The Family Point of View, Family Social Capital, and Firm Performance

Abstract

Based on the social capital, conflict, and ethics literatures, this study introduces a new concept, the family point of view, and provides theoretical arguments resulting in the following hypotheses: (a) The family point of view emerges from collaborative dialogue, which helps develop agreement to ethical norms; (b) the presence of ethical norms further helps cultivate family social capital; and (c) as a resource in a family business, family social capital is positively related to family firm performance. Using structural equation modeling, an exploratory test of 405 small family firms found support for all three hypotheses. The findings indicate a fully mediated relationship among collaborative dialogue, ethical norms, family social capital, and firm performance. The study not only highlights the importance of moral infrastructure in family firms but also helps clarify components of family social capital.

The learning ability of Portuguese small family businesses

“…Without a sufficient number of people with appropriate skills, the ability of family SMEs to remain competitive and grow is threatened. The opposite results were found by Sorenson et al (2009). Based on research into 405 family SMEs, Sorenson et al (2009) conclude that due to their special qualities, family businesses have more potential to be considered learning organisations.…”

“…The opposite results were found by Sorenson et al (2009). Based on research into 405 family SMEs, Sorenson et al (2009) conclude that due to their special qualities, family businesses have more potential to be considered learning organisations. Nordqvist and Melin (2010) also suggest that family businesses have advantages as they accumulate in-depth and unique knowledge of products, markets or industry over generations.…”

Does Size Matter? How Firm Size Affects Social Externalities and Community and Regional Development

“…This section summarises the scholarly publications on the three central themes of this study: externalities, firm size, and the "family point of view", a construct which appears to explain a family business' community orientation and interaction (Sorenson et al 2009). …”

“…This inheritance or "passing on" of beliefs and norms is one of the characteristics that make family companies distinctive (Sorenson et al 2009). The authors found that extensive collaboration within the family was associated with an increase in the resources available to the family business, including loyal customers, family support and, critically, community goodwill.…”

“…Section 3 presents a literature review in the fields of externalities and firm size, then offers a theoretical construct that could underpin a family business's community interaction and orientation: the "family point of view" (Sorenson et al 2009). In where it is found that the hypothesis is supported.…”