The study, published in Journal of Management Studies, also involved researchers from Arizona State University, Free University of Bozen- Bolzano, IMD Business School and Michigan State University. The researchers analyzed data from a set of more than 3,100 listed companies in 33 countries over a 10-year period (between 2007 and 2016). And what they have found is that family businesses are less prone to staff cuts, compared to non-family companies. In addition, this differential effect is magnified in those countries where there is political upheaval and, consequently, institutional protection of workers may be more uncertain.
These results indicate that “the affective ties and emotional bonds that family businesses prioritize (known as socio-emotional wealth) and that go beyond the goal of maximizing value (without forgetting financial objectives) seem to have a positive impact on the well-being of employees, so that they can find in the family business a working environment in line with practices aimed at maintaining stable employment”, says one of the authors of the study, María José Sánchez Bueno, professor of the Department of Business Economics at UC3M.
By recognizing both the role of family control in a business and the political risk of a country in terms of job stability, this research aims to offer an integrating approach to certain internal and external aspects of the organization that may affect the protection of workers against potentially “unwanted” conditions such as the termination of their job. In particular, family businesses appear to be less prone to making decisions linked to job insecurity because doing so threatens their socio-emotional wealth (through possible negative consequences associated with staff adjustments, such as lack of trust from the workforce or the breakdown of ties with employees). “Our study thus reveals that the control of the company by the owning family can have a significant impact on job security, and this impact may be more critical during situations of political turbulence”, says Professor Sánchez Bueno.
This line of research focuses on job security, which is a crucial issue for our current society, according to the researchers, since the ability to cover basic expenses depends largely on having a permanent job. “Even in periods of economic boom, employees can lose their jobs as staff reductions have become a global phenomenon that companies carry out, for example, in order to reduce costs and increase their efficiency”, concludes María José Sánchez Bueno.
Bibliographic reference: Gomez-Mejia, L.R., Sanchez-Bueno, M. J., Miroshnychenko, I., Wiseman, R. M., Muñoz-Bullón, F., De Massis, A. (2023). Family control, political risk and employment security: A cross- national study. Journal of Management Studies, forthcoming. Open Access. https://onlinelibrary.wiley.com/doi/full/10.1111/joms.12970
https://www.expansion.com/economia/2024/02/06/65c1f413e5fdea77548b456d.html
