Developing the Next Generation of Entrepreneurs
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Del negocio familiar a la empresa familiar: desarrollando la próxima generación de empresarios Ciclo de Conferencias: Actividad empresarial y crecimiento: una perspectiva internacional. En colaboración con el IE Business School. Cristina Cruz (IE Business School. Madrid). Madrid, 5 de marzo de 2012
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Developing the Next Generation of Entrepreneurs
- 1. FUNDACIÓN RAMÓN ARECES Conferencia: Del negocio familiar a la empresa familiar: desarrollando la prxima generacin de empresarios Conference: From family businesses to enterprising families: developing the next generation of entrepreneurs Cristina Cruz Madrid, 5 de marzo de 2012
- 2. Entrepreneurship and growth: An international perspective Understanding Entrepreneurship in Family Firms:Cristina Cruz, IE Business School A Socioemotional Wealth approach
- 3. WHY ME? • More than 10 years of experience working, teaching and researching on family business IMBAs, Exective Couses . 4th generation family owned company Thesis on Corporate Governance in family Firm Academic publications (AMJ,ASQ,ETP,JBV..) Cases & Articles ..
- 5. WHY? Facts & Figures
- 6. WHY? Facts & Figures
- 7. WHY? Facts and Figures • 2004 Assessment of Entrepreneurship in the US (Reynolds, 2005) • 29.5% of all start-ups are initiated by existing family firms. • 16.9% of new firms are related to existing family firms. • 17.8% of established entrepreneurial firms are related to another family firm. • 29.5% of start-ups expect family ownership. • $218 Billion informal investment primarily from family firm owners.
- 8. WHY? The anecdotic evidence • Wanda Ferragamo, when asked about the reason behind the acquisition of a hotel chain by the 90´s: • Why did I buy the hotels? It is easy…. I need to give employment to my grandchildren”!!!
- 9. WHY? The anecdotic evidence
- 10. Why? Anecdotic evidence • Some famous splits for “family feuds” With the blessing of Srinathji (a reference to the Hindu god Krishna) I have today amicably resolved the issues between my two sons” “The battle never ended between the two of Kokilaben Ambani (mother) them. Back then there was a butcher who served Puma and a butcher who served Adidas. The town was divided” Kit Chellel (founder´s grandson)
- 11. Why? Anecdotic evidence • CHANGING THE LOGO: “It was a “sensitive” subject for the family, our shareholders almost carried their identity card written in gothic letters” • DIVEST (Heating Division) : “It was not an easy decision but the family had to get over very import emotional links, in what was at the very origins of the company. Jose Miguel Roca. CEO Roca Corporation
- 12. WHY? Selected empirical evidence AUTHORS SAMPLE VARIABLE OF INTEREST MAIN RESULTS Beehr, Drexler and 198 privately held Work relations Family businesses are better at Faulkner, 1997 firms managing conflicts and offer greater job satisfaction and harmony in the work place. Mishra and 690 US publicly Capital Structure Family firms use less debt to avoid a McConaughy held firms loss of control and decrease the (1999) likelihood of bankruptcy Chrisman, Chua, 1,141 small Agency costs Family involvement reduced overall and Litz (2004) privately held U.S. agency costs and increase firms performance, measured by short term sales growth Reid and Adams 300 Irish SMEs Human Resource Family firms employ in general less (2001) Management Practices complex HRM practices than non family firms Berrone et al (2010) 194 US publicly Environmental Family firms exhibit better held firms Performance environmental performance than non family firms Gomez-Mejia et al 360 firms from Diversification Family firms diversify less both (2010) COMPUSTAT decisions domestically and internationally database than non family firms.
- 13. WHY? The conclusion Family firms are not simply a unique phenomenological setting but are significantly different from non-family firms (Gomez Mejia,Cruz, Berrone & DeCastro , 2011).
- 14. WHAT MAKES FAMILY BUSINESS DIFFERENT?
