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Is nepotism so bad for family firms? A socioemotional wealth approach

Author

Listed:
  • Shainaz Firfiray

    (IE Business School - IE Business School Madrid - IE Business School Madrid)

  • Cristina Cruz
  • Ionela Neacsu

    (ESC [Rennes] - ESC Rennes School of Business)

  • Luis Gomez-Mejia

Abstract

This paper focuses on the issue of nepotism or the practice of hiring and managing family members in family firms. Extant research suggests that while nepotism is related to numerous problems, it also offers some unique advantages to family owned firms. We use a socioemotional wealth (SEW) perspective to develop a theoretical framework that explains how nepotism influences firm performance. In doing so, we rely upon a nuanced conceptualization of SEW to clarify why some family firms are more likely to engage in nepotism than others, as well as explain the contingencies under which nepotism may prove beneficial or detrimental for family firms. Finally, we explore how human resource practices might impact the interplay between nepotism, environmental contingencies, and firm performance.

Suggested Citation

  • Shainaz Firfiray & Cristina Cruz & Ionela Neacsu & Luis Gomez-Mejia, 2018. "Is nepotism so bad for family firms? A socioemotional wealth approach," Post-Print hal-02001706, HAL.
    • Handle: RePEc:hal:journl:hal-02001706
    DOI: 10.1016/j.hrmr.2017.05.008
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    Citations

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    Cited by:

    1. Wang, Zhonghui “Hugo” & Randolph, Robert & Su, Emma & Memili, Esra, 2023. "How does the founding family matter in corporate governance? A study of the entrenchment heterogeneity among S&P 1,500 firms," Journal of Business Research, Elsevier, vol. 154(C).
    2. Schell, Sabrina & de Groote, Julia K. & Moog, Petra & Hack, Andreas, 2020. "Successor selection in family business—A signaling game," Journal of Family Business Strategy, Elsevier, vol. 11(3).
    3. Arzubiaga, Unai & Diaz-Moriana, Vanessa & Bauweraerts, Jonathan & Escobar, Octavio, 2021. "Big data in family firms: A socioemotional wealth perspective," European Management Journal, Elsevier, vol. 39(3), pages 344-352.
    4. Manel Plana-Farran & Unai Arzubiaga & Angel Blanch, 2023. "Successors’ Future Training in Family Farms: The Impact of Intrinsic and Extrinsic Factors," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4216-4237, December.
    5. Cirillo, Alessandro & Muñoz-Bullón, Fernando & Sánchez-Bueno, María J. & Sciascia, Salvatore, 2022. "Employee downsizing and sales internationalization strategy in family firms," Journal of Family Business Strategy, Elsevier, vol. 13(2).
    6. Peláez-León, Juan David & Sánchez-Marín, Gregorio, 2023. "High-performance work systems in family firms: A mixed gamble approach," Journal of Business Research, Elsevier, vol. 156(C).
    7. Guoli Chen & Raveendra Chittoor & Balagopal Vissa, 2021. "Does nepotism run in the family? CEO pay and pay‐performance sensitivity in Indian family firms," Strategic Management Journal, Wiley Blackwell, vol. 42(7), pages 1326-1343, July.
    8. 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).
    9. Guedes, Maria João & Patel, Pankaj C. & Kowalkowski, Christian & Oghazi, Pejvak, 2022. "Family business, servitization, and performance: Evidence from Portugal," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    10. Jaufenthaler, Philipp, 2023. "A safe haven in times of crisis: The appeal of family companies as employers amid the COVID-19 pandemic," Journal of Family Business Strategy, Elsevier, vol. 14(1).
    11. Ng, Poh Yen & Dayan, Mumin & Di Benedetto, Anthony, 2019. "Performance in family firm: Influences of socioemotional wealth and managerial capabilities," Journal of Business Research, Elsevier, vol. 102(C), pages 178-190.
    12. Bauweraerts, Jonathan & Arzubiaga, Unai & Diaz-Moriana, Vanessa, 2022. "Going greener, performing better? The case of private family firms," Research in International Business and Finance, Elsevier, vol. 63(C).
    13. Rondi, Emanuela & Überbacher, Ruth & von Schlenk-Barnsdorf, Leopold & De Massis, Alfredo & Hülsbeck, Marcel, 2022. "One for all, all for one: A mutual gains perspective on HRM and innovation management practices in family firms," Journal of Family Business Strategy, Elsevier, vol. 13(2).
    14. Islam, Nazrul & Wang, Qidong & Marinakis, Yorgos & Walsh, Steven, 2022. "Family enterprise and technological innovation," Journal of Business Research, Elsevier, vol. 147(C), pages 208-221.
    15. Elsbach, Kimberly D. & Pieper, Torsten M., 2019. "How psychological needs motivate family firm identifications and identifiers: A framework and future research agenda," Journal of Family Business Strategy, Elsevier, vol. 10(3), pages 1-1.

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