Religion logic and family firms’ ethical behavior towards employees

Abstract

Religiosity holds significant influence over organizational and entrepreneurial decision-making processes, yet its impact remains scarcely researched in existing business research. By conducting a qualitative field study involving 23 family firms we aim to investigate how religiosity shapes the ethical behavior of family firms towards their employees in a secularized context in Western Europe. Drawing on the institutional logics perspective and a qualitative field study of 23 family firms, we contribute a nuanced typology of how religiosity impacts these firms. We establish Integrator family firms, where religiosity is deeply embedded in both personal and professional lives; Separator family firms, where religiosity is considered to be a private matter (i.e., kept separate from the business); and Secular family firms, where religiosity does not influence business practices. While these three types of family firms exhibit similar ethical behavior towards employees, they differ markedly in how they motivate and justify their decision-making processes. Comparing these types of family firms, we not only identify complementarity (business and family logics) and conflict (business vs. religion logic) between institutional logics but also observe substitution. Specifically, in family firms where religion holds utmost prominence (i.e., Integrator family firms), the ubiquitous family logic is substituted by religion logic. Conflicts between logics are managed through various strategies. Integrator family firms employ a compromise strategy between business and religion logics, while Separator family firms use an avoidance strategy to address this issue. Finally, our results indicate secularization trends over recent decades, suggesting that the mobilization of logics may evolve over time.