- 15. Theoretical approaches • Early studies in the field suffered from significant methodological problems and were largely descriptive and atheoretical. • As the field evolved, different “borrowed” paradigms: • Agency theory (Morck & Yeung, 2003; Schulze, Lubatkin, Dino & Buchholz, 2001) • Stewardship theory (Miller & LeBreton-Miller, 2006) • Resource-based view of the firm (Habbershon & Williams, 1999; Habbershon, Williams & MacMillan, 2003)
- 16. A duality of goals
- 17. An emergent paradigm : A Socioemotional wealth approach to family business • SEW: • Stock of affect-related value that a family derives from its controlling position in a particular firm. (Gomez-Mejia, et al, 2007) • “Affective endowment” of family owners (Berrone,Cruz, Gomez-Mejia et al, 2010) “While non-family principals and managers might experience some of this, the value of socioemotional wealth to the family is more intrinsic, its preservation becomes an end in itself, and it is anchored at a deep psychological level among family owners whose identity is inextricably tied to the organization” (Berrone, Cruz, Gomez-Mejia & Larraza-Kintana. 2010: 87.
- 18. An emergent paradigm : A Socioemotional wealth approach to family business • Rooted in the BAM (behavioral agency model) (Wiseman & Gomez-Mejia, 1998). • Family owners are concerned about preserving their SEW • Family owners frame problems in terms of assessing how actions will impact family socioemotional endowment
- 19. Implications SEW has a major impact on strategic decision making in family firms Managerial choices in family firms tend to reflect the family’s desire to preserve its socioemotional wealth apart from efficiency or economic instrumentality considerations Gomez-Mejia, Cruz, Berrone & De Castro, 2011
- 20. Implications Family firms are NOT risk averse (but SEW loss averse) “When issues are framed negatively by the family in terms of SEW losses, family principals tend to choose risky economic actions that preserve SEW”
- 21. Implications SEW preservation goals can conflict with economic objectives “When there is a threat to SEW the family is willing to make decisions that are not driven by an economic logic, and in fact the family would be willing to put the firm at risk if this is what it would take to preserve that
- 22. Empirical evidence • Gomez –Mejia et al (2007) – 1237 Spanish olive oils mills – Family-owned olive oil mills prefer to remain independent and not join a cooperative even though the co-op offers many financial benefits to the firm and greatly reduces firm risk.owners are willing to accept a performance hazard (FW) in order to Family retain family control (SEW)
- 23. Empirical evidence • Berrone, Cruz & Gomez-Mejia (2010) – 194 US publicly held firms in polluting industries – Family-controlled firms tend to contaminate less , particularly if the plants are geographically congregated in a particular community Family owners place a greater value on the legitimacy afforded by environmental initiatives because doing so would safeguard their SEW (family image) even if it is economically risky
- 24. Empirical evidence • Cruz, Becerra & Gomez-Mejia (2010) – 122 privately owned Spanish firms – Family principals tend to create contracts for the TMT that are more protective of their welfare when the team is composed of family members even though this action is decoupled from firm performance. Family owners place a greater value on preserving the SEW by nurturing family members (emotional attachment )
- 25. Empirical evidence • Gomez-Mejia et al (2010) – 360 publicly held US firms – Family firms are less likely to engage in coporate diversification Diversification poses a hazard on the family SEW : it requires external funding, outside managerial talent and changes in the way the family firm is organized (loss of family control and influence)
- 26. A contingency approach • Family firms are more willing to make economically driven decisions as firm faces greater performance hazard • Firms are more willing to diversify as performance deteriorates (Gomez Mejia et al, 2007) • Family owned olive mills are more willing to join coops as the volume of olive oil sales decreases (Gomez Mejia et al, 2007) • Newspapers are more likely to terminate family directors when the probability of failure is high (Gomez Mejia et al, 2003)
- 27. A contingency approach One size fits all?
- 28. The Empirical evidence • Strategic choices are more likely to be driven by economic considerations in later generations (Gomez-Mejia et al, 2007; Chen et al, 2010) • Strategic choices are more likely to be driven by economic considerations as firm Strategic choices are more likely to be grows (Gomez-Mejia et al, 2007; Miller et al, 2010) driven by economic considerations with the presence of non family shareholders (Gomez-Mejia et al, 2011)
- 29. Conclusions • SEW as an overarching construct to capture family firms idiosyncrasy • SEW as promising “home grown” theoretical approach with a strong theoretical base • Built on the foundation of family firms + anchored in the behavioral tradition within management field • SEW reconciles previous approaches to family firms: – It allows for differential risk preferences, it accounts for non financial aspects and it contemplates both, positive and negative consequences of this non
- 30. The Challenges • How to measure SEW? Berrone, Cruz, Gomez-Mejia, 2012: 30 items to capture five dimensions of SEW and discussing some alternative ways to measure these.
