The investment behavior of single-family offices (SFOs) reflects the coexistence of finance and family institutional logics, often generating tensions in investment decision-making. How SFOs reconcile these logics remains poorly understood. Adopting a sensemaking perspective, we conducted a multicase study of 10 SFOs based on 27 interviews with key decision-makers within the SFO. Our findings identify three sensemaking mechanisms – constructing meaningful engagement, making sense of wealth across time, and legitimizing professional governance – that shape SFOs’ investment behavior. By integrating institutional logics and sensemaking, this study advances research on family wealth management and hybrid investment strategies.
Although entrepreneurial orientation is central to family firms’ renewal and long-term survival, less is known about the executive cognitions and managerial conditions associated with its emergence. Integrating upper echelons theory with stewardship theory and relying on survey data from 165 family firms, we reveal that the CEO’s perception of TMT strategic decision quality positively relates to the family firm’s entrepreneurial orientation, particularly when led by a family CEO and with higher TMT family involvement. Our findings highlight CEO’s perceptions as cognitive cues associated with family firm’s entrepreneurial orientation, and family involvement as a managerial condition that strengthens this association.
Family-firm scholarship offers competing predictions about whether family control protects or threatens market integrity. We argue that the answer depends on how family involvement is exercised. Drawing on socioemotional wealth and agency-entrenchment perspectives, we examine 8,634 U.S. firm-years (2007-2018) and link family-firm constructs to exchange-generated surveillance flags from NASDAQ SMARTS. Founder-CEO control is associated with approximately 9.5
Single-family offices are increasingly important actors in impact investing, yet little is known about how they translate impact intentions into desired outcomes after investing. Drawing on the socioemotional wealth perspective, we conduct an abductive qualitative study based on a dual perspective of nine single-family offices and eight portfolio companies. We identify four impact intention translation strategies, three barriers, and two enabling mechanisms. Building on these findings, we develop a typology of four impact translation logics—hands-on controllers, embedded stewards, relational investors, and formalized partners—that explains heterogeneity in how family-based priorities and intentions shape impact translation.
Ever since scholars recognized that family firms are heterogeneous, many studies have attempted to compare different types of family firms without ensuring that the source of heterogeneity is unique to family firms. When the source of heterogeneity among family firms resembles the source of heterogeneity among nonfamily firms, the problem of counterfactual indeterminacy bias can lead to misleading or irrelevant findings that fail to distinguish the effects of family influence from factors that affect all firms. We delineate common forms of this bias and offer recommendations to prevent it in research on family firm behavior and performance.
This paper examines the influence of family management and firm age on a firm’s decisions on product versus international diversification. Based on socioemotional wealth literature and the temporal dimension of family influence, we hypothesize that family management prefers product diversification and that the positive impact of family management becomes stronger in older firms. Analyzing data from 422 manufacturing firms in the S&P 1,500, we find strong empirical support. Our findings remain robust to endogeneity concerns. This study contributes to the literature by offering new insights into how socioemotional wealth preservation and temporal factors jointly shape diversification strategies in publicly traded firms.
We offer novel insights into the utilization of heterogeneous types of financial slack (unabsorbed, absorbed, and potential) by family versus non-family small- and medium-sized enterprises (SMEs). We hypothesize that agency problems in family SMEs imply idiosyncratic effects on the ability to leverage the different types of financial slack, with implications for financial performance. Moreover, among family SMEs, having a family CEO can engender additional agency problems, reinforcing the heterogeneous effects of slack resources on performance. A longitudinal analysis of a panel dataset of Italian SMEs generally supports our expectations while revealing some counterintuitive findings regarding the effect of unabsorbed financial slack on performance.
Prior research suggests that the territory in which firms operate shapes the Corporate Social Responsibility (CSR) orientation of family firms. Yet, we know little about how the owning families' territorial bonds relate to CSR. Drawing on survey data from 316 Italian family firms, we examine the association between owning families' emotional ties to place (place attachment) and CSR orientation, and whether this association operates indirectly through the firm's economic and social ties to its local context (local embeddedness). Results indicate a positive relationship between place attachment and CSR, partially mediated by local embeddedness, thus advancing a place-based perspective on CSR in family firms.
For family businesses in the world's poorest economies, formalization-registering with the government and paying taxes and fees-has been found to lead to better performance. However, formalization may also lead to unexpected negative consequences. Drawing on institutional logics and family embeddedness perspectives and using a sample of family businesses in Eswatini, we find an inverted U-shaped association between businesses' degree of formality and child work. We find that child work increases, then decreases, as family businesses move from informal, to semi-formal, to formal status. We also explore how entrepreneurs' gender and family business performance moderate this relationship.
