This week’s articles consider the interesting relationship between religion, ethics and the way family businesses are run.
Turkey: The role of religion in Islamic family business
Religion has significantly influenced societies throughout history and across the globe. Family firms—particularly those operating in strongly religious regions—are more likely to be subject to the influence of religion. However, little is known about the mechanisms by which religion affects business activities in family firms.
The authors study how religion impacts business activities through a qualitative study of two Anatolian-based family firms in Turkey. The authors find that religion provides a dominant meaning system that plays a key role in constituting business activities through three mechanisms:
(1) family imports religious practices as business practices;
(2) family adheres to religious values as a rationale for business actions; and
(3) family religious values define business taboos by avoiding the evil eye.
These mechanisms highlight how religion becomes a source of well-understood business practices, how religion defines the nature of rationality that guides business activities, and how religious taboos can delimit the range of potential business activities, respectively.
Mustafa Kavas, Paula Jarzabkowski & Amit Nigam. 2020. Islamic Family Business: The Constitutive Role of Religion in Business.
Journal of Business Ethics, 163(4), 689–700.
India: Spirituality and corporate philanthropy in family firms
Family firm philanthropy (FFP) is the donation of resources to support societal betterment in ways meaningful for the controlling family. Family business literature suggests that socioemotional goals of achieving family prominence, harmony, and continuity drive FFP.
However, these drivers fail to explain spiritually motivated philanthropic behaviours like anonymous giving by business families. 14 case studies of Indian Hindu business families with a combined FFP exceeding 2 billion INR in 2016–17 reveal spirituality or the moral dimension as an additional important driver of corporate behaviours like FFP.
Two fundamental spiritual beliefs of dharma (duty towards society) and karma (right to action without expectation of rewards) instill a duty-bound giving culture in Hindus. However, the strength of each belief varies in controlling families revealing four configurations of philanthropists labelled as Devout, Committed, Devoid, and Coerced in this study.
Devouts, the biggest givers, are spiritually motivated, controlled by at least third-generation family members with executive power and professional support. Committed philanthropists are motivated by societal development rather than spirituality. While devoids hold spiritual beliefs, they neglect to devote appropriate resources or develop professional structures to support FFP. Coerced, the smallest givers, focus on business growth, lack family champions or supporting professional structures, and face turbulent family or business domains.
Navneet Bhatnagar, Pramodita Sharma & Kavil Ramachandran. 2020. Spirituality and Corporate Philanthropy in Indian Family Firms: An Exploratory Study.
Journal of Business Ethics, 163(4), 715–728.
Lebanon: How religion shapes family business ethical behaviours
Based on case studies of religious Muslim and Christian family firms operating in a religiously diverse country, the authors explain the multiplicity of family, business, religion, and community logics in the family firm. In particular, the authors give attention to the religion logic and how it interacts with other logics when family firms are considering ethical issues.
The authors show that religion has a rule-based approach in Muslim family firms and a principle-based approach in Christian family firms. The authors also draw attention to the fluidity characteristic of the religion logic, through which family firms interpret the role of religion among other logics in influencing ethical decisions.
This study advances institutional logics literature in highlighting the plurality between and within logics in family firms, and contributes to the growing recognition of the influence of religious beliefs on the ethical behaviours of family firms.
Ramzi Fathallah, Yusuf Sidani & Sandra Khalil. 2020. How Religion Shapes Family Business Ethical Behaviors: An Institutional Logics Perspective.
Journal of Business Ethics, 163(4), 647–659.
General: Religious identity and strategic renewal in family firms
We examine the role of religious identity in promoting strategic renewal in privately held founder family firms. Religious identity in these firms refers to their collective sense of being that reflects their founders’ and owner family members’ espoused religious values and beliefs, thereby distinguishing themselves from others in what is central, distinct, and enduring about their organisation.
The authors propose that such a religious identity determines family firms’ spiritual capital, which influences strategic renewal activities such as conflict resolution and resource allocation. Specifically, the authors argue that spiritual capital can be a double-edged sword when family firms pursue strategic renewal.
The authors discuss the implications of their work for future research.
Sondos G. Abdelgawad & Shaker A. Zahra. 2020. Family Firms’ Religious Identity and Strategic Renewal.
Journal of Business Ethics, 163(4), 775–787.
China: Religion and succession in family firms
Family business succession is a vital issue in corporate finance and management. Drawing from corporate governance perspective in finance and socio-emotional wealth approach in management, this paper reveals the interesting relationship between religion and family business succession intention.
Using nationwide family firm survey data, we find that family firm founders’ religiosity is conducive to their succession intention. Family firm founders’ religiosity and family firm’s socioemotional wealth interactively strengthen management succession intention, but not ownership succession intention.
We also find that Eastern religious beliefs, especially Buddhism, strengthen the religiosity-succession relation in Chinese family firms.
Shen, Na and Su, Jun. 2017. Religion and succession intention – Evidence from Chinese family firms.
Journal of Corporate Finance, 45(Aug.), 150-161.