Social Issues in the Family Enterprise

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2014 27: 193 originally published online 9 July 2014Family Business ReviewAnita Van Gils, Clay Dibrell, Donald O. Neubaum and Justin B. Craig

Social Issues in the Family Enterprise

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Editorial

Climate change, environmental pollution, population growth, widespread patterns of inequality, and increas-ing levels of youth unemployment are only some of the major social issues facing society in the coming century (ISSC & UNESCO, 2013). Given that governments and social institutions seem to be unable to tackle these chal-lenges on their own, prosocial behavior is proclaimed to be of increasing importance among individuals and both profit- and nonprofit organizations (McCann, 1983). This special issue of Family Business Review focuses on the potential role and contributions of family enterprises in dealing with these social issues. Before discussing the current state of knowledge within the family business literature and introducing the four articles in this Special Issue, this article first defines “social issues” and pro-vides a brief broad historical perspective on the develop-ments within the field. We conclude with research questions scholars may wish to address in the future.

Social Issues: An Historical Perspective

Humans are inherently social beings (Weber, 1978), reflected in “their attachment to families, commitment to social norms and institutions (school, employment), involvement in these activities, and their belief that

these things are important” (Hirschi, 1969, p. 16). As such, human behavior cannot be fully studied in isola-tion of the social institutions, relationships, or processes of a given social system (Hunt, 1978/2005). Within these social systems, individuals have perceptions about the ideal social life (Lauer, 1976), which permits soci-ologists to identify “social issues or problems” arising when a substantial part of a social order identifies behav-iors that violate the generally accepted or approved norms (Merton & Nisbet, 1971). These perceptions also allow for the recognition of prosocial behaviors, such as helping, sharing, donating, cooperating or volunteering (Brief & Motowidlo, 1986).

It has been suggested that businesses, as well as indi-viduals, fulfill a significant role in the social system (Donham, 1927; Usher, 1924). Providing labor, income, products, and services, businesses create social benefits

542398 FBRXXX10.1177/0894486514542398Family Business ReviewVan Gils et al.research-article2014

1Maastricht University, Maastricht, Netherlands2CYFE, University of Bergamo, Bergamo, Italy3University of Mississippi, University, MS, USA4Oregon State University, Corvallis, OR, USA5Northeastern University, Boston, MA, USA

Corresponding Author:Anita Van Gils, Department of Organisation and Strategy, Maastricht University, P.O. Box 616, 6200 MD, Maastricht, Netherlands. Email: [email protected]

Social Issues in the Family Enterprise

Anita Van Gils1,2, Clay Dibrell3, Donald O. Neubaum4, and Justin B. Craig5

AbstractIn this introduction, we discuss social issue research in the management and family business literatures, focusing on ethics, corporate social responsibility, and philanthropic practices of family enterprises. Next, we introduce and highlight four articles accepted for publication. The editorial concludes by presenting future research questions at the social issues—family business interface. Our review of 35 articles, as well as those included in this Special Issue, suggest that family businesses are more attuned and attentive to social issues and stakeholders than nonfamily business. Noneconomic motivations (e.g., reputation, socioemotional wealth, and stewardship) appear particularly salient to family enterprises.

Keywordssocial issues, social problems, family enterprise, corporate social responsibility (CSR), ethics, philanthropy

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194 Family Business Review 27(3)

and help others satisfy their needs. At the same time, businesses are also responsible for creating social costs, manifested in activities and outcomes such as poor labor or environmental practices, or other unethical behaviors. Notwithstanding some economists (Friedman, 1962; Levitt, 1958) providing arguments for an emphasis on firm efficiency, a vast number of researchers assert that businesses have a fundamental moral responsibility to uphold the claims of stakeholders unrelated to the inter-est of shareholders (Davis, 1960; Donaldson & Preston, 1995; Freeman, 1984). Similarly, the ubiquity, size, and market power of business and corporate interests around the globe create a role and responsibility for them to be attentive not only to the interests of shareholders but also to the social interests of society at large.

Recent interest in the study of corporate social responsibility (CSR), defined as “the firm’s consider-ations of, and response to, issues beyond the narrow economic, technical, and legal requirements of the firm to accomplish social benefits along with traditional and economic gains which the firm seeks” (Davis, 1973, p. 312), has grown, as witnessed by the 588 articles and 102 books included in a recent review of the CSR litera-ture by Aguinis and Glavas (2012). CSR activities can include proactive environmental strategies, philan-thropy, ethics, engagement in community activities, and employment strategies for minority groups or disabled persons. While CSR and social issues have been fre-quently discussed within the management literature dur-ing the past century, fewer studies have examined this issue within the context of family enterprises. Nevertheless, research illustrates that the family firms’ social behavior toward their stakeholders differs from that of nonfamily firms (Bingham, Dyer, Smith, & Adams, 2011; Miller, Lee, Chang, & Le Breton-Miller, 2009), and as a result, the genesis of this “Social Issues in the Family Enterprise” Special Issue was born. Given the focus of the articles selected for publication in this issue, the remainder of this literature review will focus only on a select group of themes, namely CSR, ethics, and philanthropy.

