Skip to main content

Family Business Ethics: At the Crossroads of Business Ethics and Family Business

Abstract

In spite of the considerable development of research in the fields of business ethics and family business, a comprehensive review and integration of the area where both disciplines intersect has not been undertaken so far. This paper aims at contributing to the call for more research on family business ethics by answering the following research questions: What is the status of the current research at the intersection of business ethics and family business? Why and how do family firms differ from non-family firms regarding business ethics? And, what are the key directions for further research? To answer these questions, this study combines a systematic approach for the selection of articles, resulting in a sample of 31 articles over 35 years, with a narrative review to analyze the literature. This paper finds that research on family business ethics is scarce but increasing and that family firms are considerably different from non-family firms regarding ethical issues. Particular stakeholders, goals, relationships, and practices are found to be the forces behind the peculiarity of family business ethics. Ultimately, research development on family business ethics is encouraged and future research directions flowing from the key findings and reflections of this review are provided.

This is a preview of subscription content, access via your institution.

References

  1. Adams, J., Taschian, A., & Shore, T. (1996). Ethics in family and non-family owned firms: An exploratory study. Family Business Review, 9(2), 157–170.

    Article  Google Scholar 

  2. Anderson, R. C., & Reeb, D. M. (2003). Founding-family ownership and firm performance: Evidence from the S&P 500. Journal of Finance, 58(3), 1301–1328.

    Article  Google Scholar 

  3. Argandoña, A. (1994). La enseñanza de la ética de la empresa. Anuario Filosófico, 27(2), 745–762.

    Google Scholar 

  4. Basco, R., & Rodríguez, M. J. P. (2009). Studying the family enterprise holistically. Evidence for integrated family and business systems. Family Business Review, 22(1), 82–95.

  5. Berrone, P., Cruz, C., & Gomez Mejía, L. (2012). Socioemotional wealth in family firms: Theoretical dimensions, assessment approaches, and agenda for future research. Family Business Review, 25(3), 258–279.

    Article  Google Scholar 

  6. Berrone, P., Cruz, C., Gomez-Mejia, L. R., & Larraza-Kintana, M. (2010). Socioemotional wealth and corporate responses to institutional pressures: Do family-controlled firms pollute less? Administrative Science Quarterly, 55(1), 82–113.

    Article  Google Scholar 

  7. Bingham, J. B., Dyer, W. G., Jr, Smith, I., & Adams, G. L. (2011). A stakeholder identity orientation approach to corporate social performance in family firms. Journal of Business Ethics, 99(4), 565–585.

    Article  Google Scholar 

  8. Blodgett, M. S., Dumas, C., & Zanzi, A. (2011). Emerging trends in global ethics: A comparative study of US and international family business values. Journal of Business Ethics, 99(1), 29–38.

    Article  Google Scholar 

  9. Calabretta, G., Durisin, B., & Ogliengo, M. (2011). Uncovering the intellectual structure of research in business ethics: A journey through the history, the classics, and the pillars of Journal of Business Ethics. Journal of Business Ethics, 104(4), 499–524.

    Article  Google Scholar 

  10. Campopiano, G., & De Massis, A. (2014). Corporate social responsibility reporting: A content analysis in family and non-family firms. Journal of Business Ethics, 129(3), 1–24.

    Google Scholar 

  11. Carney, M. (2005). Corporate governance and competitive advantage in family-controlled firms. Entrepreneurship Theory and Practice, 29(3), 249–265.

    Article  Google Scholar 

  12. Cennamo, C., Berrone, P., Cruz, C., & Gomez-Mejia, L. R. (2012). Socioemotional wealth and proactive stakeholder engagement: Why family-controlled firms care more about their stakeholders. Entrepreneurship Theory and Practice, 36(6), 1153–1173.

    Article  Google Scholar 

  13. Chan, K. C., Fung, H. G., & Yau, J. (2010). Business ethics research: A global perspective. Journal of Business Ethics, 95(1), 39–53.

    Article  Google Scholar 

  14. Chan, K. C., Fung, H. G., & Yau, J. (2013). Predominant sources and contributors of influential business ethics research: Evidence and implications from a threshold citation analysis. Business Ethics: A European Review, 22(3), 263–276.

    Article  Google Scholar 

  15. Chrisman, J. J., Chua, J. H., & Sharma, P. (2003). Current trends and future directions in family business management studies: Toward a theory of the family firm. Coleman White Paper Series, 4, 1–63.

    Google Scholar 

  16. Chrisman, J. J., Kellermanns, F. W., Chan, K. C., & Liano, K. (2010). Intellectual foundations of current research in family business: An identification and review of 25 influential articles. Family Business Review, 23(1), 9–26.

