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Socioemotional Wealth and Proactive Stakeholder Engagement: Why Family-Controlled Firms Care More About Their Stakeholders

Authors

  • Carmelo Cennamo,

  • Pascual Berrone,

  • Cristina Cruz,

  • Luis R. Gomez-Mejia


Please send correspondence to: Pascual Berrone, tel.: (34) 91-2113200; e-mail: pberrone@iese.edu, to Carmelo Cennamo at carmelo.cennamo@unibocconi.it, to Cristina Cruz at cristina.cruz@ie.edu, and to Luis R. Gomez-Mejia at lgomez-mejia@mays.tamu.edu.

Abstract

While family business research has prominently recognized that family firms are motivated by nonfinancial factors, the literature has remained relatively silent about whether or not these firms are more likely than others to engage actively with their stakeholders, who often have nonpecuniary demands. This paper argues that family firms are more prone to adopt proactive stakeholder engagement (PSE) activities because by doing so they preserve and enhance their socioemotional wealth (SEW). We explore the impact of the different dimensions of SEW on PSE and identify distinctive logics that explain the adoption of such practices. Finally, we offer a set of topics for future studies.

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