A Stakeholder Perspective on Family Firm Performance

Abstract

Through the lens of stakeholder theory, this article deepens our understanding of financial and nonfinancial performance outcomes in family firms across multiple stakeholder categories, including the family level of analysis. Based on this foundation, we develop a typology of performance relationships between performance outcomes: overlapping, causal, synergistic, and substitutional. We argue that these relationships, when used between constructive (positive) performance outcomes, are able to increase stakeholder satisfaction, which in turn increases organizational effectiveness. Through this analysis, we extend the common one‐dimensional and cause‐effect understanding of performance in family firms and move toward a comprehensive stakeholder performance perspective, which provides insights for increasing organizational effectiveness of family firms.

A Stakeholder Identity Orientation Approach to Corporate Social Performance in Family Firms

“…We acknowledge that family firms may be no less interested in increasing profits; however, wealth creation is arguably not the only -or even the primary -goal of family firms (Chrisman et al, 2003;Davis and Tagiuri, 1989;Sharma et al, 1997). Family firms have a heightened sense of obligation to a variety of stakeholder claims and, therefore, may be more attuned to the influence of various stakeholders on corporate behavior (Mitchell et al, 1997;Zellweger and Nason, 2008). Family firms pay greater attention to the needs, preferences, and desires of consumers and the public at large (Brief and Bazerman, 2003).…”

“…Family firms -companies in which members of a family exert significant influence through controlling ownership and/or management -are unique as a result of family member involvement in decisions regarding corporate social performance (CSP) and the management of important stakeholders (Sharma, 2004;Zellweger and Nason, 2008). Family firms possess a ''strong social element affecting the decisions that determine a firm's strategy, operations, and administrative structure'' (Chrisman et al, 2005, p. 238).…”

“…Family firms possess a ''strong social element affecting the decisions that determine a firm's strategy, operations, and administrative structure'' (Chrisman et al, 2005, p. 238). The management literature is paying increased attention to the CSP activity of and the relationship between family firms and their stakeholder beneficiaries (Gomez-Mejia et al, 2007;Sharma, 2004;Zellweger and Nason, 2008). Whether family firms engage in more CSP activity than nonfamily firms and the conditions under which family firms engage in socially responsible initiatives vis-à-vis certain stakeholders, however, remain fundamental questions for researchers interested in better understanding family firms.…”

Exploring the concept of familiness: Introducing family firm identity

“…Building on past research (e.g., Ben-Porath, 1980;Eddleston et al, 2008;Naldi et al, 2007;Sirmon & Hitt, 2003;Zellweger, 2007;Zellweger & Astrachan, 2008;Zellweger & Nason, 2008) and acknowledging that other theoretical lenses may also provide fruitful and complementary avenues for investigating sources and consequences of familiness (Pearson et al, 2008;Sharma, 2008), we focus on the family aspect of familiness to explore ways in which a family can influence the family firm. Thereby we reach beyond the component of involvement and the essence approaches (e.g., Chrisman et al, 2009bChrisman et al, , 2005, and introduce organizational identity as a third element.…”

Supply chain management capability of small and medium sized family businesses in India: A multiple case study approach

“…Past research in the family business discipline explicitly mentions the following demographic characteristics that typify SMFBs such as: size of the business, sales, employment, industry, start-up capital, age of business, legal form of organization, employee composition, customer base, physical location, and exports (Farrington and Venter, 2010;Carney, 2005;Sharma, 2004;Ward, 2004). According to Zellweger and Nason (2008), growth in sales, employees and profitability are examples of performance outcomes that are key to family businesses.…”