Academic journal article International Journal of Entrepreneurship

The Determinants of Socioemotional Wealth and the Family Firm's Outcomes

Academic journal article International Journal of Entrepreneurship

The Determinants of Socioemotional Wealth and the Family Firm's Outcomes

Article excerpt

INTRODUCTION

The family businesses have a principal role in the world economies but even more in the emerging economies in which they are considered as a motor of the economy (Carney, 2005; Kachan er, Stalk, & Bloch, 2012; Whyte, 1996). The family businesses have a unique characteristic that make them different from non-familiar companies; the integration of the family and the business (Astrachan & Shanker, 2003). The evidence of the family influence on the organizational outcomes of the company are contradictories, studies demonstrate that family businesses have a superior result to other organization forms (Anderson & Reeb, 2003, 2004; McConaughy, Walker, Henderson, & Mishra, 1998; Villalonga & Amit, 2006), but on the other hand, one of the reasons of an inferior organizational outcomes is the conflict of personal relationships that are lived in the family business (Eddieston & Kellermanns, 2007).

The most common theories to study the family businesses are the Agency Theory and the Stewardship Theory. The Behavioral Agency Theory recently proposed to understand the influence of family in a business. This theory proposes that the decisions in a company will depend on the reference point that uses the principal, and this one at the same time, will take into consideration his wealth or accumulated legacy in the company at the moment of taking decisions even against an economical logic (Berrone, et al., 2012). The principaTs wealth and accumulated legacy in the company is denominated as socioemotional wealth. On this research work, socioemotional wealth is the value related to the family's affection for keeping the ownership and the business control (Gómez-Mejia, Haynes, Núñez-Nickel, Jacobson, & Moyano-Fuentes, 2007). The socioemotional wealth could also be considered as one of the most important characteristics that captures the family business' essence that makes them different from other organizational forms (Berrone, et ah, 2012).

We made this analysis to collaborate within the family business field for three main reasons. First, the study of the emotional commitments and its characteristics will contribute to the comprehension of a family business and it could be sustained through socioemotional wealth (Yu, Lumpkin, Sorenson, & Brigham, 2012). Second, the socioemotional wealth has not been measured directly and it has been used variables such as property, decision making power, intention of transgenerational control, and others (Gómez-Mejía, et al., 2007; Jones, Makri, & Gomez-Mejia, 2008; Zellweger, et ah, 2012), for this reason we will use the construct to measure directly the socioemotional wealth proposed by Berrone, et ah, (2012) through a scale of 5 dimensions. Third, this research work has as objective the collaboration in the analysis of socioemotional wealth and its impact on organizational outcomes of the family business. The organizational outcomes construct is constituted by 6 subjective elements from the financial, marketing and human resources areas. It also has the purpose of analyzing how the characteristics of the size and age influence on the relation of the socioemotional wealth and family firm's results in the context of private companies from an emerging economy. Despite other research works that analyze public family businesses, this study focuses only on private businesses (not listed on the stock market).

The current work is organized in the following order: after the introduction, in the second section the theoretical framework is presented from the most relevant literature about Behavioral Agency Theory and socioemotional wealth. The third section contains the hypothesis and the proposed model. Later, the study, data and methodology are presented. The fifth section contains the results of the study. The sixth section includes the conclusions and implications for the family businesses. Finally, the ending part presents the limitations and future suggestions for research fields. …

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