Family businesses as emotional arenas.The influence of family CEO’s empathy and external monitoring on the importance of family goals

Abstract

Extant research has recognized the important role that emotions play in organizational processes and behaviour. We assert that family businesses would appear to be especially rich contexts in which emotions influence processes and behaviour, which could provide deeper insights into the workings of a family business firm. In this paper, we take a modest step by studying the influence of family firm CEOs` empathic concern – an affective emotion – on the importance that is placed on family-oriented goals. Additionally, since family goals sometimes conflict with business goals, we include the moderating effect of the presence of external board members, as a monitoring device, on the importance of family-oriented goals. The results show that a family firm CEO`s level of empathic concern has a positive influence on the importance that is placed on family-oriented goals. However, the presence of an external board of directors attenuates this relationship.