setting was desig- ed to elicit messages from business co-workers using email. Message senders were instructed to describe the same business problem in order for the recipient to understand the problem and decide how to proceed. Eighty-three family business owners, managers, and employees received one message from a family member belonging to the same business and one message assigned at random from a nonfamily member working elsewhere (a stranger). The 83 message receivers were asked to complete instruments measuring their perceptions of the messages. Results and conclusions: Results suggested that the relational familiarity between communicators played a significant role in improving message effectiveness and message appropriateness. Sender likeability was also enhanced when family members correctly identified the source of the message. The findings suggest that family members can benefit from channel expansion, though not as many members as expected, and that complex problem and task descriptions were communicated using lean media (communication channels that inhibit sending messages infused with communicative cues) and are perceived as most effective when described by familiar others.
We extend recent commentary about socioemotional wealth by reviewing theory and offering suggestions aimed at enhancing the correspondence between the theoretical construct and its empirical correlate. While it is clear that the field has made vast strides since its introduction in 2007, the research literature remains diverse and disjointed: an outcome we attribute, in part, to the use of underspecified research models. We hope our suggestions help researchers establish a robust methodological foundation on which future research can build.
While Cruz, Larraza-Kintana, Garcés-Galdeano, and Berrone demonstrate how SEW can simultaneously elicit good and bad behavior in regard to corporate social responsibility, their findings also give rise to the idea that maintaining control and influence over day-to-day operations (internal socioemotional wealth [SEW]) and maintaining positive assessments of the firm's reputation (external SEW) may at times be in conflict. This commentary builds upon this notion by highlighting the need to explicitly examine SEW conflict, as well as offering initial theorizing on how family firms will pursue SEW preservation in these situations. Drawing on image theory, we theorize a process where preserving internal SEW is generally used as the guiding script in family firms because it is more salient on an everyday basis. However, we propose that if its preservation threatens the organization's identity and reputation, the script will be disrupted, precipitating a shift to preserving external SEW. The article concludes by discussing the broader theoretical implications of SEW conflict for family firms.
The article contributes to the literature on socioemotional wealth by analysing the drivers of non-financial goals in the family firm. We draw from family system and social identity literature to analyse how family dynamics affect the setting of non-financial goals suggesting that this influence is mediated by the family's degree of identification with the firm. More specifically, we propose that a positive family climate in terms of cohesion, open communication and intergenerational attention generates a greater identification of the family with the firm. In turn, identification leads the firm to adopt value creation goals specific to the family or non-financial goals. Data obtained from 374 members of TMTs in 173 Spanish private family firms allow for the confirmation of these expectations.
Purpose
– The purpose of this paper is to examine how family member employees’ communicative experiences within their families affect their perceptions of the workplace. The influence of family business employees’ perceptions of family communication patterns on family satisfaction, family involvement, and work involvement within their family businesses were explored.
Design/methodology/approach
– A total of 138 family business employees, representing 81 family businesses, were surveyed. The questionnaire contained measures of family communication patterns, family involvement, work involvement, family satisfaction, as well as several demographic questions. Path modeling was used to analyze two proposed models of family involvement and work involvement.
Findings
– Conversation orientation was related to perceptions of family satisfaction and perceptions of family satisfaction were related to perceptions of family involvement. While both proposed models were consistent with the data, no significant relationships were found between conformity orientation and perceptions of family satisfaction and between perceptions of family satisfaction and work involvement.
Originality/value
– While not only exploring family business employees’ experiences through a unique communicative lens, this study also provides several practical implications for family business owners and managers.
Theoretical explanations for family firm underinvestment in R&D relative to nonfamily firms remain nascent. We revisit this question using a refinement to the behavioral agency model (BAM)—the mixed gamble—that allows us to examine the socioemotional trade-offs that R&D represents for the family firm and how this differentiates their R&D investment decision from nonfamily firms. We do so in an empirical context where R&D investment is of greatest importance—high-technology industries. Moreover, we examine three contingencies that allow us to explore heterogeneity across family firms in their R&D decisions due to their effect upon the family's socioemotional wealth mixed gamble: institutional investor ownership, related diversification, and performance hazard.
