UNDERSTANDING FAMILY FIRM’S BEHAVIORS: BASED ON SOCIOEMOTIONAL WEALTH (SEW) PERSPECTIVE

Abstract

We examine how family executives' simultaneous pursuit of conflicting SEW desires affects family executives' responses to competing logics from its external environment, based on large public family firms in Korea. The first study suggests that facing the competing logics between shareholders and stakeholders, controlling families' simultaneous pursuit of control and reputation leads to family firms' selective responses to stakeholder expectations based on the consensus with foreign investors. The second study examines how family executives' legitimacy concerns as "competent managers" affect family firms' responses to conflicting logics between family and market. We suggest that a family firm's financial distress positively and negatively moderates the relationship between the proportion of family executives and the firm's stewardship behaviors depending on whether financial distress threatens family executives' managerial position. We deepen the understanding of the degree to which controlling families' conflicting SEW leads to family firm's inconsistent responses to varying external expectations.