Within the general management literature, a detailed multilevel and multidisciplinary theoretical framework on CSR has been developed (Aguinis & Glavas, 2012). Among others, the authors discuss that at the institu-tional level, institutional and stakeholder pressures regarding CSR can influence the reputation of the firm or the resulting choices made by their customers. At the

organizational and individual levels, instrumental and normative CSR motives influence resource deploy-ments, employee perceptions, organizational identity, and all these factors have an impact on a wide range of outcomes, such as firm performance, market- or organi-zational-related capabilities and employee engagement. Furthermore, Aguinis and Glavas (2012) provided sev-eral suggestions for mediating and moderating variables that can affect these relationships. Nevertheless, incon-sistencies still remain in research findings regarding the (financial) performance results of CSR (Barnett, 2007; Margolis & Walsh, 2003). Moreover, within the CSR research field, much attention is given to the social con-text as researchers have illustrated that CSR-practices differ among countries and how and why they change (Campbell, 2007; Matten & Moon, 2008).

Whereas some authors see CSR as an all-encompass-ing term for the prosocial behavior of businesses, other researchers have examined the specific topics of ethics or philanthropy. Business ethics can be defined as “moral rules, standards, codes, or principles which pro-vide guidelines for right and truthful behavior in specific situations” (Lewis, 1985, p. 382). As for CSR, which is sometimes referred to as a type of ethical behavior (and further illustrating conceptual problems in this field), review articles that discuss empirical findings (Ford & Richardson, 1994; O’Fallon & Butterfield, 2005), or findings related to specific groups, such as entrepre-neurs (Hannafey, 2003) or small businesses (Spence, 1999), are available. In this research, the use of both normative (i.e., how individuals are supposed to behave given institutional, religious, or other types of norms and standards) and contextual concepts (i.e., the context of ethical behavior, such as organizational climates) illustrates that a multilevel framework also enhances findings in this academic field (Kahn, 1990).

Finally, and consistent with Godfrey (2005, p. 778), we define philanthropy as “an unconditional transfer of cash or other assets to an entity or a settlement or cancel-lation of its liabilities in a voluntary nonreciprocal trans-fer by another entity acting other than as an owner.” In the first instance, researchers have mainly discussed the businesses’ motives behind these types of resource transfers, and have emphasized issues, such as generat-ing goodwill or positive publicity, boosting employee morale, or identifying individual moral drivers (Bekkers & Wiepking, 2011; Porter & Kramer, 2002; Shaw & Post, 1993). Secondly, the effect of philanthropic



Van Gils et al. 195

behavior on outcomes as financial performance and shareholder value remains a critical question (Godfrey, 2005; Van Beurden & Gössling, 2008).

To summarize, individuals, families, and organiza-tions are intrinsically linked to society through multiple social relationships. Individuals and businesses can cause social problems, but also have a responsibility in solving these social issues. So far, we briefly discussed academic research conducted in the areas of CSR, busi-ness ethics, and corporate philanthropy. Next, we pro-vide a literature overview of social issues within the context of family enterprises.

Social Issues in Family Enterprises

The literature surrounding social issues within family enterprises has increased dramatically in the past years through a broad range of topics. The works of Adams, Taschian, and Shore (1996) and Gallo (2004) were some of the first scholarly activities to focus on the social issues of family enterprises. Adams et al. (1996), through their qualitative research design, compared the ethical practices of family and nonfamily businesses. They found that family businesses did not often have a formal code of ethics, but they were more likely to model ethical behaviors through their actions. Gallo (2004) took a different direction by considering the social responsibility of firms to their local communi-ties. Specifically, he found that family businesses were more likely than their nonfamily business counterparts to create wealth and to deliver products for the common good of the community.

Dyer and Whetten (2006) built on these earlier works by considering the corporate social performance of fam-ily businesses in the S&P 500. In their study, these authors found that family ownership and management do matter, as family firms were more likely than their nonfa-mily counterparts to be more fully engaged in socially responsible concerns (e.g., community, environment). Furthermore, they posited family firms are more likely to engage in these activities, as these firms are more con-cerned “about image and reputation and a desire to pro-tect family assets” (2006, p. 785). This perspective—that family firms are not only motivated by an economic incentive but also by a noneconomic motivation to engage in socially responsible behaviors—is a theme that consistently emerges throughout the recent surge of research on the social practices of family enterprises.

