We examine the role of religious identity in promoting strategic renewal in privately held founder family firms. Religious identity in these firms refers to their collective sense of being that reflects their founders’ and owner family members’ espoused religious values and beliefs, thereby distinguishing themselves from others in what is central, distinct, and enduring about their organization. We propose that such a religious identity determines family firms’ spiritual capital, which influences strategic renewal activities such (...) as conflict resolution and resource allocation. Specifically, we argue that spiritual capital can be a double-edged sword when family firms pursue strategic renewal. We discuss the implications of our work for future research. (shrink)

We examine the role of religious identity in promoting strategic renewal in privately held founder family firms. Religious identity in these firms refers to their collective sense of being that reflects their founders’ and owner family members’ espoused religious values and beliefs, thereby distinguishing themselves from others in what is central, distinct, and enduring about their organization. We propose that such a religious identity determines family firms’ spiritual capital, which influences strategic renewal activities such (...) as conflict resolution and resource allocation. Specifically, we argue that spiritual capital can be a double-edged sword when family firms pursue strategic renewal. We discuss the implications of our work for future research. (shrink)

Building on agency and resource-based view theories, this study investigates the level of environmental disclosure (ED) practices of family versus non-family firms and explores the moderating role of board gender diversity. We test our hypotheses on a 3-year (2018–2020) panel data sample comprising 324 observations of Italian small- and medium-sized enterprises traded on the Euronext Growth Milan. Findings show that, compared to non-family firms, companies with a family firm status are characterized by lower levels (...) of ED. Gender diversity on the board, however, moderates this relationship, reducing this gap, to the extent that the family firm status is associated with higher ED when the number of women directors is high enough to constitute a critical mass. We consequently contribute to the studies on family business, corporate governance, and corporate social responsibility. (shrink)

Business Ethics, the Environment &Responsibility, Volume 33, Issue 2, Page 217-240, April 2024.

This study investigates the engagement of family firms in corporate social responsibility. We first compare their corporate social performance to non-family firms. Then, following recent evidence on the heterogeneity of family firms, we examine two factors that may influence CSP within family firms: the level of family control and the governance orientation of the country in which they operate. This research is based on a theoretical framework which considers both agency and (...) socioemotional wealth influences on family firms CSR engagements. Overall, we find that family firms exhibit lower CSP than non-family firms. But when focusing on family firms, our analyses show a curvilinear relationship between family control and CSP. At lower levels of control, family owners invest more in social initiatives to protect their SEW. Beyond a threshold level of control that we estimate at 36 % in our sample, economic considerations prevail over SEW and social performance starts decreasing. We also find that family firms operating in stakeholder-oriented countries are more attentive to social concerns than those operating in more shareholder-oriented countries. (shrink)

The current work represents a piece of research on the family firm of the semasiological, interpretive or culture creation type. In it we carry out a comparative analysis of the organizational culture of this type of firm along with firms not considered to be family firms, using as theoretical framework generally accepted theories in business administration, such as the systems, neoinstitutional, transformational leadership, and social identity theories. Our findings confirm the existence of certain elements of culture, (...) especially values and allow us to propose a value-based model to help family firms to survive through different family generations. (shrink)

The goal of this research is to analyze the heterogeneity of family firms in the normative attention to their non-family stakeholders. With this aim, we suggest that the psychological process of top family managers in terms of individual affective commitment to their firms is a key variable to explain that heterogeneity. However, we also suggest a moderator effect of the family stakeholder salience in the relationship between the managers' affective commitment to the firm and (...) the establishment of firm goals toward non-family stakeholders. The results of a hierarchical regression analysis on data obtained from 207 family executives show a significant positive influence of managers' affective commitment on the establishment of goals related both to internal and external non-family stakeholders. In addition, we can observe a negative moderator effect of the family utilitarian power—as an indicator of the family stakeholder salience—on the relationship between the family managers' affective commitment and the goals related to non-family employees. (shrink)

