Problematizing socioemotional wealth in family firms: a systems-theoretical reframing

The concept of socioemotional wealth (SEW) seeks to present an independent paradigmatic basis for family-firm research, and in doing so aims to establish a sound basis for the scientific legitimacy of family-firm research. Establishing that legitimacy requires scholars to demonstrate that SEW is based on coherent assumptions on several theoretical levels. This paper uses the problematization methodology to challenge the coherence of the theoretical assumptions underpinning SEW and to advance theory development. The results of this problematization show that SEW is built on a theoretical level close to the object of research (in-house assumptions), but that more deeply-rooted theoretical levels (e.g. paradigmatic assumptions) are not sufficiently elaborated. Moreover, the original conceptualization is based on a positivist-mechanistic view, which hinders SEW reflecting the complex reality of family firms. Based on the results of this problematization, new systems theory is applied to reframe SEW’s theoretical grounding. Thereby the main contribution of the paper is a critical reflection on the theoretical underpinnings of SEW (in particular root-metaphor and paradigmatic assumptions), serving as the basis for advancing a coherent theoretical understanding of this important concept in family business research.     

Formalized HR practices and firm performance: an empirical comparison of family and non-family firms

The influence of the family on human resource (HR) management structures creates important idiosyncrasies with potential implications in terms of firm performance. Based on the agency and socioemotional wealth perspectives, this paper examines the formalization and effectiveness of three basic HR practices – selection, training and compensation – in different contexts of family and non-family firms. Using a sample of 500 Spanish companies, the results show that a higher degree of HR formalization has a positive influence on firm performance, confirming the negative moderating influence of family involvement on the relationship between the formalization of training practices and the firm performance. In addition, the findings indicate that the mediating role of selection practices in the relationship between training and firm performance is smaller in family than in non-family firms.     

Board gender diversity and corporate environmental performance: The moderating role of family and dual‐class majority ownership structures

While prior work has investigated the impact of (a) ownership structure and (b) board gender diversity separately on corporate environmental performance, researchers have not studied the potentially important relationship between ownership control and female board diversity in influencing corporate environmental performance jointly. We do so in the context of majority ownership in family‐controlled and dual‐class firms whose motives and influence are theoretically different from that of the firm's minority shareholders. Drawing on resource dependency, socioemotional wealth theory, and secondary agency theory, we hypothesize that majority family owners and dual‐class owners likely choose women directors to help advance their personal preferences for environmental corporate social responsibility. Our empirical tests utilizing 2,755 U.S. firm years over the 2010–2015 show that, as hypothesized, these two majority ownership types interact with board gender diversity to positively influence corporate environmental performance.     

Work and family practices in Japanese firms: their scope,nature and impact on employee turnover

Using firm-level data from Japan, this study examines the effects of four commonly used work and family practices on employee turnover: flextime, maternity leave, child care leave, and nursing care leave. Overall, we find statistically significant associations between work and family practices and female employee turnover in Japan. In stark contrast, we do not find such a statistically significant linkage between work and family practices and male employee turnover. As such, this study highlights the potential moderating effect of individual characteristics such as gender on the relationship between work and family practices and employee attitudes and behaviours.     

Environmental sustainability orientation and performance of family and nonfamily firms

Despite the growing research evidence on the effect of environmental sustainability orientation (ESO) on firm outcomes, contingent factors that may influence the strength of this relationship have received little scholarly attention. In this study, we use insights from the literature on ESO and family business to introduce family status and firm age as moderators in the ESO‐performance linkage. Using time‐lagged data from 253 small and medium‐sized enterprises in Ghana, we found the impact of ESO on firm performance is amplified for nonfamily firms but not significant for family firms. Our evidence suggests it is stronger among older firms than younger ones. Implications and directions for future research are discussed.     

The saving,human wealth and asset pricing nexus: Evidence from around the world

The present study examines the dynamics of the saving, human wealth and asset pricing nexus across developed and emerging economies. We introduce two equilibrium asset pricing models in an intertemporal capital asset pricing framework, including the priced factors human wealth and market portfolio in the first framework and the saving and market portfolio in the second framework. Both asset pricing frameworks consist of two-factor, four-factor and five-factor asset pricing models. We control for size and value factors in the four-factor model and size, value and momentum factors in the five-factor model. The IV-GMM estimation and GRS test results indicate that human wealth and market portfolio for the first framework and saving and market portfolio in the second framework are primary priced factors in explaining the average returns for developed economies and the aggregate level. On the contrary, both frameworks fail to yield significant results explaining the average returns for emerging economies.     

