Many firms are resilient when facing critical external events such as pandemics or major economic crises. However, little is known about how and why this resilience develops. In this article, we focus on firms with strong socioemotional traits: family firms. Combining rational expectations equilibrium (REE) and socioemotional wealth (SEW) theories, we argue that family firms uniquely distill positive narratives to promote sunspots-or cycles of self-reinforcing, positive expectations-in the face of adversity. We use a novel human-artificial intelligence hybrid approach to test our sensegiving argument. We apply supervised machine learning sentiment analysis to a matched sample of letters to shareholders from 72 family and nonfamily firms during an unprecedented three-year period of difficulty and uncertainty: the 2007-2009 global financial crisis. We discuss how this study on the communication-related foundations of family firms' resilience adds to our understanding of this phenomenon.

Purpose There is a growing interest in understanding family firms' strategic behavior using the socioemotional wealth (SEW) perspective. This study explores how family SEW dimensions influence non-family managers' attitudes toward risk in the context of product innovation. This study also examines whether managerial risk-taking mediates the relationship between SEW and product innovation. Design/methodology/approach The study uses a sample of 150 family firms in the United Arab Emirates and collects data from family owners and non-family managers via self-administered questionnaires. The study uses SmartPLS structural equation modeling to test the conceptual model and the proposed hypotheses. Findings The results indicate that multidimensional SEW influences non-family managers' risk-taking behavior in different magnitudes and directions, thus impacting firms' product innovation. Moreover, risk-taking partially mediates the relationship between SEW dimensions and product innovation. Originality/value While product innovation could be seen as a loss scenario for family firms due to the potential loss of SEW, growth, continuity and reputation outweighed the desire to maintain control for the firms in this sample. Thus, these firms encourage non-family managers to take risks in product innovation.

Does family membership differentiate family and nonfamily top management team (TMT) members’ ownership-based motivations to pursue corporate entrepreneurship? We adopt the concept of psychological ownership to answer this question. Based on a sample of 192 TMT members from 90 Korean companies, this study found that family and nonfamily TMT members do not differ in the levels of psychological ownership of the organization or that of the job, nor do the two groups differ in the emphasis they place on corporate entrepreneurship. Family involvement and nepotism mitigate this relationship, but only for nonfamily TMT members. These results help reconcile discrepant findings for family versus nonfamily TMT members’ agency and stewardship behaviors.

The focus of this study is how Top Management Team (hereinafter TMT) psychological ownership influences Corporate Entrepreneurship (hereinafter CE) and how family involvement and nepotism may moderate this relationship. In addition, this study differentiates between TMT psychological ownership to the organization and to the job, and delves into the relationship of each component to CE. We conducted two studies based on surveys collected from TMT members in Korean companies. Results indicate that TMT psychological ownership to the organization and the job positively influence CE. Interestingly, family involvement and nepotism negatively moderate the relationships of psychological ownership to the organization and the job on CE, although both are positively related to CE. This study contributes to not only corporate governance research but also psychological ownership research by showing the importance of psychological ownership and family-control issues in organizations while pursuing CE.

Two seemingly contradictory traits of family firms have been identified by emotion researchers: on one hand a focus on positive emotions, and on the other hand an emotional sensitivity that suggests the opposite–the prevalence of negative emotions. To address this puzzle, we combine research on family firms’ goals and on emotional appraisal and develop the argument of an emotional portfolio. Multiplicity and variety of goals in family firms, we argue, involves two distinct reactions to adverse events: a higher sensitive to adverse events, but also an increased ability to cope with them. To test our argument, we analyze narratives of firms that face an exceptionally adverse context−the 2007-2009 global economic and financial crisis. Mixing quantitative and qualitative methods, we compare reactions of family and nonfamily firms along the grief process. Together, our theory and findings suggest that while family firms are more sensitive to adverse events than nonfamily firms, they also show a unique capability to turn those adverse events into more positive emotional states. Adversity hurts family firms more broadly, but less deeply, and offers them opportunities to recover.

We examine the unique nature of conflict between controlling family owners and minority shareholders (principal–principal conflict) in publicly traded family controlled firms through examining shareholder proposals. Implicit in prior governance and family business research has been that nonfamily shareholders are likely to be in conflict with the dominant family owners. In general, we find that much of this fear may be unwarranted except under specific circumstances. Our findings elucidate sources of heterogeneity in family firm principal–principal conflict and add greater nuance to our understanding of this type of agency problem within family firms.

