Now showing 1 - 10 of 28
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Why Do Family Firms Strive for Nonfinancial Goals? An Organizational Identity Perspective

2013-03 , Zellweger, Thomas , Nason, Robert S. , Nordqvist, M. , Brush, Candida

This paper develops an organizational identity based rationale for why family firms strive for nonfinancial goals. We show that the visibility of the family in the firm, the transgenerational sustainability intentions of the family, and the capability of the firm for self-enhancement of the family positively influence the importance of identity fit between family and firm as well as the family's concern for corporate reputation. We suggest that the concern for corporate reputation leads the family to pursue nonfinancial goals to the benefit of nonfamily stakeholders. We also discuss reinforcing feedback loops in these processes

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Family Control and Family Firm Valuation by Family CEOs : The Importance of Intentions for Transgenerational Control

2012-05 , Zellweger, Thomas , Kellermanns, Franz W. , Chrisman, James J. , Chua, Jess H.

Family firms are thought to pursue non-financial goals that provide socioemotional wealth but socioemotional wealth is feasible only with family control of the firm. Using prospect theory, we hypothesize that socioemotional wealth increases with the extent of current control, duration of control, and intentions for transgenerational control thus adding to the price at which owners would be willing to sell their firms to non-family buyers. Findings from two countries show that current control has no impact and duration of control has a mixed impact. However, intention for transgenerational control has a consistent positive impact on the perceived acceptable selling price

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Family Firm Valuation by Family FIRM CEOs: The Role of Socioemotional Value

2009-04-24 , Zellweger, Thomas , Kellermanns, Franz W. , Chrisman, James J. , Chua, Jess H.

Based on the contentions of prospect theory that ownership endows possessions with a value premium, this study provides evidence that socioemotional value in family firms influences the monetary value attached to the firm by family owners. Ability to measure socioemotional value is a critical step toward establishing that it has a direct instead of an imputed link to family firm behavior. The results from two different samples of family firm owner-CEOs show that the socioemotional values for their firms increase with their desires for transgenerational sustainability, a distinctive socioemotional attribute of family firm ownership.

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Why do firms strive for non-pecuniary performance?

2008-08-13 , Zellweger, Thomas , Nason, Robert S. , Nordqvist, Mattias

The present paper develops an explanation of non-pecuniary performance of firms, which extends current ethical and financial rational and encompasses multiple levels of stakeholder analysis. Drawing from social identity theory and the literature on organizational reputation, we show that identity overlaps between managers and organizations create an incentive to protect and build corporate reputation, thereby motivating managers to produce non-pecuniary performance outcomes that satisfy reputation forming stakeholders. We suggest that the link between identity overlaps and the incentives to build and protect corporate reputation is moderated by the type of the manager's commitment and provide empirically testable propositions for our claims. We use the family business, a particularly high identity overlap organization, as a context to explore our arguments.

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Extending the Socioemotional Wealth Perspective: A Look at the dark Side

2012-11 , Kellermanns, Franz W. , Eddleston, Kimberley H. , Zellweger, Thomas

We extend the socioemotional wealth (SEW) perspective by arguing that SEW can be negatively associated with proactive stakeholder engagement (PSE). We further suggest that the SEW dimensions can be associated with positive or negative valence. Lastly, we propose that negatively valenced SEW dimensions lead to family centric behavior, which negatively affects PSE. This multifaceted conceptualization of SEW allows us to explain how family firms can partake in harmful stakeholder behaviors despite having seemingly strong SEW. Our paper suggests that SEW can be either an affective endowment or burden for family firms and their constituents.

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Socioemotional Wealth and Family Firm Performance: Economic Gains from Pursuing Noneconomic Goals

2013-08-09 , Madison, Kristen , Kellermanns, Franz W. , Zellweger, Thomas

Socioemotional wealth recently emerged as an important distinguishing characteristic between family and nonfamily firms. It is used in extant literature as a theoretical framework to rationalize the behavior of protecting family interests at the expense of financial success. We present socioemotional wealth differently: as a measureable construct, conceptualized through a stewardship theory lens, with empirical support for its positive relationship with family firm financial performance. Results also show hostile environments attenuate the SEW–performance relationship, indicating that firms with high socioemotional wealth are unable to make the necessary strategic adjustments needed to enhance performance in difficult environments.

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Family Firm Valuation by Family Firm CEOs

2008-11-23 , Zellweger, Thomas , Kellermanns, Franz W. , Chrisman, James J. , Chua, Jess H.

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Value is in the Eye of the Owner : Affect Infusion and Socioemotional Wealth among Family Firm Owners

2012-09-01 , Zellweger, Thomas , Dehlen, Tobias

Drawing on the Affect Infusion Model (AIM) from cognitive psychology we develop a conceptual framework that explains how affect related to corporate ownership impacts the formation of socioemotional wealth perceptions among family firm owners reflected in altered subjective value perceptions for the ownership stake. We explore target, personal, and situational features in the subjective valuation process for the ownership stake and explain how these factors mediate the relationship between affect and socioemotional wealth perceptions. We further our understanding about the level of bias in family owners' subjective firm value assessments and offer new approaches for socioemotional wealth research

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How Socioemotional Wealth biases Survival Risk Perceptions among Family Firm Owners

2011-08-15 , Zellweger, Thomas , Dehlen, Tobias , Kellermanns, Franz W.

Applying a behavioral perspective, we investigate how threats to firm survival, measured through reduced performance and heightened leverage, impact risk perceptions among family firm owners. More specifically, we test whether socioemotional biases induced by duration of family ownership and transgenerational sustainability intentions, alter the negative relationship between low profitability and high leverage on the acceptable sale price of the firm. In extension to existing literature on family owners' risk perceptions and organizational risk taking, our study finds increased risk sensitivity for family owners with long ownership traditions, whereas transgenerational sustainability intentions do not bias the negative relationship of low profitability and high leverage on acceptable sale price

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A note on socioemotional wealth as a determinant of family firm valuations by family owners

2008-07-02 , Zellweger, Thomas , Kellermanns, Franz W. , Chrisman, James J. , Chua, Jess H.