Analyzing the Social Responsibility of Small, Family-Owned Businesses: A Research Agenda

Article excerpt

Executive Summary

The small, family-owned business is an important, yet under-researched, object of study. In particular, the social responsibility efforts of these businesses have not been given sufficient attention in the literature, as academics have focused more on large, publicly-owned corporations. Therefore, systematic research is needed to study if they engage in social responsibility, why and to what extent. This paper provides an overview of peer-reviewed literature of the social responsibility of small, familyowned businesses, conducted in the U.S. and abroad within the past ten years. It also takes a critical look at this literature and identifies several research questions that need (further) exploration in this field.

Introduction

The social responsibility (SR) literature written both in the U.S. and abroad has understandably concentrated on the actions of the large firms and has not given sufficient attention to the actions of the smaller businesses, many of which are family-owned (Tilley 2000). Reasons stem from the perception that small organizations lack resources, that our research methodologies are more suited for corporate analysis and that more readily available information is available to study large firms (Thompson and Smith (1991) cited in Tilley 2000). For instance, secondary data such as annual reports, magazine or government rankings or other indexes aimed at gauging SR involvement of small, family-owned businesses, are lacking (Miller and Besser 2000).

However, more attention should be paid to family businesses, as they represent a large sector of the U.S. economy (Astrachan and Carey Shanker 2003). According to Simmonds (2007), family businesses make up 95% of all American businesses, 65% of the working population, 55% of the US GNP and 25% of market capitalization. They also generate 78% of all new job creation (Perman, 2006).' Moreover, people using their own money or family assets for business startups included 77 percent for businesses with paid employees and 59 percent for businesses with no paid employees (U.S. Census Bureau 2006). Research conducted in Organization for Economic Cooperation and Development (OECD) countries indicates that most businesses in OECD member countries are family-owned (Spence and Rutherfoord, 2003, p.l, cited in Perrini 2006).

Given the importance of family-owned businesses to the economy, it is critical to study their motivations to engage in social responsibility (SR) practices and to determine the factors that are important to them when doing so." Accordingly, this paper has two main objectives. First, it provides a state-of-the-art overview of the literature researching the social responsibility of small, family-owned businesses. Peer-reviewed articles written in the past ten years both in the U.S. and abroad are researched for this purpose. Second, it takes a critical look at this literature and identifies several research questions that need (further) exploration in this field.

As stated above, the focus of research is on small, family-owned businesses. Since not all familyowned businesses are small and not all small businesses are family-owned, a subset of both will be analyzed. Given the overlap between the two sets, studies focusing on small and medium sized enterprises (SMEs), as well as studies analyzing family businesses, regardless of size, are considered. Both sets of studies are relevant, since some of their conclusions may relate to small, family-owned businesses in particular.

The paper is organized as follows. The first section addresses definition issues and outlines briefly the peculiarities of small, family-owned businesses. The second section provides an overview of research and, as such, it identifies the links analyzed in the SR literature of small, family-owned businesses. The third section identifies the research questions that need further exploration in small family business research with respect to their SR practices. …