Drawing on social identity theory, we explore the social identities of next-generation founders from business families and how these shape their venture creation activities. We find that differences in the valence and interplay of family-internal-such as family expectations and legacy-and family-external identity considerations-including peer influences-shape founders' self-conceptions, yielding three identity types: legacy preservers, independence seekers, and identity integrators. These guide key venture creation activities, including opportunity identification, business model development, resource mobilization, and strategic vision. This study contributes by developing next-generation founder identities, linking them to action around venture creation, and broadening the understanding of entrepreneurship beyond succession.
This study applies an identity theory lens to explore how the founder's identity affects family firm philanthropy in later stages of the business. Our study's insights derive from a philanthropy survey of key decision makers in international family firms. Our study finds that a Missionary founder identity increases the philanthropic engagement of family firms and that this effect is strengthened over family generations. Somewhat surprisingly, a Darwinian founder identity also increases philanthropy. This effect is likely to be weakened if family owners pursue transgenerational control intentions. Our research contributes to the literature on founder identities, philanthropy, and family firms.
Intra-family succession is at the heart of what makes family business unique. To explain why businesses are (not) transferred within the family, this article adopts a macroperspective, viewing succession as a specific transfer regime. Portraying the case of Germany since the 1990s, we show how this transfer regime has been changed. Using document analysis and expert interviews, we show when, how, and why the configuration of the intra-family succession regime was altered and an "exit regime" emerged. In this new regime, the family as owner is problematized, and ownership transfer is coordinated through matchmaking, which increases the importance of business intermediaries.
Non-family managers play a crucial role in fostering innovation within family firms, yet their impact remains debated due to inconsistent research findings and a lack of comprehensive synthesis. This study integrates this effect through a meta-analysis of 213 effect sizes from 101 studies. The results demonstrate a positive influence of non-family managers on firm innovation, with a stronger effect on inputs than on outputs. Furthermore, this study identifies key governance and managerial contingencies at the firm level. First-generation control weakens this relationship, while non-family TMTs strengthen it. The implications for theory and practice are discussed, with suggestions for future research.
This study is concerned with how founding stories are sustained across multiple generations of employees in family firms and how these stories influence organizational identification. Drawing on a social memory perspective and narrative memory work, we explore the retold founding stories of employees in a large agricultural family firm. Our study demonstrates that founding stories transform firsthand memories into collective memory across multiple generations through intertwining intradiegetic storytelling with material and relational processes. The effortful work of remembering together across familial and social relations, spaces, and embodied ways explains how successive generations understand their belongingness to the organization.
This research on family business goal formation examines a longitudinal case study of a family and its business, going "from rags to riches to rags again" over 140 years and four generations. Complementing family business literature on economic and noneconomic goals and the socioemotional wealth lens with self-determination theory, the analysis provides the basis for a process model of family business goal formation. This model highlights individual-level mechanisms through which firm-level objectives emerge. It also illustrates the interaction of the owner's individual motivation with the family level while taking into account the influence of the business and external context.
Family firms enjoy strong reputations, but deep ties between family and business make them vulnerable to reputational threats. We examined the psychological ownership (PO) gap between family and nonfamily employees and its effect on reputational defense behaviors, theorizing stewardship climate as one way to inspire nonfamily employees to defend the firm's reputation "like family." Using a multisource study of Irish family firms, we show that stewardship climates elevate nonfamily employees' PO, motivating them to defend the firm's reputation. Our study validates a new firm-level measure of reputational defense behavior and reveals the power of stewardship, especially when reputation feels threatened.
Despite the prevalence of publicly listed family-controlled firms (FCFs) in high-technology sectors, the impact of family control on their corporate venture capital (CVC) strategy remains largely unexplored. Using socioemotional wealth (SEW) theory, we posit that FCFs in high-technology sectors are less likely to invest in CVC and, when they do, make fewer but larger CVC investments to enhance influence over startups and reduce risk. However, board independence can limit FCFs' SEW-driven CVC investment behavior. Empirical evidence from a sample of U.S. publicly listed firms in three high-technology sectors supports most of our hypotheses.
Despite the importance of family ownership in family business, limited attention has been given to the interplay between evolving family contexts, unpredictable life courses, and ownership transfer choices. Based on a study of ownership transfer narratives of 27 members of business families, we investigate how shifts in family life precipitate different types of intrafamily ownership transfers. Drawing on life course theory, we find that changing family lives and events precipitate three types of ownership transfers: symbolic, protectionist, and rebalancing. We advance a theoretical framework which contributes more nuanced insights into processual and temporal aspects of ownership transfer embedded in family dynamics.
