Corporate Social Performance of Family Firms: A Place-Based Perspective in the Context of Layoffs
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ORIGINAL PAPER
Corporate Social Performance of Family Firms: A Place-Based Perspective in the Context of Layoffs Kihun Kim1 · Zulfiquer Ali Haider2,4 · Zhenyu Wu2 · Junsheng Dou3 Received: 5 June 2018 / Accepted: 15 March 2019 © Springer Nature B.V. 2019
Abstract This paper investigates the layoff behavior, a typical people dimension of corporate social performance (CSP), of family firms from a place-based perspective. We theorize that a place-based culture within family firms ensures that all organizational members share a deep sense of connection with the place of operations which makes them inherently care about their impact on society. Using data on layoffs of 2000 largest US firms between 1994 and 2007, we find that family firms do indeed exhibit a lower tendency to lay off employees in comparison to non-family firms; this relationship is particularly strong in ‘places’ with low population where the negative social externalities related to layoffs tend to be higher. Further post hoc analyses indicate that family firms have a strong place-based culture which can provide resource-based competitive advantages. Keywords Family business · Layoff · Place-based organizational culture · Corporate social performance · Resource-based view
Introduction Due to the prevalence of family firms all over the world and because family firms possess unique characteristics emanating from their pursuit of non-economic utilities (Chrisman and Patel 2012), scholars have shown considerable interest in the Corporate Social Performance (hereafter CSP) of family firms (Campopiano and De Massis 2015; Dekker and Hasso 2016; Dou et al. 2017; Du 2015; El Ghoul et al. 2016;
* Junsheng Dou [email protected] Kihun Kim [email protected] Zulfiquer Ali Haider [email protected] Zhenyu Wu [email protected] 1
Miami University, 800 E. High Stret, Oxford, OH 45056, USA
2
I. H. Asper School of Business, University of Manitoba, 181 Freedman Crescent, Winnipeg, MB R3T 5V4, Canada
3
School of Management, Zhejiang University, 866 Yuhangtang Rd., Hangzhou 310058, China
4
North South University, Dhaka, Bangladesh
Labelle et al. 2018; Lamb and Butler 2016; Rees and Rodionova 2015; Nekhili et al. 2017; Samara et al. 2017; Stavrou et al. 2007). We add to this literature by explaining layoff behavior, a typical people dimension of CSP, of family firms from a place-based perspective (Shrivastava and Kennelly 2013), which suggests that organizations that have a strong connection to their location of operations will be more likely to care about their impact on place, i.e., the society and environment. Such strong connections are brought about by meaningful experiences that individuals have with a place (Hay 1988; Tuan 1977). Given that families usually share the same place, they are likely to develop a shared ‘sense of meaning.’ In this paper, we argue that the family firm governance structure is particularly predisposed towards a place-based culture (or ‘place-basedness’) because of the diffusion of family values to the famil
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