Large-scale Traumatic Events and Emotional Portfolio in Family Firms’ Narratives

Two seemingly contradictory traits of family firms have been identified by emotion researchers: on one hand a focus on positive emotions, and on the other hand an emotional sensitivity that suggests the opposite–the prevalence of negative emotions. To address this puzzle, we combine research on family firms' goals and on emotional appraisal and develop the argument of an emotional portfolio. Multiplicity and variety of goals in family firms, we argue, involves two distinct reactions to adverse events: a higher sensitive to adverse events, but also an increased ability to cope with them. To test our argument, we analyze narratives of firms that face an exceptionally adverse context−the 2007-2009 global economic and financial crisis. Mixing quantitative and qualitative methods, we compare reactions of family and nonfamily firms along the grief process. Together, our theory and findings suggest that while family firms are more sensitive to adverse events than nonfamily firms, they also show a unique capability to turn those adverse events into more positive emotional states. Adversity hurts family firms more broadly, but less deeply, and offers them opportunities to recover.