Are Family Owners Willing to Risk “Rocking the Boat”? - A Blended Socioemotional Wealth-Implicit Theory Framework

Aug 31, 2026

Upload by Noah

Examines how socioemotional wealth (SEW) and implicit theories jointly shape family owners’ risk taking. A blended SEW-implicit theory framework explains why some family firms are more risk seeking and others more risk averse. The framework proposes that high SEW intensity fosters an entity orientation, while low SEW intensity promotes an incremental orientation. Owners with an entity orientation take fewer risks, whereas incremental-oriented owners are more willing to act under uncertainty. It further theorizes that firm performance hazard can shift implicit orientation over time, changing risk behavior.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages29

Reading Time1 h 13 min

AccessFree to download

Introduction

Research gap on family-firm risk-taking

Socioemotional wealth and implicit theories

SEW intensity and orientation

Risk preferences and hazard-driven shifts

Keywords and key constructs

Journal of Management Vol. XX No. X, Month XXXX 1–29 DOI: 10. 1177/01492063241311865 © The Author(s) 2025 Article reuse guidelines: [sagepub.com/journals-permissions](sagepub.com/journals-permissions) Are Family Owners Willing to Risk “Rocking the Boat”? A Blended Socioemotional Wealth-Implicit Theory Framework Luis R. Gómez-Mejía Arizona State University Francesco Chirico Macquarie University Jönköping University Michael C. Withers Texas A&M University Geoffrey P. Martin Melbourne Business School Robert M. Wiseman Michigan State University We leverage research on socioemotional wealth (SEW) and implicit theories to develop a novel blended SEW-implicit theory framework that explains why some family firms are more risk seeking or more risk averse. According to implicit theory, individuals perceive reality through their interpretative cognitive filters. Those with an entity theory orientation see reality as relatively fixed or uncontrollable, while those with an incremental-implicit theory orientation tend to perceive reality as malleable and change as leading to positive outcomes. We theorize that family firms with high SEW intensity tend to adopt an entity orientation, whereas those with low SEW intensity tend to adopt an incremental orientation. Accordingly, we propose that the likelihood that family owners hold either orientation is shaped by organizational features associated with SEW intensity, namely (a) the salience of family versus business identity,(b) family founder Acknowledgments: We express our sincere gratitude to associate editor Aaron Hill and two anonymous reviewers for providing us with invaluable guidance and feedback throughout the review process. Corresponding author: Luis R. Gómez-Mejía, Department of Management, W. P. Carey School of Business, Arizona State University, Box 874006, Tempe, AZ 85287, USA. E-mail: [luis.gomez-mejia@asu.edu](luis.gomez-mejia@asu.edu) 2 Journal of Management / Month XXXX imprinting,(c) generational stage, and (d) favorable path dependence. In turn, family owners with an entity orientation are less likely to take risks compared to family owners with an incremental orientation. Furthermore, we theorize that a firm’s performance hazard can shift family owners’implicit orientation from entity-based to incremental and vice versa, thereby impacting their risk-taking behavior. Keywords: corporate governance; decision-making; family firms Family firm owners obtain both economic and socioemotional wealth (SEW) benefits from their business, with SEW encompassing those “non-financial aspects of the firm that meet the family’s affective needs, such as identity, the ability to exercise family influence, and the perpetuation of the family dynasty”(Gómez-Mejía, Haynes, Núñez-Nickel, Jacobson,& Moyano-Fuentes, 2007: 106) . Since the introduction of SEW theory by Gómez-Mejía et al. (2007), research has argued that preservation of SEW plays a major role in strategic decision-making in family firms (e.g., Duran, Kammerlander, van Essen, & Zellweger, 2015; Feldman, Amit, & Villalonga, 2016; Patel & Cooper, 2014). A particular focus of this research has centered on family firms’risk-taking (Hiebl, 2012), which is defined as actions designed to improve profitability that are associated with greater uncertainty about future income streams (Anderson, Kreiser, Kuratko, Hornsby, & Eshima, 2015; Hoskisson, Chirico, Zyung,& Gambeta, 2017) . Traditionally, family firms have been portrayed as risk-averse, with the concentration of family wealth in a single firm inducing them to protect their patrimony (Anderson & Reeb, 2003; La Porta, Lopez-de-Silanes, & Shleifer, 1999; Morck & Yeung, 2004). However, other research has challenged this simplistic view, suggesting that family firms may become more risk-seeking when their SEW is under threat. In particular, Gómez-Mejía et al. (2007) extend the behavioral agency model, or BAM (Wiseman & Gómez-Mejía, 1998), by incorp

FAQs

What does the blended SEW-implicit theory framework aim to explain?

It explains why some family firms become more risk seeking and others more risk averse by linking socioemotional wealth with implicit theory orientations.

How does SEW intensity influence family owners’ implicit orientation?

High SEW intensity is theorized to encourage an entity orientation, while low SEW intensity tends to lead to an incremental orientation.

How is risk taking affected by entity versus incremental orientation?

Family owners with an entity orientation are less likely to take risks than owners with an incremental orientation.

Can a firm’s performance hazard change owners’ risk-related cognition?

Yes. The theory proposes that performance hazard can shift owners’ implicit orientation between entity-based and incremental, thereby altering their risk-taking behavior.

Aug 31, 2026

Upload by Noah