Multiple theories and perspectives have been used to better understand the phenomenon of why family enter-prises behave differently than their nonfamily competi-tors in relation to social issues. Although the following list is neither exhaustive nor in any order of ranking, these theories have been employed to better understand social issues in family enterprises: social identity theory (Bingham et al., 2011), stewardship theory (Craig & Dibrell, 2006; Neubaum, Dibrell, & Craig, 2012), agency theory (e.g., McGuire, Dow, & Ibrahim, 2012), behavioral agency model (e.g., Cennamo, Berrone, Cruz, & Gomez-Mejia, 2012; Neubaum et al., 2012), stakeholder theory (Cennamo et al., 2012; Déniz-Déniz & Suárez, 2005; Mitchell, Agle, Chrisman, & Spence, 2011; Neubaum et al., 2012; Zellweger & Nason, 2008), institutional theory (Berrone, Cruz, Gomez-Mejia, & Larraza-Kintana, 2010; Campopiano & De Massis, 2014; Mitchell et al., 2011), social exchange theory (e.g., Long & Mathews, 2011), sustainable family busi-ness theory (Fitzgerald, Haynes, Schrank, & Danes, 2010; Niehm, Swinney, & Miller, 2008), and resource-based view (e.g., Sharma & Sharma, 2011).

With the possible exception of stakeholder theory (e.g., Mitchell et al., 2011), the behavioral agency model in the form of socioemotional wealth has seemingly become the theoretical foundation for most family busi-ness research dealing with social issues. Socioemotional wealth, “or the stock of affect-related value that the fam-ily has invested in the firm” (Berrone et al., 2010, p. 82), is considered to be a primary motivator for family busi-nesses to engage in responsible corporate practices. Berrone et al. (2010), in their study of firms who were required to report their emission levels to regulatory agencies, found that family firms had significantly bet-ter environmental performance than their nonfamily competitors. The impetus for these family firms to engage in pollution reduction strategies beyond regula-tory requirements was the result of their desire to main-tain socioemotional wealth, whereas nonfamily firms were motivated by the incentives to maximize economic wealth. More recently, this work was further extended through the development of FIBER, “which stands for Family control and influence, Identification of family members with the firm, Binding social ties, Emotional attachment of family members, and Renewal of family bonds to the firm through dynastic succession” (Berrone, Cruz, & Gomez-Mejia, 2012, p. 259). Overall, socio-emotional wealth is a prevalent theoretical foundation




that enables scholars to better understand why family businesses behave differently in regard to social issues, such as the environment (e.g., Berrone et al., 2010; Neubaum et al., 2012).

With regard to the conceptualization of the family, scholars have taken prevalent family business literature constructs, such as familiness (Habbershon & Williams, 1999) to explore social issues. Key family constructs include family involvement (e.g., Bingham et al., 2011; Niehm et al., 2008; O’Boyle, Rutherford, & Pollack, 2010), family ownership (e.g., Berrone et al., 2010), family management (e.g., Wu, 2006), familiness (e.g., Blodgett, Dumas, & Zanzi, 2011), family heterogeneity (e.g., Déniz-Déniz & Suárez, 2005), family cohesion (Long & Mathews, 2011), and family control and influ-ence (e.g., Hauswald & Hack, 2013) to provide the link-ages between characteristics of the family and the social outcomes of the firm.

Of the varying conceptualizations of family and the family’s impact on the firm in relation to socially related inquiries, family involvement seems to be prevalent (e.g., Bingham et al., 2011; Niehm et al., 2008; O’Boyle et al., 2010). Although there are varying definitions and measures of family involvement, we follow O’Boyle et al.’s (2010, p. 311) definition, which suggests “family involvement represents a substantial family presence in ownership, governance, management, succession, and/or employment.” In this study, O’Boyle et al. (2010) dis-covered ethical focus by the family firm mediated the family involvement to firm performance relationship. Using different definitions, Bingham et al. (2011) found that the extent of family involvement will lead to differ-ing emphasis on CSR initiatives. Furthermore, Niehm et al. (2008) highlighted family firms with higher family involvement will be more likely to have a stronger com-mitment to their community, greater community sup-port, and a deeper sense of community within the community where their business was located.

From a social context, authors examined family busi-nesses in areas, such as CSR (e.g., Campopiano & De Massis, 2014; Chrisman, Chua, & Zahra, 2003; Niehm et al., 2008), corporate social performance (e.g., Bingham et al., 2010; Dyer & Whetten, 2006), proactive stakeholder engagement (e.g., Cennamo et al., 2012), ethical climate (Duh, Belak, & Milfelner, 2010; Kidwell, Kellermanns, & Eddleston, 2012), ethical focus (O’Boyle et al., 2010), benevolence (Hauswald & Hack, 2013), organizational virtue orientation (i.e., integrity,

empathy, warmth, courage, conscientiousness, and zeal; Payne, Brigham, Broberg, Moss, & Short, 2011), and the natural environment (Berrone et al., 2010; Craig & Dibrell, 2006; Neubaum et al., 2012; Sharma & Sharma, 2011). An overview of the literature of social issues within the family enterprise is provided in Table 1.

