Socioemotional wealth importance within family firm internal communication

Marett, Emily Garrigues; Marler, Laura E.; Marett, Kent

doi:10.1108/jfbm-08-2017-0022

Cited by 19 publications

(14 citation statements)

References 56 publications

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“…Continuity of the family legacy in the firm is an important distinction between family and non-family firms Marett et al, 2018;Rousseau et al, 2019). This SEW dimension is related to the satisfaction that family managers derive from being able to contribute to the trans-generational sustainability of family influence over the firm.…”

Section: Renewal Of Family Bonds Through Dynastic Succession and Family Commitmentmentioning

confidence: 99%

Socioemotional wealth and performance in private family firms

Razzak

Jassem

2019

JFBM

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Purpose Although family business literature acknowledges that family firms owners are motivated by a set of socioemotional wealth (SEW) goals along with firm-centric business goals, yet a consistently predictable pattern of relationship between SEW and financial wealth is yet to be discerned. The purpose of this paper is to propose a theoretical model based on the stakeholder approach to suggest that family commitment mediates the association between the dimensions of SEW and firm performance. Design/methodology/approach A set of hypotheses are proposed that are tested using structural equation modeling with data collected from 357 medium to large sized privately held family firms in Bangladesh. The data analysis is done with SmartPLS (v.3.2). Findings The results indicate that family commitment partially mediates the relationships between family control and influence, family identification, emotional attachment and renewal of family bonds through dynastic succession and firm performance. The only non-significant relationship was between binding social ties and firm performance. The results provide a more nuanced understanding of the link between SEW goals and firm performance, and present important implications for theory and practice. Research limitations/implications The cross-sectional nature of the study exposes it to the specter of common method bias despite the fact that procedural remedies were initiated to minimize the impact of such occurrence. A longitudinal study with data obtained from multiple individuals at different levels of the organization would possibly yield more robust findings. Furthermore, in the absence of a multi-country and multi-sector analysis, a broad generalization of the findings may not be feasible. Practical implications The knowledge that family identity, emotional attachment and renewal of family bonds through dynastic succession may be leveraged to enhance the commitment of subsequent generation of family firm owners to the firm that may be pertinent to incumbents who desire to see their successors more engaged in the family enterprise. Furthermore, knowing that excessive focus on family control over the firm leads to negative outcomes is also pertinent to family firm leaders. Social implications Survival of family businesses is vital to the global economy as one of the primary drivers of global GDP growth and source of new employment. Policy makers can benefit from the findings of this study to customize policies that take into cognizance the importance of SEW owners of family firms and the fact that some of these SEW goals actually benefit the firm in terms of enhanced commitment to the enterprise and consequently superior firm performance. Originality/value The role of family commitment as a mediator between SEW and firm performance has not been dominant in the literature. By providing a finer-grained understanding of how family commitment accounts for the relationship between family-centric non-economic goals such as SEW and firm-centric goals such as business performance, the study presents a theoretical link between sociomemotional wealth and financial wealth in the context of private family firms.

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Section: Renewal Of Family Bonds Through Dynastic Succession and Family Commitmentmentioning

confidence: 99%

Socioemotional wealth and performance in private family firms

Razzak

Jassem

2019

JFBM

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“…To succeed in relationship competency, Kaur and Bains (2013) stated that entrepreneurs have to rely on good interpersonal and communication skills, their ability to influence others, and gain support. Thus communication is a critical aspect of day-to-day functioning that enables a firm to build social capital, foster identification with the firm, and develop the goodwill required to create a sense of community around common values and goals (Marett, Marler and Marett, 2018). As a matter of fact, human capital is a process of developing a strategy & support the business through problem solving, value adding, heterogeneity of the product, and quality of the product (Baum, 1994;Unger et al, 2011).…”

Section: Entrepreneurial Competenciesmentioning

confidence: 99%

Human Capital and Entrepreneurial Competencies towards Performance of Informal Microenterprises in Kelantan, Malaysia