This study examines the R&D investment behaviour of different types of family-controlled firms with the moderating role of ownership discrepancy between cash-flow rights and excess voting rights by using the sufficiency conditions’ theoretical framework of ability and willingness developed by De Massis. It uses data from family firms that have issued A-shares from 2008 to 2018. They used pooled OLS regression for data analysis and Tobit regression for robustness checks. This study classifies family firm types (...) into two categories, namely, the lone-controller family firms (LCFFs) and the multi-controller family firms (MCFFs), with each being further classified as “excess” or “no excess” voting rights. Both LCFFs without excess voting rights and MCFFs with excess voting rights have the “ability” and “willingness” toward R&D investment. LCFFs with excess voting rights and MCFFs without excess voting rights only have the ability but low willingness to invest in R&D. The study also establishes that Chinese family-controlled firms are heterogeneous toward risky investment. To the best of our knowledge, this study is the first to differentiate Chinese family firms by their unique ownership structure characteristics in investigating the effect of the family firm structure on R&D investment. The study is a novel attempt to test the willingness and ability framework of LCFFs and MCFFs. Previous studies based on agency theory have tacitly assumed that ability and willingness exist in family-controlled firms. However, this study challenges this implicit assumption. (shrink)

This study explores the downsizing propensity of family and non-family firms by considering their territorial embeddedness during both periods of economic stability and financial crisis. By drawing on a panel dataset of Spanish manufacturing firms for the period 2002–2015, we show that, all things being equal, family firms have a lower propensity to downsizing than non-family firms. When considering the effect of territorial embeddedness, we found that territorially embedded family firms (...) have an even lower propensity to downsizing than their non-family counterparts. Furthermore, the concern of territorially embedded family firms for their employees’ welfare was particularly pronounced during the years of the global financial crisis. This result is explained by the existence of socially proximate relationships with the firms’ immediate surroundings, based on similarity and a sense of belonging, which push deeply rooted family firms to treat their employees as salient stakeholders during hard times. Overall, our study stresses the importance of local roots in moderating the relationship between family firms and downsizing. (shrink)

ABSTRACT:This manuscript develops the concept of organizational virtue orientation (OVO) and examines differences between family and non-family firms on the six organizational virtue dimensions of Integrity, Empathy, Warmth, Courage, Conscientiousness, and Zeal. Using content analysis of shareholder letters fromS&P 500companies, our analyses find that there are significant differences between family and non-family firms in their espoused OVO, with family firms generally being higher. Specifically, family firms were significantly higher on the (...) dimensions of Empathy, Warmth, and Zeal, but lower on Courage. Based on these findings we further develop the OVO concept through the discussion of implications and areas for future research. (shrink)

ABSTRACT:The ubiquity of family dominated firms in economies worldwide suggests that inquiry into the nature of the ethical frames of these types of firms is increasingly important. In the context of a social exchange approach and the norm of reciprocity, this manuscript addresses social cohesion in a dominant family firm coalition. It is argued that the factors underlying this cohesion, direct versus indirect reciprocity, shape unique attributes of family firms such as intentions for transgenerational (...) sustainability, the pursuit of non-economic goals, and strong interpersonal ties. Exchange structures, represented by direct and indirect reciprocity, lead family and non-family firms toward development of distinctive ethical frames of reference. (shrink)

This study draws upon the behavioral agency model and the concept of socioemotional wealth to investigate how family firms’ employee pension underfunding decisions differ from those of non-family firms. We explore how these differences are influenced by financial distress, generational stage, and whether the firm is eponymous. We test our hypotheses using data from 452 US firms over an eleven-year period. Our results suggest that family firms are less likely to underfund pensions, but (...) this effect is attenuated in later generational ownership stages and in non-eponymous firms. (shrink)

This paper investigates the layoff behavior, a typical people dimension of corporate social performance, of family firms from a place-based perspective. We theorize that a place-based culture within family firms ensures that all organizational members share a deep sense of connection with the place of operations which makes them inherently care about their impact on society. Using data on layoffs of 2000 largest US firms between 1994 and 2007, we find that family firms (...) do indeed exhibit a lower tendency to lay off employees in comparison to non-family firms; this relationship is particularly strong in ‘places’ with low population where the negative social externalities related to layoffs tend to be higher. Further post hoc analyses indicate that family firms have a strong place-based culture which can provide resource-based competitive advantages. (shrink)