Development of and Contents in this Issue

The Special Issue Call for Submission included a diver-sity of topical issues and theoretical perspectives to understand the social issues related to family enterprises, and we were particularly pleased with the articles we attracted. The 21 articles initially submitted studied family firms from South America, Asia, Europe, and North America, which reflects the growing reach of family business research, as well as the widespread interest in social issues research. Topics included CSR, philanthropy and family foundations, virtues of family business, social interactions and social capital, commu-nity involvement, eco-certification, environmental per-formance, and diversity. Two external reviewers and a team of at least two of the special issue editors reviewed each manuscript during each round of review. Ultimately, after at least three rounds of the blind review process, four empirical papers were selected for publication. As editors, we were pleased with the diversity of topics (i.e., CSR, eco-certification, and philanthropy) and con-texts (i.e., China, Italy, Spain, and the United States) reflected in the accepted articles.

Our special issue begins by taking a broad view of social practices and focuses on the patterns of CSR engagement of family firms. In their case study analysis of 12 Spanish family firms, Marques, Preses, and Simon (2014) provide insights into how family firms view their socially responsible practices. These authors examine the scope of CSR practices (i.e., workplace, market-place, environmental and community practices) and intensity of CSR engagement of family firms to con-clude that family firms with high family involvement tend to have higher levels of CSR performance. In par-ticular, Marques et al. find that family firms emphasized “people-related” CSR (i.e., workplace and community CSR practices) over environmental or marketplace activities. Like several of the other articles in this special issue, this article creates distinctions between the influ-ence of family ownership and family involvement on the



Van Gils et al. 197

Table 1. Overview of the Articles Addressing Social Issues in Family Enterprises.

Authors Focal topic Methodology and theoretical approach Main results and contributions

Adams et al. (1996) Ethics Interviews with 213 family firms and 230 nonfamily firms, theory of moral reasoning and ethic of care

Few differences exist in perceptions of ethics-related behavior and attitudes in family versus nonfamily-owned firms. Nonfamily firms more often reported to have a formal code of ethics; family businesses are more likely to rely on role modeling to encourage ethical behavior

Berrone et al. (2010) Corporate social responsibility (CSR)

194 U.S. public firms over 1998-2002 period, database information, institutional theory

Family-controlled public firms protect their socioemotional wealth by having a better environmental performance than their nonfamily counterparts. The positive effect of family ownership on environmental performance persists independently of whether the CEO is a family member or serves both as CEO and board chair

Bingham et al. (2011) CSR S&P 500 firms during the period 1991-2005, stakeholder identity orientation perspective

Family firms engage in significantly more positive social initiatives than nonfamily firms. Positive community and employee social initiatives were also significantly higher for family firms than those of nonfamily firms. Moreover, the more a family is involved in the business, the more a family firm will take stakeholders into account when making decisions that have CSP implications

Blodgett et al. (2011) Ethics 46 U.S. family business, 48 U.S. nonfamily business companies, 44 foreign (non-U.S.) family business, analysis of mission statements

U.S. family businesses express a higher frequency of ethical values than its nonfamily corporate and international counterpart. U.S. family businesses also have a strong lead in “integrity” and “honesty” whereas international family businesses lead in “environmentalism,” “globalism,” and “social responsibility.” Finally, the frequency of ethics values for all family business globally increased over time

Cabrera-Suarez, Déniz-Déniz, and Martín-Santana (2014)

Stakeholders 173 Spanish family firms, social capital approach

Results show that structural family social capital (FSC) directly influences the establishment of corporate goals related to nonfamily stakeholders. Moreover, there is an indirect influence through the effect FSC has on the relational social capital (trust) in the TMT (top management team)

Campopiano and De Massis (2014)

CSR 98 large- and medium-sized Italian firms, institutional theory

In comparison to nonfamily firms, family firms disseminate a greater variety of CSR reports, are less compliant with CSR standards, and place emphasis on different CSR topics

Cennamo et al. (2012) Proactive stakeholder engagement

Conceptual, stakeholder theory and behavioral agency model

Family firms are more prone to adopt proactive stakeholder engagement activities because by doing so they preserve and enhance their socioemotional wealth

Chrisman et al. (2003) CSR Conceptual, resource based The aspirations and values of the dominant coalition of family owners/managers will affect the types and scope of the noneconomic responsibilities—including those related to social responsibility—of a family firm. The types of social responsibilities acknowledged by the family firm will affect its resource management decisions and, consequently, its potential for competitive advantage and superior economic performance

Craig and Dibrell (2006) CSR Survey research, 391 U.S. SMEs of diverse industries, stewardship theory

Family firms are better able to facilitate environmentally friendly firm policies associated with improved firm innovation and greater financial performance

Déniz-Déniz and Suárez (2005)

CSR Descriptive analysis of 122 Spanish family firms, altruism versus stewardship

Family firms are not a homogeneous group in terms of their orientation toward CSR, and these differences do not seem to be associated to biographical characteristics. Values and culture might be more important antecedents

Duh et al. (2010) Ethics Multiple case study design, 49 Slovenian enterprises, stakeholder approach

Some differences in ethical core values, climate, and culture exist between family and nonfamily enterprises. The functioning of nonfamily enterprises indicates a lower level of connection among coworkers, top management, and employees as well as less loyalty, anchoring of enterprise values and norms, and capacity for innovative behavior

Dyer and Whetten (2006)

CSR U.S. S&P 500 sample Publicly traded family firms are more socially responsible than nonfamily publicly traded firms on several dimensions of social responsibility from the KLD data set

Fernando and Almeida (2012)

CSR Case study of Sri Lankan family-owned holding, stakeholder theory and organizational virtuousness

Strategic CSR initiatives could be virtuous despite generating profits, publicity, and reputation.