    Article  Google Scholar 

  17. Chrisman, J., Chua, J. H., Kellermanns, F. W., Matherne, C. F., I. I. I., & Debicki, B. J. (2008). Management journals as venues for publication of family business research. Entrepreneurship Theory and Practice, 32(5), 927–934.

    Article  Google Scholar 

  18. David, R. J., & Han, S. K. (2004). A systematic assessment of the empirical support for transaction cost economics. Strategic Management Journal, 25(1), 39–58.

    Article  Google Scholar 

  19. Debicki, B. J., Matherne, C. F., Kellermanns, F. W., & Chrisman, J. J. (2009). Family business research in the new millennium an overview of the who, the where, the what, and the why. Family Business Review, 22(2), 151–166.

    Article  Google Scholar 

  20. Déniz Déniz, M., & Suárez, M. K. C. (2005). Corporate social responsibility and family business in Spain. Journal of Business Ethics, 56(1), 27–41.

    Article  Google Scholar 

  21. DiMaggio, P., & Powell, W. (1983). The Iron Cahe Revisited-institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48, 147–160.

  22. Duh, M., Belak, J., & Milfelner, B. (2010). Core values, culture and ethical climate as constitutional elements of ethical behaviour: Exploring differences between family and non-family enterprises. Journal of Business Ethics, 97(3), 473–489.

    Article  Google Scholar 

  23. Dunn, J. (2006). Moral development in early childhood and social interaction in the family. Handbook of Moral Development, 331–350.

  24. Dyer, W. G. (2003). The family: The missing variable in organizational research. Entrepreneurship Theory and Practice, 27(4), 401–416.

    Article  Google Scholar 

  25. Dyer, W. G., & Whetten, D. A. (2006). Family firms and social responsibility: Preliminary evidence from the S&P 500. Entrepreneurship Theory and Practice, 30(6), 785–802.

    Article  Google Scholar 

  26. Egels, N. (2005). Sorting out the Mess. A review of definitions of ethical issues in business. Göteborg: Center for Business in Society, GRI, Göteborg University.

    Google Scholar 

  27. Ennas, G., Biggio, B., & Di Guardo, M. C. (2014). Data-driven journal meta-ranking in business and management. Scientometrics, 105(3), 1911–1929.

    Article  Google Scholar 

  28. Everett, W. J. (1986). OIKOS: Convergence in business ethics. Journal of Business Ethics, 5(4), 313–325.

    Article  Google Scholar 

  29. Faccio, M., & Lang, L. H. (2002). The ultimate ownership of Western European corporations. Journal of Financial Economics, 65(3), 365–395.

    Article  Google Scholar 

  30. Fassin, Y., Van Rossem, A., & Buelens, M. (2011). Small-business owner-managers’ perceptions of business ethics and CSR-related concepts. Journal of Business Ethics, 98(3), 425–453.

    Article  Google Scholar 

  31. Feldman, S. P. (2007). Moral memory: Why and how moral companies manage tradition. Journal of Business Ethics, 72(4), 395–409.

    Article  Google Scholar 

  32. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston, MA: Pitman.

    Google Scholar 

  33. Gallo, M. A. (1998). Ethics in personal behavior in family business. Family Business Review, 11(4), 325–335.

    Article  Google Scholar 

  34. Gallo, M. A. (2004). The family business and its social responsibilities. Family Business Review, 17(2), 135–149.

    Article  Google Scholar 

  35. Gomez-Mejia, L. R., Cruz, C., Berrone, P., & De Castro, J. (2011). The bind that ties: Socioemotional wealth preservation in family firms. The Academy of Management Annals, 5(1), 653–707.

    Article  Google Scholar 

  36. Gómez-Mejía, L. R. H. K. T., Núñez-Nickel, M., Jacobson, K. J., & Moyano-Fuentes, J. (2007). Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52, 106–137.

    Article  Google Scholar 

  37. Graafland, J., Van de Ven, B., & Stoffele, N. (2003). Strategies and instruments for organising CSR by small and large businesses in the Netherlands. Journal of Business Ethics, 47(1), 45–60.

    Article  Google Scholar 

  38. Harris, J. D., Sapienza, H. J., & Bowie, N. E. (2009). Ethics and entrepreneurship. Journal of Business Venturing, 24(5), 407–418.

    Article  Google Scholar 

  39. He, T. T., Li, W. X., & Tang, G. Y. (2012). Dividends behavior in state-versus family-controlled firms: Evidence from Hong Kong. Journal of Business Ethics, 110(1), 97–112.

