Back to the Roots: Applying the Concept of Individual Human Values to Understand Family Firm Behavior

Abstract

This study examines the influence of individual owner-manager values on the different dimensions of socioemotional wealth in family firms. We argue that values of owner-managers in family firms are one of the underlying motivators for socioemotional wealth behavior and used structural equation modeling to test the assumed connection. The results of our data set with 1,003 cases show, in accordance with Schwartz’s value dimensions, that social- and person-oriented values influence different dimensions of the FIBER scale. Our findings help understand the importance of individual values, advance socioemotional wealth research, and contribute to the understanding of family firm behavior.

The Psychological Foundations of Management in Family Firms: Values, Biases, and Heuristics

“…We believe that recognizing and categorizing perilous traps (e.g., the escalation of risky investments; Staw, 1981) initiated by some leaders’ strategic and entrepreneurship values and heuristics is a relevant and necessary step to propose practices to avoid these traps. For example, Ruf et al (2020) invite practitioners to pay attention to the interrelation between the values and behaviors of family businesses, and then consider implementing organizational practices that facilitate objective decisions (e.g., introducing a “devil’s advocate” in the decision process). Additionally, since we have yet to understand how family businesses allocate, organize, and reconfigure their resources to generate value for family members and other shareholders, exploring the psychological foundations of management in family business will contribute to the literature by comparing family business research with other disciplinary traditions.…”

“…The authors contend that the family members’ decision processes reflect the family members’ psychological attributes, shaping family business heterogeneity, and in turn, the decision processes. Ruf et al (2020) complement the debate by focusing on the values rectangle in the family and personal background section of our framework, considering the predominant basic human values of owner-managers as key drivers of family firm behavior.…”

The Psychological Foundations of Management in Family Firms: Emotions, Memories, and Experiences

“…Heeding this call, Picone, De Massis, Tang and Piccolo (2021) built a conceptual framework linking the psychological foundations of management in family business, strategic decision-making, and firm performance. The first issue of the Family Business Review special issue discusses some of Picone et al’s (2021) key constructs: decision comprehensiveness (Carr, Vardaman, Marler, McLarty, & Blettner, 2020), values (Ruf, Graffius, Wolff, Moog, & Felden, 2020), overconfidence (Dick, Wagner, & Pernsteiner, 2020), and Machiavellism (Chandler, Petrenko, Hill, & Hayes, 2020).…”

What motivates environmental and social sustainability in family firms? A cross‐cultural survey

“…Berrone et al (2012) proposed 28 qualitative measures to evaluate SEW through the FIBER dimensions. We use a shortened modified FIBER scale in this study (Hauck et al, 2016), applied in a number of recent studies (e.g., Cleary et al, 2019; Ruf et al, 2020; Swab et al, 2020). To measure trust the study employs measures devised by Noelle‐Neumann in 1948, and applied in family firms by Bertrand and Schoar (2006).…”