Balancing bonds and business: how socioemotional wealth shapes family firm success
Irfan Siddique, Shafaq AftabPurpose
This research examines how aspects of socioemotional wealth (SEW) manifest in corporate entrepreneurship (CE) and stakeholder engagement (SE) within family businesses. This research also distinguishes between SEW elements that promote innovation and collaboration and those that may not yield the desired engagement outcomes. Grounded in the theories of SEW and the Behavioural Agency Model, the study explores how family firms reconcile non-economic goals with entrepreneurial aspirations and relationship-building activities.
Design/methodology/approach
Data were collected through a structured questionnaire from 156 family-owned manufacturing and service firms in Pakistan. The study employed structural equation modelling (SEM) using SmartPLS-4 to test hypothesised relationships.
Findings
Binding social ties and the renewal of family bonds are significantly and positively associated with CE and SE, whereas family control and influence are significantly and negatively associated with both outcomes. Emotional attachment shows no significant association with SE, suggesting that internal affective ties alone are insufficient to mobilise external engagement.
Practical implications
Family business leaders should consider how to spur innovation and collaboration by emphasising the relational and control-based dimensions of SEW; however, it is crucial to assess reliance on emotional ties critically.
Originality/value
This study extends the SEW theory and provides evidence-based practical implications for increasing entrepreneurship and engagement in family firms by empirically distinguishing functional and non-functional SEW elements.