ABSTRACT:This manuscript develops the concept of organizational virtue orientation (OVO) and examines differences between family and non-family firms on the six organizational virtue dimensions of Integrity, Empathy, Warmth, Courage, Conscientiousness, and Zeal. Using content analysis of shareholder letters fromS&P 500companies, our analyses find that there are significant differences between family and non-family firms in their espoused OVO, with family firms generally being higher. Specifically, family firms were significantly higher on the (...) dimensions of Empathy, Warmth, and Zeal, but lower on Courage. Based on these findings we further develop the OVO concept through the discussion of implications and areas for future research. (shrink)

Extending the dialogue on corporate social performance (CSP) as descriptive stakeholder management (Clarkson, Acad Manage Rev 20: 92, 1995), we examine differences in CSP activity between family and nonfamily firms. We argue that CSP activity can be explained by the firm's identity orientation toward stakeholders (Brickson, Admin Sci Quart 50: 576, 2005; Acad Manage Rev 32: 864, 2007). Specifically, individualistic, relational, or collectivistic identity orientations can describe a firm's level of CSP activity toward certain stakeholders. Family (...) class='Hi'>firms, we suggest, adopt a more relational orientation toward their stakeholders than nonfamily firms, and thus engage in higher levels of CSP.Further, we invoke collectivistic identity orientation to argue that the higher the level of family or founder involvement within a family firm, the greater the level of CSP toward specific stakeholders. Using social performance rating data from 1991 to 2005, we find that family and nonfamily firms demonstrate notable differences in terms of social initiatives and social concerns. We also find that the level of family and founder involvement is related to the type and frequency of a family firm's social initiatives and social concerns. (shrink)

This is an exploratory study of corporate social performance in firms with family members in executive, governance, or strong ownership positions. Family firmsdominate the economy in most countries, including the United States, and families are thought to be more concerned with personal wealth creation and risk avoidance than social performance. Although such firms have been shown to have superior financial performance, I found no evidence of superior (or inferior) social performance among family firms in (...) the S&P 500. In a departure from the methodological norm in business and society, I used KLD data as dependent variables instead of independent variables. I was able to predict KLD scores from firm size, industry, and strategy variables, but family firm status rarely played a role. (shrink)

Research on corporate social responsibility 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. (shrink)

Family firms not only play an important role in economic growth but should also be held partly responsible for environmental degradation. Employing normative stakeholder theory and analyzing unique Chinese survey data via stepwise regression models, our findings indicate that second-generation successors did not significantly impact family firms' environmental investment. However, among second-generation successors, we find that successors with international experience positively impacted environmental investment. The propensity score matching (PSM) and two-stage least squares estimation (2SLS) approaches confirm (...) our results. As an interdisciplinary study, our research is of great value to the environmental responsibility and family business literature. (shrink)

The widespread critical evidence surrounding executive compensation of listed corporations has boosted shareholder activism in recent decades. The say-on-pay (SOP) mechanism—a vote in which shareholders express their (dis)agreement with executive pay designs—is one of the corporate governance mechanisms that has led to this activism among listed firms. Merging agency and socioemotional wealth (SEW) arguments, this paper analyzes how effective SOP voting results are among listed family firms in terms of CEO compensation efficiency and equity. Using a sample (...) of UK listed firms from 2011 to 2018, our results show that SOP effectiveness is positively influenced by family ownership and is strongly moderated by family involvement in management and in governance as well as by family generation. Our findings stress the strong family effect and the ethical perceptions of family shareholders on SOP voting, showing how family participation in the firm encourages fairer and more aligned CEO compensation packages. SOP institutional and practical implications oriented to preserve shareholder value and family wealth are finally outlined. (shrink)

