Socioemotional Wealth in Family Businesses

2020 ◽  
pp. 101-119
Author(s):  
Veland Ramadani ◽  
Esra Memili ◽  
Ramo Palalić ◽  
Erick P. C. Chang
Keyword(s):  
Family Businesses ◽  
Socioemotional Wealth

Family business and value-added distribution: a socioemotional wealth approach

2017 ◽  
Vol 30 (1) ◽  
pp. 2-22 ◽  
Author(s):  
Jose Luis Gallizo ◽  
Cecilio Mar-Molinero ◽  
Jordi Moreno ◽  
Manuel Salvador
Keyword(s):  
Family Business ◽  
Value Added ◽  
Family Businesses ◽  
Management Style ◽  
Socioemotional Wealth ◽  
Content Type ◽  
Economic Agents ◽  
Share Prices ◽  
The Family ◽  
The Impact

Purpose Research has demonstrated that family businesses limit the goal of maximizing profits in exchange for maintaining control of the company and passing control to future generations. However, these decisions are not always shared by the stakeholders who are outside the family context, making tensions arise within the company that may affect profitability and the share prices of the family business. The purpose of this paper is to analyse the internal tensions in family businesses in the value-added (VA) distribution, and whether these tensions harm their performance as a result of the restrictions under which these companies operate. Design/methodology/approach A factor analysis has been used to measure the tension that results from VA distribution of a sample of 105 Spanish listed firms for the 2005-2012 period. A regression analysis has been used to study the impact of this tension on their share prices. Findings Results show that being a family business has a positive effect on the business tension factor and that returns and share prices are inversely related to tension factors. Thus, the authors conclude that the decision to maintain control over the family business threatens profitability and share prices. Social implications An analysis of distribution of VA in family businesses sheds light on whether or not the management in its decisions preserves its socioemotional wealth (SEW) generating tensions among its economic agents, affecting its profitability and continuity. This knowledge is important for company stakeholders and future investors. Originality/value This is the first study in which the value-added statement is used to analyse how the management style of firms, and especially family businesses, are seeking to preserve their SEW and internal tensions generated by them.

scholarly journals Values of family businesses in Czech Republic in the context of socioemotional wealth

2021 ◽  
Vol 14 (2) ◽  
pp. 184-208
Author(s):  
Miroslav Jurásek ◽  
Naděžda Petrů ◽  
Zdenek Caha ◽  
Jaroslav Belas,
Keyword(s):  
Czech Republic ◽  
Family Businesses ◽  
Socioemotional Wealth

scholarly journals Family Business Internationalization in Paradox: Effects of Socioemotional Wealth and Entrepreneurial Spirit

2021 ◽  
Vol 12 ◽  
Author(s):  
Chenfei Jin ◽  
Bao Wu ◽  
Yingjie Hu
Keyword(s):  
Family Involvement ◽  
Family Business ◽  
Foreign Investment ◽  
Negative Relationship ◽  
Family Businesses ◽  
Socioemotional Wealth ◽  
Small Family ◽  
Entrepreneurial Spirit ◽  
Negative Effect ◽  
Positive Effect

This study investigates the internationalization (i. e., foreign investment) of small family businesses by classifying the effects of external socioemotional wealth (family reputation) vs. internal socioemotional wealth (family involvement). The study involved 2,704 small family businesses in China, and the results support the hypothesis that family reputation has a positive effect on internationalization, while family involvement has a negative effect on internationalization. Moreover, entrepreneurial spirit reinforces the positive effect of family reputation on internationalization and enhances the negative relationship between family involvement and internationalization. This study contributes by examining the effect of entrepreneurial spirit as a potential balancing factor for the paradoxical influence of internal vs. external socioemotional wealth.