Doing more and doing better are two different entities: Different patterns of family control and environmental performance

Family firms bear two types of agency costs, including type I and type II agency problems, in corporate environmental practices: (1) Outside executives at family firms hesitate to engage in environmental strategies, which can lead to drops in profits; (2) Controlling families employ opportunistically environmental management to achieve their interests. We argue that a primary cause for the agency problems lies on ineffective internal corporate governance at family firms, which can cause loss of managerial (or power) balance between outside executives and family executives. Our findings show that family firms with ownership and strategic control (FSC), which family executives and outside executives monitor and constrain each other, can achieve the highest environmental performance. Moreover, external controls, including product market competition and provincial environmental regulations, substitute effective internal control of FSC. The environmental performance premium of FSC is more prevalent when the production market competition is lower. Family firms with ownership, operational, and strategic control (FOSC) can achieve higher environmental performance within a province with more stringent environmental regulations.     

CEO Succession Mechanisms,Organizational Context,and Performance: A Socio‐Emotional Wealth Perspective on Family‐Controlled Firms

This article extends the literature on CEO succession and financial performance by addressing corporate owners' mixed motives and desires to protect their interest in being in business. We draw on a Socio‐Emotional Wealth (SEW) perspective to investigate how the choice of one of three succession mechanisms – relay succession, ‘horse races’ among internal CEO candidates, and hiring from outside – may effectively balance trade‐offs between corporate owners' non‐financial SEW motives and the firm's financial performance. We find that implementing one of these succession mechanisms reduces the negative impact that typically characterizes CEO transitions in family firms. We also show that family presence on the board of directors offsets the benefits of having selected these balancing succession mechanisms, in either placing too much emphasis on SEW, or creating negative dynamics that make the chosen succession mechanisms less effective.     

Family ownership and environmental performance: The mediation effect of human resource practices

Previous literature has found that listed family firms underperform their nonfamily counterparts in terms of environmental performance, but has not explained why this occurs. We address this research gap by hypothesizing that training and development practices (i.e., managerial practices devoted to providing training and development for the workforce) mediate the relationship between family blockholders and environmental performance. Using a sample of 33,901 firm‐year observations from 2002 to 2016 distributed across 56 countries and employing the structural equation model technique, we find that investment in training and development practices explains almost half of the negative relationship between family blockholders and environmental performance. Our study contributes to the agency theory debate on principal–principal problems by explaining why family blockholders could damage other blockholders and minority shareholders.     

Enhancing corporate sustainable development: Proactive environmental strategy,stakeholder pressure and the moderating effect of firm size

The article evaluates the influence of pressure of 10 distinct types of stakeholders on the adoption of environmental strategies, with the special focus on the proactive environmental strategy (PES). The moderation effect of the company size on this relationship is investigated in depth. The existence of the relationship between stakeholder pressure and environmental strategies has been explored by numerous studies. The study adds significantly to this ongoing discussion as the moderation effect of the company size was explored scarcely so far in the literature. The results from the multinomial logistic regression models confirmed almost unanimously the effect of stakeholder pressure and the presence of the moderation. Positive, but nonlinear, direct and moderated effect of pressures of regulators, competitors, clients, NGOs, media, shareholders and employees on PES was discovered. In case of suppliers, consumers and top management, the pressure–PES relation was more complex. Also, large companies seem to be more resilient to pressures than the smaller ones when adopting PES.     

HRM retrenchment practices and firm performance in times of economic downturn: exploring the moderating effects of family involvement in management

A substantial number of studies have indicated a significant negative relationship between human resource management (HRM) retrenchment practices such as downsizing, and firm performance. However, a consideration of the potential effects of business family involvement in management is largely absent from the general employment restructuring literature. Using a sample of 218 Taiwanese publicly listed firms, this study seeks to further our understanding in this area by examining the moderating effects of family involvement in management on the relationship between the adoption of HRM retrenchment practices and firm performance during the period of global economic downturn that erupted in the middle of 2008. Data analysis reveals that HRM retrenchment practices had a negative influence on firm performance, and that the relationship between HRM retrenchment practices and firm performance was negatively and significantly moderated by family involvement in management.     

