Academic journal article Academy of Entrepreneurship Journal

A Socioemotional Wealth Perspective in Small Family Firms

Academic journal article Academy of Entrepreneurship Journal

A Socioemotional Wealth Perspective in Small Family Firms

Article excerpt

INTRODUCTION

Socioemotional wealth is a fairly new concept utilized in family business research and is proposed to be a key means of distinguishing family firms from other businesses (Gomez-Mejia, Haynes, Nunez-Nickel, Jacobson, and Moyano-Fuentes, 2007). The socioemotional wealth (SEW) concept acknowledges the non-financial aspects that enter into the management decision processes within family businesses. This research expands the SEW links with family business by focusing on micro and small family businesses. Our research proposes that the inclusion of socioemotional wealth (SEW) is vital in examining family businesses and especially those businesses of a micro or small-size. Real world examples are utilized to illustrate the influence of the SEW dimensions and how this influence is stronger for the micro-sized firm compared to large family businesses.

Family business research has been housed within several areas including entrepreneurship, general management and family business specific journals. The vast majority of published work in family business research utilizes publicly traded corporations and large data sets. A review of the family business literature found that the most researched area was corporate governance concerns within family businesses (Debicki, Matherne, Kellermanns & Chrisman, 2009). The work on corporate governance would exclude micro and small-sized firms. Other popular areas dealt with corporate strategy and management decisions based on the resourced based view; both of these topics are consistent with analysis of large-sized family firms. Debicki et al. (2009) noted the scarcity of research into non-economic goals of the family firms as a research gap. The analysis of SEW is consistent with addressing this gap in the literature. Other work that has analyzed family business research also found that corporate governance was the main focus on scholarly work and other significant family business research areas were: defining the field; competitive advantages; leadership and management; and succession (Xi, Kraus, Filser & Kellermanns, 2013). The authors specifically state "the advancement of SEW research and the need for taking a micro perspective into account have been identified as offering vast potential for future research." (Xi et al, 2013, pg. 128).

The examination of small and micro-sized family businesses is inadequately addressed in academic management journals. The pursuit of statistical rigor needed to publish in peer-reviewed journals has resulted in a shift towards research on large, publicly traded companies, and has resulted in an inadequate examination of small and micro-sized businesses. The validity and robustness is often questioned for self-report data from micro or small-sized private companies. There seems to be a tendency to apply the findings to all businesses even though significant differences exist between the research sample and many businesses. In addition, the existing research is mainly from private firms outside of the U.S., where is it more common for large companies to be family owned and privately held. The volume and economic impact of the small and micro-sized family firms within the U.S., however, make it an important category of business and one that is underserved by the research community. Interestingly, it has been proposed that small to micro-sized businesses account for well over 90% of all firms in developed countries, such as the US and EU (Schaper, 2006). Micro to small-sized businesses have little in common with the large family firms such as Ford Motor Company. In this research article, we examine micro-sized family firms and demonstrate the importance of the SEW concept for research into these types of family firms.

For this research, we suggest that micro-sized family firms demonstrate far higher levels of influence for the SEW dimensions and that the dimensions of identity and emotional attachment play a major role in the business management processes of the family firm. …

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