- 31. SEW DIMENSIONS Berrone, Cruz & Gomez-Mejia, in press
- 32. The Challenges In search of the Holy Grail: What is the impact of family ownership on firm performance?
- 33. The Challenges • Under which conditions is an emphasis on SEW preservation beneficial for firm performance? • How does the different SEW dimensions impact performance outcomes? • Cruz, Justo & De Castro (2011) : – Employing family members increases firm performance in the context of MSEs – Cruz & Nuñez (Work in progress ) : • Drives of Value creation among European publicly traded family firms (sponsored by Banca
- 34. The Challenges • How does SEW affect entrepreneurial outcomes? • SEW + Family embeddedness perspective to entrepreneurship (Aldrich & Cliff, 2003) – Cruz, Justo & De Castro (2011) Family entrepreneurs context and the impact of family employment on performance – Cruz & Justo (Work in progress) : Family
- 35. Many others unresolved questions…. • What factors play a role in determining the different weights given to the dimensions of SEW? • Under what conditions do economic objectives become preferable to SEW related goals? • Under what conditions might be the preservation of SEW by controlling families beneficial for other stakeholders/stakeholders? • What are the minimum financial level that a company needs to reach to be able to neglect SEW objectives?
- 36. Implications for family owners & practitioners HOW DOES YOUR FAMILY DEFINE SUCCESS?
- 37. Implications for family owners & practitioners • How can we ensure the preservation of the SEW aspects that are worth to the family ? (Governance mechanisms, Human Resource Practices, Succession Planning…)
- 38. Implications for family owners & practitioners • How can we ensure that actions towards SEW preservation do not act against (financial) value creation ? • AN ENTREPRENEURIAL FOCUS : The preservation of the family SEW and the perpetuation of the familyBusiness a business are From Family ties to overlapping, to ENTERPRISING FAMILIES but distinct issues: From survival to A TRANSGENERATIONAL VIEW OF WEALTH CREATION
- 39. Implications for family owners and practitioners ENTREPRENEURSHIP FAMILY BUSINESS Sucession Estate Planning Opportunity seeking Continuity Risk taking Family Conflict Innovation Growth ENTERPRISING FAMILIES 39
- 40. Implications for family owners and practitioners • IT IS NOT about how to assist families to pass on a business over to the next generation…. • IT IS ABOUT how to assist families to preserve their SEW and at the same time to pass on the entrepreneurial mindset and capabilities that enable them to sustain and create new streams of wealth (financial and
- 41. Implications for family owners & practitioners It is not about choosing the next successor… it is about DEVELOPING THE NEXT GENERATION OF FAMILY ENTREPRENEURS
- 42. QUESTIONS?
Notas do Editor
- the gothic letters of “Roca” were going to be to be substituted by a more modern style of lettering, which would reflect the innovative spirit and the adaptation to modernity that prevailed in the company. The redesign of the Roca logotype would signify an investment of 9 million euros.
- As the field evolves by the end of the 90s studies become more theoretically sounded and A wealth of articles started to appear in top tier journals and special issues of other outlets… In these studies scholars suggested a battery of paradigms to examine issues that were idiosyncratic to family controlled firms. These paradigms were borrowed from other domains, primarily financial economics and strategic management, where the primary focus of attention was large publicly owned corporations with highly dispersed ownership. But still… These paradigms were borrowed from other domains, primarily financial economics and strategic management, where the primary focus of attention was large publicly-owned corporations with highly dispersed ownership. retains a strong phenomenological flavor. We believe that “foreign” paradigms designed for organizations where economic instrumentality is assumed fall short of adequately dealing with the uniqueness of family firms. For family business studies this practice has often led to contradictory empirical results, excessive reductionism, overlapping terminology, fragmented theoretical interpretations, and a forced application of borrowed logic to explain descriptive findings.