A study of environmental policies and regulations,governance structures,and environmental performance: The role of female directors

This paper seeks to contribute to the existing business strategy and the environment literature by examining the effect of governance structures on environmental performance within a unique context of improving environmental governance, policies, regulations, and management. Specifically, we investigate the extent to which corporate board gender diversity, including the proportion, age, and level of education of female directors, affects environmental performance of Chinese publicly listed corporations. Using one of the largest Chinese data sets to date, consisting of a sample of 383 listed A‐shares from 2011 to 2015 (i.e., observations of 1,674), our findings are threefold. First, we find that the proportion and age of female directors have a positive effect on the overall corporate environmental performance. Second, our findings indicate that the proportion and age of female directors also have a positive effect on the three individual environmental performance components, namely, environmental (a) strategy, (b) implementation, and (c) disclosure. Finally, and by contrast, we do not find any evidence that suggests that the level of education of female directors has any impact on environmental performance, neither the overall environmental performance measure nor its individual components. Our findings have important implication for regulators and policymakers. Our evidence is robust to controlling for alternative measures, other governance and firm‐level control variables, and possible endogeneities. We interpret our findings within a multitheoretical framework that draws insights from agency, legitimacy, neo‐institutional, resource dependence, stakeholder, and tokenism theoretical perspectives.     

The double effects of female executives' participation on corporate sustainable competitive advantage through unethical environmental behavior and proactive environmental strategy

Based on the upper echelons theory, ecofeminist theory, and natural resource‐based theory (NRBV), this study has constructed a relational model between female executives' participation, unethical environmental behavior, proactive environmental strategy, and corporate sustainable competitive advantage. The samples include a total of 496 female executives from listed 524 companies in the manufacturing sector in China, and multiple regression methods are used for the analysis. The study showed that female executives' participation had double positive effects on corporate sustainable competitive advantage, which included both the inhibiting effect on unethical environmental behavior and the stimulating effect on proactive environmental strategies. The study also explored the boundary conditions of “conservative” and “proactive” behaviors from the internal and external perspectives of enterprises. But it was shown that the effect would not be further improved when both moderation effects of environmental stakeholder pressure and environmental leadership were higher at the same time. As enterprises' behaviors should match with their capability range, radical behaviors might run counter to their desires.     

Work–family conflict,family satisfaction and employee well‐being: a comparative study of Australian and Indian social workers

Work‐to‐family conflict and family‐to‐work conflict have been widely investigated as antecedents of well‐being in various employee groups. However, these studies have largely been performed in Western countries, and only a few studies have investigated the phenomenon using both Western and non‐Western samples. The present study contributes to the literature by investigating work–family conflict experiences of social workers in Australia and India. More specifically, it explores the impact of work‐to‐family conflict and family‐to‐work conflict on well‐being and the mediating role of family satisfaction in this relationship. Our findings reveal the direct negative effects of work‐to‐family conflict on well‐being and family satisfaction in both groups and of family‐to‐work conflict on well‐being of Indian social workers. There is evidence that family satisfaction mediates work–family conflict and well‐being relationships in both samples. We discuss the theoretical and practical implications of the findings for HRM policies in social service agencies of both countries.     

A comparison of family and nonfamily small firms in their approach to green innovation: A study of Italian companies in the agri‐food industry

Despite the growing scholars' attention toward green innovation, on the one hand, and family firms, on the other hand, there is still limited attention toward the intersection of these two streams of literature, because very few studies deal with green innovation in family firms. This paper aims at comparing family and nonfamily small firms in their approach to green innovation. To this aim, a multiple case studies methodology was used to understand whether and in which aspects family firms and nonfamily firms differ. In particular, a sample of 14 small enterprises (seven family and seven nonfamily firms) operating in the agri‐food industry and located in Italy was studied. Results suggest that family and nonfamily firms are similar with regard to green innovation characteristics, features of the green innovation process, faced challenges, and achieved outcomes. On the contrary, family firms differ from nonfamily firms in three key areas: firm's motivations, most relevant pressures, and green innovation view.     

