Abstract

“Do family firms really behave differently from nonfamily firms? If so, how and why are they different?” (Chrisman Chua & Sharma 2005, 567). Family firm scholars have long argued that family involvement and behavior in the firm leads family firms to have unique strategic outcomes relative to their nonfamily counterparts. Overlapping family and firm systems are thought to introduce family members’ emotions and goals into management, enabling family firms’ unique outcomes (Gómez-Mejía, Cruz, Berrone, & Castro, 2011). Despite intentions to integrate family and firm assumptions, family firm research has traditionally focused on family firms’ unique strategic outcomes at the expense of not fully understanding the family members’ cognitions, emotions, goals, and behaviors that drive them. Indeed, family firm research often: (1) builds broad assumptions about how structural aspects of the family, such as the number of family members in the firm or the number of generations involved in the firm, will impact strategic and firm-level outcomes and (2) uses distal firm-level proxies to latently measure family behavior (Berrone Cruz & Gómez-Mejía 2012; Morris & Kellermanns 2013). Consequently, the family firm literature’s microfoundations, which we characterize as the family firm members’ affective, cognitive, and behavioral factors that drive unique family firm outcomes, remain unnaturally constricted and generally untested.