chapter  3
Social Family Entrepreneurship: social issues and stakeholder salience in small- and medium- sized family firms
Pages 21

Family businesses play a pivotal role in all European countries. This is particularly true in Italy, where a study conducted by Aidaf (Italian Association of Family Enterprises) and the Bank of Italy (2004) shows that family businesses represent 93 percent of the nation’s companies and employ 98 percent of the workforce in manufacturing companies with fewer than 50 employees (European Commission, 2008). This evidence appears to be closely linked to the fact that family businesses are mostly small-and medium-sized enterprises (SMEs) and that they account for 99 percent of Italian firms (Istat, 2008). Family firms are increasingly committing themselves to face and solve social issues, behaving as social entrepreneurs and involving their resources in philanthropic activities (Campopiano, De Massis, & Chirico, 2014). They are usually interested not only in the financial returns that are necessary for survival, but also in non-economic returns (Chrisman et al., 2012; Kotlar & De Massis, 2013), considered at times more relevant for the firm success and considered by family members when making strategic decisions (Short, Moss, & Lumpkin, 2009). Noneconomic rationales that drive family firm decisions and activities lead to a socially responsible behavior and compliance with environmental and social standards (Berrone et al., 2010). There is in addition an increasing attention by practitioners to family firms’ commitment toward philanthropy; and growing evidence of family firms that place emphasis on their role in the community, planning, and engaging in philanthropic activities (see, for example, the KPMG website section dedicated to philanthropy and family business). Family members consider their family’s wealth, satisfaction, self-realization, image, and reputation as strongly tied to the business (Ward, 2004); they regard their business as a relevant entity of their own, within which they share common objectives (e.g., sustainability across generations) (Long & Mathews, 2011). In some cases, these elements are exacerbated, and family firm entrepreneurs actually act as social entrepreneurs, as this behavior also allows them to have the family name positively linked to a business that is attentive to social issues in the community, and thus consistent with their objectives. Family owners indeed aim to strengthen the firm, its employees, and the relationships with all its stakeholders (Hoopes & Miller, 2006). Social entrepreneurship often overlaps with corporate social responsibility (CSR) as it refers to the accomplishment of social activities within the community where the firm is located. In particular, while social entrepreneurship relates especially to the entrepreneurial activity of a business aimed at achieving a social goal (Cukier, Trenholm, Carl, & Gekas,

2011), CSR is usually referred in the literature as the set of actions and practices accomplished by a firm in order to address any social issue to proactively “give back” to society (Carroll, 2000). The focus on SMEs is important for several reasons. The first reason is that small firms have a number of specific characteristics that affect the key aspects of small business social responsibility (SBSR) (Lepoutre & Heene, 2006). In addition, empirical research on social entrepreneurship and corporate social responsibility in small businesses is limited in the number of studies (Thompson & Smith, 1991). According to Lepoutre and Heene (2006), in the literature there is, on the one hand, the idea that small businesses are socially responsible by nature; on the other, the presence of barriers, due to smaller firm size, is thought to constrain SMEs’ ability to engage in social action. It is therefore interesting to investigate what characterizes small-and mediumsized family firms in their behavior as social entrepreneurs. In particular, the aim is to link the underlying motivations of entrepreneurs to the salience of the stakeholders, whose claims the firm is called to respond. The chapter is thus organized as follows: the first section defines and reviews the social entrepreneurship and corporate social responsibility literatures, focusing especially on family firms’ behavior; then a section is dedicated to developing the framework used for the analysis, as it is based on stakeholder theory and social identity theory. Methods and findings are then reported, and discussion and conclusions are finally drawn to close the chapter.