- Most of the literature noted above has stressed the role of noneconomic factors in the management of the firm as the key distinguishing feature that separates family firms from other organizational forms. All these studies suggest that because of the existence of aspects such as a strong emotional overtone, a strong identity with the organization , or a sense legacy for future generations,,, control over the family assets give family members some utilities that are beyond the pure financial ones. …
- Gomez-Mejia, and collegues in (2007) collectively labeled the utilities family owners derive from the noneconomic aspects of the business noted above as “socioemotional wealth” or “affective endowments” As noted earlier, SEW is an all-encompassing approach that captures the “affective endowment” of family owners, including the family’s desire to exercise authority, enjoyment of family influence, maintenance of clan membership within the firm, the appointment of trusted family members to important posts, retention of a strong family identity, the continuation of family dynasty and so on (Berrone et al., 2010; Gomez-Mejia et al., 2007; Gomez-Mejia et al., 2010). While some may argue that this SEW could exist in non family organizations-.– in the case of family firms it has a distnct nature becuase as it is wrtiten there… we think that
- Family owners take into account socioemotional gains or losses for the family when considering the relative risk of various strategic choices. The SEW approach not only provides the field with an overaching construct to capture the uniqueness of family businesses, but it also offer a theoretical explanation for their distinct behavior (Berrone, Cruz, & Gomez Mejia, in press-a). Behavioral agency theory integrates elements of prospect theory, behavioral theory of the firm, and agency theory. Fundamental to this theory is the notion that firms make choices depending on the reference point of the firm’s dominant principals. Moreover they suggest that decision makers are not risk averse but loss averse in the sense that they prefer to avoid a loss even if this means accepting a higher risk; A key notion of BAM is that risk evaluation is subjective rather than based on an economic calculus that weighs risk against financial returns. Decision makers weigh perceived threats to their endowment according to a subjective valuation of what is important to their welfare, what is already accrued, and what can be counted on. In the case of family principals, the emphasis on preserving socioemotional wealth becomes critical, it is an end on itself .. So family principals are loss averse towards SEW preservation
- Family owners take into account socioemotional gains or losses for the family when considering the relative risk of various strategic choices. This does not mean however that is not meant to imply that family fi rms are self-sacrifi cial, pay exclusive attention to socioemotional wealth, and/or ignore fi nancial issues. Our key point is that when both are in conflict, families arre willing to take actions that preserve their SEW regardless financial implications Appliying the SEW framewrok we secondbig impliction which I consider it is crucial for fostering entrepreneurship in family business- That Fb contrary to traditional belifes are not RISK averse but SEW loss averse… . This is to say that For the family principals, risk averseness to socioemotional endowment takes priority over risk averseness to financial losses. For the family principals, risk averseness to socioemotional endowment takes priority over risk averseness to financial losses. In contrast, agency arguments indicate that family principals would avoid strategic choices that carry significant risk of financial losses because the family’s patrimony is largely tied to one firm. Hence, SEW preservation in a behavioral agency context contradicts a basic agency prediction: to the extent that SEW preservation is the primary reference point of family principals, and that strategic choices that reduce the firm’s financial risk jeopardize that SEW, the family will opt for the SEW preservation alternative. The notion that FB are risk averse in making business decisions come from pure agency theory…. Their reasoning may be summarized as follows. Because family principals have most of their wealth concentrated in a single enterprise, unlike shareholders who invest across multiple firms, their risks and returns are tied to a single asset, the family firm. Therefore, the family’s welfare would be severely affected if risky choices turn out poorly. Given this vulnerability, family principals prefer to avoid risk because the costs of negative outcomes more than outweigh any benefits that might accrue through the pursuit of a high-risk/high-return strategy. Despite its popularity, particularly in accounting and finance circles, the viewpoint summarized above is not consistent with empirical evidence, which shows a paradox that agency-based models cannot resolve: undiversified family principals contemplating certain strategic choices are willing to take business risks even when the economic welfare of the family is at stake and regardless of the potential returns associated with these choices. I think that that the main problem with agency-based explanations is that they ignore the role of socioemotional gains or losses for the family when considering the relative risk of various strategic choices.
- Appliying the SEW framewrok we got the second big impliction which I consider it is crucial for fostering entrepreneurship in family business- That Fb contrary to traditional belifes are not RISK averse but SEW loss averse… . This is to say that For the family principals, risk averseness to socioemotional endowment takes priority over risk averseness to financial losses. For the family principals, risk averseness to socioemotional endowment takes priority over risk averseness to financial losses. In contrast, agency arguments indicate that family principals would avoid strategic choices that carry significant risk of financial losses because the family’s patrimony is largely tied to one firm. Hence, SEW preservation in a behavioral agency context contradicts a basic agency prediction: to the extent that SEW preservation is the primary reference point of family principals, and that strategic choices that reduce the firm’s financial risk jeopardize that SEW, the family will opt for the SEW preservation alternative. The notion that FB are risk averse in making business decisions come from pure agency theory…. Their reasoning may be summarized as follows. Because family principals have most of their wealth concentrated in a single enterprise, unlike shareholders who invest across multiple firms, their risks and returns are tied to a single asset, the family firm. Therefore, the family’s welfare would be severely affected if risky choices turn out poorly. Given this vulnerability, family principals prefer to avoid risk because the costs of negative outcomes more than outweigh any benefits that might accrue through the pursuit of a high-risk/high-return strategy. Despite its popularity, particularly in accounting and finance circles, the viewpoint summarized above is not consistent with empirical evidence, which shows a paradox that agency-based models cannot resolve: undiversified family principals contemplating certain strategic choices are willing to take business risks even when the economic welfare of the family is at stake and regardless of the potential returns associated with these choices. I think that that the main problem with agency-based explanations is that they ignore the role of socioemotional gains or losses for the family when considering the relative risk of various strategic choices.
