Family Social Capital, Trust within the TMT, and the Establishment of Corporate Goals Related to Nonfamily Stakeholders

Abstract

Based on a social capital approach, we analyze how structural and cognitive family social capital (FSC) influences the establishment of corporate goals related to nonfamily stakeholders (EGNFS) in family firms. Data were obtained from 374 family and nonfamily members of top management teams (TMTs) in 173 Spanish family firms. Results show that structural FSC directly influences the establishment of corporate goals related to nonfamily stakeholders. Also there is an indirect influence through the effect FSC has on the relational social capital (trust) in the TMT. When data are split based on familial and nonfamilial TMTs (depending on the percentage of family members), results show important differences between the two groups.

Family involvement in top management team: Impact on relationships between internal social capital and innovation

“…Finally, 48% of the firms in the sample belong to the manufacturing sector and 52% to the service sector (see Table 1). Therefore, the descriptive statistics for our sample are in line with those of prior studies on Spanish non-listed family firms (e.g., Cabrera-Suarez, Deniz-Deniz, & Martin-Santana, 2015; Deniz-Deniz & Cabrera-Suarez, 2005). Table 2 presents the descriptive statistics and correlations for all the variables analysed in this study 6 .…”

From Intention to Trust to Behavioral Trust: Trust Building in Family Business Advising

“…As goals related to SEW are driven mainly by affective elements, such as the identification of family members with the firm, emotional attachment and family control (Berrone et al, 2012), interpersonal trust between a family business and an external actor is the key connecting factor (Sundaramurthy, 2008). Previous family business research has found that trust serves as a governance mechanism (Eddleston et al, 2010), reduces transaction costs (Steier, 2001), fosters cooperation (Kudlats et al, 2019), increases a family business's social capital (Cabrera-Suárez et al, 2015;Pearson & Carr, 2011) and, thus, constitutes a competitive advantage (Steier, 2001;Sundaramurthy, 2008). Surprisingly, to date, how trust building processes in family businesses evolve remains a black box (Sundaramurthy, 2008); thus, a clear understanding of the internal psychological processes affecting family business's assessments of the risk (uncertainty) associated with trusting a nonfamily actor is lacking (Jiang et al, 2018;Sundaramurthy, 2008).…”

Not all family firms are equal: The moderating effect of family involvement on the political risk exposure of the foreign direct investment portfolio. Preliminary evidence from Spanish multinational enterprises

“…The bonding form of SC is naturally promoted in family businesses when managers have been associated with their businesses for a very long time since “ in many cases … (they) are founders or later generation executives who have spent enduring apprenticeships within their firms ” (Miller, Minichilli, & Corbetta, ). Developing a bonding form of SC has different effects on FF operations (Cabrera‐Suárez, Déniz‐Déniz, & Martín‐Santana, ). We argue the bonding form of SC enhances the effectiveness of political capabilities at the time of sharing knowledge with other managers in the firm for various reasons.…”