Understanding the Impact of Family Firms Through Social Capital Theory: A South American Perspective

Abstract

This exploratory study investigates the impact of family firms as a product of their contributions, and proposes a framework, which associates these with the adopted social capital theory. Interviews with owners of six firms operating in three different South American countries not only revealed the more familiar contributions of creating employment and instilling values, but also through business opportunities, growth, a sense of community and increasing knowledge. Aligned with various dimensions of social capital theory, several observable premises emerged, for instance, through the creation of value gained from developing links between individuals, developing local niches, or reciprocity.

This is a preview of subscription content, log in to check access.

Fig. 1
Fig. 2
Fig. 3

References

  1. Alshenqeeti, H. (2014). Interviewing as a data collection method: A critical review. English Linguistics Research,3(1), 39–45.

    Google Scholar 

  2. Arregle, J. L., Hitt, M. A., Sirmon, D. G., & Very, P. (2007). The development of organizational social capital: Attributes of family firms. Journal of Management Studies, 44(1), 73–95. https://doi.org/10.1111/j.1467-6486.2007.00665.x.

    Article  Google Scholar 

  3. Berg, B. L. (2007). Qualitative research methods for the social sciences. London: Pearson.

    Google Scholar 

  4. Biggemann, S. (2013). Collaborative research and publishing from Latin America. São Paulo, Brazil: International B2B Research Workshop.

  5. Birnik, A., & Bowman, C. (2007). Marketing mix standardization in multinational corporations: A review of the evidence. International Journal of Management Reviews,9(4), 303–324.

    Google Scholar 

  6. Bolino, M. C., Turnley, W. H., & Bloodgood, J. M. (2002). Citizenship behavior and the creation of social capital in organizations. Academy of Management Review,27(4), 505–522.

    Google Scholar 

  7. Bryman, A., & Bell, E. (2015). Business research methods (4th ed.). Oxford: Oxford University Press.

    Google Scholar 

  8. Burt, R. (2001). Structural holes versus network closure as social capital. In N. Lin, K. S. Cook, & R. S. Burt (Eds.), Social capital: Theory and research (pp. 31–56). New York: Aldine de Gruyter.

    Google Scholar 

  9. Carneiro, J., & Brenes, E. R. (2014). Latin American firms competing in the global economy. Journal of Business Research,67(5), 831–836.

    Google Scholar 

  10. Chang, H. H., & Chuang, S. S. (2011). Social capital and individual motivations on knowledge sharing: Participant involvement as a moderator. Information and Management,48(1), 9–18.

    Google Scholar 

  11. Chua, J. H., Chrisman, J. J., & Sharma, P. (1999). Defining the family business by behaviour. Entrepreneurship Theory and Practice,23(4), 19–39.

    Google Scholar 

  12. Coleman, J. S. (1988). Social capital in the creation of human capital. American Journal of Sociology,94, S95–S120.

    Google Scholar 

  13. Coleman, J. S. (1990). Foundations of social theory. Cambridge, MA: Harvard University Press.

    Google Scholar 

  14. Craig, J. B., & Moores, K. (2006). A 10-year longitudinal investigation of strategy, systems, and environment on innovation in family firms. Family Business Review,19(1), 1–10.

    Google Scholar 

  15. Davis, K. (2014). Different stakeholder groups and their perceptions of project Success. International Journal of Project Management,32(2), 189–201.

    Google Scholar 

  16. De Clercq, D., & Belausteguigoitia, I. (2015). Intergenerational strategy involvement and family firms’ innovation pursuits: The critical roles of conflict management and social capital. Journal of Family Business Strategy,6(3), 178–189.

    Google Scholar 

  17. del Carmen Briano-Turrent, G., & Poletti-Hughes, J. (2017). Corporate governance compliance of family and non-family listed firms in emerging markets: Evidence from Latin America. Journal of Family Business Strategy,8(4), 237–247.

    Google Scholar 

  18. Duarte Alonso, A., & Bressan, A. (2013). Small rural family wineries as contributors to social capital and socioeconomic development. Community Development,44(4), 503–519.

    Google Scholar 

  19. Eddleston, K. A., Chrisman, J. J., Steier, L. P., & Chua, J. H. (2010). Governance and trust in family firms: An introduction. Entrepreneurship Theory and Practice,34(6), 1043–1056.

    Google Scholar 

  20. Elo, S., & Kyngäs, H. (2008). The qualitative content analysis process. Journal of Advanced Nursing, 62(1), 107–115.

    Google Scholar 

  21. European Commission. (2018). Family Business. Retrieved February 17, 2019 from https://ec.europa.eu/growth/smes/promoting-entrepreneurship/we-work-for/family-business_en.

  22. Fastoso, F., & Whitelock, J. (2011). Why is so little marketing research on Latin America published in high quality journals and what can we do about it? Lessons from a Delphi study of authors who have succeeded. International Marketing Review,28(4), 435–449.

    Google Scholar 

  23. Felzensztein, C., Gimmon, E., & Aqueveque, C. (2012). Clusters or un-clustered industries? Where inter-firm marketing cooperation matters. Journal of Business and Industrial Marketing,27(5), 392–402.