- And the second one…..is that the. managerial choices in family firms tend to reflect the family’s desire to preserve its socioemotional wealth apart from efficiency or economic instrumentality considerations… and even furthers When there is a threat to that endowment, the family is willing to make decisions that are not driven by an economic logic, and in fact the family would be willing to put the firm at risk if this is what it would take to preserve that endowment. Following this reasoning, it is possible to understand why family principals are more willing to make strategic choices associated with a greater probability of failure than their non-family counterparts if this is necessary to preserve socioemotional wealth or more willing (to make strategic choices that imply below-target performance relative to their own past performance in order to preserve socioemotional wealth The foregoing discussion is not meant to imply that family fi rms are self-sacrifi cial, pay exclusive attention to socioemotional wealth, and/or ignore fi nancial issues. Our key point is that when both are in conflict, families arre willing to take actions that preserve their SEW regardless financial implications
- In our research,,, we found just on exception to this rule of SEW taking precendence over financial consideration.. This is when the oners perceive that the company is at risk , when performance deteriorates too much… Poor performance raises the specter of a dual threat: the prospect of severe financial hardship to the family’s standard of living (because the family has most of its patrimony deposited in one organization) and the possibility of SEW extinction (because the firm might have to be sold, merge with another firm, be taken over by another firm, go bankrupt, be liquidated and the like). In this cases, families take decisions following a more financial logic…. So families are willing to reconsider SEW guiding their decision making… but only when they are forced to do it!!!
- Moreover, we understood that if the SEW apporach aims at become the framework for family business it SEW must be able to reflect the fact that there is a lot of heterogeneity among family firms .. Research show that they do differ in terms of size, generation, presence of non family shareholders… how does the SEW framework accomodates these differences?
- What we agree on general is that the emphasis on preserving the family’s socioemotional wealth lessens as the firm moves through generations and that financial considerations become more important Similrly, they become less important as the firm grows and the centrlity of decision making is not that high… Moreover the presence of non family investors impliest that families need to accommodate other agendas,,, and SEW concern are not the only priority for shareholders--- We have empirical proofs for all these variations in Sew concern for family owners
- 1. 2. SEW model largely relies and is developed based on the body of research in family business. This is relevant because, contrasting other approaches that struggle to adjust their rationales to the context of family firms, the SEW insights naturally stems from the reality of family business as it gathers insights and understandings from the wealth of research that has been created over the last three decades. .. But at the same time it has a strong theoretical base.
- As is commonly the case with new theoretical approaches, the SEW model shows several benefits but at the same time poses important challenges, The first onw is that . Because of its recent addition to the family business literature, empirical studies using this model have relied on socioemotional wealth as an explanatory construct but the construct itself has not been directly measured.