This study proposes and tests a model that integrates ethical leadership, internal social capital, and firm performance in small- and medium-sized family firms at different generational stages. Using the upper echelons theory and the social capital perspective of familiness, this study shows that ethical leadership can explain the effectiveness of certain behaviors in relation to family firm performance. Moreover, social capital helps spread a leader's business ethics to firm members, thus improving the family firm's performance. Our (...) results show that founders' personalities and identities determine high internal social capital, which decreases over generations. The study also shows that internal social capital is a communicative element crucial to ethical leadership, facilitating the absorption of the culture and values of the family in the firm. This powerful resource should be promoted and supported by coherent behavior over time by senior leaders. (shrink)

This systematic literature review contributes to the increasing interest regarding corporate social responsibility (CSR) in family firms—a research field that has developed considerably in the last few years. It now provides the opportunity to take a holistic view on the relationship dynamics—i.e., drivers, activities, outcomes, and contextual influences—of family firms with CSR, thus enabling a more coherent organization of current research and a sounder understanding of the phenomenon. To conceptualize the research field, we analyzed 122 peer-reviewed (...) articles published in highly ranked journals identifying the main issues examined. The results clearly show a lack of research regarding CSR outcomes in family firms. Although considered increasingly crucial in family firm research, a study investigating family outcomes (e.g., family community status, family emotional well-being), as opposed to firm outcomes, is missing. This literature review outlines the current state of research and contributes to the actual debate on CSR in family firms by discussing how family firms can use CSR activities as strategic management tools. Moreover, our analysis shows a black box indicating how CSR links different antecedents and outcomes. The black box is significant since firms generally need to know where to allocate their scarce resources to generate the best outcomes. We identify nine research questions based on these findings, which we hope will inspire future research. (shrink)

The extent and mechanisms through which religion intertwines with decision-making processes in family firms remain inadequately understood. Family firm owners, driven by their commitment to ethical business practices and the safeguarding of their socioemotional wealth, actively seek cues to inform their decision-making processes. This research demonstrates that, among these guiding cues, top-level executives’ perceived religiosity emerges as a relevant factor. Building upon the socioemotional wealth perspective and conducting a longitudinal analysis based on listed family firms (...) between 2009 and 2018, our findings reveal a positive association between family voting rights and the presence of board members perceived to be religious. Furthermore, this relationship is less pronounced if family firms operate in industries with high research and development intensity. Our study confirms that boards with high shares of religiously perceived directors are positively associated with the appointment of chief executive officers perceived to be religious during succession events. We thereby present a unique perspective that acknowledges perceived religiosity as a micro-level constituent shaping board membership and successor selection. This investigation captures the intricate interplay between religion and family firms under a socioemotional wealth umbrella, offering important insights to the family business ethics discourse. Our research also offers practical implications for board and leadership diversity management in family firms. (shrink)

With the advancement of China’s economic transformation, the impact of economic policy uncertainty on family firms has become increasingly significant. The “familism” of family firms makes them more motivated to maintain family harmony, pursue innovative activities, and the long-term development of enterprises when faced with economic policy uncertainty. In this paper, we employed the data of listed Chinese family firms from 2010 to 2018 to analyze the impact of economic policy uncertainty on (...) class='Hi'>family business innovation activities, analyze the inherent characteristics of family firm innovation, and find the path that enables the innovative activities of family firms and provides a valuable experience for the innovation of private enterprises in economic policy uncertainty. We provide evidence that economic policy uncertainty positively relates to family firm innovation. Moreover, the relationship is affected by factors such as directors’ executive background and access to state-owned equity. Further analysis indicates that economic policy uncertainty can promote family firms’ innovation activities by improving their risk-taking, internal capital market circulation, and reducing political connections. (shrink)