Green process innovation and operational performance: The role of proactive environment strategy,technological capabilities,and organizational learning

With increase in the focus on environmental protection, firms are integrating sustainability issues in process and product innovations. Firms can contribute toward sustainability and also improve operational performance through green innovation practices. However, the adoption of green innovation practices depends on the proactivity of top managers toward environment management. In this paper, we study the relationships between proactive environment strategy, green process innovation (GPRI), and operational performance. Further, we examine the mediating effect of dynamic capabilities (DCs) (technological capabilities and organizational learning) between GPRI and operational performance. The proposed framework is tested by data collected from the Indian manufacturing industries and using partial least squares (PLS) technique. The findings demonstrate proactive environment strategy as an important antecedent for GPRI practices. Second, technological capabilities and organizational learning mediate between GPRI and operational performance. The results of the study are useful for managers in the manufacturing firms, who are interested to implement GPRI practices or who are in the early stage of implementing the GPRI practices.     

Interplay between reputation and growth: the source,role and audience of reputation of rapid growth technology-based SMEs

Abstract

Drawing on resource-based view and signalling theory, this paper presents a comparative case of four (young vs. old; small vs. medium-sized) business-to-business firms to examine how (i.e. through which sources), why (i.e. for which managerial purposes) and for whom (i.e. for which audiences) do technology-based small and medium-sized enterprises build their reputation along the process of rapid growth? The results indicate that in the pre-growth stage product awards as well as technological and financial partners are important sources of reputation for demonstrating technological capabilities and firm sustainability to potential customers especially for young firms. Older firms, in turn, rely on technology partners and acquisitions in the rapid growth stage to convince existing customers that the firms’ can keep up with their customer’s changing needs. Moreover, the reputation gained from the first well-known customer and a focused clientele appear to be two critical antecedents of rapid growth whereas patents do not seem to have a significant reputational role in rapid growth. Our study informs the theory of reputation development of growing technology-based firms by abstracting a more nuanced understanding of stakeholder- and stage-contingent reputation that fosters rapid growth, and provides new insight into the literature on small firm growth.     

Strategic stakeholder management,environmental corporate social responsibility engagement,and financial performance of stigmatized firms derived from Chinese special environmental policy

We draw upon the stigma literature and strategic stakeholder management model to develop a framework capable of explaining the link between environmental corporate social responsibility (ECSR) engagement and financial performance of stigmatized firms, taking stakeholder‐oriented governance and density of local stigmatized firms into consideration. Using a uniquely compiled dataset of Chinese firms specifically monitored by the Ministry of Environmental Protection of China, we conducted propensity score matching analysis to estimate the impact of stigma on corporate financial performance and corporate environmental responsibility. The result shows that the financial performance of stigmatized firms is negatively affected by the stigma label, spurring them to engage in more ECSR than their peers to improve their legitimacy. Though ECSR engagement of stigmatized firms is found to be negatively associated with their financial performance in current study. Our results also confirm that (a) the financial performance of stigmatized firms is positively affected by two proxies for corporate stakeholder‐oriented governance (i.e., institutional ownership and corporate transparency) and negatively affected by the density of local stigmatized firms; (b) corporate stakeholder‐oriented governance compensates for the negative effect of ECSR engagement; (c) high intensity of local stigmatized firms provides focal firms with an opportunity to improve their financial performance through ECSR engagement; and (d) the positive effects of corporate stakeholder‐oriented governance are diminished by the density of local stigmatized firms.     

Servant leadership,organizational identification,and work‐to‐family enrichment: The moderating role of work climate for sharing family concerns

The present study investigates the impact of servant leadership as perceived by followers on their work‐to‐family enrichment (WFE) by focusing on the mediating role of organizational identification and the moderating role of work climate for sharing family concerns. The results from a field survey of 230 married managers in China provide full support for our hypotheses, indicating that perceived servant leadership is positively related to WFE; this relationship is also mediated by organizational identification. In addition, work climate for sharing family concerns attenuates the effects of servant leadership on organizational identification and WFE. The theoretical and managerial implications of these findings are discussed. © 2012 Wiley Periodicals, Inc.