(continued)





Fitzgerald et al. (2010) CSR 334 U.S. family businesses, National Family Business survey 2000 panel, sustainable family business theory

Individuals with very positive attitudes about their local communities were more likely to serve in leadership positions and make financial and technical contributions to the community. Individuals with more education are more likely to participate as civic leaders in elected or appointed positions, while individuals with more household wealth and profitable businesses are more likely to provide financial and technical assistance to their communities

Gallo (2004) CSR Opinions of 44 academics Family businesses are better at carrying out the responsibilities of wealth creation and delivery of goods to the market

Graafland, Van de Ven, and Stoffele (2003)

Ethics Survey research of 111 large and small Dutch businesses

The distinction between family and nonfamily firms hardly affects the use of instruments like code of conduct, ISO certification, social reporting, social handbook, and confidential person

Habbershon and Williams (1999)

Resources Conceptual, resource-based view Family businesses possess unique resources that result in stakeholder unity, scanning of the environment and flexible reactions to environmental changes

Hauswald and Hack (2013)

Benevolence Conceptual, stakeholder theory and benevolence research

The impact of perceivable family control/influence on stakeholders’ perceptions of benevolence is not straightforward but instead hinges on a set of individual-level contingency factors of the stakeholder, such as stakeholders’ family business in-group membership, stakeholders’ secondhand category information, and stakeholders’ firsthand category information

Kidwell et al. (2012) Ethics 147 U.S. family firms Ethical norms of family harmony and perceptions of fairness have a negative effect on family member impediment, while role ambiguity was positively related to family member impediment. These relationships are mediated by relationship conflict

Litz and Turner (2013) Ethics 124 business school students When a parent’s behavior is perceived by his or her child as immoral, it is likely to result in the child’s perceiving that he or she carries some vicarious responsibility for what the parent has done. The most significant determinant of intended response is perceived normative obligation

Long and Mathews (2011)

Ethics Conceptual, social exchange theory Interactions among family members and within the dominant coalition operate to produce a distinctive ethical frame of reference

McGuire et al. (2012) Social performance

473 U.S. family and nonfamily firms, data from KLD company database, agency and stakeholder theory

An inverse relationship exists between family firm status and negative or poor social performance. The combination of strong family control and strong corporate governance is associated with weak social performance

McKenny, Short, Zachary, and Payne (2012)

Philanthrophy Australia’s top 100 private family firms, organizational identity perspective

Next to utilitarian goals, family firms also discuss a significant number of normative goals in their “about us” websites and press releases. The most commonly referenced normative goal category was donations and community involvement

Mitchell et al. (2011) Stakeholder salience

Conceptual, stakeholder theory Normative power is more typical in family business stakeholder salience. For family stakeholders, legitimacy is based on heredity. Temporality and criticality are linked in the family business case because of family ties and family-centered noneconomic goals

Neubaum et al. (2012) CSR Survey among 359 U.S. food-processing firms, stewardship theory

Only for nonfamily firms, attention to the concerns of stakeholders in the environment is positively associated with firm performance. Only for family firms, this relationship is positively moderated for those firms that are particularly attentive to the concerns of its employees

Niehm et al. (2008) CSR 221 U.S. family businesses, National Family Business survey 2000 panel, enlightened self-interest and social capital perspectives

Three dimensions, commitment to the community, community support, and sense of community, account for 43% of the variation in family business operators’ CSR. Size of the business is significantly related to family firms’ ability to give and receive community support

O’Boyle et al. (2010) Ethics 526 U.S. small family businesses, from 2007 Arthur Anderson/Mass Mutual American Family Business Survey

A firm’s ethical focus mediates the relation between family involvement and financial performance

Table 1. (continued)

(continued)



Van Gils et al. 199


Payne et al. (2011) Organizational virtue orientation (OVO)

Content analysis of shareholder letters from S&P 500 companies

There are significant differences between family and nonfamily firms in their espoused OVO, with family firms generally being higher. Family firms were significantly higher on the dimensions of Empathy, Warmth, and Zeal, but lower on Courage

Perrini and Minoja (2008)

CSR Case study of one Italian medium-sized business, stakeholder theory

The entrepreneur’s beliefs and value system, and his past experience are antecedents of strategic CSR, while formalization of the owner’s personal values and corporate governance act as mediators—or second-level antecedents—between owner-related variables and corporate strategy