- In a recent article published in Famimly Business Review, we
- And once whe understand why family firms act and think differently,, the next step is to determine how this impact firm performance…. Over the past 15 or more years, great effort has been devoted to understanding the direct family ownership effect on firm performance. However,,,, doubt remains about whether family ownership and management are good or bad for financial outcomes since results have been mixed and conflicting. The literature on family firms is full of normative assessments of the positive and negative aspects of family ownership, some of which may be inferred from our prior discussions. To name a few, aspects of family firms that may have a positive effect on performance include: Patient capital that values long-term returns over short-term gains (Arregle et al., 2007; Harris, Martinez , & Ward, 1994) Affective commitment of owners, managers, and employees who want the firm to succeed (Chrisman, Chua , & Kellermanns, 2009) A culture that fosters employee identification with the organization (Astrachan et al., 2002) and lower employee turnover, thereby ensuring continuity and the capacity to pursue long-term projects (Habbershon, Williams , & McMillan, 2003). Accumulation of social capital, which becomes a “moral resource” (Sorenson, Goodpaster, Hedberg , & Yu, 2009). Continuity of leadership, offering greater resilience in hard times and faster decision making (Kets de Vries, 1993). Negative aspects of family control mentioned in the literature that should depress firm performance include: Appropriation of firm resources to satisfy parochial family desires (Bertrand & Schoar, 2006; Morck & Yeung, 2003). Nepotism, cronyism, and incompetent family members on the payroll (Claessens et al., 2002; Volpin, 2002). Excessive effort expended on family emotions and conflict, which distract from paying attention to market forces and business matters (Ward, 2004). Barnett, Eddleston, and Kellermanns (2009) note that “based on theories of individual and social identity, it is possible that a family firm owner could regard the family as being more salient than the business and could thus overemphasize relationship concerns at the expense of business concerns.” (p.42). The “spoiled kid syndrome,” which can create feelings of inequity among employees (Kets de Vries, 1993); Parental altruism, overuse of business perks, and biased hiring decisions (Schulze et al., 2003b; Schulze et al., 2001). many of the aspects listed above relate to the family’s desire to preserve socioemotional wealth, some of which carry “good” connotations and some which carry “bad” connotations in terms of consequences for firm performance. In the end, both positives and negatives probably coexist in family firms, and it would be difficult to determine which predominates when it comes to performance results. A further complication is that sometimes the positives and negatives are two sides of the same coin (affective commitment versus more time spent handling emotions or long-term orientation versus entrenchment). It is entirely possible that in most family firms, the positives neutralize the negatives and vice-versa so that any performance advantages or disadvantages due to family ownership may cancel each other out. Moreover, performance in family firms is in part influenced by a unique set of strategic choices, which in turn are affected by socioemotional considerations (as discussed in prior sections) with contradicting performance implications. Thus, socioemotional elements can lead to strategic choices that shape both negatively (e.g., less investment in R&D) and positively (e.g., better stakeholder relations) the long term results of family firms. Lastly, a host of methodological problems make it difficult to interpret results concerning the singular effect of family ownership on performance outcomes. First, despite statistical attempts by authors to rule out endogeneity, disentangling the effect of family ownership on firm performance from all the other possible factors that might influence performance is a heroic challenge. Firm performance is an “ultimate variable,” that is, it is influenced by myriad factors difficult to model in a single study (including industry forces, firm history, time period, population density, newness, technological change, government policy, changes in consumer tastes, and access to capital). Second, with few exceptions, empirical studies on this topic rely on publicly traded firms, most of them American. The samples being compared when using publicly traded firms are therefore highly selective and the results may not be generalizeable to the broad population of family firms, relatively few of which are ever publicly traded. Third, given the differences in definitions of family ownership, institutional settings, time periods, samples, measurement of control variables, and methodologies across studies, it is not surprising that they came up with divergent results. Villalonga and Amit (2006), for instance, note that performance differences are sensitive to how family ownership is defined. Likewise, Miller et al (2007) point out that observed performance differences by family control status depend on how firms are classified, the time period studied, and the sample used. Surprisingly, despite general agreement that family firms include nonfinancial objectives in their utility functions, the focus of much of this normative work has been almost exclusively on financial objectives, ignoring nonfinancial aspects even as controls. Our perspective may be useful in explaining contradictory evidence about family influence on financial outcomes. According to the view advanced here, the preservation of socioemotional wealth is an end in and of itself, strongly influencing strategic decisions and sometimes even conflicting with economic objectives. This is not to say, however, that family firms sacrifice or ignore financial goals. The key point is that when family interests predominate, firms are more likely to bear the costs incurred in pursuing certain actions, policies, and strategies because they are driven by the belief that these costs are counterbalanced by noneconomic utilities other than financial gains. The challenge for future research is therefore to understand how family owners frame decisions with socioemotional wealth as a reference point. But perhaps a more fundamental question is whether financial performance is the ultimate objective for family firms rather than more intangible qualities such as stable employment, harmony among kin, and long-term survival. This does not mean financial performance is unworthy of study, but rather that socioemotional wealth should be given an equal level of importance.
- Moreover,,, the need to take into account the context… the fact that family firms are heterogeneous…
- And manybe to be able to understan