Shifting socioemotional wealth prioritization during a crisis : A content analysis of statements to shareholders of family businesses

Family businesses are generally considered to be the most prevalent form of business around the world. They have also been shown to differ from their non-family counterparts due the non-economic factors that influence their decision-making. One of the most widely used conceptualization of these factors concerns the controlling family’s socioemotional endowment or in other words, the family’s socioemotional wealth. Newer approaches have proposed that socioemotional wealth can not only be broken down into several component dimensions, but that these dimensions may shift in prioritization in response to different contingencies. The sudden spread of the COVID-19 pandemic and the global crisis that has followed in its wake is one such contingency, impacting economies and family firms virtually everywhere in the world. Studying the crisis’ effects on family firms has thus already been outlined as a major focus of research going forward. This paper aims to develop the concept of socioemotional wealth as a dynamic construct and study the crisis’ effects on family firms. We conduct a content analysis of 20 Swedish and 20 German publicly listed family firms’ statements to shareholders published over a three-year period coinciding with the emergence of the crisis. Thus, this research presents an empirical look at how family firms in the contexts of two differing governmental responses to the crisis prioritized the different dimensions of their socioemotional wealth. The results show the families’ emotional attachment coming to the forefront in both cases, with no significant difference between the two countries’ family firms. Furthermore, we observe the families’ socioemotional ties to their employees retain their pre-crisis prevalence as the most prioritized dimension. This is accompanied by a deepening of the quality of the communication tied to this dimension of socioemotional wealth with it coming to reflect the emerging solidarity and cultural changes resulting from the crisis. The results suggest that family firms may respond to a crisis on the scale of the COVID-19 pandemic through their decision-making being increasingly influenced by their emotional attachment to the firm, while also retaining a focus on preserving strong social ties to their employees to persevere through the difficult period