The Social Capital in Family Firms: Impacts on Family-Longevity-Goals and Performances
Keywords:family firms, social capital, social capital dimensions, family longevity goals, firm performances
The research was motivated to examine the impact of family, specifically in social capital on firm performances during the COVID-19 pandemic. The research used a quantitative approach and will be analysed by both descriptive and inferential statistics by obtaining questionnaires from the 89 research subjects with a Likert scale to create a whole picture of the social capital dimensions of 89 family firms and their family longevity goals (FLG) as well as their firm performances (FP). The research finds that social capital dimensions have a significant and positive impact on both family longevity goals and firm performance. Moreover, it is found that family longevity goals mediate the positive relationship between social capital dimensions and firm performances. It is also revealed that the impact of social capital dimensions is stronger in firms controlled by the second generation. It is suggested that future research include the external side of the social capital to have further understanding on its impact towards the performance of family business.
Afriyadi, A. D. (2021, March 31). Swasta bantu UMKM bangkit dari pandemi, begini caranya. detikFinance. https://finance.detik.com/berita-ekonomi-bisnis/d-5515667/swasta-bantu-umkm-bangkit-dari-pandemi-begini-caranya?_ga=2.149519158.1297723199.1617767914-1206182895.1617619825
Ahmad, S., Omar, R., & Quoquab, F. (2020). Family firms’ sustainable longevity: The role of family involvement in business and innovation capability. Journal of Family Business Management, 11(1), 86-106. https://doi.org/10.1108/JFBM-12-2019-0081
Arrondo-García, R., Fernández-Méndez, C., & Menéndez-Requejo, S. (2016). The growth and performance of family businesses during the global financial crisis. Journal of Family Business Strategy.
Casprini, E., De Massis, A., Di Minin, A., Frattini, F., & Piccaluga, A. (2017). How family firms execute open innovation strategies: the Loccioni case. In Journal of Knowledge Management, 21(6), 1459-1485. https://doi.org/10.1108/JKM-11-2016-0515
Clarfeld, R. (2019, March 19). Family businesses: Social capital is key to successful succession planning. Forbes. https://www.forbes.com/sites/robclarfeld/2019/03/19/family-businesses-social-capital-is-key-to-successful-succession-planning/?sh=2161d1c57136
De Massis, A., Frattini, F., Majocchi, A., & Piscitello, L. (2018). Family firms in the global economy: Toward a deeper understanding of internationalization determinants, processes, and outcomes. Global Strategy Journal, 8(1), 3-21. https://doi.org/10.1002/gsj.1199
De Massis, A., & Rondi, E. (2020). Covid-19 and the future of family business research. Journal of Management Studies, 57(8), 1727-1731. https://doi.org/10.1111/joms.12632
Family business model in Indonesia set to change with new generation of business owners. (2020). Sun Life. https://www.sunlife.co.id/en/about-us/newsroom/press-releases/2020/family-business-model-in-indonesia-set-to-change-with-new-genera/
Fang, H., Kotlar, J., Memili, E., Chrisman, J. J., & De Massis, A. (2018). The pursuit of international opportunities in family firms: Generational differences and the role of knowledge-based resources. Global Strategy Journal, 8(1), 136-157. https://doi.org/10.1002/gsj.1197
Galadanchi, H., & Bakar, L. J. (2018). A study of factors that support longevity of business enterprises. IOSR Journal of Business and Management, 20(1), 53-59.
George, D., & Mallery, P. (2018). IBM SPSS Statistics 25 Step by Step (15th Ed.). New York: Routledge.
Hair, J. F., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (2nd Ed.). SAGE Publications.
Hannon, K. (2020, July 1). 5 ways family businesses can adapt to Covid-19. FamilyBusiness.org. https://familybusiness.org/content/5-ways-family-businesses-can-adapt-to-covid-19
Herrero, I., & Hughes, M. (2019). When family social capital is too much of a good thing. Journal of Family Business Strategy, 10(3). https://doi.org/https://doi.org/10.1016/j.jfbs.2019.01.001
Kim, Y., & Gao, F. Y. (2013). Does family involvement increase business performance? Family-longevity goals’ moderating role in Chinese family firms. Journal of Business Research, 66(2), 265-274. https://doi.org/10.1016/j.jbusres.2012.08.018
Lee, T., & Chu, W. (2017). The relationship between entrepreneurial orientation and firm performance: Influence of Family Governance. Journal of Family Business Strategy, 8, 213-223. https://doi.org/http://dx.doi.org/10.1016/j.jfbs.2017.09.002
Librianty, A. (2021, March 2). Setahun corona Covid-19, begini kondisi ekonomi Indonesia. Liputan 6. https://www.liputan6.com/bisnis/read/4496337/setahun-corona-covid-19-begini-kondisi-ekonomi-indonesia
Löhde, A. S. K., Calabrò, A., & Torchia, M. (2020). Understanding the main drivers of family firm longevity: The role of business family learning. International Studies of Management & Organization, 50(2), 130-152. https://doi.org/10.1080/00208825.2020.1758421
Mani, Y. & Lakhal, L. (2015). Exploring the family effect on firm performance: The impact of internal social capital dimensions on family firm performance. International Journal of Entrepreneurial Behavior & Research, 21(6), 898-917. https://doi.org/http://dx.doi.org/10.1108/IJEBR-06-2014-0100
Ng, H. C., Tan, J. D., Sugiarto, S., Widjaja, A. W., & Pramono, R. (2021). Too big to fail: Succession challenge in large family businesses. Journal of Asian Finance, Economics and Business, 8(1), 199-206. https://doi.org/10.13106/jafeb.2021.vol8.no1.199
Ng, P. Y., Dayan, M., & Di Benedetto, A. (2019). Performance in family firm: Influences of socioemotional wealth and managerial capabilities. Journal of Business Research, 102, 178-190. https://doi.org/10.1016/j.jbusres.2019.05.026
Nordin, N., Abdul Khalid, S., Ale Ibrahim, N., & Samsudin, M. A. (2020). Bibliometric analysis of publication trends in family firms’ social capital in emerging economies. Journal of Entrepreneurship, Business and Economics, 8(1), 144-179.