Zainol

Mamun

Ahmad

et al. 2018

Economics &Amp; Sociology

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Microenterprise is essential for strengthening the economies in developing countries through job creation, skills' development, self-esteem, and knowledge. This study intended to measure the effect of human capital on entrepreneurial competencies and the effect of entrepreneurial competencies on the performance of informal microenterprises owned and managed by women-microentrepreneurs in Kelantan, Malaysia. This study has employed a cross-sectional design and collected quantitative data from 384 informal women-entrepreneurs in Kelantan, Malaysia. The result indicated that human capital and entrepreneurial competencies had a significant positive effect on women microenterprises' performance. Despite the increase in the number of research in this subsector, little attention has been given to the effect of human capital and entrepreneurial competencies on business performance in Malaysia. Therefore, this study aims to examine human capital, entrepreneurial competencies, and business performance among informal microenterprises owned and managed by women in Kelantan, Malaysia. Given that investments in human capital and entrepreneurial competencies improve the performance of informal microenterprises, the government and development organizations should, therefore, focus on entrepreneurship development programs, so that to improve the entrepreneurial competencies among women microentrepreneurs in Kelantan, Malaysia.

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“…By nurturing an environment where family members are encouraged to build social ties through the business organization with internal stakeholders such as employees and other shareholders, and also with external stakeholders such as vendors, financiers and society at large, the next generation of family managers may be more inclined to commit to the family enterprise. Studies have shown that strategic measures such as frequent family meetings where current family managers discuss current state of the business and future strategies, and invite suggestions from other family members even those who are currently not involved in the business operations may help future family business leaders to visualize the benefits of being engaged with the family enterprise (Marett et al , 2018). Such close interactions among family members have been known to create stronger emotional bonds by uniting the family to a common vision (Samara and Paul, 2018).…”

Section: Discussion Limitations and Future Directionsmentioning

confidence: 99%

Emotions, identity, social bonds and commitment to the family business: moderating role of controlling generation

Razzak

2022

JEEE

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Purpose Drawing on the stakeholder theory, the purpose of this study is to examine relationships between family identity, emotional attachment and binding social ties, and commitment of family firm owners to the family enterprise in the context of an emerging economy. Furthermore, this study examines whether the strength of the above relationships significantly vary between the founder generation and the subsequent generation of owners. Design/methodology/approach A set of hypotheses is tested by applying partial least squares structural equation modeling on a sample of 357 family-owned manufacturing companies in Bangladesh. Deploying SmartPLS (v. 3.2), the path model is analyzed through bootstrapping procedure. The moderating effect is tested through multigroup analysis. Findings The findings suggest that the relationships between emotional attachment and family identity and commitment are positive and significant, whereas the association between binding social ties and commitment was not significant. Furthermore, a multigroup analysis revealed that there is a significant difference between the founder generation and their next generation in terms of influence of binding social ties and family identity on commitment, whereas there appears to be no difference in terms of emotional attachment and commitment between the two generations. Practical implications This study shows that compared to the founder generation, the next generation prioritizes family identity and social bonds, which leads to greater levels of collective commitment to the organization. Such knowledge may provide clues to incumbent family-firm leaders by identifying the areas where they need to emphasize in generating greater levels of commitment among their successors. Originality/value To the best of the author’s knowledge, this appears to be the first such study that provides a nuanced understanding of how family generation in control of the family firm influences the relationships between psychosocial components of socioemotional wealth and collective commitment of the owners of family firms in the context of an emerging economy.

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Socioemotional wealth importance within family firm internal communication

Cited by 19 publications

References 56 publications

Socioemotional wealth and performance in private family firms

Socioemotional wealth and performance in private family firms

Human Capital and Entrepreneurial Competencies towards Performance of Informal Microenterprises in Kelantan, Malaysia

Emotions, identity, social bonds and commitment to the family business: moderating role of controlling generation

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