    Article  Google Scholar 

  40. Hoy, F., & Verser, T. G. (1994). Emerging business, emerging field: Entrepreneurship and the family firm. Entrepreneurship Theory and Practice, 19(1), 9–24.

    Article  Google Scholar 

  41. James, A. E., Jennings, J. E., & Breitkreuz, R. S. (2012). Worlds apart? Rebridging the distance between family science and family business research. Family Business Review, 25(1), 87–108.

    Article  Google Scholar 

  42. Joyner, B. E., & Payne, D. (2002). Evolution and implementation: A study of values, business ethics and corporate social responsibility. Journal of Business Ethics, 41(4), 297–311.

    Article  Google Scholar 

  43. Kashmiri, S., & Mahajan, V. (2014). A rose by any other name: Are family firms named after their founding families rewarded more for their new product introductions? Journal of Business Ethics, 124(1), 81–99.

    Article  Google Scholar 

  44. Kidwell, R. E., Kellermanns, F. W., & Eddleston, K. A. (2012). Harmony, justice, confusion, and conflict in family firms: Implications for ethical climate and the “Fredo effect”. Journal of Business Ethics, 106(4), 503–517.

    Article  Google Scholar 

  45. Kilduff, M. (2006). Editor’s comments: Publishing theory. Academy of Management Review, 31(2), 252–255.

    Article  Google Scholar 

  46. Kohlberg, L., & Hersh, R. H. (1977). Moral development: A review of the theory. Theory Into Practice, 16(2), 53–59.

    Article  Google Scholar 

  47. Koiranen, M. (2002). Over 100 years of age but still entrepreneurially active in business: Exploring the values and family characteristics of old Finnish family firms. Family Business Review, 15(3), 175–187.

    Article  Google Scholar 

  48. Lewis, P. V. (1985). Defining ‘business ethics’: Like nailing jello to a wall. Journal of Business Ethics, 4(5), 377–383.

    Article  Google Scholar 

  49. Linton, J. D. (2013). Updating the top ranking business journals. Technovation, 12(33), 387–390.

    Article  Google Scholar 

  50. Litz, R. A., Pearson, A. W., & Litchfield, S. (2011). Charting the future of family business research: Perspectives from the field. Family Business Review, 25(1), 16–32.

    Article  Google Scholar 

  51. Litz, R. A., & Turner, N. (2013). Sins of the father’s firm: Exploring responses to inherited ethical dilemmas in family business. Journal of Business Ethics, 113(2), 297–315.

    Article  Google Scholar 

  52. Long, R. G., & Mathews, K. M. (2011). Ethics in the family firm: Cohesion through reciprocity and exchange. Business Ethics Quarterly, 21(02), 287–308.

    Article  Google Scholar 

  53. Ma, Z., Liang, D., Yu, K. H., & Lee, Y. (2012). Most cited business ethics publications: Mapping the intellectual structure of business ethics studies in 2001–2008. Business Ethics: A European Review, 21(3), 286–297.

    Article  Google Scholar 

  54. McKenny, A. F., Short, J. C., Zachary, M. A., & Payne, G. T. (2011). Assessing espoused goals in private family firms using content analysis. Family Business Review, 25(3), 298–317.

    Article  Google Scholar 

  55. McMullen, J. S., & Warnick, B. J. (2015). To nurture or groom? The parent-founder succession dilemma. Entrepreneurship Theory and Practice, 39(6), 1379–1412.

    Article  Google Scholar 

  56. Mitchell, R. K., Agle, B. R., Chrisman, J. J., & Spence, L. J. (2011). Toward a theory of stakeholder salience in family firms. Business Ethics Quarterly, 21(02), 235–255.

    Article  Google Scholar 

  57. Moores, K. (2009). Paradigms and theory building in the domain of business families. Family Business Review, 22, 167–180.

    Article  Google Scholar 

  58. Neubauer, F., & Lank, A. G. (1998). The family business: Its governance for sustainability. New York: Macmillan.

    Book  Google Scholar 

  59. Newbert, S. L. (2007). Empirical research on the resource-based view of the firm: An assessment and suggestions for future research. Strategic Management Journal, 28(2), 121–146.

    Article  Google Scholar 

  60. Nicholson, N. (2013). Evolutionary theory: A new synthesis for family business thought and research. In L. Melin, M. Nordqvist, & P. Sharma (Eds.), The SAGE handbook of family business (p. 119). Beverly Hills, CA: Sage.

    Google Scholar 

  61. O’Boyle, E. H., Rutherford, M. W., & Pollack, J. M. (2010). Examining the relation between ethical focus and financial performance in family firms: An exploratory study. Family Business Review, 23(4), 310–326.

