Socioemotional Wealth Conflict in Family Firms

Abstract

and Berrone demonstrate how SEW can simultaneously elicit good and bad behavior in regard to corporate social responsibility, their findings also give rise to the idea that maintaining control and influence over day-to-day operations (internal socioemotional wealth [SEW]) and maintaining positive assessments of the firm's reputation (external SEW) may at times be in conflict. This commentary builds upon this notion by highlighting the need to explicitly examine SEW conflict, as well as offering initial theorizing on how family firms will pursue SEW preservation in these situations. Drawing on image theory, we theorize a process where preserving internal SEW is generally used as the guiding script in family firms because it is more salient on an everyday basis. However, we propose that if its preservation threatens the organization's identity and reputation, the script will be disrupted, precipitating a shift to preserving external SEW. The article concludes by discussing the broader theoretical implications of SEW conflict for family firms.

A socioemotional wealth perspective on innovativeness and performance of family businesses.

“…These expectations align with discussions in the family business literature about internal and external SEW (Cruz et al, 2014;Vardaman and Gondo, 2014). SEW may have both positive and negative influences in firm-level outcomes, including innovation, although the majority of scholars has considered the effects of SEW as primarily positive .…”

“…Even though the majority of scholars has considered the general effects of SEW as primarily positive , there are researchers who emphasize that SEW can be both beneficial and harmful for family businesses . To understand this duality of the effects of SEW on innovation, it is necessary to dive deeper into the discussion of internal versus external SEW (Cruz, Lazzara-Kintana, GercesGaldeano, and Berrone, 2014;Vardaman and Gondo, 2014). External SEW of family firms captures the desire to have positive recognition (reputation and image) whereas, internal SEW captures the desire to maintain the family's unity and control (Vardaman and Gordo, 2014).…”

Family Enterprise and Context

“…Family firms are better able to act unilaterally and apparently attach value to that ability. However, in their commentary, Vardaman and Gondo (2014) argue that the value of unilateral action has its limits and there are times when preserving both internal and external SEW may not be possible. They draw on image theory to theorize a process where preserving internal SEW is generally used as the guiding or default script in family firms.…”

“Whom do I want to be the next CEO?” Desirable successor attributes in family firms

“…In addition, family members working every day in the firm might fight an incumbent's final decision by not being supportive towards the new (external) CEO and creating additional conflicts and frictions within the firm, which could be detrimental socioemotionally but also with respect to firm profitability. This finding also suggests that the more an incumbent is exposed to interactions and exchanges with other family members working in the firm, the more likely it is that they will develop a conflict in terms of their SEW preservation tendency (Vardaman and Gondo 2014). Our findings shed new light on the debate about succession in the family business research field, providing several contributions.…”

“…That is, the normative belief, which frames the subjective norms for the incumbent, defines the perception and attitude that the incumbent has regarding approval or disapproval of a particular decision. The intention to preserve family relationships and ties might contrast with the intention not to preserve management control within the family, creating conflicts in terms of SEW (Vardaman and Gondo 2014). For example, such a decision could harm family relationships (Eddleston and Kellermanns 2007), decreasing family social capital (Arregle et al 2007) and activating conflicts within the family.…”