Rey-Garcia and Puig-Raposo (2013)

Philanthropy U.S., Germany, and Spain, historical perspective on institutional differences

Highlight relevance of family foundations and emphasize that strong national differences prevail. Identification of two basic family foundation models: controlling or noncontrolling model

Sharma and Sharma (2011)

CSR Conceptual, theory of planned behavior Family involvement in business influences the attitudes, subjective norms, and perceived behavioral control of a firm’s dominant coalition. Together, these factors determine the extent of the dominant coalition’s intentions to undertake proactive environmental strategy (PES). Family firms with lower levels of relationship conflict within the controlling family will be more successful in translating the dominant coalition’s intentions to allocate resources for the pursuit of PES

Sorenson, Goodpaster, Hedberg, and Yu (2009)

Ethics 405 U.S. small family firms, social capital perspective

The family point of view emerges from collaborative dialogue, which helps develop agreement to ethical norms; (b) the presence of ethical norms further helps cultivate FSC; and (c) as a resource in a family business, FSC is positively related to family firm performance

Uhlaner, van Goor-Balk, and Masurel (2004)

CSR Focused interviews with 42 small and medium-sized Dutch family businesses

A mix of CSR perspectives, including economic benefits, conformance to ethical and legal expectations, and philanthropic as well as community involvement, help to explain the nature of relationships with, and behaviors toward, various constituency groups. The family character of the business most frequently affects employee, client, and supplier relationships

Wu (2006) Ethics 161 listed or OTC (over the counter) companies in Taiwan

Family management is a critical mediating variable between ethical considerations of corporate governance and organizational performance

Zellweger and Nason (2008)

Stakeholders and performance

Conceptual, stakeholder theory Family firms exhibit an innate incentive to satisfy the demands of multiple stakeholders. A typology of four performance relationships was developed: overlapping, causal, synergistic, and substitution. Making use of overlapping and causal relationships, which have the capacity to satisfy multiple stakeholders with one performance outcome, increases organizational effectiveness of family firms

Table 1. (continued)

social practices of family businesses. These authors argue that family involvement provides the mechanism by which family values are transferred into the consider-ation of firm stakeholders. Furthermore, family values may not only influence the salience of specific stake-holders but may also affect the value of the benefits that potential stakeholders provide to the family.

In the second article, “Sustainable Certification for Future Generations: The Case of Family Business,” Delmas and Gergaud (2014) take a more narrow view of social practices and introduce the next generation as an influential stakeholder in decisions related to social issues. The authors focus on better understanding the

process by which current family business owners make long-term decisions, especially those related to the adop-tion of sustainable practices. Testing their thesis on a sample of 281 family and nonfamily-owned wineries in the United States, Delmas and Gergaud (2014) provide previously overlooked insights into the forward-looking behavior of the family business community. Of note, the article is one of few published works to examine the role of intergenerational succession intention in the strategic decision-making process. Specifically, this study finds that while family businesses, in general, were no more likely to adopt eco-certification practices, those family businesses that intended to pass their firm down to the




next generation were more likely to adopt such practices. For those family businesses that intended to pass the firm down to the next generation, the motivations to adopt eco-certification in order to improve product quality were particularly strong. As such, this study finds that the unique characteristic of family businesses, namely the intention to pass ownership and control to the next gen-eration, is a defining, and influential characteristic that not only differentiates family firms from nonfamily firms, but also creates a unique logic that fosters a long-term orientation and engages both market-based and pro-social action. Drawing attention to the role of incumbent owners’ stewardship of the natural environment enhances the appreciation of family business contribution to the social and economic fabric of all communities.

Our last two articles focus directly on one aspect of social issues, namely philanthropy. Our third article, “Firm Philanthropy in Small- and Medium-Sized Family Firms: The Effects of Family Involvement in Ownership and Management,” by Campopiano, De Massis, and Chirico (2014), examines how family ownership and involvement in management fosters or hinders altruistic activities, specifically through the discretionary wealth transfer of their net income to stakeholders, that is, phi-lanthropy. In their study of 130 Italian family firms, these authors shed light on these previously underex-plored prosocial behaviors within the family business context. As they highlight, most of what is known about “giving” emanates from research of larger, more estab-lished firms. However, the majority of firms around the globe tend to be small- and medium-sized, many of which are family firms. Campopiano et al. find that the relationships between family ownership and philan-thropic behavior are significantly affected by the level of family involvement in management. When both fam-ily ownership and involvement are high, philanthropy propensity suffers; when family ownership is high and family involvement is low, philanthropy propensity increases. Thus, family businesses’ prosocial behaviors, such as philanthropy, are heterogeneous and are a func-tion of both the level of family ownership and family involvement in the management of the firm.