    Article  Google Scholar 

  62. Paul, K. (2004). Business and society and business ethics journals: A citation and impact analysis. Journal of Scholarly Publishing, 35(2), 103–117.

    Article  Google Scholar 

  63. Payne, G. T., Brigham, K. H., Broberg, J. C., Moss, T. W., & Short, J. C. (2011). Organizational virtue orientation and family firms. Business Ethics Quarterly, 21(02), 257–285.

    Article  Google Scholar 

  64. Perrini, F., & Minoja, M. (2008). Strategizing corporate social responsibility: Evidence from an Italian medium-sized, family-owned company. Business Ethics: A European Review, 17(1), 47–63.

    Article  Google Scholar 

  65. Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (1999). Corporate ownership around the world. The Journal of Finance, 54(2), 471–517.

    Article  Google Scholar 

  66. Pukall, T. J., & Calabrò, A. (2014). The internationalization of family firms a critical review and integrative model. Family Business Review, 27(2), 103–125.

    Article  Google Scholar 

  67. Scott, W. R. (1987). The adolescence of institutional theory. Administrative Science Quarterly, 32(4), 493–511.

  68. Sharma, P., & Carney, M. (2012). Value creation and performance in private family firms: Measurement and methodological issues. Family Business Review, 25(3), 233–242.

    Article  Google Scholar 

  69. Sharma, P., Melin, L., & Nordqvist, M. (2014). Introduction: Scope, evolution and future of family business studies. SAGE Handbook of Family Business, 1–22.

  70. Sharma, P., & Sharma, S. (2011). Drivers of proactive environmental strategy in family firms. Business Ethics Quarterly, 21(02), 309–334.

    Article  Google Scholar 

  71. Sims, R. R. (1994). Ethics and organizational decision making: A call for renewal. Westport, CT: Greenwood Publishing Group.

    Google Scholar 

  72. Sison, A. J. G., & Fontrodona, J. (2012). The common good of the firm in the Aristotelian-Thomistic tradition. Business Ethics Quarterly, 22(02), 211–246.

    Article  Google Scholar 

  73. Solomon, R. C. (1994). Business and the humanities. The Ruffin Series in Business Ethics, 45–75.

  74. Sorenson, R. L., Goodpaster, K. E., Hedberg, P. R., & Yu, A. (2009). The family point of view, family social capital, and firm performance an exploratory test. Family Business Review, 22(3), 239–253.

    Article  Google Scholar 

  75. Thomson Reuters. (2014). 2013 Journal Citation Reports ®, s.l.: s.n.

  76. Van Gils, A., Dibrell, C., Neubaum, D. O., & Craig, J. B. (2014). Social issues in the family enterprise. Family Business Review, 27(3), 193–205.

    Article  Google Scholar 

  77. Weick, K. E. (1995). What theory is not, theorizing is. Administrative Science Quarterly, 40(3), 385–390.

    Article  Google Scholar 

  78. Westhead, P., & Howorth, C. (2006). Ownership and management issues associated with family firm performance and company objectives. Family Business Review, 19(4), 301–316.

    Article  Google Scholar 

  79. Whetten, D. A. (1989). What constitutes a theoretical contribution? Academy of Management Review, 14(4), 490–495.

    Article  Google Scholar 

  80. Wiseman, R. M., & Gomez-Mejia, L. R. (1998). A behavioral agency model of managerial risk taking. Academy of Management Review, 22, 133–153.

    Article  Google Scholar 

  81. Wortman, M. S. (1994). Theoretical foundations for family-owned businesses: A conceptual and research based paradigm. Family Business Review, 7(1), 3–27.

    Article  Google Scholar 

  82. Wu, C. F. (2006). The study of the relations among ethical considerations, family management and organizational performance in corporate governance. Journal of Business Ethics, 68(2), 165–179.

    Article  Google Scholar 

  83. Zellweger, T. M., Kellermanns, F. W., Chrisman, J. J., & Chua, J. H. (2012). Family control and family firm valuation by family CEOs: The importance of intentions for transgenerational control. Organization Science, 23(3), 851–868.

    Article  Google Scholar 

  84. Zellweger, T., & Nason, R. S. (2008). A stakeholder perspective on family firm performance. Family Business Review, 21(3), 203–216.

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Pedro Vazquez.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Vazquez, P. Family Business Ethics: At the Crossroads of Business Ethics and Family Business. J Bus Ethics 150, 691–709 (2018). https://doi.org/10.1007/s10551-016-3171-1

Download citation

Keywords

  • Family business ethics
  • Family firms
  • Literature review