The ethical behavior prevalent in an organization often determines business success or failure. Much research in the business context has scrutinized ethical behavior, but there are still few insights into its roots; this study furthers this line of inquiry. In line with identity work theory, we examine how employees’ identification with a family business shapes internal ethical decision-making processes. Because it is individuals who engage in decision-making—be it ethical or not—our research perspective centers on the individual level. We followed (...) an inductive, qualitative approach and conducted interviews with 19 employees in seven family businesses. We found that individuals engage in identity work when they identify as individual family firm employees and when they identify with the perceived characteristics of the family firm. These processes of identification, in turn, influence how employees cope with ethical situations. Our findings contribute to ethics and family business research, as well as to identity theory. (shrink)

There is a dearth of business ethics research on family firms, despite the importance of such firms to the US economy. We answer Vazquez’s call to examine the intersection of family-firm research and business ethics, by investigating whether external auditors assess higher risk of fraud in family firms. We test the contradictory predictions of two dominant theoretical perspectives in family-firm research—entrenchment theory and alignment theory. We conduct an experiment with highly experienced external audit (...) professionals, who assess the risk of fraud and make client acceptance decisions for family firms versus non-family firms with different strength of corporate governance: strong versus weak audit committees. We find that auditors assess the risk of fraud as higher for family firms than for non-family firms, consistent with the predictions of entrenchment theory. Auditors are also less likely to make client acceptance recommendations for family firms. The strength of the AC moderates the family-firm effect, whereby auditors assess family firms with weak ACs to have the highest fraud risk and to be the least desirable audit clients. Our findings suggest that auditors perceive more severe agency conflicts to be present in family firms than in non-family firms, consistent with entrenchment theory, according to which family members may behave opportunistically to extract rents and potentially expropriate the firm’s resources at the expense of minority shareholders. (shrink)

The authors explore the relation between the way different family firms are named, and the shareholder value impact of these firms’ new product introductions. Using an event study of 1,294 product introduction announcements of 107 publicly listed U.S. family firms, the authors find that the presence of the founding family’s name as part of a family firm’s name acts as a valuable firm resource, increasing the abnormal stock returns surrounding the firm’s new product (...) introductions. Superior returns to family-named firms’ new product introductions are partially mediated by these firms’ history of ethical product-related behavior: family-named firms, particularly those with corporate branding, and those wherein a founding family member holds the CEO or chairman position, are more likely to exhibit a history of avoiding such product-related controversies as product safety issues, and deceptive advertising. The authors highlight the managerial and theoretical contributions of this research. (shrink)

Although commitment is one of the attributes of family firms of continuing interest to researchers, they almost always study it from the perspective of the owning family. In the current work, we analyze the commitment of the non-family employees. We propose a model of commitment, with the aim of studying the implications that this variable may have for family businesses. We study both the aspects on the basis of the approaches of Meyer and Allen's three-component (...) model of organizational commitment and stewardship theory. Results show that the identification level of non-family employees positively and significantly influences the profitability and the survival or continuity of familyowned businesses. At the same time that their involvement level positively and significantly influences the survival or continuity of family-owned businesses. (shrink)

ABSTRACT: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. (shrink)

Family firms are ubiquitous and play a crucial role across all world economies, but how they differ in the disclosure of social and environmental actions from non-family firms has been largely overlooked in the literature. Advancing the discourse on corporate social responsibility reporting, we examine how family influence on a business organization affects CSR reporting. The arguments developed here draw on institutional theory, using a rich body of empirical evidence gathered through a content analysis of (...) the CSR reports of 98 large- and medium-sized Italian firms. The grounded theory analysis informs and contextualizes several differences in the type and content of corporate social responsibility reports of family and non-family firms. Our findings show that in comparison to non-family firms, family firms disseminate a greater variety of CSR reports, are less compliant with CSR standards and place emphasis on different CSR topics. We, thus, contribute to the family business and corporate social responsibility reporting literatures in several ways, offering implications for practice and outlining promising avenues for future research. (shrink)