The issue closes with an article titled, “Does Family Involvement Make Firms Donate More? Empirical Evidence from Chinese Private Firms,” which also examined the propensity of family firms to engage in philanthropy. In their study of 2,921 private Chinese firms, Dou, Zhang, and Su (2014) examined the rela-tionships between (a) family ownership, (b) family

involvement in management, and (c) the duration of family control and the firm’s participation in charitable giving. These authors further tested whether or not the willingness of the next generation to assume control of the firm altered these relationships. These authors found that although family ownership and duration of control were positively associated with charitable giving, the next generations’ unwillingness to assume control of the firm weakened the positive family ownership–charitable giving relationship. Like the Delmas and Gergaud (2014) article, this study reinforces the role of the next generation of family business leaders on the long-term orientation and prosocial behavior of family firms.

Recommendations for Future Research

The collection of articles in this Special Issue, as well as questions that have emerged from reading these articles, presents numerous opportunities for future research. First, these articles suggest that future studies consider-ing the social behaviors of family firms should further examine the complementary and contrasting effects of family ownership and family management in the firm. If family firms are positively predisposed to consider a wider array of social stakeholders and more vigorously pursue prosocial behaviors, then through what mecha-nisms (i.e., ownership or management) are those values conveyed and transformed into organizational out-comes? Similarly, is the scope of CSR-related activities that a family firm may pursue altered by the extent to which the firm is either family owned, or family man-aged? Does family ownership or management engage a different set of social values or make different sets of stakeholders more salient for family firms? For exam-ple, might family firm ownership be more strongly asso-ciated with CSR-activities related to reputational benefits (i.e., philanthropy or community involvement) while family management be more strongly related to socially responsible workplace or marketplace activi-ties? Furthermore, to what extent does the conceptual-ization and measurement of family influence or involvement have an effect on the varying social issues described in this special issue?

Second, articles in this special issue highlight the crit-ical role that future generations play within the family firm. While prior studies (e.g., Dyer & Whetten, 2006) have shown that family businesses were more fully engaged in socially responsible concerns, two studies



Van Gils et al. 201

presented here suggest succession intentions and the willingness of future generations to assume control of the firm are critical contingencies in the social behavior of family firms. Thus, family firms with succession plans or intentions view their social responsibilities differently from those family firms without such plans. This pres-ents two important research questions. First, what role do succession intentions play in the impetus for family firms to pursue socially responsible goals? Is this intention a critical and igniting incident in this process? Second, what also remains unknown is by what mechanisms does this shift in the salience of social issues become engaged? Do succession intentions foster a long-term orientation within family firms, which in turns leads them to be more mindful of their social responsibilities? Or, does the input, perspectives, and consideration of the successive generations (who are likely to possess more progressive, prosocial attitudes than their parents) alter the prevailing thinking within family firms and enact a new set of val-ues that foster the pursuit of a wider range of organiza-tional goals, including socially responsible actions? In other words, when, and by what means, does a family firm evolve into a firm that embraces its social and envi-ronmental obligations?

Third, while several studies examining the CSR prac-tices of family firms across multiple countries were sub-mitted for consideration for this special issue, regretfully none of these articles made it to print. Nevertheless, these articles addressed important questions as future researchers should consider the effect of national con-text on the scope and level of social practices of family businesses (Campbell, 2007; Matten & Moon, 2008). For example, do family firms from different countries place greater or lesser emphasis on some CSR practices than others? Do cultural dimensions, such as time orien-tation (Brigham, Lumpkin, Payne, & Zachary, 2014; Sharma, Salvato, & Reay, 2014), collectivism, or risk aversion, or institutional settings, such as country-spe-cific levels of corruption (Payne, Moore, Bell, & Zachary, 2013) play a role in this process? One limita-tion of all the studies in this special issue is their single-country focus. Researchers may consider replicating this work in other countries or cultural settings.

Fourth, what is the nature of the relationship between family firms’ desire to maintain socioemotional wealth and their prosocial or CSR activities? Like an organiza-tional emphasis on CSR, efforts to maintain socioemo-tional wealth can help firms keep their long-term focus, sometimes at the expense of short-term gains. The

pursuit of both CSR and socioemotional wealth requires the family firm to be adept at evaluating tradeoffs between long-term and short-term choices, as well as balancing financial and nonfinancial concerns. Perhaps these skills, along with their multitemporal mindset (Le Breton-Miller & Miller, 2011), may enable family firms to more vigorously and effectively pursue positive CSR practices. Drawing from the CSR literature on green-washing (Laufer, 2003), scholars may want to consider the extent family firms engage in family washing to accrue the benefits associated with being a socially responsible family business. Specifically, do some fam-ily firms portray themselves as being more proactively involved in social issues than they actually are (i.e., fam-ily washing) to accrue the economic or socioemotional benefits from their stakeholders? Alternatively, are fam-ily businesses held to a different social standard than nonfamily firms? Are family firms’ social violations more seriously punished by stakeholders, who might view such violations as more personal than similar vio-lations of conduct by nonfamily firms?

