Familiness, social capital and market orientation in the family firm

2020 ◽  
Vol 54 (7) ◽  
pp. 1731-1760
Author(s):  
Josefa D. Martín-Santana ◽  
M. Katiuska Cabrera-Suárez ◽  
M. de la Cruz Déniz-Déniz
Keyword(s):  
Social Capital ◽  
Market Orientation ◽  
Family Relationships ◽  
Structural Equation ◽  
Family Firms ◽  
Top Management Teams ◽  
Family Influence ◽  
Open Communication ◽  
Content Type ◽  
The Family

Purpose This paper aims to analyse if the family influence on the firm and the relational dynamics inside the family and the firm could create specific familiness resources, which lead to a stronger market orientation (MO) of the family firms (FFs). Design/methodology/approach This study is based on a cross-industry sample of 374 managers in 174 Spanish FFs. Structural equation modelling is used to test the research hypotheses. Findings The climate of family relationships is going to affect the firm’s MO through the influence that this climate has on two relational social capital variables, one in the family area (the identification of the family managers with the FF) and the other in the business area (the level of trust between the members [family and non-family] of the top management teams [TMTs]). Research limitations/implications This study contributes to the literature on the under-researched topic of MO in the FFs by going beyond earlier studies focusing on FFs’ explicit attributes, such as their names, as potential explanatory variables of their marketing behaviour. This study also proposes and analyses new internal antecedents of MO based on the social capital of the firm. Practical implications Business families should promote the adequate governance mechanisms to enhance the quality of family social capital to promote the firms’ social capital and ultimately their MO. With the same aim, family managers should try to orientate their leadership behaviour to transmit their own organizational identification to the rest of the firm’s employees. Also, open communication and shared values should be promoted within TMTs to reinforce firms’ social capital that leads to MO. Originality/value This paper integrates social capital literature with MO literature. It also contributes to the literature on FFs, and specifically to the issue of familiness, by analyzing the effect of specific FF characteristics on MO.

The influence of family involvement on tax aggressiveness of family firms

2016 ◽  
Vol 6 (2) ◽  
pp. 143-168 ◽  
Author(s):  
Gregorio Sánchez-Marín ◽  
María-José Portillo-Navarro ◽  
José G. Clavel
Keyword(s):  
Family Involvement ◽  
Structural Equation ◽  
Family Firms ◽  
Family Influence ◽  
Equation Modeling ◽  
Content Type ◽  
Tax Aggressiveness ◽  
Family Enterprises ◽  
The Family ◽  
Different Levels

Purpose – The purpose of this paper is to analyze the tax aggressiveness among family firms considering their different levels of family involvement. Based on the family influence on power, experience, and culture approach proposed by Astrachan et al. (2002), this study examines to what extent the heterogeneity among family firms generates distinctive (and unique resource) combinations of family involvement that explain different levels of tax aggressiveness. Design/methodology/approach – A sample of 282 small and medium-sized family enterprises and a structural equation modeling approach have been used to study simultaneously the effects of family influence through the power, experience, and culture dimensions of tax aggressiveness in family firms. Findings – The family influences the business’ tax aggressiveness in different ways. As such, the greater the family experience, by the incorporation of second and subsequent generations, the greater the tax aggressiveness; in contrast, greater family power in terms of firm ownership and management negatively affects tax aggressiveness. Additionally, greater alignment of the family and business culture does not exert a significant effect on tax behaviors of family firms. Practical implications – Tax aggressiveness is a complex activity that should be managed from a global point of view in family firms. Managers should compensate for the negative influence of family governance on tax aggressiveness with the positive effect of the family generations in order to obtain proper and balanced tax management that contributes to the sustainability of family firms. Originality/value – This study contributes to the understanding of tax behavior heterogeneities among family firms by going further than most research (usually based mainly on comparative ownership aspects between large, publicly quoted family and non-family firms), considering some other more representative factors of family small and medium-sized enterprises, where the influence of characteristics of family management, family generation, and family values can be the main determinants of the firm taxation policies.

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

2009 ◽  
Vol 22 (3) ◽  
pp. 239-253 ◽  
Author(s):  
Ritch L. Sorenson ◽  
Kenneth E. Goodpaster ◽  
Patricia R. Hedberg ◽  
Andy Yu
Keyword(s):  
Social Capital ◽  
Firm Performance ◽  
Structural Equation ◽  
Family Firms ◽  
Point Of View ◽  
Equation Modeling ◽  
Collaborative Dialogue ◽  
Family Social Capital ◽  
The Family ◽  
Ethical Norms

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.

