Implications for Theory and Practice of Philanthropy in Family Businesses
[We’re pleased to welcome Dr. Alfredo De Massis who collaborated with Giovanna Campopiano and Francesco Chirico on their paper “Firm Philanthropy in Small and Medium-Sized Family Firms: The Effects of Family Involvement in Ownership and Management” from Family Business Review.]
Firm philanthropy is a relevant topic, at times considered at odds with corporations and their profitability goals. Notwithstanding, firms nowadays are involved with charity, donating their extra money, letting their employees spend part of their time in social initiatives and establishing foundations. Both from the literature and from our personal experience it emerges that for a great number of these firms families play an important role, so that this research idea has been triggered. Particularly small and medium-sized family firms have been the focus of our analysis, as extant research has focused mostly on large companies, and smaller family firms are usually more committed to their local communities and proximate stakeholders.
This research has shown that family involvement in the business is crucial and it engenders distinctive dynamics within the shareholders and the management group that affect engagement in firm philanthropy. The intersection and overlap of family and business systems engender counterintuitive issues related to the behavior of these firms with respect to firm philanthropy.
This study can be considered a pioneering contribution at the crossroads of the family business and philanthropy literatures, and our hope is that it will stimulate further research on this topic. The impact of family firms’ engagement in philanthropy on performance or on firm’s reputation, as well as the relationship between the institutional context and the firm’s behavior are just a few examples of research directions deserving attention in the near future. Finally, a number of practical implications derive from the results of this study: family firms’ owners and managers may develop strategies to engage in philanthropy, if they believe that their firms should be involved in initiatives that reflect the personal motivations and values of these business families.
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Giovanna Campopiano is an assistant professor at the Chair of Business Administration and Family Entrepreneurship at the University of Witten/Herdecke, Germany. Her research interests mainly focus on management issues in Family Business in relation to growth, performance, corporate social responsibility, sustainability, and entrepreneurial activities.
Alfredo De Massis is the director of the Centre for Family Business at the Institute for Entrepreneurship and Enterprise Development (IEED) of Lancaster University Management School (UK) and a former professor in the area of family business at University of Bergamo (Italy), where he cofounded the Center for Young and Family Enterprise (CYFE) that he ran as deputy director until October 2013. He has been STEP Global Board member and currently serves as Chairman of the STEP European Leadership Council of the Global STEP Project for Family Enterprising. His research is focused on innovation, organizational goals, and social and behavioral issues in the context of family firms and enterprising families.
Francesco Chirico is an associate professor at Jönköping International Business School (JIBS), Center for Family Enterprise and Ownership (CeFEO). His research stands on the intersection of entrepreneurship and strategy with a special focus on family-controlled firms. It explores the resource management processes and exit strategies that affect the realization of competitive advantage and value creation in organizations.
