IDEAS home Printed from https://ideas.repec.org/a/sae/jouent/v4y2018i1p53-67.html
   My bibliography  Save this article

Heart and Soul: Transferring ‘Socio-emotional Wealth’ (SEW) in Family Business Succession

Author

Listed:
  • Csaba Makó
  • Péter Csizmadia
  • Balázs Heidrich

Abstract

The importance of the family business (FB) is not only stable but it is also improving its position in the global economy and playing a key role in the European economy. They represent 60 per cent of the employment and more than 60 million jobs in the private sector. But they face many internal challenges, of which the importance of ‘company succession’ is growing together with the need for technology renewal and attracting the right skills/talents ( PwC, 2014 ). This article focuses on the transfer of socio-emotional wealth (SEW) as a key intangible asset during intergenerational changes in the FB ( Debicki, Kellermanns, Chrisman, Pearson, & Spencer, 2016 ; Gómez-Mehija, Takács Haynes, Núnez-Nickel, Jackobson, & Moyano-Fuentes, 2007 ; Martinez-Romero & Rojo-Ramírez, 2016). Using empirical experiences based on multi-site company case studies in three countries (Hungary, Poland and the UK), the analysis presents the transfer of the following key components of the SEW to the next generation: a trust-based social-system, generic human values (namely, openness, mutual respect, correctness, reliability and responsibility) and ‘practice based–embedded collective knowledge’. We find that a key lesson is that transferring physical assets in the succession process seems to be less important than the transfer of the intangible ones embedded in the company’s culture because of the complex, informal and dynamic nature of the transferring mechanisms and of the role they play in sustaining entrepreneurial willingness and economic success over generations.