Investigating social capital, trust and commitment in family business: case of media firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mehdi Tajpour ◽  
Aidin Salamzadeh ◽  
Yashar Salamzadeh ◽  
Vitor Braga
Keyword(s):  
Social Capital ◽  
Family Business ◽  
Structural Equation ◽  
Family Firms ◽  
Business Development ◽  
Media Industries ◽  
Statistical Population ◽  
Content Type ◽  
Media Firms ◽  
The Impact

PurposeThe purpose of this paper is to investigate social capital's effect on family business development in selected family media firms.Design/methodology/approachThe statistical population includes 100 individuals who run a family business in this industry. Eighty individuals are selected as the research sample through the stratified random sampling method. The data are collected using a questionnaire. The authors used structural equation modelling method for data analysis.FindingsThe results indicate that social capital affects the development of family businesses in media firms. According to the results obtained from the structural equation test, the effect of the relational dimension of social capital on trust and the effect of the cognitive and structural dimensions of social capital on trust are supported, while the effect of the relational dimension of social capital on commitment as well as the effect of the cognitive dimension of social capital on trust are not supported.Practical implicationsThis research could help family firms in media industries improve trust and commitment by paying attention to different aspects of social capital. Besides, it shows that even the impact of relational and cognitive social capital, respectively, on commitment and trust, are not supported; these two could affect trust and commitment, respectively.Originality/valueThe paper is among the first studies that investigate family firms in media industries. Besides, the relationships between relational, cognitive and structural aspects of social capital and trust and commitment are rarely studied in the literature as two determinants of family business development.

Exploring the double-edged sword of familiness from a knowledge-based perspective

2020 ◽  
Vol 16 (1) ◽  
pp. 71-96
Author(s):  
Omar Belkhodja ◽  
Abdelkader Daghfous
Keyword(s):  
Social Capital ◽  
United Arab Emirates ◽  
Family Relationships ◽  
Family Firms ◽  
Organizational Outcomes ◽  
Comparative Case Study ◽  
Structured Interviews ◽  
Content Type ◽  
Knowledge Based

PurposeFor family businesses, familiness constitutes a unique bundle of resources and capabilities resulting from family relationships and influences. The extant literature has shown that familiness impacts organizational outcomes such as performance and innovation. This paper investigates the role of familiness in relation to absorptive capacity (ACAP). It also explores the specificities of nonfamily members’ social capital when different knowledge management (KM) approaches are adopted.Design/methodology/approachAn exploratory comparative case study design is adopted. Data from three family firms based in the United Arab Emirates (UAE) provide the empirical setting for this study. The data were collected using semi-structured interviews, available documents, observations and company websites.FindingsOur results reveal that the role of familiness in relation to ACAP varies according to the adopted KM approach. Familiness targets the potential ACAP when an explicit KM approach is adopted, the realized ACAP when a tacit KM approach is adopted, and both potential and realized ACAPs when a strategic KM approach is adopted. Our results also show that family firms invest in KM processes that support knowledge exploration and/or exploitation.Originality/valueThis paper provides further evidence for the role of familiness. It moves beyond the study of familiness from a resource-based view and adopts a knowledge-based perspective to develop a better understanding of the role of familiness in relation to ACAP. It also improves our understanding of nonfamily members’ social capital in family firms.

Socio-emotional wealth preservation and KPI voluntary disclosure quality

2020 ◽  
Vol 18 (3) ◽  
pp. 459-482
Author(s):  
Saoussen Boujelben ◽  
Chourouk Boujelben
Keyword(s):  
Voluntary Disclosure ◽  
Family Firms ◽  
Family Members ◽  
Family Influence ◽  
Disclosure Quality ◽  
Content Type ◽  
The Family ◽  
And Control ◽  
Practical Implications

