The ethical behavior prevalent in an organization often determines business success or failure. Much research in the business context has scrutinized ethical behavior, but there are still few insights into its roots; this study furthers this line of inquiry. In line with identity work theory, we examine how employees’ identification with a family business shapes internal ethical decision-making processes. Because it is individuals who engage in decision-making—be it ethical or not—our research perspective centers on the individual level. We followed an (...) inductive, qualitative approach and conducted interviews with 19 employees in seven family businesses. We found that individuals engage in identity work when they identify as individual family firm employees and when they identify with the perceived characteristics of the family firm. These processes of identification, in turn, influence how employees cope with ethical situations. Our findings contribute to ethics and family business research, as well as to identity theory. (shrink)

When this study was initiated in 2008, the concept of family social capital was new to the family business discipline. This paper summarizes in-depth qualitative research grounded in owning family experience to understand the nature and source of owning family social capital. _Exploratory research_ began with roundtable discussions among family business owners, advisors, and researchers to understand how owning families sustain positive relationships characteristic of family social capital. These discussions revealed that some family business owners rely on their family faith (...) to sustain and establish ethical norms. A follow-up review in the family studies literature revealed that many families rely on family faith practices and faith-based narratives to reinforce ethical norms that strengthen family relationships. Based on these findings, researchers developed hypotheses to guide additional research. Four owning families affiliated with different Christian denominations participated in _in-depth qualitative research_ that supports hypotheses. Interviews and archival data revealed very similar faith-based practices, beliefs, and values across the four owning families. And additional qualitative evidence indicated positive connections between values-based family social capital and family owner succession, business performance, and community support. Theoretical relationships derived from qualitative data are summarized in a Faith-Based Values Theory of Family Business. (shrink)

This article discusses the ethics and drivers of philanthropic foundations in emerging markets. A foundation organizes assets to invest in philanthropic initiatives. Previous scholarship has largely focused on developed countries, especially the United States, and has questioned the ethics behind the activities of foundations, particularly for strategic motives that served wider corporate purposes. We argue that philanthropic foundations in emerging markets have distinctive characteristics that merit separate examination. We scrutinize the ethics behind the longitudinal activity of such foundations using 70 (...) oral history interviews with business leaders in 18 countries in Africa, Asia, Latin America, and the Middle East. We find that 55 out of 70 foundations associated with these leaders have been used as vehicles for a specific type of philanthropic ethics defined as “spiritual philanthropy”. These foundations often embodied personal or family traditions, culture, and religious values, which emphasized charitable giving and social responsibility. As in the case of many of the industrial foundations in Europe, these foundations also carried founding family names and provided a structure to maintain family control and enhance corporate reputation. We argue that, as business leaders in emerging markets are more directly exposed to dire social, educational and health deprivation than their counterparts in developed countries, they are less inclined toward grandiose world-making, and their foundations are more focused on delivering immediate benefits to communities in their home countries, motivated by implicit or explicit spirituality. (shrink)

The goal of this study is to reveal which contextual factors can shape ethical behaviour and decision-making in family firms (FFs), with the aim to uncover emerging themes that help set the stage for future work on FF ethics. To do so, we conducted an integrative literature review. By systematically collecting, reviewing 90 studies and synthesizing their key findings with prior theoretical foundations in the FF field, we demonstrate how personal and family values, preservation of socioemotional wealth, generation succession and (...) structural factors (e.g. FF size, FF life cycle) can affect ethical decision-making in FFs. We also provide propositions and research pathways to orient future studies. (shrink)

While the prevailing perspective on executive leadership has emphasized the effectiveness of a unified command structure, family firms frequently adopt shared leadership structures, such as dyads, triads, or larger co-CEO constellations. Given the widespread use of such structures in family firms, it becomes imperative to understand how family involvement in the firm shapes the dynamics of co-CEO constellations and their implications for firm outcomes. Drawing upon the socioemotional wealth (SEW) perspective, we propose that the salience of extended SEW concerns increases (...) the costs associated with a shared leadership structure. These elevated costs, in turn, result in adverse environmental, social, and governance (ESG) outcomes. Our empirical analysis, based on panel data from 76 Italian firms listed on the Milan Stock Exchange during 2003–2020, suggests that family firms employing a co-CEO structure tend to exhibit lower ESG performance, while a positive relationship emerges in nonfamily firms. We theorize and find empirical support that the negative effect for family firms stems from family-induced cognitive diversity, manifested via the inclusion of both family and nonfamily members or family members from different generations in the co-CEO constellation. Importantly, we identify a key mitigating factor: when one of the co-CEOs also holds the position of the board chair, the negative impact of the co-CEO structure on ESG performance is mitigated and even turns positive. These findings advance our understanding of how family involvement in the shared leadership structure shapes a firm’s ethical orientation, having important implications for the governance of family firms. (shrink)