Fifth, we would like to encourage researchers to explore different units of analysis when examining social issues in a family firm context. Whereas the two philanthropy articles in this special issue examine fam-ily firm donations, families might develop specific structures for philanthropy purposes, such as family foundations (Gersick & Neus, 2014; Lathram, 2003). More research is needed on reasons to develop these organizations, their strategies, and governance struc-tures (Lungeanu & Ward, 2012).

Sixth, much of the existing research in our review of the literature compared the social practices of family and nonfamily firms. While this research is insightful, we believe is it time for family business scholars to direct their focus on the heterogeneity of family enterprises. The effects of variance in generation, succession, owner-ship, governance, management, structure, family coun-cils, and advisors provide ripe avenues to consider. While prior research has examined “if” and “how” family busi-nesses are different, we encourage future scholars to examine “why” family businesses are different from nonfamily businesses, and different from each other.

Finally, while we were particularly pleased to learn that Family Business Review was a frequent outlet for studies in our review, we would like to offer a list of other potential outlets for social issues–family business research. Journals such as Business and Society, Business and Society Review, Business Ethics Quarterly,




Corporate Social Responsibility and Environmental Management, Entrepreneurship Theory and Practice, Journal of Business Ethics, and Organization and Environment are a few journals we believe would be particularly receptive to this work.

In closing, we would like to thank all the scholars who submitted their work for this special issue, and especially thank the cadre of expert reviewers who pro-vided excellent evaluations of this work (please see the appendix). Given their prevalence around the world, family businesses are a significant creator of social ben-efits, as well as social costs, in many social and eco-nomic systems. Our knowledge of the relationships between business and social issues, as well as our ability to address social problems in the future, will be signifi-cantly advanced by understanding how and why family firms make socially conscious decisions.

Appendix

Reviewers Who Have Contributed to This Issue

We thank the following researchers for their valuable contributions while reviewing for this special issue:

•• Yannick Bammens, Maastricht University, Netherlands

•• Tim Blumentritt, Kennesaw State University, USA

•• Erick Chang, Arkansas State University, USA•• Eric Clinton, Dublin City University, Ireland•• Cristina Cruz, IE Business School, Spain•• Sharon Danes, University of Minnesota, USA•• Allan Discua Cruz, Lancaster University, UK•• Kimberly Eddleston, Northeaster University,

USA•• Paula Englis, Berry College, USA•• Frank Hoy, Worcester Polytechnic Institute, USA•• Chen Hsiang-Lan, National Kaohsiung First

University of Science and Technology, Taiwan•• Nadine Kammerlander, University of St. Gallen,

Switzerland•• Alexander Kessler, FHWien University of

Applied Sciences of WKW, Institute for Management & Entrepreneurship, Austria

•• Dmitry Khanin, University of La Verne, USA•• Martin Larraza-Kintana, Universidad Publica de

Navarra, Spain

•• Nancy Levenburg, Grand Valley State University, USA

•• Rebecca Long, Mississippi State University, USA•• Raj Mahto, University of New Mexico, USA•• Curtis Matherne, University of Louisiana at

Lafayette, USA•• Aaron McKenny, University of Central Florida,

USA•• Ken Moores, Bond University, Australia•• Donata Mussolino, University of Naples Federico

II, Italy•• Lorraine Uhlaner, EDHEC Business School,

France•• Justin Webb, University of North Carolina,

Charlotte, USA•• Andy Yu, University of Wisconsin–Whitewater,

USA

Acknowledgments

The authors respectfully thank Trish Reay, Becky Reuber, Carlo Salvato, and Pramodita Sharma for their instructive comments on prior versions of this article.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

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Author Biographies

Anita Van Gils is an associate professor at Maastricht University, the Netherlands, visiting professor at University of Bergamo, and member of the board of IFERA. She is an associ-ate editor for the Journal of Family Business Strategy and serves on the editorial review board of Family Business Review. Her research interests include strategic and organizational aspects of entrepreneurial, small- to medium-sized and family businesses.

Clay Dibrell is an associate professor of management in the School of Business at The University of Mississippi, where he is the holder of the William W. Gresham, Jr. Entrepreneurial Lectureship. He is an associate editor for the Journal of Family Business Strategy. His research examines family enterprises, innovation, and the interaction between firms and the natural environment.

Donald O. Neubaum is an associate professor in the College of Business at Oregon State University. He is an editor for Entrepreneurship Theory and Practice and has served or is serv-ing on the editorial review boards of Academy of Management Journal, Journal of Management, and Family Business Review.

Justin B. Craig is an associate professor of entrepreneurship in the D’Amore-McKim School of Business at Northeastern University. He is an associate editor at Family Business Review, and a member of the editorial board of Journal of Family Business Strategy. In addition to these two journals, his research has appeared in Journal of Business Venturing, Entrepreneurship Theory and Practice, Journal of World Business, Journal of Business Research, Journal of Small Business Management, Journal of Business Ethics, Small Business Economics, among others.



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