Osunde, C. (2017). Family businesses and its impact on the economy. Journal of Business & Financial Affairs, 6(1), 1-3. https://doi.org/10.4172/2167-0234.1000251
Robertsson, H. (2021, September 14). How the world’s largest family businesses are proving their resilience. Ernst & Young Global Limited. https://www.ey.com/en_gl/family-enterprise/how-the-worlds-largest-family-businesses-are-proving-their-resilience
Sanchez-Famoso, V., Pittino, D., Chirico, F., Maseda, A., & Iturralde, T. (2019). Social capital and innovation in family firms: The moderating roles of family control and generational involvement. Scandinavian Journal of Management, 35(3). https://doi.org/10.1016/j.scaman.2019.02.002
Sanchez-Ruiz, P., Daspit, J. J., Holt, D. T., & Rutherford, M. W. (2019). Family social capital in the family firm: A taxonomic classification, relationships with outcomes, and directions for advancement. Family Business Review, 32(2), 131-153. https://doi.org/10.1177/0894486519836833
Schmid, A. & Sender, A. (2021). How social capital influences performance in family firms: the moderating role of nepotism. International Journal of Human Resource Management, 32(18), 3973-3993. https://doi.org/10.1080/09585192.2019.1674355
Soluk, J., Kammerlander, N., & De Massis, A. (2021). Exogenous shocks and the adaptive capacity of family firms: Exploring behavioral changes and digital technologies in the COVID-19 pandemic. R and D Management, 51(4), 364-380. https://doi.org/10.1111/radm.12471
Sreih, J. F., Lussier, R. N., & Sonfield, M. C. (2019). Differences in management styles, levels of profitability, and performance across generations, and the development of the family business success model. Journal of Organizational Change Management, 32(1), 32-50. https://doi.org/10.1108/JOCM-01-2018-0030
Tasavori, M., Zaefarian, R., & Eng, T.-Y. (2018). Internal social capital and international firm performance in emerging market family firms: The mediating role of participative governance. International Small Business Journal: Researching Entrepreneurship, 36(8), 887-910. https://doi.org/10.1177/0266242618773145
The impact of COVID-19 on family businesses: How COVID-19 impacted family businesses globally. (2021). KPMG. https://home.kpmg/xx/en/home/insights/2021/03/the-impact-of-covid-19-on-family-businesses.html
Tseng, S.-M., & Lee, P.-S. (2012). The effect of knowledge management capability and dynamic capability on organizational performance. Journal of Enterprise Information Management, 27(2), 158-179. https://doi.org/10.1108/JEIM-05-2012-0025
Widiarini, A. D. (2020, December 11). Peran aktif Sampoerna dukung percepatan penanganan pandemi Covid-19. Kompas. https://money.kompas.com/read/2020/12/11/112900426/peran-aktif-sampoerna-dukung-percepatan-penanganan-pandemi-covid-1
Wilcox, R. (2017). Modern Statistics for the Social and Behavioral Sciences: A Practical Introduction (2nd Ed.). CRC Press: Taylor Francis Group.
Williams Jr., R. I., Pieper, T. M., Kellermanns, F. W., & Astrachan, J. H. (2018). Family firm goals and their effects on strategy, family, and organization behavior: A review and research agenda. International Journal of Management Reviews, 20, 63-82. https://doi.org/10.1111/ijmr.12167
Copyright (c) 2022 Daniel Kurniawan, Elia Ardyan, Istiatin Istiatin, Luhgianto Luhgianto
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
a. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License - Share Alike that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
b. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
c. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
All articles published Open Access will be immediately and permanently free for everyone to read and download. We are continuously working with our author communities to select the best choice of license options, currently being defined for this journal as follows: Creative Commons Attribution-Share Alike (CC BY-SA)