Understanding how private family firms gauge performance is of great interest to family business scholars. Unfortunately, finding comparable data to understand differences in the performance of such firms is challenging. This study draws from the organizational identity literature to show how private family firms communicate different goals in publicly available organizational narratives. The authors illustrate a process using content analysis that allows family business scholars to create a comparative data set that captures both normative and utilitarian goals using website and press release narratives from a sample of Australian firms.
We apply organizational identity theory to examine factors that lead family firms to create a family firm image and investigate how a family firm image impacts firm performance. We find that family firm pride, community social ties, and long-term orientation are positively associated with the inclination of a firm to portray itself as a family business to consumers and stakeholders. In turn, we find that a family firm image benefits firm performance. Thus, our study demonstrates that by building a family firm image, the unique family influences on the firm can be leveraged to create a competitive advantage for family firms.
While family business research has prominently recognized that family firms are motivated by nonfinancial factors, the literature has remained relatively silent about whether or not these firms are more likely than others to engage actively with their stakeholders, who often have nonpecuniary demands. This paper argues that family firms are more prone to adopt proactive stakeholder engagement (PSE) activities because by doing so they preserve and enhance their socioemotional wealth (SEW). We explore the impact of the different dimensions of SEW on PSE and identify distinctive logics that explain the adoption of such practices. Finally, we offer a set of topics for future studies.
The study investigated the empirical relationships among social power, message behavior, and compliance. A conceptualization of social power from power dependency theory was offered, and two models of the general relations among these constructs were advanced. They included a mediation model and a moderating model. These issues were investigated by having 108 subjects participate in a bargaining experiment where power was controlled by systematically varying each partner's alternatives, and participants' message behavior and outcomes were observed. Although power had non-trivial effects on message behavior, the data were generally inconsistent with the mediation model. The data were consistent with the moderator model which predicted that message effectiveness varies as a function of social power. Implications and limitations of the results are discussed.
A major challenge facing the family firm is the succession process. One reason for this challenge might involve the successor's ability to acquire the predecessor's key knowledge and skills adequately to maintain and improve the organizational performance of the firm. This paper uses two theoretical approaches from the strategic management field to explore this critical process and analyze how it can be managed effectively: the resource-based theory of the firm and the emergent knowledge-based view. This conceptual framework provides a powerful tool for understanding the nature and transfer of knowledge within the family business, which becomes the basis for developing competitive advantage over nonfamily businesses.
Under which conditions can professional knowledge and values be integrated successfully into the organization and management of a family firm?
Analyzes arguments presented by S. Jackson (1984 [unpublished paper]), Jackson and S. Jacobs (see record
1983-25258-001), and Jackson and Jacobs (1987 [unpublished paper]) concerning the use of a controlled message design in the study of language variables. The arguments contain both methodological and substantive errors, such that nested designs and multiple messages should be used only when necessary. The traditional controlled message, crossed design (not the naturalistic message, nested design) is robust; robust against incidental and fundamental confounding, against message by treatment by message interactions, and relatively robust against Type II error. Taken together with meta-analysis, the traditional single message, crossed design can identify message by treatment interactions while the multiple message design makes it impossible to identify such interactions. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
An empirical study examines some determinants of succession planning in family firms.
While some researchers propose that the combination of family and business creates a need for trade-offs in family and business demands, we argue that the social system of the family creates a synergy in the top management team (TMT) that is not present in TMTs with less “familiness.” We argue that the unique dynamics created by the social aspects of the family-owned firm will result in higher cohesion, potency, task conflict, and shared strategic consensus than those TMTs with less “familiness.” Discriminant analysis of three groups of TMTs (parental, familial, and nonfamily) was conducted on a sample of 224 TMTs of new ventures to explore our propositions.
