The Importance of Values in Family-Owned Firms

Abstract

Belief in the powerful role that values play in family-owned firms' success and well-being drove collaboration on this research project among the disciplines of management, psychology and philosophy. The goals of this research are to define the concept of values from a philosophical perspective, to empirically examine the corporate values of the world's largest family-owned firms and non-family businesses, and to study whether there are specific values that are predominant in family-owned firms. The study resulted in three main findings. First, based on the philosophical literature, we developed a definition, classification and hierarchy of values. Second, we found that within the values that were mentioned most frequently by the world's largest corporations, the top three most mentioned (i.e., integrity, respect and customers) were the same for both family-owned firms and non-family businesses. Finally, findings from the present study indicate a series of values that are characteristic of family businesses (i.e., generosity, humility, communication, service, quality, excellence, creativity and entrepreneurship). Examining these values shows interesting patterns. For example, most of them belong to the category of behavioral values. Likewise, values in the world's largest family-owned firms seem to have three main characteristics: they emphasize a collective orientation; they have a long-term perspective; and they have a sense of stewardship. Also discussed are the practical implications of the study, its limitations and areas for future research.

Keywords: family-owned firms, values, mission, vision