An extension of the socioemotional wealth perspective

Abstract

Purpose Socioemotional wealth (SEW) has emerged as the most differentiating aspect in family firms and has become the focal issue in family firm decision making. Family firms have to face the jeopardy of financial gains and socioemotional. The purpose of this paper is to investigate the different dimensions of SEW in developing the firm as corporate entrepreneurial and which dimensions engage stakeholders. Design/methodology/approach The authors designed a survey questionnaire to obtain primary data for the study using purposive sampling method. The study conducted on the family firm using the questionnaire to investigate for corporate entrepreneurship (CE), and stakeholder engagement (SE) depended on family control and influence, family identity, binding social ties, emotional attachment and renewal of family bonds. Findings The study identified different SEW factors affecting CE and SE. The authors found that binding social ties and renewal of family bonds has a statistically significant impact on SE, whereas family identity and social ties have a statistically significant impact on CE. Research limitations/implications The authors receive data from the CEOs with low response rate and expected to have better results with more observations. The same study been conducted in different parts of the world may give different results and a cultural bias may restrict the findings. Practical implications From the research, family firms can take twofold benefits. In short term, a family firm with better SE can generate satisfied employees with lesser turnover intentions. For long-term objectives with respect to CE, a firm can get a result in terms of market innovations through for better firm’s performance. Social implications Since her inception, Pakistan has emerged as a society of commodity traders and technology importers. This society can easily generate an import-driven business. Nonetheless this import-driven economy always remains under great economic distress due to limited potential for actual innovations and market disruptions. The family businesses of any emerging market like Pakistan need to learn CE and SE while safeguarding social-emotional wealth, thereby being successful as firm to become export-driven economy at large. Originality/value The study identifies different SEW factors that help in developing a firm as corporate entrepreneurial and stakeholder’s engagement. Findings of the study are valuable for managing the family firms in developing economies where the family structures are very vibrant and businesses have a clear dependency on family formations.

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