Purpose The purpose of this paper is to examine the effect of the emotional attachment strength of family members to their business on the quality of the voluntary disclosure of their key performance indicator (KPI). More specifically, the authors focused on the effect of two dimensions of the socio-emotional theory, i.e. “family influence and control” and “firm dynasty succession.” Design/methodology/approach The authors performed a content analysis of annual reports for a sample of 87 French families listed in CAC All-Tradable to calculate a disclosure quality index of KPI. The authors proxied the “family influence and control” by the proportion of family members appointed in the board. To identify the “firm dynasty succession” concern, the authors classified firms according to the generation they belonged to. The authors estimated a cross-sectional linear regression model to meet the research objective. Findings This study confirms the role of the family affective attachment in decreasing the quality of KPI disclosure in such a way to preserve its socio-emotional wealth. The family firms’ principals who desire to sustain their control on the firm, to perpetuate the business for future generations and to protect their emotional wealth tend to avoid the disclosure of credible and reliable KPI information. Practical implications The findings have meaningful practical implications. First, they provide relevant insights into the regulatory bodies of the financial reporting regarding the increasing appeal for making KPI disclosure mandatory. Second, as the family businesses are the most widespread proprietorship in the French context, the effect of the family agenda on the quality of the KPI should be of interest to various policymakers and financial statements’ users of such firms. Third, the results inform nonfamily shareholders regarding the importance of selecting representatives on the board that should share similar interest with regard to KPI disclosure. Social implications From a societal perspective, this study is relevant in taking into account the critical role the family businesses have in the French economy. This study should help the minority shareholders to protect their interests and maximize their wealth within the family firm because it sheds light on the influence that family members have on hiding key information on the firm’s real performance. Originality/value To the best of the authors’ knowledge, no prior study in the family firms literature has examined the quality of voluntary disclosure of KPI. Although most previous studies merely compared family and nonfamily firms in terms of voluntary disclosure, the authors acknowledge and address the heterogeneity between family firms. The authors contribute to the few prior empirical validations of SEW implication on voluntary disclosure decisions by testing the effect of an additional dimension, which is family dynasty.

Impact of wise leadership, workplace friendships on open innovation in family firms: a developing country perspective

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amir A. Abdulmuhsin ◽  
Ali Tarhini
Keyword(s):  
Developing Country ◽  
Open Innovation ◽  
Structural Equation ◽  
Online Survey ◽  
Family Firms ◽  
Hybrid Approach ◽  
Top Management Teams ◽  
Content Type ◽  
Workplace Friendships

PurposeThis study draws upon the hybrid approach of the resource-based view and social capital theory, and aims to develop and empirically validate a model that examines the relationship amongst wise leadership, workplace friendships and open innovation (OI) in family firms (FFs).Design/methodology/approachAn online survey was conducted to collect data from a sample of 381 firms from a developing country. Additionally, this study used AMOS software and structural equation model to empirically test the proposed hypotheses of the theoretical model.FindingsFindings show that wise leadership has a significant, positive indirect effect on stimulating OI in FFs via its influence on building workplace friendships and overcoming knowledge–strategic and collaboration–organisational challenges.Practical implicationsTo improve OI, top management teams of family businesses should encourage wise, intelligent, well-informed and strong leaders who drive change. Moreover, they should establish small group, “smart-world” networks for specialised innovation to facilitate friendship based on trust and competence, and develop the coordinating role of family leaders in these networks.Originality/valueThis study complements and advances previous research on OI in many ways. Firstly, the current study proposes a conceptual model that demonstrates the interrelationships amongst the main variables in Iraqi FFs. Secondly, this research explores the crucial mediating role of workplace friendship, which capitalises on the principles of friendship in the context of the acquisition, accumulation and exchange of knowledge, thereby overcoming the challenges associated with innovation.

Entrepreneurial decision-making and family social capital

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cizhi Wang ◽  
Giulia Flamini ◽  
Kai Wang ◽  
Rong Pei ◽  
Chiyin Chen
Keyword(s):  
Decision Making ◽  
Social Capital ◽  
Family Firms ◽  
Family Members ◽  
Chinese Family ◽  
Content Type ◽  
Family Social Capital ◽  
The Family ◽  
Entrepreneurial Decision ◽  
The Impact

PurposeThe purpose of this paper is to adopt a collective perspective in the study of entrepreneurial decision-making processes and empirically analyse the ways in which social relationships between family members can shape their collective entrepreneurial decision-making behaviour (ED).Design/methodology/approachThis paper considers the family social capital (FSC) in inducing overall conformity to the focal family member's decision to exploit an opportunity. In terms of the seminal construct of social capital, the authors propose three FSC dimensions that can be used to induce conformity: structural, relational and cognitive dimensions. Then, the authors design questionnaires to collect data pertaining to the relationships between the family members' ED and the FSC. Finally, the authors collect 152 valid questionnaires from Chinese family firms.FindingsThe data analysis consists of two parts. The first section of this paper analyses conformity by testing the discriminant validity of models. Regression analysis is then used to test the relationship between family members' ED and the FSC. Significant relationships between the cognitive dimension of FSC and the entrepreneur's decision-making are found.Originality/valueThe research contributes towards academic literature concerning both entrepreneurship and social capital. On the one hand, this paper is one of the rare pieces of entrepreneurial research that responds to the call for the study of entrepreneurship from a collective perspective. On the other hand, our study quantitatively tests the impact of FSC at a multidimensional level. It provides conclusions regarding the social influence of other family members and provides insights into social capital by studying entrepreneurship from a social/community perspective.