Drawing from conservation of resources theory, we theorize that spiritual leadership serves as both a resource to enhance employees’ organizational commitment and a passageway to mitigate the negative effects of work–family conflict. Using primary triadic data from leaders, family employees, and nonfamily employees in 77 family firms, results support our theorizing that organizational commitment is enhanced by spiritual leadership but is decreased by work–family conflict. Contrary to theory, however, spiritual leadership exacerbated the negative effects of (...) work–family conflict. Further analysis reveals that family and nonfamily employees respond differently to leadership and work–family stressors. While spiritual leadership has positive effects for family employees, it has negative effects for nonfamily employees experiencing high work–family conflict. (shrink)

Family firm philanthropy (FFP) is the donation of resources to support societal betterment in ways meaningful for the controlling family. Family business literature suggests that socioemotional goals of achieving family prominence, harmony, and continuity drive FFP. However, these drivers fail to explain spiritually motivated philanthropic behaviors like anonymous giving by business families. 14 case studies of Indian Hindu business families with a combined FFP exceeding 2 billion INR in 2016–17 reveal spirituality or the moral dimension as (...) an additional important driver of corporate behaviors like FFP. Two fundamental spiritual beliefs of dharma (duty towards society) and karma (right to action without expectation of rewards) instill a duty-bound giving culture in Hindus. However, the strength of each belief varies in controlling families revealing four configurations of philanthropists labeled as Devout, Committed, Devoid, and Coerced in this study. Devouts, the biggest givers, are spiritually motivated, controlled by at least third-generation family members with executive power and professional support. Committed philanthropists are motivated by societal development rather than spirituality. While devoids hold spiritual beliefs, they neglect to devote appropriate resources or develop professional structures to support FFP. Coerced, the smallest givers, focus on business growth, lack family champions or supporting professional structures, and face turbulent family or business domains. (shrink)

ABSTRACT: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. (shrink)

In order to address social and ecological crises that business-as-usual practices have contributed to, we will need firms that emphasise Universal care (e.g., who place greater commitment on the well-being of the larger community versus on the firm itself) and Benefaction (e.g., who treat stakeholders with dignity and generosity rather than seeing them as means to instrumental financial ends). This study examines two kinds of family firms that have been identified as exhibiting Universal care and Benefaction, which (...) are two components of the social emotional wealth (SEW) family firms are thought to be more likely to emphasize than business-as-usual firms. In particular, we compare Stewardship family firms and Universal family firms, and find support for the proposition from the literature that Universal firms place greater emphasis on Universal care and Benefaction. Implications are discussed. (shrink)

Extending the dialogue on corporate social performance as descriptive stakeholder management, we examine differences in CSP activity between family and nonfamily firms. We argue that CSP activity can be explained by the firm’s identity orientation toward stakeholders. Specifically, individualistic, relational, or collectivistic identity orientations can describe a firm’s level of CSP activity toward certain stakeholders. Family firms, we suggest, adopt a more relational orientation toward their stakeholders than nonfamily firms, and thus engage in higher levels (...) of CSP. Further, we invoke collectivistic identity orientation to argue that the higher the level of family or founder involvement within a family firm, the greater the level of CSP toward specific stakeholders. Using social performance rating data from 1991 to 2005, we find that family and nonfamily firms demonstrate notable differences in terms of social initiatives and social concerns. We also find that the level of family and founder involvement is related to the type and frequency of a family firm’s social initiatives and social concerns. (shrink)

Using a signaling framework, we argue that ethical behavior as evidenced by charitable donations is viewed more positively by investors when seen not to be based on self-serving motives but rather on authentic generosity that builds moral capital. The affirmed religiosity of CEOs may make their ethical position more credible, while their embeddedness within a family business suggests that CEOs are backed by powerful owners with long-time horizons and a desire to build moral capital with stakeholders. We find in (...) a study of market responses to 1572 corporate donations by S&P 1500 firms that financial markets react more positively to charitable initiatives from firms with religion-declared CEOs, but only if these are family businesses. (shrink)

