Socio‐Emotional Wealth Separation and Decision‐Making Quality in Family Firm TMTs: The Moderating Role of Psychological Safety

Abstract

Socio-emotional wealth (SEW), defined as the firm's non-financial aspects meeting the family's affective needs, has become the dominant paradigm in family firm research. Recent debate acknowledges potential SEW heterogeneity within family firms. This study considers the effect of polarizing opinions on SEW preservation among TMT members as a source of separation in the TMT. More concretely, we study the effect of SEW separation on TMT decision-making quality, while taking into consideration behavioural integration as a team process and psychological safety as a team context. Based on a unique multiple respondent sample of 300 managers from 55 Belgian private family firms, we find that behavioural integration mediates the negative effect of SEW separation on TMT decisionmaking quality. In addition, we find that the negative effect of SEW separation on behavioural integration is mitigated by psychological safety and even turns into a positive effect at high levels of psychological safety.

Hierarchical Dyadic Congruence in Family Firms: The Interplay of Supervisor and Supervisee Socioemotional Wealth Importance and Familial Status

“…Conversely, when supervisee and supervisor with different familial status share low SEWi, both family and nonfamily member agree to focus on financial wealth creation (Vandekerkhof et al, 2017). Therefore, in both cases, although the relationship is based on contractualism and individual interests, there would be no conflict of interests or behavior and the complementary effects of working together will tend to nurture collectivism and boost cooperation.…”

“…Recent research suggests a considerable variation in the extent to which family firm members aim to preserve socioemotional wealth Vandekerkhof, Steijvers, Hendriks, & Voordeckers, 2017). Following this line of inquiry, McLarty et al (in press) propose that supervisor (in)congruence would foster (hinder) supervisee motivation thereby, through (without) the resolution of goal dissonance, positively (negatively) affects the supervisees' commitment-performance relationship.…”

“…When the familial status of the two members of the dyad differ but the family member, whether supervisor or supervisee, has higher SEWi, a collectivistic, cooperative, and collaborative relationship is still possible through understanding about the parties' divergent interests, agreement about responsibilities, and the ensuing division of labor. The family member who benefits more from SEWi emphasizes both financial and socioemotional goals while the nonfamily member focuses on financial wealth creation (Vandekerkhof et al, 2017). In this intermediate form of social exchange along the continuum, indirect reciprocity is ensured by adherence to mutual expectations regarding SEWi blending diverse interests into a win-win situation (Le Breton -Miller, Miller, & Lester, 2011).…”

Researching Family Business Growth

“…Second, research linking TMT demographic features such as the proportion of family managers in the TMT directly to firm outcomes makes the implicit assumption that demographic variables are valuable proxies for intervening (team) processes (Pettigrew, 1992). Recently, however, scholars have started to investigate the impact of several dimensions of diversity in the family firm TMT on these intervening team processes (e.g., Vandekerkhof et al ., 2018). However, we still lack an understanding of whether and how family involvement in management will have an impact on team processes and team outcomes and how these team outcomes will be related to firm outcomes like firm growth.…”

Extending international entrepreneurship’s concepts, constructs and decision frameworks to reach beyond the ordinary

“…However, recent developments in entrepreneurship and family firms (e.g. Vandekerkhof et al 2018 ) point to entrepreneurs whose decisions favour, if not require, optimizing across a multitude of varied objectives, using different allied field that are akin, if not closer, to typical decisions involving many influential dimensions, including socio-cultural , welfare and normative aspects , that extend much beyond the economics of the firm or microeconomic, concerned mainly with minimizing cost and maximizing growth, profits and revenues. Furthermore, the increasing complexity of the environment and the appearance of focused institutions, such as family firms, passion-driven enterprises (Cardon et al 2009 ) and ethnic or socially-oriented entrepreneurial firms, including the not-for-profit institutions, social cause–driven firms or “B Corporations”, 1 amongst many others, that are using alternative decision frameworks, in turn impose intrinsic constraints on traditional approaches.…”