Using the conflict theory lens and insights from the family business literature, we develop a theoretical model concerning the effects of task, process, and relationship conflict in family firms. Family firms are characterized by different control structures and generational involvement. Accordingly, we discuss the expected effect control concentration has on task, process, and relationship conflict, and propose that generational involvement affects the importance of task and process conflict to a family firm's performance. Furthermore, our model suggests that relationship conflict moderates the outcomes of task and process conflict. The degree of relationship conflict in family firms is in turn influenced by altruism, which characterizes interactions among family members.
Trust, a competitive advantage for family businesses in the early stages, often deteriorates as the firm grows, putting it under considerable risk. While sustaining trust within family businesses is a critical topic, we have limited understanding of this issue. Yet, the trust research within the organizational sciences provides considerable insight on this topic. Therefore, in this paper a model of sustaining trust is presented based on an integration of this trust literature with the family business literature. The basic premise of the model is that trust is dynamic and multiple dimensions of trust need to be developed through structures and processes to sustain interpersonal trust inherent in the early stages. Implications of the model and future research directions are outlined.
After decades of being viewed as obsolete and problem ridden, recent research has begun to show that major, publicly traded family-controlled businesses (FCBs) actually outperform other types of businesses. This article examines the nature of such family businesses in an attempt to explain why some seem to do so well and others so poorly. It begins with four fundamental governance choices that distinguish among different kinds of family businesses: level and mode of family ownership, family leadership, the broader involvement of multiple family members, and the planned or actual participation of later generations. Using precepts from agency and stewardship theory, it relates these dimensions to the nature of the resource-allocation decisions made by the business and capability development, which in turn have implications for financial performance. Propositions are drawn about the drivers that make some family businesses great competitors—while leaving others at a disadvantage.
Our paper contributes to the overarching question: "How does the family contribute to firm success?" We add to the nomological net of the familiness construct, by reaching beyond the components of involvement and the essence approach and by introducing organizational identity as a third dimension of familiness. As such, we investigate which families are most likely to build familiness. Specifically, the organizational identity dimension of familiness reflects how the family defines and views the firm, which can facilitate performance advantages through leveraging familiness both internally and externally. Lastly, we discuss how the combinations of components of involvement, essence and identity dimensions of familiness interact and explain why and how some families are a key resource to their firms while others add little value to their organizations.
Social identity theory has been applied to many organizational contexts, including family businesses. However, the current study is one of the first to explore the organizational identification of non-family member employees. Based on previous research, it seems likely that, for family business employees, organizational identification mediates the relationship between organizational justice, homophily, and commitment. This study proposes a model of identification for family business employees based on these considerations. Although the current study did not confirm the proposed model, an alternative model is discussed.
The common perception of family-controlled businesses (FCBs) is that they are subject to stagnation, clannishness, cronyism and rash leadership. Yet many FCBs are highly successful. This paper is based on a study of 46 successful and 24 struggling FCBs to determine how they differed in their strategic, organisational and leadership priorities. It identifies four main priorities which it calls “the 4 Cs”: continuity, community, connections and command. Each of these priorities contains advantages, but they also have their downsides. While the successful FCBs effectively exploited the Cs, the unsuccessful companies manifested these priorities and practices less frequently, and fell victim to their negative aspects. Citing examples of FCBs, this paper offers an analysis of each of the 4C priorities and the lessons that can be applied to FCBs and non-family companies.
This paper identifies the thinking patterns necessary for nonfamily employees to work effectively within family businesses. Herein, we use transaction cognition theory (Mitchell, R.K., 2001) to systematically identify the extent of cognitive complexity experienced by nonfamily employees, and thereby highlight factors within the cognitive situation that can improve family/nonfamily compatibility and effectiveness. We conclude with a discussion of the transaction cognition theory contribution to theory building.
Advances in technology and communication have rendered corporate reputations more vulnerable than ever to criticism and attack from anti-corporate pressure groups, which now have the capacity to reach a global audience and mobilize their protests at a multinational level. This paper will discuss the increasing value of corporate reputation as a source of differential advantage in the global marketplace, and the threats that exist to even the most reputable organizations. Based on this analysis, the paper will investigate the role of reputation in crisis management, and the extent to which the actions of the increasingly influential anti-corporate movement can be managed successfully