We examine the relationship between agent ( CEO ) risk bearing and the quality of executive risk‐taking outcomes, by examining the contingency effect of CEO perceived firm efficacy. In doing so, we extend the behavioral agency model ( BAM ) beyond predictions of risk magnitude to examining how CEO risk‐taking outcomes differ qualitatively in response to risk bearing. We argue that CEO risk bearing (due to stock options or cash compensation) will positively influence performance outcomes in the presence of higher perceived firm efficacy. However, this positive influence reverses when efficacy is lower. We demonstrate the utility of firm efficacy in exploring the effect of agent risk bearing on performance outcomes and provide the insight that the CEO pay‐performance relationship is influenced by the CEO ’s perception of firm efficacy. © 2014 Wiley Periodicals, Inc.

This paper examines how socio-emotional factors can influence family firms’ commitment to entrepreneurially- oriented activities, and how their level of commitment is moderated by the technological intensity of the sector and firm performance. We find that, while family firms are less entrepreneurially-oriented than non-family firms, this gap closes with increasing technological intensity of the sector. We find no evidence, however, to suggest any change in entrepreneurial orientation in family firms resulting from a drop in firm performance.

Researchers have attributed the unique social orientation of family firms to the reputational motives of family members. However, little is known about how such an enduring characteristic could persist beyond the lifetimes of those individual members. Using an inductive, qualitative approach and comparing letters to shareholders from family and nonfamily Fortune 500 firms, we combine theory on succession in family firms and recent work on death awareness to derive a model linking the organizational identity to a reflective approach to death. We discuss implications for research and practice in the areas of sustainability, family firms, and organizational identity.

Although family startups are well documented agents for economic growth and technological innovation, surprisingly little is known about the source of those innovations. Regulatory Focus Theory predicts that the motivation to self-regulate goal-directed thought and behaviors depends on two distinct regulation strategies: a promotion focus based on attaining gains and a prevention focus based on avoiding losses. This study takes a social-cognitive approach predicting that regulatory focus mediates the effect that family startups (several family related founders) have on exploration of new ideas or actions, compared to lone founder startups (only one founder present). Drawing in Regulatory Focus Theory, it is proposed that the social context embedded in family ties among founders leads family startups to a less promotion regulation in order to avoid the loss of the socio-emotional benefits of those ties. In order to avoid that loss, family startups increase risk perceptions and, therefore, explore less than lone founder startups, which lack family ties. Results strongly suggest a complete mediation of promotion regulation on the effect of family ties on exploration. This study sheds light on the conditions by which family startups can foster or hamper exploration, which may give them a competitive advantage over lone founder startups.

Theoretical explanations for family firm underinvestment in R&D relative to nonfamily firms remain nascent. We revisit this question using a refinement to the behavioral agency model (BAM)—the mixed gamble—that allows us to examine the socioemotional trade–offs that R&D represents for the family firm and how this differentiates their R&D investment decision from nonfamily firms. We do so in an empirical context where R&D investment is of greatest importance—high–technology industries. Moreover, we examine three contingencies that allow us to explore heterogeneity across family firms in their R&D decisions due to their effect upon the family's socioemotional wealth mixed gamble: institutional investor ownership, related diversification, and performance hazard.

This study explores the influence of socioemotional wealth upon stakeholder management strategies of family firms relative to non-family firms. We do so by building predictions of antecedents to stakeholder management strategies of family firms relative to non-family and founder firms. In doing so, we (1) empirically examine contextual circumstances influencing firm stakeholder strategy, using Freeman’s (1984) generic strategies; and (2) explore the role of ownership structure and specifically family ownership in stakeholder management. We suggest that the preservation of SEW exacerbates conflict between family firms and minority shareholders, but declining performance or increasing business risk are more likely to entice family owners to cooperate with shareholders, in an attempt to preserve SEW.

While recent studies have investigated how groups (e.g., families) at the helm of organizations affect their financial performance, research has returned equivocal results about their effect on soc...

Drawing on the theories of entrepreneurial opportunity and information asymmetry, we hypothesized that industrial factor (what entrepreneurs are doing) matters for the outcomes of entrepreneurship. Building on the theory of economic geography, we argued that regional factor (where entrepreneurs are doing) helped young firms to achieve a millstone such as initial public offering (IPO). We also theorized that the regional factor plays moderating role on the relation between industrial factor and entrepreneurial outcomes. We used SDC Platinum VentureXpert database that included all VC transactions from 1980 to 2002 to test our theory. Our empirical results provide some support for our theory. Specifically, we found strong evidence that the industry factor is an important determinant for emerging firms to achieve IPO. Key words: regional technical intensity, geographic economic, venture capital, entrepreneurial performance