Influence of Family Culture on Enterprise Risk Management in Brazilian Companies

Abstract

Context: family involvement creates specific goals that include family interests and values, and is used to pursue the family’s vision, creating effective corporate governance and risk management practices. Objective: our objective is to evaluate the relationship between family influence and enterprise risk management in Brazilian family businesses. Method: data from 142 family businesses was analyzed using descriptive statistics and structural equation modeling. The construct of enterprise risk management comprised: identification, evaluation, response, and communication. Family influence was captured by power, experience, and culture. Results: the results broaden the understanding that, among the three family dimensions investigated, culture is the one that better explains risk management practices. Conclusions: we concluded that the higher the level of family culture, the higher the level of attention to enterprise risk management.

Social Structures and Family Systems: An Analysis of Cultural Influences

“…The influence of culture on family dynamics extends beyond individual families to encompass family businesses, with cultural aspects being identified as key factors for competitiveness and internationalization in family firms (Lucas et al, 2014). Furthermore, the impact of family culture on enterprise risk management and firm performance underscores the pervasive influence of cultural factors on business operations and decision-making processes (Alves et al, 2020;Brandt et al, 2021). The interplay between family culture and business practices highlights the intricate relationship between cultural influences and organizational dynamics, particularly in the context of family-owned enterprises.…”