Are Family Firms Really More Socially Responsible?

Abstract

This paper conducts an empirical study as to whether family firms are more socially responsible than their nonfamily counterparts and explores the conditions in which this difference in social behavior occurs. We argue that family firms, given their socioemotional wealth bias, have a positive effect on social dimensions linked to external stakeholders, yet have a negative impact on internal social dimensions. Thus, family firms can be socially responsible and irresponsible at the same time. We also suggest that institutional and organizational conditions act as catalysts in the relationship between firm type and corporate social responsibility (CSR). General support for our thesis that family firms neglect internal social dimensions came from the study of a sample of 598 listed European firms over a period of 4 years. Moreover, while national standards and industry conditions influence the degree of CSR in nonfamily firms, these factors do not affect family firms. However, family firms' social activities are more sensitive to declining organizational performance.

A socioemotional wealth perspective on innovativeness and performance of family businesses.

“…These expectations align with discussions in the family business literature about internal and external SEW (Cruz et al, 2014;Vardaman and Gondo, 2014). SEW may have both positive and negative influences in firm-level outcomes, including innovation, although the majority of scholars has considered the effects of SEW as primarily positive .…”

“…These non-monetary benefits are captured by the construct of SEW that Gomez-Mejia and colleagues have introduced first to the family business literature (Gomez-Mejia et al, 2007;Gomez-Mejia et al, 2010). Although scholars have so far emphasized the observed differences between family and non-family firms as separate grounds (Deephouse and Jaskiewitz, 2013;Cruz et al, 2014), differences within family businesses should also be considered, because family firms are also highly heterogeneous and different from one another. For instance, Miller et al (2007) report differences between family firms that are managed by founders and those managed by heirs.…”

“…Scholars have previously theorized about the non-economic goals of family businesses. Specifically, they have used SEW to explain outcomes such as the family's reluctance to sell the family firm (Zellweger and Astrachan, 2008), its acceptance of lower IPO 1 gains (Leitterstorf and Rau, 2014), the firm's corporate social responsibility (Cruz et al, 2014) and R&D investments (Gomez-Mejia, Campbell, Martin, Hoskinsson, Makri, and Sirmon, 2014). Nevertheless, other than a few notable exceptions (Debicki, 2012;Debicki et al, 2016;Schepers, Voordeckers, Steijvers, and Laveren, 2014;Vandekerkhof, Steijvers, Hendriks, and Voordeckers, 2015), the majority of them has rarely measured SEW directly.…”

Sources of the Competitive Advantage of Family Enterprises: An International Approach Focusing on China, Nigeria and Poland

“…In essence, family members can rely on each other to make the best decision in the overall interest of the organisation, this can lead to people working well together (Kramer, Brewer & Hanna, 1996). Taking into account the CSR subject, one can refer to a profound international study by Cruz, Larraza-Kintana, Garce´s-Galdeano and Berrone (2014). Those authors concluded that in general FEs "can be socially responsible and irresponsible at the same time.…”

Family Business’s Transitioning to Circular Economy Model: The Case of “Mercadona”

“…It includes issues such as concern for corporate reputation, which could drive adoption of more environmentally sustainable practices [48] because the firm seeks a favorable organizational reputation [49]. Since families also pursue nonfinancial goals in order to guarantee transgenerational sustainability, they will invest in proactive environmental practices [45].…”