Family SMEs’ survival: the role of owner family and corporate social responsibility

Abstract

Purpose

The purpose of this paper is to examine the impact of owner family involvement in business on sustainable survival of family small-to-medium enterprises (SMEs) and to empirically validate the intervening role of corporate social responsibility (CSR).

Design/methodology/approach

The authors analyze data from 489 owner and nonowner executives of 150 family SMEs using PLS-SEM (Partial Least Square–Structural Equation Modeling).

Findings

The authors found evidence that family involvement in business positively impacts the sustainable survival of family SMEs while corporate social responsibility partially mediates this relationship. Apart from effective family involvement in business, active involvement in social causes enhances a firm's ability to survive longer.

Research limitations/implications

This study was conducted in a geographic context and data were collected from family-managed and controlled firms. Further research is needed to generalize the findings to all types of family firms in the global context. In an Islamic society, family firms need to invest in social causes, human development, and environmental sustainability through zakat, sadaqat, and donations.

Practical implications

The findings imply that family firms require stakeholder-centric competitive strategies and socially responsible behavior along with effective family control, commitment, enrichment, and successful succession since the path to sustainable survival goes through CSR.

Originality/value

Survival is the biggest challenge facing family SMEs forcing them to achieve the ability to sustain longer. Rooted in transaction cost economics (TCE) theory of the family firm and stakeholder theory, this paper validates an integrative model for family SMEs' sustainable survival.

Citation

Ahmad, S., Siddiqui, K.A. and AboAlsamh, H.M. (2020), "Family SMEs’ survival: the role of owner family and corporate social responsibility", Journal of Small Business and Enterprise Development, Vol. 27 No. 2, pp. 281-297. https://doi.org/10.1108/JSBED-12-2019-0406