Managing non-family employees’ emotional connection with the family firms via shifting, compensating, and leveraging approaches

Abstract

Many family firms deploy strategies and practices to satisfy the needs of family employees. When non-family employees perceive a relational disadvantage compared to family employees, they may lower their evaluation of organizational identity (OI) and, in turn, identify less strongly with the family firm. Because family firms can ill afford to have non-family employees who lack a strong emotional connection with and commitment to the family firm, we explore approaches to foster non-family employees' evaluations of OI. Drawing on organizational identity theory, we find support for three approaches: (1) shifting non-family employees' evaluation of OI by enacting a proactive Corporate Social Responsibility (CSR) strategy, (2) compensating non-family employees for a perceived relational disadvantage by involving them in CSR decision-making, and (3) leveraging non-family employees' context, by drawing on those who share the values of the controlling family. Our theory and results suggest that family firms can deploy different approaches to manage the emotional connection with their non-family employees, which can help explain the observed variation in non-family employees’ organizational identification across family firms.