Community Social Responsibility and Its Consequences for Family Business Performance *

By Niehm, Linda S.; Swinney, Jane et al. | Journal of Small Business Management, July 2008 | Go to article overview

Community Social Responsibility and Its Consequences for Family Business Performance *


Niehm, Linda S., Swinney, Jane, Miller, Nancy J., Journal of Small Business Management


Family-centered businesses may have unique perspectives of socially responsible behavior due to family involvement and ties to the community. This research explored the antecedents and consequences of community social responsibility (CSR) for family firms operating in small and rural markets. Using a national sample from the 2000 wave of the National Family Business Survey (NFBS), researchers profiled family business operators' (n = 221) to determine if their CSR orientation contributed to family business performance. Enlightened self interest and social capital perspectives provide a framework for elaborating the role of CSR in sustaining family businesses in changing small communities. Results indicated that three dimensions, commitment to the community, community support, and sense of community, account for 43 percent of the variation in family business operators' CSR. Size of the business was significantly related to family firms' ability to give and receive community support. Further, commitment to the community was found to significantly explain perceived family business performance while community support explained financial performance. Findings suggest that socially responsible business behaviors can indeed contribute to the sustainability of family businesses in small rural communities.

Introduction

Family businesses comprise the primary resident and economic base in most rural communities. The locale in which they operate is the same place that they call home. Because of family involvement in the business and ties to the community, family-centered businesses may hold a unique perspective of socially responsible business behavior. Borrowing from the literature on corporate business ethics and research by Besser and Miller (2001), Miller and Besser (2000), and Besser (1999, 1998), this study contributes to understanding the social responsibility of family businesses operating in rural markets and its consequences for firm performance. We specifically explored the antecedents and consequences of community social responsibility (CSR) for small family firms operating in rural markets to determine if their CSR orientation contributed to family business performance.

In this study we examine CSR from a broad range of locales, using a national sample of small businesses from the 2000 wave of the National Family Business Survey (NFBS). The NFBS (2000, 1997) was one of the first attempts to study a national sample of households where someone owns and manages a business, though most of the businesses were not located in the home (Winter et al. 2004). The 2000 NFBS (n = 553) consisted of data gathered three years later from the same family business operators who responded to the 1997 survey (n =n708). Another distinct aspect is that only family-owned firms were included in the study. Additionally, all firms were located in small or rural communities with populations fewer than 10,000. This focus addressed a community size seldom examined with respect to CSR, but is often the population size designated in analyses regarding small and rural communities (see Miller and Besser 2000; Ghelfi and Parker 1997; Miller and Kean 1997; Ryan, Terry, and Woebke 1995). This size of community also faces substantial economic and demographic changes, suggesting that CSR may have important implications for business performance and sustainability.

Unique Aspects of Family-Owned Businesses

A majority of family business studies have focused on organizational vision, control mechanisms, creation of resources, and firm capabilities (Chris-man, Chua,; and Litz 2003; Habberschon, Williams, and MacMillan 2003). Family firms have also been defined in a variety of ways in the literature including the degree of family ownership, management by family members, interdepen-dency of systems, and intention to transfer to the family (Litz 1995; Green and Pryde 1990). To address the degree of involvement in family business, Astrachan and Shanker (2003) offer a broad definition that includes control over the strategic direction of the firm and direct involvement in daily operational issues. …

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