Using behavioral and stakeholder theories, we suggest that family firms may have family–centered non–economic goals and that these goals could influence firm behaviors. This study extends the literature by hypothesizing that the essence of family influence partially mediates the relationship between family involvement and family firms’ adoption of family–centered non–economic goals. The results using 1,060 small firms support the hypotheses. Aside from contributing to family business theory by explaining and testing mediating variables as sources of goal heterogeneity among family firms, our findings also imply that the involvement and essence approaches to defining family businesses may be hierarchically reconciled.

In the search for ways in which the family firm context is unique to organizational science, the construct of "familiness" has been identified and defined as resources and capabilities that are unique to the family's involvement and interactions in the business. While identification and isolation of a construct unique to family firms is both groundbreaking and important for family firm research, it is also important that the development of the construct continues to be examined from complementing theoretical viewpoints. As such, we set out to review the development of the familiness construct and identify its dimensions. We also explore the nomological relationships of the construct based on a social capital theory perspective and offer a theory of familiness.

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Family firms are essential for economic growth and development through new business startups and growth of existing family firms. Entrepreneurial behavior by the CEO is essential for such growth to occur. Entrepreneurial behavior can be influenced by inherent characteristics of the CEO, such as age and tenure, as well as by the degree of family influence in the firm, as indicated by the number of generations involved in the business. We assess the empirical relationships of these variables to both entrepreneurial behavior and subsequent firm growth.