Family-controlled businesses (FCB) are the predominant organizational form around the world (La Porta, Lopez-de-Silanes, & Shleifer, 1999). I define a Family-Controlled Business as “a business that is governed and/or managed... [ view full abstract ]
Family-controlled businesses (FCB) are the predominant organizational form around the world (La Porta, Lopez-de-Silanes, & Shleifer, 1999). I define a Family-Controlled Business as “a business that is governed and/or managed by two or more members of the same family with significant ownership by those and possibly other members of that family and with the intent to pass the ownership and management of the firm on to the next generation”. FCBs seem to outperform non-family businesses, especially over the long run (Miller & Le Breton-Miller, 2005). In recent years, scholars have been writing on stakeholders, ethics and social responsibility in the context of family firms (Berrone, Cruz, & Gomez-Mejia, 2014; Cennamo, Berrone, Cruz, & Gomez‐Mejia, 2012b; Dyer & Whetten, 2006; Zellweger & Nason, 2008). This literature also suggests that family involvement is a critical issue to comprehend when asking why FCBs may be more socially responsible than non-FCBs. Following this trend, my paper attempts to contribute to this emerging literature by analyzing the relationship between the constructs of familiness and corporate social performance (CSP), thus exploring if FCBs promote sustainable management practices. I use the following definition of CSP as a “business organization's configuration of principles of social responsibility, processes of social responsiveness, and policies, programs, and observable outcomes as they relate to the firm's societal relationships” (Wood, 1991: 693). My paper focus on private FCBs and follow the case survey methodology (Larsson, 1993) as it allows to combine quantitative analysis with qualitative data. I survey, analyze and compare a sample of 30 longitudinal in-depth private family-firm case studies from all over the world. Cases were theoretically sampled out of the STEP case pool which consists of more than 100 case studies (Sieger, Zellweger, Nason, & Clinton, 2011). Preliminary evidence also indicate that family involvement correlates with social initiatives towards external stakeholders (local communities and the environment), while internal being neglected. FCBs tend to prioritize relationships over transactions with regards to their stakeholder management (Le Breton-Miller & Miller, 2011). Thus, FCBs are prone to connect with the broader community, making contributions to the causes they believe in. Results suggest that FCBs are heterogeneous and that different dimensions of familiness (especially family involvement in governance) appear to explain some of this variation. Family involvement seems to be a complex phenomenon that may explain why some FCBs can behave in a socially responsible way and work towards sustainability, while others do not. Moreover, results open lines for further research.
5a Corporate sustainability strategies (and sustainable entrepreneurship)