Socioemotional wealth (SEW) as the driver of business performance in family businesses in Bosnia and Herzegovina: the mediating role of transformational leadership

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ramo Palalić ◽  
Hamza Smajić
Keyword(s):  
Bosnia And Herzegovina ◽  
Business Performance ◽  
Theoretical Perspective ◽  
Structured Interview ◽  
Family Businesses ◽  
Socioemotional Wealth ◽  
Organizational Governance ◽  
Content Type ◽  
Positive Leadership

PurposeThe aim of this study is to investigate a mediation role of leadership over business performance and socioemotional wealth, within two Bosnian family businesses. This research purpose brings interesting highlights regarding how family businesses embedded the role of leadership that it might have a tremendous influence on business performance while tuning the socioemotional wealth.Design/methodology/approachThis study is based on qualitative research methodology. The sample is collected based on a purposive sampling method as in most qualitative studies. As the instrument for data collection is concerned, in-person-semi-structured interview has been employed with the owner-manager of each particular-family firm. Thus, two case studies were conducted and analyzed.FindingsThe research contributes both to the theory and the practice. From the theoretical perspective, it contributes to the theoretical knowledge of leadership as an important role in relationship between the socioemotional wealth and business performance. The practical contribution of this research could be summed up in the sense that business owners should seek to employ positive leadership vibes to create a good socioemotional wealth so that would be positively reflected in overall business performance of a family business. Other findings are further discussed.Originality/valueScarce empirical research offers mixed results while theoretical propositions that organizational governance (leadership) plays an important role in this relationship, is somehow neglected. Hence, this is the first empirical study on this particular that investigates this topic in Bosnia and Herzegovina (BiH), even in the Balkan region.

A Study on the Effect of Culture and Human and Social Capital on Entrepreneurial Strategies in Family Businesses in Iran

2016 ◽  
pp. 153-200 ◽  
Author(s):  
Hossein Moghaddam ◽  
Meir Russ
Keyword(s):  
Social Capital ◽  
Human Capital ◽  
Family Business ◽  
Family Businesses ◽  
Family Influence ◽  
Socioemotional Wealth ◽  
Relative Risks ◽  
Entrepreneurial Strategies ◽  
Human And Social Capital ◽  
Gains And Losses

Family businesses are formed and often transferred to new generations in order to achieve both financial and non-financial desired performances. Socioemotional wealth, such as a family's desire to exercise authority, and enjoyment of family influence, is an important driver of non-financial desires. Family business owners take into account socioemotional gains or losses for the family when considering the relative risks and benefits of various strategic choices. Culture, human capital, and social capital are some of the variables that influence decisions regarding socioemotional gains and losses. Entrepreneurship is also favorable for any economy and the interconnectivity of family businesses and entrepreneurship is of a great importance. To study the effect of the mentioned variables we have studied family business in Iran, a family oriented country with a strong cultural consistency which in many cases influences businesses. This study aims to analyze how culture, human capital, and social capital affect the preservation and development of socioemotional wealth in families and how they affect the firm's performance.

Chinese Private Firms and Internationalization

2013 ◽  
Vol 27 (2) ◽  
pp. 126-141 ◽  
Author(s):  
Xiaoya Liang ◽  
Lihua Wang ◽  
Zhiyu Cui
Keyword(s):  
Family Involvement ◽  
Family Businesses ◽  
Family Ownership ◽  
Private Firms ◽  
Socioemotional Wealth ◽  
Chinese Firms ◽  
Family Control ◽  
Internationalization Strategies ◽  
Family Involvement In Management

Applying the socioemotional wealth perspective of family businesses, this study examines how family control affects whether firms tend to go international. Departing from prior research that has treated family involvement in management and family ownership as interchangeable and inseparable, we suggest that they are two different aspects of family control, which independently and differently affect firms’ internationalization strategies. A sample of private Chinese firms supports our predictions that family involvement in management has an inverted-U-shaped relationship with the likelihood of internationalization and that the percentage of family ownership has a U-shaped relationship with the likelihood of internationalization.

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