The Family Ties That Bind: How Emotion and Family Dynamics Preserve Socioemotional Wealth

Family business researchers contend that family firms differ from nonfamily firms because they make unique strategic decisions that preserve socioemotional wealth (SEW). However, extant family firm scholarship focuses primarily on the distinct firm level consequences of SEW preservation decisions without understanding emotion or the family’s assumed causal roles behind them. In this paper we address these theoretical needs by articulating how emotion and family dynamics preserve SEW. We integrate affective events theory (AET) and emotional contagion process research with SEW theory to examine emotional dynamics and the moderating role of SEW salience in individual and family level processes leading to SEW preservation decisions. Collectively, our theorizing extends contextual research on emotion in organizational behavior while also offering theory that moves family business research beyond a dichotomous view of family firms vs. nonfamily firms to examining various affective events as the family’s sources of heterogeneity within and between family firms. Bringing these contributions together, we conclude by inviting scholars to build research that can further understand the psychological microfoundations of family firm behavior