This study examines the effects of socializing activity of the owned family in family firms in order to find out if the special characteristics of the socializing processes in this type of firm can contribute to defining a climate that favors employees' commitment to the organization.For this purpose, this study uses the main arguments of the sociological approach known as moral economy. The data required for this analysis was collected using a self-administered postal questionnaire and the results (...) show that the special type of socialization that takes place in the family firm, and particularly the emotional mediation that this type of socialization tends to entail, favors the appearance of noneconomic links between employers and employees. Thus, in family firms the climate favors the management of the affective, normative, and symbolic aspects. The authors consider that this provides an explanation for the higher levels of identification, involvement, and loyalty — and consequently organizational commitment — that they find empirically among the employees of such firms. (shrink)

ABSTRACT:The notion of stakeholder salience based on attributes (e.g., power, legitimacy, urgency) is applied in the family business setting. We argue that where principal institutions intersect (i.e., family and business); managerial perceptions of stakeholder salience will be different and more complex than where institutions are based on a single dominant logic. We propose that (1) whereas utilitarian power is more likely in the general business case, normative power is more typical in family business stakeholder salience; (2) whereas (...) in a general business context legitimacy is socially constructed; for family stakeholders, legitimacy is based on heredity; and (3) whereas temporality and criticality are somewhat independent in general-business urgency, they are linked in the family business case because of family ties and family-centered non-economic goals. We apply this theoretical framework to position and integrate the contributions to this special section ofBusiness Ethics Quarterlyon “Stakeholder Theory, Ethics, Corporate Social Responsibility, and Family Enterprise.”. (shrink)

ABSTRACT:The notion of stakeholder salience based on attributes (e.g., power, legitimacy, urgency) is applied in the family business setting. We argue that where principal institutions intersect (i.e., family and business); managerial perceptions of stakeholder salience will be different and more complex than where institutions are based on a single dominant logic. We propose that (1) whereas utilitarian power is more likely in the general business case, normative power is more typical in family business stakeholder salience; (2) whereas (...) in a general business context legitimacy is socially constructed; for family stakeholders, legitimacy is based on heredity; and (3) whereas temporality and criticality are somewhat independent in general-business urgency, they are linked in the family business case because of family ties and family-centered non-economic goals. We apply this theoretical framework to position and integrate the contributions to this special section ofBusiness Ethics Quarterlyon “Stakeholder Theory, Ethics, Corporate Social Responsibility, and Family Enterprise.”. (shrink)

Family firm leaders acting as stewards of a close-knit enterprise may attempt to build a positive atmosphere of trust, clarity, and cohesiveness in the firm’s operation. Yet, conditions unique to family firms may lead some family members to develop a heightened sense of entitlement and weaker bonds to the organization. This creates conditions for a Fredo effect, where a family member’s incompetence, opportunistic behaviors, and/or ethically dubious actions can impede the firm’s success, potentially resulting in (...) a scandal that could lead to the firm’s demise and negative economic impact on employees, customers, and other stakeholders. Surveying 147 family-firm members, we examine the role that linkages among perceptions of family harmony norms, distributive fairness, role ambiguity, and relationship conflict play in the emergence of a family member who acts as an impediment to the firm, which can be manifested in damaging unethical behaviors. As hypothesized, family harmony norms and fairness perceptions are negatively related to family impediment, while role ambiguity is positively related to family impediment. However, relationship conflict mediates these connections, underscoring the potential damage this type of conflict can create in a family firm, even if leaders of the firm attempt to establish conditions that reflect a stewardship approach to firm governance. We discuss how these findings impact the development of an ethical climate in the family firm and the implications for family business survival or scandal. (shrink)

We investigate if private family firms have a greater environmental performance focus than nonfamily firms, and if this relationship is moderated by the strength of the firms’ social embeddedness. We empirically test these issues using a representative sample of 1452 private Australian small and medium-sized enterprises. Contrary to prevailing assumptions and previous indicative findings in the public firm context, our results show that family firms have a lower environmental performance focus than nonfamily firms. (...) However, in cases where the firm is highly embedded in the social community, we find that family firms have a higher environmental performance focus. We explain our unexpected results by considering the role of financial risk in publicly held family firms. Accordingly, we posit that prior findings in the public firm context may be evidence of families expropriating wealth from nonfamily shareholders rather than altruistic pro-environmental behavior. (shrink)

