Socioemotional wealth preservation in family firms

Kalm, Matias; Gómez‐Mejía, Luis R.

doi:10.1016/j.rausp.2016.08.002

Cited by 67 publications

(56 citation statements)

References 9 publications

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“…Businesses seek legitimacy by different stakeholder groups depending on how they help to achieve the firm's goals. Family businesses' behavior is strongly influenced by non-economic objectives, i.e., family members' socioemotional wealth preservation [30,45]. Sustainability disclosure is a means of demonstrating to stakeholders that a firm's actions are in accordance with the system of values shared by society and thus preserve the SEW.…”

Section: Discussionmentioning

confidence: 99%

“…Recent studies underline that the main concern of family firms is not limited to economic performance and argue that their reference point is the preservation of socioemotional wealth [30,[45][46][47]. The concept of socioemotional wealth refers to "the stock of affect-related value that a family derives from its controlling position in a particular firm" [48] (p. 259).…”

Section: Theoretical Background and Literature Reviewmentioning

confidence: 99%

“…Prior literature identifies five main dimensions: family control and influence on the business, identification of family members with the firm, binding social ties, emotional attachment of family members and renewal of family bonds to the firm through dynastic succession [48]. Family firms show a greater preference for control than non-family businesses in order to preserve family endowment in the business [30,45]. Family members identify more strongly with a family business than non-family owners do with a firm.…”

Section: Theoretical Background and Literature Reviewmentioning

confidence: 99%

“…Several authors suggest that the extent of family involvement shape a firm's attitude towards social and environmental responsible activities and generate heterogeneity among family businesses [69][70][71]. Bingham et al [69] assert that increased levels of family involvement bring a collectivistic orientation towards stakeholders as non-economic objectives, such as endorsing the ethical values shared and perpetuated by the family members [71], become more important [30,45]. This transgenerational perspective is enhanced by the presence of the founder in active management [72] who plays a relevant role in the adoption of this collectivistic orientation, enhancing the firm's activism towards the community, employees and the supplying of quality products and services to consumers [69].…”

Section: H1mentioning

confidence: 99%

See 3 more Smart Citations

Sustainability Reporting in Family Firms: A Panel Data Analysis

2016

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Abstract:We analyze the largely unexplored differences in sustainability reporting within family businesses using a sample of 230 non-financial Italian listed firms for the period 2004-2013. Drawing on legitimacy theory and stakeholder theory, integrated with the socio-emotional wealth (SEW) approach, we study how family control, influence and identification shape a firm's attitude towards disclosing its social and environmental behavior. Our results suggest that family firms are more sensitive to media exposure than their non-family counterparts and that family control enhances sustainability disclosure when it is associated to a family's direct influence on the business, by the founder's presence on the board or by having a family CEO. In cases of indirect influence, without family involvement on the board, the level of family ownership is negatively related to sustainability reporting. On the other hand, a formal identification of the family with the firm by business name does not significantly affect social disclosure.

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Section: Discussionmentioning

confidence: 99%

Section: Theoretical Background and Literature Reviewmentioning

confidence: 99%

Section: Theoretical Background and Literature Reviewmentioning

confidence: 99%

Section: H1mentioning

confidence: 99%

See 2 more Smart Citations

Sustainability Reporting in Family Firms: A Panel Data Analysis

2016

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“…The SEW concept has proved its relevance in explaining differences between family and nonfamily firms with respect to a variety of strategic and performance issues (see Kalm & Gómez‐Mejia () for a comprehensive review). Going further, Berrone et al () argue that the SEW perspective could also be useful in explaining how the heterogeneity within family firms affects the prevalence of nonfinancial goals in decision‐making and indirectly strategic choices.…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 99%

Entrepreneurial orientation and performance in private family firms: A configurational model

Bauweraerts

2018

Can J Adm Sci

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The relationship between entrepreneurial orientation (EO) and performance has received considerable attention from the family business literature. However, little is known about how EO, organizational parameters, and environmental characteristics act in combination to influence family firm performance. Drawing on the socioemotional wealth perspective, this study proposes a configurational model that considers the performance implications of EO, family management, and environmental dynamism. The empirical analysis indicates that the combination of family management, low EO, and low environmental dynamism engenders the best performance. The paper contributes to the family entrepreneurship literature by identifying the conditions under which EO leads to improved performance in family firms, and answers a recent call for more context‐based investigations of the performance effects of family managers. © 2018 ASAC. Published by John Wiley & Sons, Ltd.

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Exploring the effects of family control on dividend policy—Evidence from Canada

Leung

2022

J Corp Accounting Finance

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This study examines if publicly listed family-controlled corporations (hereafter called FCCs) have more differential effects on cash dividend policy (in both willingness to pay and amounts paid) than non-FCCs. While the literature provides mixed conclusions, this study focuses on the theoretical underpinning that FCCs' unique behavior model with objective to preserve their socio-emotional wealth (SEW) tend to protect their highly undiversified invested capital, operate conservatively and conserve corporate wealth for future generations. As a result, FCCs, especially those with large size and large accumulated profits, would pursue type II expropriative agency motive by lowering cash dividend payout. Nevertheless, when FCCs operate for long years, their transgenerational sustainability intentions and reputational concerns stemmed from the SEW will induce FCCs to endeavor non-financial goals. This study further finds evidence that FCCs with longer years, and accumulated large retained earnings and size are willing to align with minority shareholders' interests by being more willing to pay more cash dividends. However, comparing to their non-FCC counterparts, the heterogeneous variable of FCCs age interacts with retained earnings and size to cause larger positive effects in willingness to pay more cash dividends; and cash dividend payouts.

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Socioemotional wealth preservation in family firms

Cited by 67 publications

References 9 publications

Sustainability Reporting in Family Firms: A Panel Data Analysis

Sustainability Reporting in Family Firms: A Panel Data Analysis

Entrepreneurial orientation and performance in private family firms: A configurational model

Exploring the effects of family control on dividend policy—Evidence from Canada

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