The relationship between socioemotional and financial wealth: Re-visiting family firm decision making

Geoffrey Martin, Luis Gomez-Mejia

Research output: Contribution to journalArticlepeer-review

38 Scopus citations

Abstract

Purpose: A growing volume of family firm literature has argued that the preservation of family socioemotional wealth takes precedence over the pursuit of financial goals. The purpose of this paper is to develop a conceptual framework that builds knowledge regarding the two-way relationship between socioemotional and financial forms of wealth, to develop a more complete theory of wealth concerns that may inform family firm decision-making. Design/methodology/approach: The authors conceptually examine contingencies affecting the relationship between financial and socioemotional wealth (in both causal directions). Findings: The authors predict when one form of wealth (socioemotional/financial) is likely to dominate the other (financial/socioemotional) in the family firm’s strategic decisions. Originality/value: The paper advances knowledge on the two-way relationship between socioemotional and financial forms of wealth providing a platform for further development in the nascent field of family business research, including our understanding of family firm decisions regarding control and influence over the family business, environmental policy, altruism toward family members, R&D, accounting choices and corporate diversification.

Original languageEnglish (US)
Pages (from-to)215-233
Number of pages19
JournalManagement Research
Volume14
Issue number3
DOIs
StatePublished - Jan 1 2016
Externally publishedYes

Keywords

  • Family firm
  • Financial wealth
  • Socioemotional wealth

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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