Suggested Citation

  • Csaba Makó & Péter Csizmadia & Balázs Heidrich, 2018. "Heart and Soul: Transferring ‘Socio-emotional Wealth’ (SEW) in Family Business Succession," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 4(1), pages 53-67, January.
    • Handle: RePEc:sae:jouent:v:4:y:2018:i:1:p:53-67
    DOI: 10.1177/2393957517749708
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/2393957517749708
    Download Restriction: no
    File URL: https://libkey.io/10.1177/2393957517749708?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Thomas M. Zellweger & Robert S. Nason & Mattias Nordqvist & Candida G. Brush, 2013. "Why Do Family Firms Strive for Nonfinancial Goals? An Organizational Identity Perspective," Entrepreneurship Theory and Practice, , vol. 37(2), pages 229-248, March.
    2. Debicki, Bart J. & Kellermanns, Franz W. & Chrisman, James J. & Pearson, Allison W. & Spencer, Barbara A., 2016. "Development of a socioemotional wealth importance (SEWi) scale for family firm research," Journal of Family Business Strategy, Elsevier, vol. 7(1), pages 47-57.
    3. Marianne Bertrand & Antoinette Schoar, 2006. "The Role of Family in Family Firms," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 73-96, Spring.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cambrea, Domenico Rocco & Ponomareva, Yuliya & Pittino, Daniel & Minichilli, Alessandro, 2022. "Strings attached: Socioemotional wealth mixed gambles in the cash management choices of family firms," Journal of Family Business Strategy, Elsevier, vol. 13(3).
    2. Van Gils, Anita & Huybrechts, Jolien & Minola, Tommaso & Cassia, Lucio, 2019. "Unraveling the impact of family antecedents on family firm image: A serial multiple-mediation model," Journal of Family Business Strategy, Elsevier, vol. 10(1), pages 17-27.
    3. Drago, Carlo & Ginesti, Gianluca & Pongelli, Claudia & Sciascia, Salvatore, 2018. "Reporting strategies: What makes family firms beat around the bush? Family-related antecedents of annual report readability," Journal of Family Business Strategy, Elsevier, vol. 9(2), pages 142-150.
    4. Lorenzo Dal Maso & Rodrigo Basco & Thomas Bassetti & Nicola Lattanzi, 2020. "Family ownership and environmental performance: The mediation effect of human resource practices," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1548-1562, March.
    5. Minghui Yang & Yan Wang & Lu Bai & Petra Maresova, 2023. "Corporate social responsibility, family involvement, and stock price crash risk," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1204-1225, May.
    6. Alfredo De Massis & Josip Kotlar & Pietro Mazzola & Tommaso Minola & Salvatore Sciascia, 2018. "Conflicting Selves: Family Owners' Multiple Goals and Self-Control Agency Problems in Private Firms," Entrepreneurship Theory and Practice, , vol. 42(3), pages 362-389, May.
    7. Sondos G. Abdelgawad & Shaker A. Zahra, 2020. "Family Firms’ Religious Identity and Strategic Renewal," Journal of Business Ethics, Springer, vol. 163(4), pages 775-787, May.
    8. Mario Daniele Amore & Mircea Epure & Orsola Garofalo, 2023. "Organizational Identity and Performance: An inquiry into Nonconforming Company Names," Working Papers 1408, Barcelona School of Economics.
    9. Schickinger, Antonia & Bierl, Philipp A. & Leitterstorf, Max P. & Kammerlander, Nadine, 2023. "Family-related goals, entrepreneurial investment behavior, and governance mechanisms of single family offices: An exploratory study," Journal of Family Business Strategy, Elsevier, vol. 14(2).
    10. Mumin Dayan & Poh Yen Ng & Nelson Oly Ndubisi, 2019. "Mindfulness, socioemotional wealth, and environmental strategy of family businesses," Business Strategy and the Environment, Wiley Blackwell, vol. 28(3), pages 466-481, March.
    11. Flamini, Giulia & Pittino, Daniel & Visintin, Francesca, 2022. "Family leadership, family involvement and mutuality HRM practices in family SMEs," Journal of Family Business Strategy, Elsevier, vol. 13(2).
    12. Ivan Miroshnychenko & Giorgio Vocalelli & Alfredo Massis & Stefano Grassi & Francesco Ravazzolo, 2024. "The COVID-19 pandemic and family business performance," Small Business Economics, Springer, vol. 62(1), pages 213-241, January.
    13. Rebeca García-Ramos & Belén Díaz-Díaz & Myriam García-Olalla, 2017. "Independent directors, large shareholders and firm performance: the generational stage of family businesses and the socioemotional wealth approach," Review of Managerial Science, Springer, vol. 11(1), pages 119-156, January.
    14. Benjiang Ma & Yanlin Wang & Zhifang Zhou & Yu Lai & Zhongmin Zhou & Muhammad Farhan Bashir, 2022. "Can controlling family involvement promote firms to fulfill environmental responsibilities?—Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(2), pages 569-592, March.
    15. Karina Nicolle Esbeih & Valentín Molina-Moreno & Pedro Núñez-Cacho & Bruna Silva-Santos, 2021. "Transition to the Circular Economy in the Fashion Industry: The Case of the Inditex Family Business," Sustainability, MDPI, vol. 13(18), pages 1-18, September.
    16. Bauweraerts, Jonathan & Sciascia, Salvatore & Naldi, Lucia & Mazzola, Pietro, 2019. "Family CEO and board service: Turning the tide for export scope in family SMEs," International Business Review, Elsevier, vol. 28(5), pages 1-1.
    17. Lee, Tingko, 2019. "Management ties and firm performance: Influence of family governance," Journal of Family Business Strategy, Elsevier, vol. 10(2), pages 105-118.
    18. Tsao, Chiung-Wen & Le Breton-Miller, Isabelle & Miller, Danny & Chen, Shyh-Jer, 2021. "Firing managers: The benefits of family ownership and costs of family management," Journal of Family Business Strategy, Elsevier, vol. 12(3).
    19. Gregorio Sánchez-Marín & Antonio J. Carrasco-Hernández & Ignacio Danvila-del-Valle, 2020. "Effects of family involvement on the monitoring of CEO compensation," International Entrepreneurship and Management Journal, Springer, vol. 16(4), pages 1347-1366, December.
    20. Christensen-Salem, Amanda & Mesquita, Luiz F. & Hashimoto, Marcos & Hom, Peter W. & Gomez-Mejia, Luis R., 2021. "Family firms are indeed better places to work than non-family firms! Socioemotional wealth and employees’ perceived organizational caring," Journal of Family Business Strategy, Elsevier, vol. 12(1).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jouent:v:4:y:2018:i:1:p:53-67. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.ediindia.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.