Extant research concludes that family firms are less likely to bribe due to reputation concerns. However, such conclusions are, to a certain extent, inconsistent with the intuition and observation that some family firms can be aggressive bribers. This study employs a restricted-extended framework of socioemotional wealth model to reconcile this inconsistency. We propose family management, on the one hand, results in reputation preservation willingness; while on the other hand, results in an abuse of trust between (...) family members and superior ability to hide bribery secrets. Integrating the willingness and ability mechanisms leads to an inverted U-shaped relationship between family management and bribery. Further, family firm political connection and province-level anti-corruption investigation play moderation role on the inverted U-shaped main effect. An empirical analysis of Chinese listed firms from 2006 to 2017 supports our hypotheses. (shrink)

Research indicates that religious values and ethical behavior are closely associated, yet, at a firm level, the processes by which this association occurs are poorly understood. Family firms are known to exhibit values-based behavior, which in turn can lead to specific firm-level outcomes. It is also known that one’s family is an important incubator, enabler, and perpetuator of religious values across successive generations. Our study examines the experiences of a single, multigenerational business family that successfully enacted (...) their religious values in their business. Drawing upon intergenerational solidarity and values-based leadership theory, and by way of an interpretive, qualitative analysis, we find that the family’s religious values enhanced their cohesion and were manifested in their leadership style, which, in turn, led to outcomes for the business. Our findings highlight the processes that underlie the relationship between religious values and organizational outcomes in family firms and offer insights into the role of solidarity in values-based leadership. (shrink)

This study examines whether religious belief influences an entrepreneur’s political involvement and further explores the moderating role of corporate philanthropy. Using the data from the 2008 national survey of Chinese family firms, my study provides strong evidence to show that the likelihood of political involvement is significantly higher for entrepreneurs with religious beliefs than for their counterparts, suggesting that religious entrepreneurs in Chinese family firms are more likely to participate in political affairs. This finding echoes the (...) view that religious believers acquire civic skills through their associational memberships or experience in involving religious activities. In addition, corporate philanthropy attenuates the positive association between religious belief and political involvement. The above findings are robust to a variety of sensitivity tests and are still valid after controlling for the potential endogeneity between political involvement and religious belief. (shrink)

We develop a model of ideals-based accountability which we have witnessed at work in several long-thriving family businesses. The owners and managers of these firms eschew individualism and materiality in the pursuit of ethical ideals such as supporting democracy and bettering the human condition. Although accountability is to these ideals, not for outcomes such as profitability or even reputation, IBA has resulted in outstanding reputations for some firms. We characterize IBA according to its missions, leadership, culture, and (...) stakeholder relationships. We also contrast it with traditional forms of accountability and differentiate IBA from related stakeholder, stewardship, and CSR perspectives. Finally, we examine its manifestations within five long-lived family enterprises, in the process generating propositions to advance the concept. (shrink)

Family ownership and/or involvement in the business have rarely been adopted as a discriminating variable in organizations and the natural environment or sustainability research. Family firms introduce a dynamic that is different from professionally run firms. This paper develops a theoretical framework to show that family firms whose dominant family coalition shares a vision of sustainability will be more likely to develop and deploy their organizational capabilities for a sustainability strategy. In family (...) firms with a shared vision of sustainability, familiness, localness, long-term orientation, and family identity will have a positive mediating effect on the deployment of organizational capabilities for a proactive sustainability strategy. (shrink)

Based on the literature on stakeholder management and family firm dynamics, this research analyses the relationship between three constructs: the identification of business families with their family firms, FFs’ orientation toward key non-family stakeholders, and the achievement of better economic performance. Data analyses from 374 family and non-family members of 173 Spanish FFs show that a high level of family identification with their firms affects the orientation of FFs toward key non-family (...) stakeholders in setting corporate goals and that this orientation will lead to higher economic performance only when it is built on family identification with the firm. Our results also show that the significance of both relationships changes with the degree of family involvement in the management of the FF. (shrink)