Top management teams and performance in non-listed family firms

2013 ◽  
Vol 19 (4) ◽  
pp. 405-423 ◽  
Author(s):  
M Katiuska Cabrera-Suárez ◽  
Josefa D Martín-Santana
Keyword(s):  
Social Capital ◽  
Significant Influence ◽  
Family Firms ◽  
Top Management Teams ◽  
Management Teams ◽  
Top Management ◽  
Top Executives ◽  
Theoretical Approaches ◽  
The Family ◽  
And Performance

AbstractSupporting on recent theoretical approaches to the concept of familiness based on the notion of social capital, this study analyzes the composition of top management teams in non-listed family firms and its effect on the performance of these firms. An empirical analysis comprising 929 Spanish private family firms highlights the positive and significant influence of the inclusion of non-family managers, the family nature of top executives, as well as the presence of the founder. The study includes no significant results regarding homogeneity within family managers, or the interaction between a top family executive and the proportion of non-family managers.

scholarly journals Family influence and firm performance: the mediating role of stewardship

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Catarina Afonso Alves ◽  
Ana Paula Matias Gama ◽  
Mário Augusto
Keyword(s):  
Financial Performance ◽  
Structural Equation ◽  
Family Firms ◽  
Mediating Effect ◽  
Family Influence ◽  
Content Type ◽  
Organizational Attitudes ◽  
Mediating Role ◽  
Firm Financial Performance

PurposeThis study examines how stewardship might mediate the influence of family ownership on firm financial performance. The authors argue that differences in financial performance may reflect not only the family's influence but also the prevalence of a stewardship-oriented culture, across varying degrees of family influence.Design/methodology/approachThe measure of family influence uses the F-PEC scale: family [F], power [P], experience [E] and culture [C]. It supports cross-firm comparisons of different levels of family influence. To capture the multidimensional nature of family influence, this study uses structural equation modelling and measures the meditating effects of stewardship.FindingsThe results reveal a mediating effect of stewardship; family firms achieve better performance when they take advantage of and encourage stewardship attitudes among owners and leaders. Factors associated with stewardship behaviour, including stewardship motivation and stewardship culture, help explain why some family firms perform better than others.Practical implicationsWhen analysing the behaviour of family firms, interested entrepreneurs, managers and consultants should acknowledge that the family's influence entails both financial and emotional capital. The survival of the family businesses depends on balancing these aspects.Originality/valueIn response to calls for research into mediators of the complex relationship between family influence and firm outcomes, this study provides a novel explanation for performance-maximizing behaviours by organizations, in which pro-organizational attitudes coexist with self-serving motives.

scholarly journals Transformational leadership, social capital and organizational innovation

2016 ◽  
Vol 37 (7) ◽  
pp. 843-859 ◽  
Author(s):  
Lu Chen ◽  
Wei Zheng ◽  
Baiyin Yang ◽  
Shuaijiao Bai
Keyword(s):  
Social Capital ◽  
Transformational Leadership ◽  
Structural Equation ◽  
Organizational Innovation ◽  
Top Management Teams ◽  
Management Teams ◽  
Equation Modeling ◽  
Top Management ◽  
Content Type ◽  
External Domain

Purpose The purpose of this paper is to investigate the forces driving organizational innovation, particularly CEO transformational leadership as it affects external and internal social capital in top management teams. Design/methodology/approach Survey questionnaires were administered to 90 Chinese top management teams. Structural equation modeling was used to test the hypothesized relationships. Findings Both internal and external social capital mediated the relationship between transformational leadership and organizational innovation. Practical implications Organizations should strengthen internal and external capital of top management teams to reap maximal innovation outcomes from transformational leadership. Originality/value The findings contribute to the transformational leadership, social capital, and innovation literature first by showing how leadership influences innovation through largely neglected mechanisms – internal and external social capital. Second, a social capital focus challenges the tacit assumption that transformational leadership has only internal influences by showing that it potentially spills over to the external domain.

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