Familiness, social capital and market orientation in the family firm

Abstract

PurposeThis paper aims to analyse if the family influence on the firm and the relational dynamics inside the family and the firm could create specific familiness resources, which lead to a stronger market orientation (MO) of the family firms (FFs).Design/methodology/approachThis study is based on a cross-industry sample of 374 managers in 174 Spanish FFs. Structural equation modelling is used to test the research hypotheses.FindingsThe climate of family relationships is going to affect the firm’s MO through the influence that this climate has on two relational social capital variables, one in the family area (the identification of the family managers with the FF) and the other in the business area (the level of trust between the members [family and non-family] of the top management teams [TMTs]).Research limitations/implicationsThis study contributes to the literature on the under-researched topic of MO in the FFs by going beyond earlier studies focusing on FFs’ explicit attributes, such as their names, as potential explanatory variables of their marketing behaviour. This study also proposes and analyses new internal antecedents of MO based on the social capital of the firm.Practical implicationsBusiness families should promote the adequate governance mechanisms to enhance the quality of family social capital to promote the firms’ social capital and ultimately their MO. With the same aim, family managers should try to orientate their leadership behaviour to transmit their own organizational identification to the rest of the firm’s employees. Also, open communication and shared values should be promoted within TMTs to reinforce firms’ social capital that leads to MO.Originality/valueThis paper integrates social capital literature with MO literature. It also contributes to the literature on FFs, and specifically to the issue of familiness, by analyzing the effect of specific FF characteristics on MO.