    Google Scholar 

  24. Fernández, Z., & Nieto, M. J. (2005). Internationalization strategy of small and medium-sized family businesses: Some influential factors. Family Business Review,18(1), 77–89.

    Google Scholar 

  25. Gonzalez-Perez, A. M., & Velez-Ocampo, F. J. (2014). Targeting one’s own region: Internationalisation trends of Colombian multinational companies. European Business Review,26(6), 531–551.

    Google Scholar 

  26. Herrero, I. (2018). How familial is family social capital? Analyzing bonding social capital in family and nonfamily firms. Family Business Review,31(4), 441–459.

    Google Scholar 

  27. Hoffman, J., Hoelscher, M., & Sorenson, R. (2006). Achieving sustained competitive advantage: A family capital theory. Family Business Review,19(2), 135–145.

    Google Scholar 

  28. Leech, N. L., & Onwuegbuzie, A. J. (2011). Beyond constant comparison qualitative data analysis: Using NVivo. School Psychology Quarterly,26(1), 70–84.

    Google Scholar 

  29. Lin, N. (1999). Building a network theory of social capital. Connections,22(1), 28–51.

    Google Scholar 

  30. Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. The Academy of Management Review,23(2), 242–266.

    Google Scholar 

  31. Nordstrom, O. A., & Steier, L. (2015). Social capital: A review of its dimensions and promise for future family enterprise research. International Journal of Entrepreneurial Behavior & Research,21(6), 801–813.

    Google Scholar 

  32. Patel, P. C., & Fiet, J. O. (2011). Knowledge combination and the potential advantages of family firms in searching for opportunities. Entrepreneurship Theory and Practice,35(6), 1179–1197.

    Google Scholar 

  33. Patton, M. Q. (2015). Qualitative research and evaluation methods (4th ed.). London: Sage Publications Ltd.

    Google Scholar 

  34. Pearson, A. W., Carr, J. C., & Shaw, J. C. (2008). Toward a theory of familiness: A social capital perspective. Entrepreneurship Theory and Practice,32(6), 949–969.

    Google Scholar 

  35. Pérez-Batres, A., Pisani, M. J., & Doh, J. P. (2010). Latin America's contribution to IB scholarship. Academy of International Business,10(1), 3–5.

    Google Scholar 

  36. Poza, E. J., & Daugherty, M. S. (2014). Family business (4th ed.). Mason, OH: South-Western Cengage Learning.

    Google Scholar 

  37. Putnam, R. D. (1995a). Bowling alone: America's declining social capital. Journal of Democracy,6(1), 65–78.

    Google Scholar 

  38. Putnam, R. D. (1995b). Tuning in, tuning out: The strange disappearance of social capital in America. PS: Political Science and Politics,28(4), 664–683.

    Google Scholar 

  39. Salvato, C., & Melin, L. (2008). Creating value across generations in family-controlled businesses: The role of family social capital. Family Business Review,21(3), 259–276.

    Google Scholar 

  40. Schmid, A., & Sender, A. (2019). How social capital influences performance in family firms: the moderating role of nepotism. The International Journal of Human Resource Management. https://doi.org/10.1080/09585192.2019.1674355.

    Article  Google Scholar 

  41. Silverman, D. (2015). Interpreting qualitative data (5th ed.). London: Sage Publications Ltd.

    Google Scholar 

  42. Steier, L. (2001). Family firms, plural forms of governance, and the evolving role of trust. Family Business Review,14(4), 353–367.

    Google Scholar 

  43. 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,36(8), 887–910.

    Google Scholar 

  44. Thomas, D. R. (2006). A general inductive approach for analyzing qualitative evaluation data. American Journal of Evaluation,27(2), 237–246.

    Google Scholar 

  45. Tongco, M. D. C. (2007). Purposive sampling as a tool for informant selection. Ethnobotany Research and Applications,5, 147–158.

    Google Scholar 

  46. Uhlaner, L. M., Matser, I. A., Berent-Braun, M. M., & Flören, R. H. (2015). Linking bonding and bridging ownership social capital in private firms: Moderating effects of ownership–management overlap and family firm identity. Family Business Review,28(3), 260–277.

    Google Scholar 

  47. United Nations. (2019). World population prospects 2019. Retrieved March 2, 2019 from https://population.un.org/wpp/Publications/Files/WPP2019_DataBooklet.pdf.

  48. World Bank. (2019). The World Bank in Latin America and the Caribbean. Retrieved March 5, 2019 from https://www.worldbank.org/en/region/lac/overview.

  49. Yin, R. K. (2009). Case study research: Design and methods (applied social research methods). London: Sage Publications Ltd.

    Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Abel Duarte Alonso.

Ethics declarations

Conflict of interest

There is no conflict of interest.

Informed Consent

Participants consented to take part in the research.

Research Involving Human Participants and/or Animals

This research involves human participants—Ethics approval was sought and received by the corresponding university prior to starting the research.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Duarte Alonso, A., Kok, S. & O’Brien, S. Understanding the Impact of Family Firms Through Social Capital Theory: A South American Perspective. J Fam Econ Iss 41, 749–761 (2020). https://doi.org/10.1007/s10834-020-09669-w

Download citation

Keywords

  • Social capital theory
  • Family firms
  • Business owners
  • Impact
  • South America